2016 Legislative Session: Fifth Session, 40th Parliament
HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Thursday, February 25, 2016

Afternoon Sitting

Volume 33, Number 7

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

THURSDAY, FEBRUARY 25, 2016

The House met at 1:32 p.m.

[Madame Speaker in the chair.]

Orders of the Day

Hon. M. de Jong: It’s estimates season again. In Committee A, we will begin with the estimates of the Ministry of Environment. In this chamber, it is second reading on Bill 10.

[R. Lee in the chair.]

Second Reading of Bills

BILL 10 — BUDGET MEASURES
IMPLEMENTATION ACT, 2016

Hon. M. de Jong: I move that Bill 10 be read a second time now.

Bill 10 enables a number of social and economic development policy initiatives included in Budget 2016. My reference to them for the purposes of second reading debate will be somewhat detailed in the description of what individually they do or are intended to do, recognizing that we’ve had a fairly general conversation over the last six days about the budget. When we get to committee stage, I’ll have an opportunity, with the official hon. critic and other members of the House, to delve into more detail about individual provisions.

I’ll go through a general description of what is included in the bill as it relates to the budget.

Two parts in Bill 10: part 1 includes a number of provisions that will enable government’s management of the ’16-17 budget and the three-year fiscal plan, and part 2 amends six statutes in order to implement many of the tax measures referred to in Budget 2016.

Beginning with part 1, the Financial Administration Act is amended to create the new B.C. prosperity fund. A new part in the act creates the fund as a special fund within the consolidated revenue fund.

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It provides for an inaugural $100 million contribution. It defines how new contributions are made and establishes allowable payouts out of the fund, with debt reduction being a first priority while protecting the balance of the fund to serve as an endowment for future generations.

The Budget Transparency and Accountability Act is amended so that the requirement in that act for dealing with increases in government cash or cash equivalents during the fiscal year will actually facilitate the intention of the previous amendment and allow for some or, I suppose, even all of those increases to be transferred to and accumulate in the B.C. prosperity fund.

The Financial Administration Act is also being amended to provide statutory authority for managing costs of negotiated public sector compensation that had not been anticipated in that year’s budget. The best example of that is the recent economic stability dividend. This amendment will allow government to incur these expenses without impacting the ability to fund core services or other emerging priorities in the fiscal year.

The Insurance Corporation Act is amended to provide flexibility in the determination of Insurance Corporation of British Columbia’s annual minimum capital reserve targets for optional insurance so as to help keep basic insurance rates low while protecting government’s fiscal plan objectives. The amendments also change the corporation’s fiscal year-end to March 31 from December 31 to harmonize ICBC’s planning and reporting with that of the government shareholder.

Bill 10 also amends the Wildfire Act to establish statutory appropriations beyond direct fire control. That will include wildfire prevention, wildfire risk reduction and rehabilitation of lands damaged by wildfires. An increased focus on wildfire prevention and risk reduction, we believe, will help keep British Columbians and the communities they live in safer from the threat of wildfire.

The Public Service Benefit Plan Act is amended to transition the former long-term disability trust fund into a new special account. This change will improve transparency of the long-term disability plan, facilitate more certainty on plan funding and assist government with its debt management strategy.

The Emergency Program Act is amended to establish a statutory appropriation for payments and grants made to local communities and organizations for emergency prevention and preparedness initiatives, such as upgrading dikes and flood protection in vulnerable communities. Investments made to support and protect our communities will help, we believe, mitigate the impact and cost of future emergencies and natural disasters.

The proposed amendment to section 9.4 of the Special Accounts Appropriation and Control Act will expand eligibility for the B.C. training and education savings program. Currently the program helps B.C. families save for their children’s post-secondary education by enabling children born on or after January 1, 2007, to receive a one-time grant of $1,200 into a registered education savings plan. This amendment extends the program to B.C. children born or after January 1, 2006, a one-year expansion. Regulations will be amended to enable the expanded eligibility for financial assistance and as a result will support an additional estimated 40,000 B.C. children in reaching their education and training goals.

That’s part 1. Part 2 of Bill 10 amends six statutes to implement many of the tax measures announced in Budget 2016. Bill 10 amends the Income Tax Act to create a new farmers food donation tax credit. The new non-refundable credit complements the existing charitable dona-
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tions tax incentive by providing an additional benefit to farmers who donate qualifying agricultural products to a registered charity that provides food to those in need. The credit is 25 percent of the fair market value of the agricultural products donated.

The Income Tax Act is also amended to expand, extend or clarify several other tax credits effective for the 2016 tax year. The B.C. tax reduction credit phase-out threshold is increased to $19,400 from $19,000.

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The credit phase-out rate is also increased to 3.56 percent from 3.5 percent. This enhancement will increase the amount that British Columbians can earn before paying any provincial income tax, and it provides a modest benefit to a significant number of lower-income taxpayers.

Far less modest are changes to the B.C. seniors home-renovation tax credit. It is being expanded to include all persons with disabilities. Persons with disabilities will now be able to claim this refundable tax credit worth up to $1,000 to assist with the cost of certain renovations to improve accessibility or to help an individual be more functional or mobile at home. The expanded credit will be available in respect of eligible expenditures made on or after February 17, 2016.

The B.C. mining flow-through share tax credit is extended for one year, to the end of 2016, and the mining exploration tax credit is extended for three years, to the end of 2019. Mineral exploration, of course, is a vital part of our economy, and the flow-through share tax credit and mining exploration tax credit do help encourage investment in mineral exploration and development.

Further, the regional and distant location tax credits for animation productions are being clarified to ensure that credits are based on the amount of eligible labour expenditures actually incurred in the regional or distant location areas. This clarification will ensure that the original policy and intent of the credit is achieved and maintained.

Bill 10 also amends the Income Tax Act to parallel federal changes to the taxation of trusts and estates. Effective for tax years ending after December 31, 2015, graduated personal income tax rates will only apply to trusts that are “graduated rate estates” or “qualified disability trusts,” as defined in the federal Income Tax Act and implemented as part of the federal 2014 budget.

The top marginal personal income tax rate will apply to all other trusts and estates in B.C., and in our view, these changes — all of them that I’ve referred to — will ensure and improve tax fairness.

Bill 10 also provides support for small businesses. The Small Business Venture Capital Act is amended to allow for a continuation of tax credits to support eligible new corporations. Bill 10 also amends the property transfer tax in a significant way to create a significant exemption for newly constructed housing. The exemption will be available to Canadian citizens and permanent residents of Canada who buy a qualifying new home worth up to $750,000 and live in it as their principal residence.

There is a phase-out of the exemption up to $800,000. There is no requirement that the purchaser be a first-time homebuyer, but the home must be a newly constructed or a newly subdivided home. The exemption is available to new arrivals in B.C., subject to the conditions I mentioned a moment ago.

The new exemption, we believe, will assist purchasers and help stimulate the market to supply moderately priced homes. It will also support measures taken by local government to encourage densification and the creation of newly affordably priced housing.

Bill 10 also amends the same act to implement a 3 percent tax rate on the portion of fair market value of a property above $2 million. The 1 percent rate will continue to apply to the first $200,000 of property value, and the 2 percent rate will continue to apply on the value of property above $200,000 up to $2 million. The new third rate, which is applicable to higher-priced properties, will help offset the cost of the new housing exemption.

The act is also amended to require the collection of certain information. That is the collection of citizenship information on foreign purchasers of property in British Columbia, and to collect data on the use of bare trusts.

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Individuals who purchase property in B.C. who are not either Canadian citizens or permanent residents of Canada will be required to disclose their citizenship on registration of a taxable transaction. Corporations who purchase property in B.C. will be required to disclose on registration of a taxable transaction the name, the address and citizenship of any director who is not a Canadian citizen or permanent resident of Canada.

Similarly, bare trustees who register as the legal owner of property will be required to disclose the names, addresses and citizenship information of the settler and beneficiary of the bare trust on registration of a taxable transaction.

This data will be used to compile statistical information on real estate purchases in British Columbia and for the enforcement and administration of tax statutes. These data collection requirements will come into force by regulation this summer.

Bill 10 also amends the Tourist Accommodation Assessment Relief Act to provide enhanced assessment relief for eligible short-term accommodation properties located outside of municipalities. The maximum reduction in assessed value has increased to $500,000 from $150,000, and the assessed value at which the phase-out of the benefit begins is increased to $4 million.

These amendments will enhance relief for short-term accommodation operators in rural areas of B.C. and make their property tax savings more comparable to those of operators within municipalities. It will include more rural operators who lost this tax relief as their prop-
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erty values increased. I can say that the changes I’ve just referred to meet our specific commitment to modernize the act in that respect.

Finally, Bill 10 amends the Carbon Tax Act and the Motor Fuel Tax Act to provide, effective March 1, 2016, an exemption for collectors from the requirement to pay security to government if they sell fuel to a person who is exempt from the requirement to pay securities.

Also effective on March 1, 2016, a deputy collector is exempt from the requirement to pay security on fuel bought in British Columbia if the fuel is to be sold outside of British Columbia by the deputy collector and the fuel is removed from British Columbia under certain circumstances.

These specific exemptions will reduce the compliance burden on certain collectors and certain deputy collectors by reducing the need to apply for refunds of security in those circumstances.

I know that we will have an opportunity — in addition to the opportunity that will follow second reading, in committee — to discuss in more detail some of these provisions.

If I might, to my colleague across the way…. I do apologize for this. I somehow managed to double-book myself this afternoon, and if I am obliged to leave the chamber, rest assured that I will be reviewing her remarks in detail. I look forward to submissions from others in second reading on this bill.

C. James: Thank you to the minister for his comments. I will take no offence if you leave the chamber.

Certainly, although the minister and I and maybe a few others in this House might find the minutiae in the implementation bill interesting, I do think it’s important to just remind the few members of the public who may be watching that this isn’t actually a vote on the budget.

I think that’s important, because we’ve seen a lot of the broader budget debate over the last while. In fact, as the minister has stated, this implements measures in the budget that require legislation and that require legislative amendments, as the minister has said.

You’ll see some minor changes, some technical provisions, as the minister has outlined — I appreciate the outline of the specific provisions in the bill — and a couple of larger pieces, as well, that I’ll spend a little bit of time on.

I just want to walk through a couple of the sections of the bill. As the minister has talked about, there’ll be much more opportunity for details and for specific questions on the sections when we get to third reading. So I’ll touch briefly on those sections and spend a little bit of time, as I said, on the things that are in the bill.

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I also want to take a little bit of time, because I think it’s also helpful to the public, to take a look at what’s not in the bill. I think that’s also important as those who watch this wonder why some measures are included and some measures are not, why some of the budget is included in this bill and why other pieces aren’t.

I think probably the place to start around what’s not in the bill, where the public might expect it to arrive, would be MSP changes. I think most of the public, if you took a look and asked most of the people on the street, would certainly think that their medical services premium is a tax.

Although the government may not call it a tax and may call it a premium and look at it in a different kind of way, certainly the majority of British Columbians that I talk to and that others talk to would consider medical services premiums a tax and would certainly imagine that you would see the changes happen through this bill. But this does not include the MSP changes. Those will come in a different route.

But I just want to take a moment to talk about those because, as I said, I think the majority of British Columbians, when they take a look at tax measures, the people that I talk to, would have expected to see the MSP tax — a tax that the Premier herself has referred to as unfair, as behind the times, as not keeping up with the changes that are there — in this Budget Measures Implementation Act.

As I said, the government doesn’t like to call them taxes. They like to talk about keeping taxes low. But when you include those medical services premiums, when you include that tax for families, for British Columbians, in fact it hugely increases the amount of tax that people in this province are paying. In fact, in some cases, you are seeing families paying as much in MSP taxes as they are in their income tax. That’s how much money is now gathered around the increase in medical services premiums.

I think the other piece that is important to note around the medical services premium tax is the unfairness of that tax. I mention it because in the budget, and certainly in some of the other tax measures that are coming forward in this implementation bill, the Finance Minister and the government talk about tax fairness. They talk about how to actually make sure that a tax is fairer, that some of the specific provisions in this implementation bill actually refer to that. They refer to both clarifying tax as well as making tax fair and making changes in the tax system.

Well, one big tax in this province is left out of all of this, and that’s the medical services premium tax. There isn’t anything, as far as I’ve been able to see, that is as unfair as that tax is when it comes to British Columbians, when it comes to families. There are some changes, yes. It’s true that there are some changes coming to the medical services premium tax, but not until January of next year, and the unfairness remains for those people who will continue paying medical services premium tax.

The other piece that’s important to note is that the medical services premium tax goes up 4 percent. It went up 4 percent in January of this year, in this year’s budget, and it goes up again 4 percent in next year’s budget. So as I said, although some people will actually benefit, you in fact will find that some people will be paying more
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medical services premium tax. More revenue is actually collected by government on the medical services premium tax.

I think British Columbians who are taking a look and hearing from the government side that this bill coming forward, Bill 10, includes provisions to look at tax fairness will see a big hole. They’ll see a big hole in this bill, which is the medical services premium tax and addressing that — addressing the fact that if you make $50,000 or you make $1 million dollars, you actually pay the same amount in medical services premium tax, and that won’t change with the changes that are coming forward.

I think that’s a question the public will certainly have. That’ll be a question that I expect the members on the other side will be receiving and a question, certainly, that I think is still out there.

Now, I have heard the Premier speculate that there may be further changes coming in future budgets. I don’t want to be cynical and say that next year is election year, but I think it’s important to note the timing of the announcements that small changes are being made and perhaps something might come next year. Well, next year does happen to be an election year.

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As I said, I certainly wouldn’t want to be cynical and presume that’s why the timing has been done on this, but I think it’s important to note it in all of this.

The other piece that is not included in this bill — and as I said, I’m going to speak to both the pieces that are included and not included — and that the public might expect to come forward would be the tax break that was given to the top 2 percent of income earners in British Columbia. Again, when you talk about tax measures and you talk about bringing forward changes to the tax system, I think the public would expect that they might see that there.

Yes, for those who don’t know, the government, even in, as they claim, fragile economic times — certainly last year, and it carries over again into the 2016 budget — did find money in the budget. They did, in fact, find money to give the top 2 percent of income earners, including millionaires in this province, a tax break that cost $230 million. It’s not included in Bill 10, and I think it’s important to take a look just for a moment at why that is.

It’s because the government, in fact, just eliminated the top income tax bracket to take effect, to give that tax break to the top 2 percent. You may hear the government saying: “Well, we didn’t give a tax break. The sunset clause just expired. It was just a clause that we put in place that put a tax increase in for a couple of years, and then it just expired.”

Interjection.

C. James: As my colleague says, it wasn’t possible to do anything. It was there. It was going to expire in a year.

Well, we have seen this government and other governments make decisions all the time to make changes. I think it’s important for the public to remember that this government, even with the small changes they’re making around MSP taxes, has said to the public: “You have to wait for those until next January. You’re required to wait until next January. But by the way, on the tax break for millionaires, of course we made sure that that one happened. We didn’t deal with the clause to be able to keep those taxes coming in. We in fact said to millionaires, ‘It’s fine. Don’t worry. You get your tax break.’”

I think that the fees and services that have been downloaded onto British Columbians — not included in Bill 10 — speaks to the challenges that families are facing and the lack of regard that the government has given to how much those additional taxes put onto British Columbians.

It’s not simply the income tax system that adds a burden to British Columbians. It’s not simply the taxes that they pay at the end of the year that add to the cost for families when they’re trying to get by. In fact, the fees and the services and the money that government collects from all of that now is equal or surpassing, in some cases, the kind of income tax that families are paying.

When you look at a family who is trying to get by, paycheque to paycheque, trying to manage, trying to put a little bit aside just in case something occurs and they need those resources, most of the families I talk to say they’re barely able to pay their bills. They’re barely able to get by. So although the minister and the government like to talk about the fact that British Columbia families are well off, certainly, the families that I talk to find it tougher and tougher to get by.

If you take a look at the increase in fees, which the government, as I said, likes to not call taxes, so they’re not included in Bill 10…. If you take a look at the cost of those fees, you can understand why families are facing pressure. It’s not that families are not utilizing their money well. In fact, families are incredibly resilient.

It’s extraordinary, when you look at these increases, that people actually are managing paycheque to paycheque. Hydro rates have gone up by 74 percent. In 2014, they went up 9 percent; 2015, 6 percent; 2016, 4 percent. In 2017, they’re going up 3.5, and in 2018, 3 percent. That’s in addition to the other taxes that are already there.

Ferry fares, 77 percent. Tuition has more than doubled. ICBC rates have gone up 48 percent since 2001. Even long-term care, when families are really struggling, when it’s one of the most difficult times, when they’re making decisions about a loved one going into long-term care — even that’s gone up 93 percent.

Although those changes are not included in Bill 10, they are, in fact, part of the budget. They are part of Budget 2016, and I think it’s important to lay them out.

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For the public to listen to some of the sections of this bill, they might wonder where those other parts of the
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budget are, the other parts of the budget that have such a great impact on the struggles that they’re facing — have such a great impact and really show, as a budget does, the character of a government who puts families at the bottom of the list. It puts the top 2 percent of income earners at the top of the list, makes sure they get their break, but doesn’t take a look at the pressures that families are facing around those taxes — a complete disregard, from my perspective, for families.

What changes are in this bill? I’ll speak a little bit about those — as I said, remembering that we will do the specific questions when we get to further committee stage.

One of the changes that the minister raised is a new farmers food donation tax credit. It’s available to individuals and corporations that donate food to a registered charity. Now, I certainly would speak in support of farming and would certainly speak in support of farmers and of farmers donating extra produce or other things that are produced on their farm. I support the option for those in need, for the most vulnerable in our province, to be able to access local food. But I also have to say that it raises all kinds of questions, and we’ll get to some of these questions when we get to committee stage.

You know, if we take a look at whether this actually does support the most vulnerable in British Columbia…. Is providing a tax credit to farmers actually going to make sure that more food gets donated to the food banks? Are food banks really the government’s solution to how we address the issue of poverty and inequality in British Columbia? I think that’s a reasonable question.

It’s a reasonable question when you take a look at the inequality rates in British Columbia. We continue to have, and again this year…. I think we were No. 2 last year. This year we are, once again, the province that has the highest rate of child poverty in this country. I’ve heard debates from members on the other side about which statistic you use and what measurement you use. Well, by any measurement, British Columbia is way down the list when it comes to support for the most vulnerable, when it comes to support for people living in poverty.

We have a huge, high use of food banks. Over 50 percent of the people who utilize food banks are working, not people on income assistance. They are people who are working, who are trying to put together two and three jobs, who are working at minimum wage that doesn’t make their rent that they have to pay each month. They’re having to use food banks to be able to stretch that dollar.

I think there will certainly be questions from myself, questions from our spokesperson on agriculture as well, around what specific support this is going to provide to ensure that those resources actually get to the food banks and, as I said, whether food banks, in actuality, are this government’s solution to poverty and to inequality.

I would suggest that there are a number of actions that could begin to be done, including a poverty reduction strategy in British Columbia. The Premier talks often about being number one. Well, in fact, we are number one in this case. We’re the only province across this country that doesn’t have a poverty reduction strategy.

A poverty reduction strategy doesn’t mean you fix everything overnight. It doesn’t mean we’re going to make poverty disappear overnight. What it does mean…. I’ve certainly learned this in my time as an MLA and in other positions I’ve had in my career. If you don’t pay attention to it, if you’re not measuring it, if you’re not reporting out on it, it doesn’t get the same kind of focus and the same kind of resources and the same kind of support that it should.

That’s why I feel it’s so important to ensure that we have a poverty reduction strategy put into place. It would require a report to the Legislature each year. It would require independent reporting out. It would require that ministries work together to look at strategies. It would require a comprehensive plan to address poverty that would include not simply farmers and food banks but housing, income assistance rates, health care, child care — all of those issues that have an impact on poverty, in fact, could be addressed through a poverty reduction strategy.

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So as I said, while I’m certainly not opposed to a break that I hope will assist people who are the most vulnerable, that I hope will assist farmers, I will have some questions, as I know our spokesperson will, when we get to this section of the bill. Does it really address the support for farmers? I think that’s going to be a reasonable question to ask as well.

Deputy Speaker: The member for Burnaby–Deer Lake seeks leave to make an introduction.

Leave granted.

Introductions by Members

K. Corrigan: It gives me a great deal of pleasure to welcome into the chamber today my dear sister Dr. Jeanne Keegan-Henry, who has just retired from her long career as a doctor and is spending many happy hours not being a doctor. She’s in Victoria today, here with her husband, Rowan Keegan-Henry. I hope the House will make them very welcome.

Debate Continued

C. James: Welcome to the member’s sister and family.

As I was saying, I think it’s also important to take a look and see whether this also actually supports the farming community. Is this the kind of strategy that’s going to make a difference there?

One of the other pieces that the minister mentioned was the B.C. seniors home-renovation tax credit. That’s now been expanded to persons with disabilities, which is
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a good move, an important move. Certainly, support for seniors and support for those with disabilities to continue to remain at home, to be able to make the kinds of renovations that often will assist them in staying in their home longer, is a plus and is a help to deal with accessibility.

But again, just as with other initiatives, other small pieces that we’ve seen come forward from this government, I think there are many questions for seniors and for people with disabilities who would not even have the income to be able to take a look at doing renovations or who could only dream of owning a home to be able to get the tax credit for the renovations.

It’s a bit like we saw last year, in last year’s budget, where we saw the government come forward with a tax credit for teachers and for teaching assistants who carried out ten hours of extracurricular coaching. It sounds terrific. It sounds like a great tax credit. It sounds like support for people who put the extra hours in, who put the extra time in.

Then when you took a look at it, in fact that benefit worked out to a total of $25.30. Well, I can tell you that most of the coaches and most of the assistants that I know put in many, many, many more resources than that, simply of their own money, never mind looking at tax credits.

We’ve seen a pattern over the last while, certainly since this government was elected. We’ve seen a pattern where the government makes massive cuts, where they pull back on programs, pull back on supports, and then a little bit is given back. It’s almost as though the government expects people to be grateful for the little bit that comes back after all of the cuts and all the resources that have been taken away. You know, people who are vulnerable — seniors, people with disabilities — are struggling, and every little bit helps, but that’s not a plan of support. That’s not a plan to try and address the challenges that they’re facing.

I think, probably — I’m not sure how else to refer to it — the best of the worst example of all of these has been, in the 2016 budget, the bus pass issue. The government put out for people with disabilities that they would be receiving a $77-a-month increase. “Wasn’t that going to be wonderful? But by the way, that $45-a-year bus pass that you used to get that was subsidized? That’s not there anymore. You now can apply for a subsidized bus pass. It’s going to cost you $55 a month.” So people who actually expected that they were going to get those resources….

You know, I’ve heard members on the other side say that we’re simply politicizing this issue. Well, I’m sorry, but I have had people with disabilities, both on the weekend and in my office this week, in tears because they believed that those extra resources were going to come to them.

They know how difficult it is. They know that they are struggling. They saw the $77 and thought that finally they were going to get that kind of support and would be able to manage a little bit easier. It’s not going to solve all of their problems, but manage a little bit easier. They then find that the government gives with one hand and takes away with the other. “By the way, $55 of that now has to go to your bus pass. Oh yes, you used to have it for $45 a year, but now — sorry — it’s going to cost you $55 a month. It’s still subsidized,” the government says. Well, what a way to treat people.

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It’s an example of the kind of approach that we’ve seen with this government. It’s the kind of approach that people call mean-spirited. It shows that people are not a priority in this government’s budget and in the decisions that they make. I think, as I said, it’s the worst of the worst when it comes to people feeling cynical about governments and feeling cynical about politicians — no wonder, when these are the kinds of games that end up being played.

There were some tax credits — and I think that the minister mentioned a few of them — that we supported last year that are continuing on this year. One of them, of course, is the mining flow-through share tax credit and the mineral exploration tax credit. Those were credits, as I said, that we saw come in that have been expanded or extended over a couple of years and that we support for an industry that really is struggling right now and having difficulty in British Columbia. Commodity markets, obviously, have a huge impact on that.

I’m glad to see some attention being paid to some other industries — other than LNG — for a change. I’m glad to see those provisions come forward. Then there were a couple of, as the minister said, technical or clarification sections — one of those being the film production tax credits.

There is an interesting piece along with that, though. I know, again, that our spokesperson on the arts will speak a little bit more about this and will have some very specific questions when we get to committee stage. But the government also mentioned that they want to work with industry to examine those film tax credits. They said that they want to do a review as part of the clarification.

It says in the budget itself — just to quote it — “to develop solutions that can be implemented this year” to address the rising cost of film tax credits. I think that’s an interesting piece, and as the minister has said, the industry approached government. I believe he said that in his budget remarks. It’s a piece that we’ll want to ask some very specific questions on, because I think we know the tax credits have been supported, certainly were supported by previous governments as well as the current government.

We are very blessed in British Columbia to have an incredible industry here in our province with an incredibly well-trained, well-educated and strong workforce in that area. Although the dollar certainly helps and the tax credit helps, we also know that it’s the workers on the ground that also make a huge difference when it comes to attracting productions here, when it comes to bringing additional work here in British Columbia.
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Also, that the tax credit is linked to B.C. workers is another very important piece in all of this. As I said, we’ll ask some questions at committee stage. But I certainly hope that the minister, in those discussions around looking for solutions with the tax credits, will be focused on B.C. productions, B.C. workers and B.C. jobs as part of that. We’ll also be looking at the stability in the industry, because we have seen, in previous years, the whipsawing that has occurred with taxation when it comes to the film industry.

It’s a very mobile industry, and we’ve seen provinces play it off each other. We do have some stability, from what I’ve seen in the market right now across the country, and I think no one wants to open that up again to the whipsawing that we’ve seen previously. I hope that we’ll see some consistency there and some stability and not end up opening up that discussion again in any of the discussions that the minister is going to have.

We also see in this bill the B.C. training and education savings program changed, now available for an additional year for children who were born in 2006. We’ll have some specific questions around that again when we get to committee stage.

I think last year, when the government brought the program in, there was an expectation of about a 50 percent takeup of that program by the number of children who were going to take part, or families who were going to take part, in that program. So I think it’ll be interesting to see what the expectation is for the expansion of a program and what the enrolment numbers look like now that it’s been in place for a short period of time.

I think it’s also important to take a look at what the government may have considered as other alternatives, whether grant programs or the cost of tuition to support students now. There are many families who — while they wouldn’t be turning down $1,000 to help their child, 15, 16, 17 years from now, go into university or college or a training program — are struggling with those costs of tuition now, are struggling to be able to manage their child going to university or college now.

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This program does not help those individuals or those families who are paying all of those fees and services and continuing to pay the high cost of tuition and the struggles that that’s creating for families as well. I think that’ll be a piece that, as I said, we’ll be taking a look at.

Some administrative changes, as the minister has said, to the carbon tax and the fuel tax collection, and we’ll have some questions at committee stage.

An interesting change for ICBC. I’m certain that our spokesperson on ICBC will have some more detailed questions for the minister when we get into third reading, but it is interesting to take a look at the change of the fiscal year for ICBC and to ask some questions about why that fiscal year is changing from December 31 to March 31.

Again, not to be cynical, but there are those who feel that the fact that ICBC was never making its mark when it came to its annual report…. Does this make it a little bit easier for them to stall off on getting their annual report out? I think those will be important questions to be able to speak to.

That leaves just the last two sections of Bill 10 that I want to take a moment to talk about, and that’s the housing section and the prosperity fund. I know that our spokesperson on housing is going to have more to say on this section. We’ll ask some very specific questions as we go through committee to discuss it, but I feel that this section of the bill really is a missed opportunity.

It’s a missed opportunity for government to do a couple of things. First, to recognize and to acknowledge the affordability crisis in housing. I think the public…. It’s not simply the Lower Mainland, not simply Vancouver, as many ministers have stood up and said. Many members have stood up on the other side and said this is simply a Vancouver problem. It’s, in fact, a much larger problem than a Vancouver problem.

Housing is a crisis in many parts of British Columbia. I think the budget was an opportunity and this bill, Bill 10, was an opportunity for government to really show that they understood, that they recognized the real affordability crisis in housing.

Then the second piece that it was an opportunity for was to do something meaningful to address it. Again, I think that was a real missed opportunity. I didn’t see anything in this bill — and just to let the Speaker know that I’ll continue on as the designated speaker on this bill as well — on the opportunity to address something like shadow flipping, which has been raised in this House; the opportunity to close the loopholes on property transfer tax, to provide an opportunity for the government to do that; to address the bare trust issue.

Where was the commitment to address those kinds of things in Bill 10? Those are pieces that in fact aren’t in the bill. They aren’t there.

Where was a commitment to address or at least examine…? Even if the government didn’t say that they were going to take it on and implement it, where was the opportunity for the government to at least say in Bill 10 or in the budget that they were going to look at the proposal and examine the proposal from a group of professors at UBC on absentee owner tax? Again, it’s a very interesting proposal, a very different kind of approach to how you deal with the issue of vacancies, the issue of very expensive properties, the issue of the challenge in parts of our province.

I’m glad to see in Bill 10 that it mentions that the information now is going to be collected by the government, that they’re going to actually take a look at absenteeism, take a look at citizenship, etc., to at least get the information in there. I think that’s very important. I’m glad that government is doing that.
[ Page 10732 ]

I’m glad that the support is there for new homes up to $750,000, but I think that it leaves a lot to be desired. I think it leaves a lot out — and late to the game. This has been an issue that has been raised over and over and over again, and I think that we saw the government simply tinker around the edges on this issue when they brought forward the changes that we see in Bill 10.

The other interesting piece on housing that’s important to at least note here is a piece that often is talked about as part of addressing the issue of housing affordability and part of addressing the supply challenge. It’s the issue of renters. We see nothing in this budget that addresses the issues of renters. We see nothing in this budget that addresses the issue of renovictions, for example.

[1420]

We’ve gone through, in my own community, some real challenges with a new owner buying buildings up in my community and then starting to evict people and starting to let people know that their rent, when they come back, was going to be, in some cases, twice what it was when they were living there. No opportunity for them to be able to challenge their renovations to see whether they were in part. It created real fear for many seniors in my community who don’t have other opportunities.

The vacancy rate in Victoria is 0.06 percent. We have a very, very low vacancy rate. I hear the Housing Minister often say that rent supplements are the answer to everything. Well, rent supplements are one answer, if you’ve got vacancies. Rent supplements don’t help you if you don’t have any place to rent, if you can’t find a vacant apartment.

Again, over Christmas I had seniors in tears in my office, talking about waiting for that eviction notice, or the few who did get an eviction notice, the fear that created for them about where they were going to live — people who’d lived in their apartments 25 years and expected to live their life out in those apartments.

In the housing section of Bill 10, there wasn’t anything that I saw that provided support to tenants, that provided support to renters, that provided support to encourage rental housing being built.

That’s another area where, certainly, I’ve had discussions. I’m sure the members on the other side have had those discussions with the Real Estate Council about encouraging rental housing to be built and how government could provide support for that to, again, ease the vacancy rate, to deal with some of the supply issue and to have that continuum of housing that is so important. I think that, again, was another missing piece from Bill 10.

Then the last piece to speak on this bill in second reading debate, of course, is the prosperity fund. I just want to take a minute to reflect on a bit of history here. I think it’s important for all of us to remember that the Premier set LNG as her sole focus during the last election campaign. We saw — and people will remember this — right after the election the Premier send her letters of expectation to all the ministers, and included in those letters of expectation was their responsibility to support the LNG industry in this province.

Those letters went to everyone, including the Ministry of Children and Families, including the Minister of Health. You might wonder how much of their time and energy was spent supporting LNG instead of the areas in their ministry. But that actually was included in part of the letters of expectation.

The Premier talked about laser focus on LNG, that that was the particular area. I think at one point wealth was going to rain down on British Columbians from the LNG industry. We were going to be debt-free. We were going to see sales tax gone. We were going to see health care improved. We were going to see education improved.

Well, that certainly hasn’t happened. We were going to see plants up and running by 2015. That was also going to be part of the Premier’s plan. Again, that hasn’t happened. In fact, if you take a look at this budget, we see just the opposite when it comes to things like education, where we haven’t seen increases in budgets. In fact, we’ve seen challenges for classroom teachers, for class size. We’ve seen real difficulties for class composition, for an area where we should be investing, where we should be putting more resources.

The Premier, as part of her commitments, as part of her promises when it came to LNG, also promised a prosperity fund. That prosperity fund was supposed to take all of this wealth that was going to be raining down on us from LNG and put a portion of it into a prosperity fund and make sure that we had that money put aside.

In fact, during the discussion around the prosperity fund, we had discussions about if new industry came to British Columbia, if you saw resources flowing, that a prosperity fund and putting some money aside may make some sense. But that is not what we are seeing when it comes to this bill. That is not what we are seeing when it comes to the prosperity fund.

[1425]

In fact, what we are seeing is a fantasy fund, a fantasy fund for the Premier — I guess to save herself some embarrassment for having broken her promise to British Columbians, for having put all of her eggs in the one basket, for having spent all these years ignoring all of those industries that are so valuable to us in British Columbia….

Interjection.

C. James: “And then drop the basket,” the member says. I think that’s what we’re seeing here.

It really feels a bit like Alice in Wonderland some days. We’re seeing a fund put together from an industry that doesn’t exist, that hasn’t come to British Columbia, without any revenue. It really is extraordinary, hon. Speaker — $100 million in this bill. This enacts that in this bill, in
[ Page 10733 ]
this budget. So 100 million taxpayer dollars — not new LNG revenue, as we were promised — will be put into a fund where one of the criteria is: “Will be available for core government priorities in the future.”

Well, again, as I was saying earlier, I’m sure that it’s just a coincidence that the future happens to be next year, when there’s an election. I’m certain that’s just a coincidence. The fact that we see money being taken and put into a fund for an industry that doesn’t exist, simply to have the Premier be able to say the money is there…. Well, British Columbians will not buy that. British Columbians know the industry has not arrived. British Columbians know the challenges that are there.

I think that it’s also no coincidence that $100 million going into the prosperity fund is also just roughly the amount of money that the government is collecting from MSP increases this year — 4 percent, which works out to about $100 million. Again, I find it extraordinary that we’re talking about $100 million in a budget and a government making a choice to move it into a fantasy fund for an industry that hasn’t existed.

We asked a lot of questions about this over the last year. We asked questions of the minister, and we asked questions of the Premier around this fund — when the fund was going to come forward, when the criteria was going to be developed. I want to just read a quote from one of those discussions that we had with the minister.

We asked about the prosperity fund and when the prosperity fund was going to be put together. The minister said: “Before the government asks the House to consider legislation relating to a prosperity fund, we’ll be asking the House to consider legislation to ratify the first project development agreement.” In fact, the Finance Minister stated during that time period when LNG arrived in British Columbia, when you saw investments being made, that in fact you would see the prosperity fund start to be developed. We would presume, as the public would, that when that revenue started flowing, the prosperity fund would be opened and you would be able to put some of that revenue in there.

Well, we got news again today that another company has pulled out. Alta Gas has now pulled out — not simply postponed but in fact pulled out their project. So another one down.

Yet the government decides that of the few things they’re actually going to do in the budget, the Premier’s fantasy fund is one of those. We’re going to create this fund. We’re going to put it aside — $100 million? I think the public would be asking themselves, as we do: what prosperity? What prosperity, and for who?

It’s certainly not for the families that I talked about. Certainly not for those who are struggling, who are working hard and doing everything right.

We will have many more questions when we get to committee stage. I know others want an opportunity to be able to speak on this bill.

With that, I’ll wrap up, take my place and look forward to committee discussion.

D. Barnett: It is my pleasure and great honour to rise today on behalf of the people of the Cariboo-Chilcotin to comment on Bill 10, the Budget Measures Implementation Act.

First, I would like to thank my CAs for their hard work and continued support of our constituents: Bev Harris in 100 Mile House; Bonnie Gavin, who has moved on to Salmon Arm after almost seven years of hard work and dedication; and a big welcome to Jenny Huffman, who is now my assistant in Williams Lake. I also want to thank all the staff in our local government offices for the service they provide for our citizens. To the staff in this great institution: thank you. And to my past LAs and present LA, Carl Richmond.

[1430]

To my colleagues, some days in this institute are tough from time to time. We disagree, which is healthy, but at the end of the day, what we as a government have accomplished over the past years has built a better future for greater generations to come.

Balancing the needs of our province in good times is easy. Balancing the needs in times when our country and the global economy are in a state of uncertainty is not easy. But this government has done so for its fourth consecutive term. We as government, in this budget, have made tough decisions, taking our whole province into consideration.

The real estate market is a free enterprise system. It takes two parties to make a real estate transaction: a willing buyer and a willing seller — also, supply and demand. Governments need not interfere with this system. Foreign investment has helped build this country. It is very upsetting to hear the opposition not welcome the world to this province. Oh, they want some, but only those they choose. I believe in an open door to all the world as long as the laws of our land are adhered to.

What is upsetting to me is the opposition’s accusations that realtors may be dishonest. Many of my friends are realtors, and I was one myself. When I went home this past weekend and spoke with them, their industry feels they have been tainted by the opposition’s comments. I guess the opposition also say no to a real estate industry.

[R. Chouhan in the chair.]

My portfolio is rural development. Rural B.C. represents 70 percent or more of the geographical area of this province. Listening to the opposition day in and day out, this province consists of Vancouver and a few miles beyond — maybe as far as Langley. The exemption from real estate purchase sales tax, up to $750,000 for new homes, opens up an opportunity for a rural B.C. construction industry. This, I will remind the opposition, is jobs and opportunities for all.
[ Page 10734 ]

The Tourist Accommodation (Assessment Relief) Act, increasing the threshold from $150,000 to $500,000, up to $4 million from $2 million, gives our rural tourism operators a hand up, and I thank the minister for filling this important need.

I listen to the opposition on minimum wage. In my past life, my husband and I had small businesses. Did we hire at minimum wage? Maybe to start. But any business we had or I know of…. Businesses are free enterprise and pay good employees what they can afford and pay well to keep good employees.

The opposition talks about doom and gloom. I ask the opposition: what is your plan?

More exciting news for rural B.C. — the $75 million, three-year dividend program. In the very near future, we will announce the process for applications for the first $25 million for rural communities.

As Parliamentary Secretary for Rural Development and chair of the rural advisory council, this is an exciting time. Our Minister of Community, Sport and Cultural Development announced, along with the federal government and the UBCM, the gas tax revenue grants: $4 million to the Cariboo regional district and city of Williams Lake for their pool upgrades; nearly $6 million to the district of 100 Mile House for water upgrades — wells, water towers and opportunities for industrial, commercial and residential growth.

Many gaming grants continuously to the Cariboo-Chilcotin and the province of British Columbia. Transportation is spending millions of dollars in the Cariboo-Chilcotin on Highway 97, the Cariboo connector; on Highway 20; and more. Our health care, education and local programs are the best in the country.

Programs at TRU university in Williams Lake. We have a saw-filing course, the only one in North America.

We have an agriculture stability program, a brand-new program, the only one in B.C.

[1435]

I could go on for hours, probably for days, on what builds a province, what creates an economy and what this government has done for rural B.C. Four balanced budgets. We are proud. We are optimistic. This budget has something for all British Columbians.

B. Ralston: I rise to address Bill 10, Budget Measures Implementation Act. Of course, as the member for Victoria–Beacon Hill and, indeed, the Finance Minister have so carefully expressed, this is the suite of legislation that implements the budget that we’ve just debated and indeed voted upon this morning.

I voted against the budget. I did so for some of the reasons articulated in the past by Gordon Campbell, a beloved figure on the other side, except, perhaps, for a few. What he said when he was in opposition about why he was voting against the budget was that in the British parliamentary system, a vote against the budget is an expression of non-confidence in the government.

It’s not about individual line items in the budget, as much as those learned people in the 250-person crew in the public affairs department would like people to believe. It’s an expression about competing visions. A vote against the budget is a vote of non-confidence in the government. Certainly, I and those of us on this side do not have confidence in the government.

There are a number of measures in this. The member for Victoria–Beacon Hill has addressed almost all of them. I will be a little bit more selective in the items that I wish to comment upon in this speech.

One of the signature pieces, one of the hallmarks, of this budget is the creation of the so-called prosperity fund. It’s striking that this really reverses the tone and some of the comments the Finance Minister has made over several years now about the timing of the creation of a prosperity fund, because the prosperity fund was to gather the revenue — the anticipated revenue, which was promised in the last election — in a separate fund and use it for future purposes. Very much, I suppose, the model would be….

The most successful fund of that type is in Norway, where the fund is now at $800 million or $900 million, largely invested outside of Norway to avoid impact on the currency and overheating the Norwegian economy. It’s invested widely in real estate, in the stock markets, in a number of ventures globally, and continues to gather wealth from what is a non-renewable resource. Norway — in their case, it’s an oil industry. They a have a state oil company, Statoil. That’s the purpose of that fund.

Alberta had a pale imitation of that fund, which successive Conservative governments, notwithstanding the political nomenclature, couldn’t resist putting their sticky fingers on and pulling out. Despite the initial vision of Peter Lougheed, the original Conservative Premier who set it up, it has really not achieved the dimensions and the growth and the fiscal impact that the fund in Norway has. In Alberta, they call it a sovereign wealth fund.

That’s the model. There are sovereign wealth funds in many jurisdictions, typically ones where there is great resource wealth. The idea is not new. Generally, the practice is, I think without exception, that you have to have revenue to put in the fund before you create the fund. Nonetheless, in this budget, the government decided to create the fund.

In the budget note, the topic box, there’s an explanation. This is the government explaining the fund in its own budget documents. This is not something that I’m inventing or making up. This is what the government has used. This is the explanation the government gives.

[1440]

They put in $100 million from general revenue. As the member for Victoria–Beacon Hill points out, that’s approximately the increase in medical services premiums that the general public is going to pay this year. The way
[ Page 10735 ]
the fund works, the direction of the fund, I think it would be fair to say…. I think most people would agree that it was a shell game.

The explanation in the budget document says that you put $100 million in, and $50 million will go out right away to pay down debt, and another $25 million will be reserved for government purposes, special projects.

The Premier sometimes has special projects. I know she wanted to celebrate yoga on the Burrard Street Bridge. Maybe this is something that didn’t work out so well, because the public didn’t support it. It also happened to be National Aboriginal Day — a little bit of a miscalculation by the big brains in the Premier’s office. So that was set aside. There are those kinds of photo-op opportunities that the Premier wants to have.

In this fund, $50 million is going to go right out to pay down debt, and $25 million is going to be reserved for spending for special projects that the Premier has in mind. Only $25 million will actually stay in the fund. Even more than most initiatives by the government, the reality is very, very tawdry indeed. It’s very, very tawdry.

The irony of this debate on this day is that it comes on a day when LNG…. It’s subject to market prices. It’s remarkable to me that a government that claims that they’re a free enterprise…. Sometimes they call themselves private enterprise. Resource prices, historically and around the world, are driven by markets.

They claim to understand markets, yet they based most of their electoral calculations and a lot of their political calculations in the last couple of years on a resource price that’s determined in a world market, and it’s gone down.

Now, that’s difficult to predict. Certainly, not many people predicted the dramatic decline in the price of oil and the related price of natural gas and, therefore, LNG. But it is well known. It’s notorious that resource prices are cyclical.

Commentators now, with the wisdom of hindsight, say that a resource supercycle — which was roaring for a number of years there, driving up prices of every commodity, particularly driven by industrial demand in the People’s Republic of China — has now gone the other way, headed exactly in the reverse direction.

In fact, today one of the projects, the number or so that the Minister of Natural Gas repeatedly refers to, is Douglas Channel — LNG. It’s a project in which AltaGas is a major partner. Douglas Channel is the inlet that runs from the coast into Kitimat.

They had a proposal, this company. It was a small one, relative to the scale of many of the others. Nonetheless, it was advanced in the sense that it had community support, First Nations support and some financing, apparently. But the announcement was today, and I’m going to read it. They announced today its decision “to halt development of the DC LNG project due to adverse economic conditions and worsening global energy price levels.”

Now, that’s regrettable. It was a good project. It was going to take place on a smaller scale, and as some of these smaller LNG projects do, it was going to be on a barge in Douglas Channel. So the environmental impact is somewhat different and limited in some ways. They had access to a pipeline through their connection with AltaGas. It was something that looked like it might well go. But they are driven by world prices and have made an assessment, and they’re ending it.

[1445]

As much as one can wish…. I know the Minister of Natural Gas always talks about a positive attitude. Well, positive attitude doesn’t, on its own, influence world markets, and that’s the sometimes cold and brutal reality of how the market works.

Again, I always find it a little bit surprising that the government that claims it understands markets and is based on that kind of private enterprise view of the world is somehow startled or taken by surprise by shifts in world markets — above all, in commodity prices, which are notoriously cyclical.

In addition to that announcement today — regrettable in the sense that that was a project that might very well have gone and generated some revenue for the prosperity fund — the competitors in Louisiana, in the United States, announced yesterday, at 7:39 p.m., Wednesday night, that the first tanker with LNG left the Sabine Pass LNG plant in Louisiana, bound for global markets.

Those of you who debated — it would probably be a bit of a specialist taste — the LNG bill will recall that in the project agreement with proponents, the date on which the first shipment took place was a significant milestone. It was a milestone that triggered a number of other calculations in terms of tax and revenue. That’s a very significant date, the date on which the first shipment set sail. That was recognized in the legislation.

The Sabine Pass plant is owned by Cheniere Energy. Cheniere Energy developed the site, starting about the same time as the Premier embarked upon this political venture, back in 2011 or 2012. It was a brownfield industrial site. It was the site of an old, what they called at that time, regasification plant.

The market was so completely turned around at what was happening there that they were importing LNG from other places, regasifying it — that is, taking it from its liquid state back to its gaseous state — and putting it into a pipeline and shipping it out in the United States. The market has changed so dramatically with the shale gas revolution in the United States that now the gas is flowing the other way.

This event took place just last night. So on one hand, a competitor is successful. They have now a fleet of, I think, six LNG tankers that are going to be regularly calling at Sabine Pass and shipping out LNG to global markets. They are operating, largely, more on a spot market basis. They don’t have long-term contracts because they’re buy-
[ Page 10736 ]
ing their gas off the grid in the United States. That will add further supply to perhaps, arguably, an overly supplied market in global LNG.

Add to that, very, very shortly in Australia, the Gorgon project — probably aptly named in the sense that it’s a monster project. It’s a $54 billion venture led by the major global player Chevron. They’re coming into production in a couple of weeks. Now, some of the offtake will be allocated to long-term contracts, but it’s, again, a measure that the global market in LNG at the present price is well supplied, if not oversupplied, and for new entrants, it will be a very tough decision to enter.

They may target supply opportunities, because their horizon is very long term. They may look to 2025, as, arguably, some analysts say there’s a window between 2025 and 2030. So they may want to get started at some point.

Nonetheless, this is a day when the prosperity fund looks even more shrivelled and desiccated and unlikely to draw any real revenue, unfortunately, given the reality of global markets, which I know the members opposite, given their penchant for private enterprise, really understand very well.

[1450]

It’s a staggering lapse or deliberate failure to understand the risk in global markets — that prices go up and prices go down. It’s not unheard of. Certainly, anyone who has a mutual fund can tell you that.

So that’s the signature piece. That’s what this budget implementation bill is really all about. Now, there’s some other stuff that I want to talk about, but that’s one of the choices that was made. Notwithstanding what the Finance Minister said, that’s one of the choices the Premier made. “This is what we’re going to do. We’re going to set up this fund, and I’m going to go around and talk about it, even though, even on the rules that I’ve set up for myself, there’s no real revenue in it, and there’s only going to be $25 million in the fund when we start.”

I don’t want to make light of $25 million, but on the other hand, it is a budget of close to $46 billion or $47 billion. So in the scale of things, relative to the rest of the budget, it’s a very, very small number.

That’s the choice that was made, and this is similar to other choices that the government has made in this budget. The member for Victoria–Beacon Hill, the Finance critic, has talked about the decision that was made — after 2015, after last year — to take out what was, effectively, a surcharge on income tax of those tax filers earning more than $150,000 net income. That’s taxable income.

Anyone who files their taxes — most people do, I hope — knows that for most people, the net taxable is generally lower than your gross income, because you get a few deductions. So generally, someone who is filing an income above $150,000 net taxable is earning, certainly, more than that and, in some cases, significantly more than that, given the range of deductions. The more income you have, generally, the more opportunity there is to take certain tax-planning measures and more exotic kinds of deductions.

There was a surtax placed on that group, which earned approximately $230 million a year. It was for two years. The government chose to let it expire. That’s how they express it. But it is as though they were powerless or incapacitated in some way, that they were standing by — something like watching a traffic accident happen. There was nothing that they could do to change this. But that’s just simply absurd.

If you look at the other measures in this act, they are extending the B.C. mining flow-through share tax credit. That’s something that we support on this side, by the way, just for the Minister of Mines and for the 250 people that are watching this debate. Maybe they could get it right for once on that.

They’ve decided to extend that credit. That’s something that the government can do. That’s something that the Minister of Finance can do. That’s something that the Premier can do.

So the choice to let that revenue go, to not continue the surtax above $150,000 net taxable, is a deliberate policy choice by the government. That’s a choice that they make. Like the prosperity fund, it illustrates their values.

It benefits those at the top end of the income scale, while the rest of the population takes a hit on MSP premiums and pays more. The middle class, squeezed as they are, pays more, and those at the top get an income tax break. Those are the values of the government. Those are the choices they make. That’s why we don’t have confidence in the government. That’s why we voted against the budget, because that’s not the approach that we take.

We take the approach that the middle class — the bulk of the population, those earning the vast majority of the personal income in the province — deserve a break every bit as much as, if not more than, those at the top end of the scale, because those at the top end of the scale have resources, too, that they can use to cushion the blow of a slightly increased tax.

[1455]

That decision is not included in the Budget Measures Implementation Act, but it could be. It could be. It’s a deliberate choice not to put it in — a deliberate choice. Those are their values. That’s who they think they represent, and that’s why we oppose it.

There are really many other measures which, as the process unfolds, the very capable critics, my colleagues, will analyze in some detail, and there will be a detailed debate at the next stage of the legislation.

I do want to make a little bit of comment about the film tax credit. Certainly, the Minister of Finance today was expressing his consternation with the tax and talking about changing it.

What our critic, the member for Vancouver–West End, has said is: “Just wait a minute. Just be careful. Be very
[ Page 10737 ]
careful.” This is an industry that’s survived, is thriving right now. Certainly, the exchange rate has contributed to that. The exchange rate with the American dollar is very favourable. But to begin tinkering and manipulating that credit could have some profound implications for an industry that’s doing very well. That’s certainly something that we on this side of the House advocated for before the last election.

I remember the Minister of Finance standing up and attacking a credit for Hollywood producers. He was — I don’t know — playing some kind of a parochial or nativistic or…. I’m not sure what he was doing. He had some reason, clearly. Or maybe he didn’t. But he was attacking Hollywood producers and making fun of Los Angeles.

These are the people that fly up here, two hours away, come here and invest money, use the very skilled crews and the post-production facilities here and make hit movies that are distributed around the world. Many, many people in British Columbia benefit from that, and government revenue benefits from that.

Maybe there’s a little residual taste of that point of view on the film industry. I’m not sure. I’m sure that…. Of course, the minister has access to the House, in his rebuttal. I’m hoping he’ll come here and explain what he meant and whether he has that kind of anxiety or distaste for American film companies.

We’ve just heard the member for Cariboo-Chilcotin talk in very pointed terms about alleging hostility to foreign investment by those of us on this side of the House, yet I recall very clearly that it was the Minister of Finance who was attacking Hollywood producers in Los Angeles, the Los Angeles–based film industry. You can’t have it both ways, although that’s kind of the way the government likes to have it on issues like this.

Because these measures implement the budget that I don’t support, I want to make it very clear, if I haven’t already, that I’m going to be opposing this bill, and I look forward to the committee stage, where we’ll dive into some of these issues in more detail.

G. Kyllo: I’m proud to stand today, on behalf of my constituents of Shuswap, and speak in support of Bill 10, the budget implementation act.

British Columbia didn’t become the shining national example for good economic stewardship by chance. It’s a result of the government having a steady, disciplined eye on our dollars and cents. It’s a result of cultivating and promoting a highly diversified provincial economy, an economy that is able to withstand the many global market forces that are beyond our control. With a diverse economy and diverse export markets, B.C. is protected from downturns in any single sector.

This is our fourth consecutive balanced budget, and I feel great about that, as do many British Columbians. We truly have reason to be proud. It’s what can happen when a government sticks to a plan, combined with the hard work of British Columbians. Investments in areas such as health, education, social assistance and services would not be possible without the healthy and diverse, stable economy that B.C. enjoys today.

I represent what would be defined as a rural riding. My riding is Shuswap — largely tourism-based with a fairly heavy forestry- and manufacturing-based economy.

[1500]

Shuswap has no cities with a population over 25,000, which means that every community in my riding can now benefit from the rural dividend program, which will pour up to $75 million over the next three years into rural communities to help reinvigorate and diversify their economies.

This budget is supporting rural B.C. in several other ways as well. We are protecting communities and citizens by setting aside $85 million to establish a new organization, the Forest Enhancement Society of B.C., that will work toward wildfire prevention and mitigation through forest fuel management, reforestation and habitat restoration. There is $10 million for the strategic wildfire prevention initiative for community wildfire protection plans, FireSmart planning activities and fuel management projects.

Tourism is a major industry in the Shuswap, and for those who provide tourist accommodation in the Shuswap and across B.C., there will be an enhanced property tax relief program.

Agriculture also is an extremely important part of the economy in the Shuswap. There is a new farmers food donation tax credit that is worth 25 percent of qualifying agricultural products that are donated to a registered society or charity providing food to those in need or help with a school meal plan. Additionally, the farmers food donation tax credit is worth 25 percent of the fair market value of qualifying agricultural products.

I spoke earlier about our diverse economy. We also have tremendous diversity in international trade. Our attractive fiscal climate, business incentives and diversified economy offer significant opportunities for growth and investment in our trade relationships that have had a great impact on the growth of family-supporting jobs across B.C.

That is why we are committed to expanding and diversifying our markets through overseas trade missions, growing our trade and investment network, and working on new partnerships and MOUs.

Diversification of markets is a priority for our government. For example, in 2001, a little over 70 percent of B.C. exports went to the United States. In 2014, exports to the United States made up just 50.6 percent of total exports, with 39½ percent of exports going to markets in the Pacific Rim.

If I can draw the comparison to our neighbouring province of Alberta and, a little bit farther east, Ontario, about 90 percent of Alberta’s trade is with the United
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States, and in Ontario, about 80 percent. It’s certainly important to recognize the fact that the U.S. is still our single-largest trading partner. It still has a very significant impact to growing the economy of this province. But we are not as reliant on the economy of the United States as other provinces — like Alberta and Ontario, for example.

Now, while we continue to diversify B.C.’s markets and export to the U.S., we are still growing. Wood exports, for example, were up 62.8 percent last year alone. Since 2011, B.C.’s exports have increased by 9½ percent. Since 2009, B.C.’s exports have increased by over 42 percent. Right now one in five jobs and 20 percent of our annual economic benefits are generated through exports.

In 2014 alone, exports accounted for $35.8 billion, a record level of exports, which was an increase of 6.3 percent over 2013. Manufactured goods accounted for just over 64 percent, or $22.8 billion, of the total value of exports.

As of May 2015, the exports of British Columbia’s goods totalled $8.77 billion, which is a 4.1 percent increase over the same period in 2014. All these numbers are upward trends and definitely signify the fact that B.C.’s economy is continuing to grow.

Our government is focused on building strong relationships with Asia. We’re using the B.C. Business Network and our expanded international trade and investment network to connect export-ready B.C. businesses with opportunities to find new markets for their products. So 43 percent of all trade flows to Asia, which has grown at a rate of 19 percent over the last ten years.

In March 2013, we hosted the B.C.-India Global Business Forum, as part of our long-term economic and outreach strategy with India, to discuss investment opportunities, profiling key sectors of mutual priority.

Over the course of ten years, British Columbia’s exports with China have increased by 375 percent. Last year China ranked second, behind the United States, for B.C. exports, with almost 17.7 percent of B.C.’s commodity exports being shipped there.

Overall, goods exports to mainland China were up 1.3 percent in 2015 compared to the same period in 2014, with $1.5 billion in exports. Indeed, we’ve developed new markets for our goods, and we’ve also bolstered our presence in existing ones. Diversification and fiscal responsibility have been the keys to British Columbia’s economic success story.

[1505]

We believe balancing the budget is a matter of fundamental respect for the taxpayer. We’re not to spend more in any one year than we take in. We believe in extending the necessary supports to British Columbians who are in need of them most, whether they’re the young, the elderly or those in between.

Fiscal responsibility allows us to spend on the social programs British Columbians expect and deserve. Our direction is clear: by sticking to our plan, we are building a stronger British Columbia for today and for years to come. This is why I’m extremely proud to support Bill 10, the Budget Measures Implementation Act.

A. Dix: It’s always good to get up in this House and speak to government initiatives such as this. As my colleague from Surrey-Whalley so thoughtfully…. I think he’s wrong. I want to say to him, because he’s here sitting beside me in the House, that he’s wrong. My understanding is that every time he gets up to speak, the ratings go up. That’s my understanding.

One of the reasons for that is people — from around the buildings here, especially — turn up the volume, turn off the mute button and listen carefully to what he has to say. What he had to say was thoughtful and, I think, cut through, in rapier-like fashion, the fallacy of, for example, what the Minister of Transportation said in question period. That is, quoting skillfully…. It’s someone that the Minister of Transportation will be familiar with, because of course, he was one of those people in the buildings. I know that whenever Gordon Campbell spoke, it was mandatory to have the volume on loud in the Liberal research office in the 1990s.

My colleague from Surrey-Whalley amiably pointed out what is obvious, which is that we oppose the budget not because we oppose every line item in the budget. That would be ridiculous, and yet it’s regularly asserted on a daily basis by the Liberal cabinet, which should know better. But the vote on the budget is a general vote of confidence in the government and on the government’s economic and social direction. We, of course, voted against that. I have to say that in ten years in the Legislature, this was one of the most out-of-touch, empty and self-absorbed budgets a government has ever produced. So naturally, we voted against it.

Now, Bill 10, the Budget Measures Implementation Act, puts into legislative form some of the initiatives in the budget. The government didn’t need — and I think people out there will be interested in that — the Budget Measures Implementation Act to continue to make the tax system more regressive by jacking up medical services premiums. They didn’t need to use this mechanism built in the Budget Measures Implementation Act to do that.

They were able to do that and to contradict what the Premier had said, even in the weeks leading up to the budget, all on their very own, without legislation. They didn’t need the Budget Measures Implementation Act, for example, to claw back bus passes from people with disabilities. They didn’t need this mechanism. Only the mechanisms that require legislative change are included here in the Budget Measures Implementation Act, which we’re talking about.

The signature event in the budget, the signature moment for the government…. I know this because, unlike some members of the Legislature, I read the throne speeches. I keep them in a place, because I know that
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somebody at GCPE worked hard. Their budget has gone up quite significantly, so we want to see if we get value for money from that. That’s the government communications branch.

If you’ve been reading the throne speeches and the political pronouncements on which every Liberal member of the Legislature ran in the last election…. What we’re talking about here — the creation of an LNG fund — is the signature measure, the signature priority, of the Liberal government. That’s what they said.

They said things like “$100 billion.” They said things like “get rid of the provincial sales tax.” They said things like “retire the provincial debt” — as a result of the LNG policies of the government. That’s what they said. That’s what they promised. That’s what they committed to.

[1510]

This fund was going to be the signature piece, the mechanism by which this happened. It was the fund that…. It’s contained here in Bill 10.

I want to say this in a way that I think people can understand. What they were like, is like a concert promoter who tried to sell 100,000 tickets to U2. Then on the day of the concert everyone goes to the concert, and they’re very excited, and K2 shows up — a well-known U2 tribute band. That is what we have here.

Alternatively, if you’re a fan…. I know that the member for Kamloops–South Thompson is a fan of the WWE…. It’s like getting a ticket, being sold a ticket by Vince McMahon and showing up and expecting to see the Undertaker, and the Underfaker comes through the curtain. This is precisely what it is. Or buying a book on cooking — which I’d be interested in — and expecting and thinking that you bought a book by Julia Child, and it turns out to be a book by Fred Child.

It’s a little like…. We’re talking about the Liberal government, so I think I was giving them too much credit with the U2 thing. It’s like showing up for an Air Supply concert and getting, instead of that, Air Deny. An Air Supply tribute band — I am sure one exists. And if it does exist, I am sure the Minister of Transportation has seen it. Oh, I could reflect on Jerry Grisham and the famous mystery writer Annette Christie — any other things that you can think of.

What they promised…. And this was their signature promise. It was in every leaflet, it was on their TV ads, and it was on the side of the bus. They promised a fund from LNG revenue that was going to do all of these things. And today, as the signature piece in the Budget Measures Implementation Act — the signature piece — we get this. No revenues from LNG — none. They’ve created a phony, fantasy, photo-op fund. That is what they’ve done.

They have so little respect for the voters who listened to them in the last election — and not everyone did listen; half the people did, but lots of people didn’t — and so little desire to be straightforward that they created the fund anyway.

This is the day, the day we’re debating this, when AltaGas said they weren’t going to proceed with LNG in British Columbia. You would think that that action would have some effect on the LNG fund, the Premier’s fund — her signature achievement. But ironically, it has no effect. That not going ahead has any effect…. This fund has nothing to do with LNG revenues. It comes about, it’s delivered, as a creation, a figment, a tribute band to a real fund by the Minister of Finance — the Colonel Pepper of the government, perhaps. He, I must say…. You know, they almost get it right. We were looking for Sergeant Pepper; we got Colonel Pepper.

He has created a fund that doesn’t exist. They put $100 million in the fund, and where’d they get the money? Well, they got it by overcharging hydro customers with a phony tax increase. They did it by overcharging ICBC customers, and we’ll be getting to that in a sec. They did it by increases in MSP premiums.

So this is a regressive tax fund that they’ve created — a regressive tax fund that’s created solely for public relations reasons. There is no purpose to its existence. There is nothing the government can do tomorrow that it couldn’t do today because of the existence of the fund. The sole reason is that the Premier and the Minister of Finance are embarrassed that what they said — not 100 years ago, not when the Premier was Deputy Premier in 2002, but a couple of years ago — has proved to be absolutely wrong because, as you know, international markets affect these things.

The suggestion — and it doesn’t matter how relentlessly you use government ads and partisan ads to advertise it — that there is a real impact by international markets….

[1515]

My colleague from Surrey-Whalley ably, even brilliantly, laid out, I think, the circumstances, the realities of the LNG market internationally. And rather than…. This fantasy fund exists in this piece of legislation today from the government for the sole purpose of allowing them to claim there is a fund, to claim income when none exists already.

They maybe got the idea from their B.C. Hydro policy over the last number of years, where they have used, systematically, deferral accounts to create the illusion of profit where none existed so that money could be transferred in the government’s balance sheet to look artificially good — that they could use such measures to increase and to jam ICBC and B.C. Hydro customers to subsidize the government’s actions.

This is the principal measure in this Bill 10. This is the signature moment in the budget. Rather than being straightforward, they were not straightforward. This is the result of that. They would rather not admit that what they said two years ago has turned out to be completely wrong and misleading. It would raise, I think, the suggestion as to whether they knew at the time that it was completely wrong and misleading. That’s the issue that’s being raised.
[ Page 10740 ]

Here we have this contrivance, this $100 million contrivance, that is the government’s priority at a time when it’s clawing back bus passes for people on disability and not taking action to support, in any substantial way, rural communities. You know what they have for rural communities? They have a fund for $75 million over three years. It’s $25 million in the next three years, smaller than the Premier’s fantasy fund. That’s all they have at a time when rural B.C. is struggling with those very same losses on the commodity side. The only thing they care about is the effect of commodity prices on the Premier’s reputation and not in rural B.C. That is what has occurred here. That is what we are debating, and that is what we are voting on in this House.

It shows a disconnect between the reality of British Columbians, including the thousands of jobs lost in forestry and the thousands of jobs lost in mining, and the government and its concerns. Commodity prices have also hurt those people who’ve lost their jobs. They’ve hurt those people, and they get nothing from the government, while the Premier digs out $100 million for this charade. It’s an embarrassment to British Columbia, and it should be an embarrassment to the government.

There are other, of course, measures in this. I’ve been asked by my colleague who is leading the discussion on this bill, my colleague from Victoria–Beacon Hill, the Finance critic for the NDP, to speak a little bit about the issue related to ICBC. I know that the minister is here in the House. I am looking forward, I must say, to discussing these issues at great length with him, both in the several days of committee debate that I would expect to have with him on this question and then, of course, in the estimates debate following.

That is, of course, that the government is proposing to change ICBC’s fiscal year, which will now end on March 31 instead of December 31, and making changes to when it produces its annual report. This is an interesting question, this question of ICBC. I’ll get to the specifics of why it’s significant that the government is choosing to change the date of the fiscal year and the timing of the fiscal year. Strangely enough, people may not realize this. I’m, of course, here to learn all the time.

ICBC, in fact, operates on several different years, depending on how you look at their books and how you look at the way they function. There are really three types of years. They have kind of a policy year, an accident and sort of statistical year, and they have a fiscal year. This one changes the latter.

The interesting thing, I suppose, about ICBC, and the extraordinary thing — people will know this; I know, hon. Speaker, that you’re well aware of this, as an experienced member of the Legislature — is that ICBC was the creation of the NDP government of the 1970s — the Barrett government. Its creation led to occasional demonstrations against the government.

[1520]

I recall it well, actually, because my dad — and some people will know this — was an insurance agent. He ran his own business. He was, I think, in that case, one of the 1 percent — the 1 percent of insurance agents who supported ICBC at the time. There was a very intense debate and, I recall, a very intense time when he spoke out about that at a public meeting.

It was very interesting what happened, of course. In spite of all the criticism of Mr. Barrett, who was the Premier, and of Mr. Strachan, who interestingly was a former leader of the NDP who became a cabinet minister in the Barrett government and who was the minister responsible for ICBC…. Of course, the Social Credit Party and the Liberal Party and the Conservative Party of the day viciously attacked the government around the question. It is a fact that since 1975, when the NDP government left office…. For a majority of those years, alas, there have been right-wing governments in B.C., and none of them have chosen to get rid of ICBC. I think it shows how farsighted the initiative by the Barrett government was.

I’m reminded of one of the most enjoyable speeches, of the many enjoyable speeches, by Dave Barrett in the Legislature. He talked about this. He talked about the Social Credit government’s decision, ultimately, to proceed with ICBC — and basically in the form, at that time, that the NDP had left it.

Barrett said as follows:

“I don’t have too much to say on ICBC, other than to say that those raving socialists over there have gone too far. They have expanded the program to a degree that is shocking even in the Soviet Union. They have embraced government-owned car insurance as if it was their own child, and as foster parents, they have denied all maternal and paternal responsibility. As one who has suffered from vindictive slings and arrows of mad opposition who scream doom and gloom about the government insurance business, let me say with some humility: welcome to the socialist club.”

Of course, through those times, ICBC has been critical in British Columbia, both for providing access to auto insurance, pursuing a public initiative of road safety and — especially in recent years, where the government used it as a cash cow — a significant source of positive revenue and capital for the government.

These were important things that occurred. Really, ICBC, until 2010, functioned in that way. There’s a very thoughtful thinker on these questions. Richard McCandless is a former public servant who writes in B.C. Studies and other things about public policy issues. He talked about what happened.

In 2010, of course — and this directly relates to what we’re doing today — the Liberal government, under then Finance Minister Colin Hansen, who we occasionally hear on the CBC these days, speaking for the government…. I’m quoting Mr. McCandless’s piece, a very thoughtful piece about the history of ICBC. He confirmed that the government, over three years, in 2010 “would take $778 million of ICBC’s ‘excess’ capital from
[ Page 10741 ]
the optional capital reserve as a dividend in order to reduce provincial borrowing costs. During the 36 years of its operation, most citizens had regarded the corporation as a not-for-profit supplier of low-cost insurance similar to its predecessors in Saskatchewan and Manitoba. In fact, the legislation did not permit a transfer of its funds to the government. Henceforth, any reserve capital greater than the optional MCT target would be considered as a dividend for the benefit of the taxpayer rather than a way of reducing premiums.”

We’ve heard this a little bit in the House in the last week from the minister responsible for B.C. Hydro. I’m sure we’ll hear it when I discuss it with the minister responsible for ICBC. They criticize past governments for keeping rates low — in other words, for returning B.C. Hydro’s profits to citizens, returning ICBC’s profits to citizens — whereas their approach has been to bring them in so that they can finance tax cuts for the rich. They’ve compared those approaches.

I like that comparison. I look forward to those debates. It seems to me that what’s happened is we’ve transitioned ICBC into playing its role as a Crown corporation, in all of the ways it’s going to do, to a role of simply saving the Liberal government at election time.

You will recall — and I mentioned this, for example — that the policy year of ICBC, which is an important question, was changed in 2013. Now get this. If you remember, 2013 was an election year, as 2017 will be. They changed the policy year from April to November. Why would they have done that?

[1525]

The member for Vancouver–Point Grey, very thoughtful on these questions, can reflect on the year and when elections are held. There are actually fixed election dates in B.C. He can probably advise me as to when elections are held and why they might have moved the policy date, the policy year, from April to November at that time. They did it, of course, for only one reason: to cover up and to hide the truth from the voters of British Columbia. That’s why they did it.

Now we have a policy year, November, and now they’re moving the fiscal year to cover the fiscal year of the government. This has some challenges, right? As you know, the policy year used to be a couple of months ahead of the fiscal year and ten months after the close of the last year. This is when we were setting rates. It’s now five months ahead of the fiscal year and seven months after the close of the prior year.

This means that the estimations that the government makes will be less precise. It has an advantage, of course, and these are issues we’ll be discussing in the two or three days of debate I’ll be having with the minister at committee stage. It has some advantages in terms of moving the fiscal year in line with the government’s fiscal year. But it does have some disadvantages for ICBC, which I think will be considered. One of the most important disadvantages is that over time, over its decades of operation since the early 1970s, they’ve operated on one round of fiscal years.

Now, magically, going into an election year, we’ll have the opportunity to do it over 15 months and make comparisons much, much more difficult, which, when you have a terrible record, is a good thing, I suppose. That’s why the Liberal government may be so encouraged to go forward at this time. When you have a good record, that would be a bad thing. We’ll guess whether the record is good or terrible by the action that the government is taking.

What’s happened at ICBC, and what happened this past year, is surely a profound lack of accountability. What we saw this past year is the minister…. We had what we call sort of a political operetta starring the minister. Maybe more like — I don’t know — Joe Verdi instead of Giuseppe Verdi.

In any event, to continue our theme, where the minister pretended in August that ICBC was proposing outrageous rate increases beyond this and he was going to wrestle it to the ground…. They’ve tended to wrestle it to the ceiling. He was going to wrestle it to the ground. He was going to get his pencil out and his abacus out. They got rid of all the computers in his office. He was going to wrestle those rates to the ground. You know what he did? He didn’t do anything of the sort. In fact, their management of ICBC has seen costs go up dramatically overall, and they are doing a whole other song and dance to justify that.

What he did was take from the optional side of ICBC, not reviewed by the BCUC, of course. He took $450 million and gave it to the basic side. That was his reform. That was his pencil work. He was able to say: “You do this. Take it over here. Then I will have brought the rate increase down.” That is the reform that was brought in by the government, five years after the previous reform, which changed the whole basis and mandate for ICBC, and three years after the other reform around fiscal years that allowed them to hide the situation through the 2013 election.

Now we have a new process, a 15-month fiscal year, to make it more difficult to hold them accountable. I think we’re still going to try, I say to the member for Surrey-Whalley. I think we’re still going to try. The upcoming days of debate on this bill will give us our first opportunity to consider doing just that.

In conclusion, what do we have to say about this piece of legislation and this government’s budget? That it’s out of touch with the people of B.C. could not be clearer. The small actions with respect to the housing market ignore the significance and challenge of housing facing every group of people in Metro Vancouver and in other parts of the province as well. It’s a budget which fails to recognize what’s going on in rural B.C., the income challenges people face in rural B.C.
[ Page 10742 ]

We hear the government bragging about long lineups of people, lining up for work. That tells you something. The government’s own budget numbers dramatically reflect the decline, in relative terms, of the resource industry as a source of revenue to the government — a dramatic decline. Virtually, as a share of the provincial budget, a quarter of what it was before, a dramatic decline in those industries.

[1530]

You cannot hide that. You cannot say, “We are the resource industry government,” and then see that kind of decline, which reflects a double whammy for rural and resource communities that have lost services as a result of that decline and have also lost jobs as a result of that decline. You respond with a three-year slush fund around an election that is $25 million smaller than the slush fund they created for the Premier personally. Out of touch with what’s going on.

Out of touch on the issue of MSP which, though it is not in this piece of legislation, hovers over this piece of legislation because it finances the key item, the Premier’s fantasy fund, in the legislation.

All of these things show why members on the opposition side voted so clearly against a budget from a government that’s out of touch, that is more used to dealing with deputy ministers and receptions and satisfying elite concerns than dealing with the concerns of real people.

You see that reflected in this piece of legislation. You see it reflected in the direct actions the government is taking and not taking. And you see it, I think, in the arrogance and contempt that the government expresses to those who simply disagree with it.

We will look forward to continuing this debate extensively at committee stage. But in closing, I want to say this — that this is not the way you do things. You, I think — we, as legislators — have an obligation to treat the public with respect. When there is not LNG revenue available, you don’t create a fund and pretend that there is.

There was a fund created at the end of the 1980s, in the declining days of another government. It was called the budget stabilization fund. Its acronym was the BS fund. That fund was an example of a government, a right-wing government, that had run out of ideas and had lost touch with the people of B.C. — an example of what not to do. And it was rejected by people.

Thankfully, the government that came in after it got rid of the BS fund. This fantasy fund has no more real money in it than that BS fund. It has other commonalities with the BS fund, but the commonality is not money in the fund.

This reflects the same thing: a government that is playing fiscal games rather than being clear and straightforward with the people of B.C.

Hon. S. Thomson: I’m pleased to stand and provide comments on the Budget Measures Implementation Act and support for that act, which implements the fourth balanced budget in a row that our government has tabled, building on the strong fiscal environment, continuing to maintain the triple-A credit rating and a fiscal framework that has created over 50,000 jobs in the last year.

I was listening to the member opposite and listening to his analogies and things, and I was just waiting for him to acknowledge the significant growth in sour cherry exports in British Columbia, from $2.7 million to $11.2 million. I thought he might get to: “Can she bake a cherry pie, charming Billy, charming Billy.” I just thought we were going through all those….

Interjection.

Hon. S. Thomson: Yeah. When we think about those cherries of our youth and all the sour cherries and the significant growth we’ve had in the Okanagan in that…. That’s just a bit of a digression.

I wanted to talk about a couple parts of the Budget Measures Implementation Act that are contained in these sections, and particularly in relation to significant measures that have been taken in the area of community safety and investments in rural economies and rural British Columbia.

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Within the Budget Measures Implementation Act and with amendments that have been made to the Wildfire Act, which is contained in this section within the legislation, we now have the opportunity and the ability to make significant investment in community safety and communities.

When you take this investment of the $85 million that has been provided to the forest enhancement program, the FEP, and to the Forest Enhancement Society, this is going to provide community safety, additional jobs in communities, reducing risk around the province and providing additional fibre opportunities in those communities and, while that is undertaken, looking at elements of developing wildlife rehabilitation and ecosystem restoration as part of that commitment. The Budget Measures Implementation Act provides that opportunity.

When you couple that with the $75 million that is invested in the rural dividend fund in communities and you couple that with the $5 million in the budget that is continuing to be invested in market development and growing market opportunities for the forest sector and you combine it with the additional investment in our land-based investment program in the budget….

All of these, along with the $10 million that has been added to the strategic wildfire prevention initiative through UBCM, which is dealing specifically with the interface in local government jurisdictions and the programs that they are running….

Those continued investments, over $120 million investment in continuing to build on community safety,
[ Page 10743 ]
on forest health — building those opportunities that will create those opportunities in local governments and rural communities around the province….

I know, in discussions with UBCM and in discussions with our rural advisory committee, which has provided significant input and advice into the development of the rural dividend program that we will be providing more details on in the coming weeks and months as we implement that program for this year, it’s going to provide those communities with those opportunities to help continue to diversify and build their local economies and create jobs in those communities. That will be the focus of the program.

The forest enhancement program, which will build on community safety, reducing wildfire risk across the landscape, is again another very, very significant investment that has been facilitated and provided for by the fact that we have the opportunity. We have the balanced budget, and we have the ability to make these strategic investments in our communities.

I hear the members opposite focusing on the fund. I think that the reality is and what people need to realize is that if it was the members opposite, we wouldn’t even have the opportunity to talk about these investments because of their continued opposition to major projects, because of their continued opposition to significant infrastructure investments in the province — all of those.

We wouldn’t even have the ability to look at those kinds of investments if we had that continued opposition to projects and to responsible resource developments in the province.

One of the things that the balanced budget does, and the measures that are in the Budget Measures Implementation Act, is provide those opportunities for investments in our communities as well.

In the Okanagan, in Kelowna and in my riding, we have seen very, very significant benefits and opportunities that come from a strong fiscal environment in the province, whether that is in the aerospace sector, whether it is in the agrifoods sector, whether it is in the technology sector in our communities.

As you know, the Okanagan and Kelowna, in particular, is developing a real innovation hub and growing technology sector in our community that is creating jobs, bringing new investments into our community.

[1540]

We are seeing go up, as we watch it daily, the new innovation centre in Kelowna, helped by a $7 million investment from the provincial government in building that innovation centre, creating that hub through Accelerate Okanagan. There is tremendous excitement and opportunity in the community for that sector.

We know the growth we have in our agrifood sector, the significant increases in agrifood growth. The Okanagan is seeing the benefits. We’ve seen the tremendous increase in cherry exports that have resulted in huge opportunities in our community.

I know that orchardists and growers like Dendy Orchards, David Geen at Coral Beach orchard, Jealous Fruits and the Sun City orchard in my riding are looking at those opportunities in those new markets. So 13,600 tonnes — a 56 percent increase and $91.7 million in value. You add that to the sour cherry exports that have gone from $2.7 million to $11.2 million, as I talked about.

Growers in our region are excited and really looking forward to continued opportunities in that area, which are provided by the strong fiscal platform and environment that we have here in British Columbia.

Just recently we had the opportunity in our community to attend the grand opening of the fourth floor, the new perinatal unit, in our hospital, building — a very, very significant investment that has been made in our community. We had the chance to tour that with expectant mothers and others who were looking forward to that new centre opening, providing that great place for bringing into our world the next generation, our children.

It was interesting talking to some of the expectant mothers, who are now saying: “What’s the exact date? Can I hold on and just make it past that official opening date so that I can have all of these facilities and this new great place to bring my son or daughter into the world?”

That’s compared to the older, less desirable place, I guess. Although when you look at the staff, the care and the support that they get, with the nurses and everybody there, it is tremendous. But to see this great new facility, it is, as they talked about that day, the icing on the cake with that top floor and all the investment in the hospital.

We have investment in Okanagan College, with trades training — 513 additional training seats, $28 million under the B.C. skills and training plan, expanded and renovated trades-training facilities. This budget and the measures that are in the budget implementation act continue to provide for those additional investments in skills training and post-secondary facilities, helping build the capacity in the province.

We have the fastest or — they always argue a little bit — ninth-fastest-growing airport in British Columbia, building a hub in Kelowna, servicing residents and businesses in the Okanagan. It is second to none, with the investment. That is all because people are excited, continuing to look at building the growth and the opportunities in the province.

All of this investment in our highways, the widening of Highway 97 from Highway 33 to Edwards Road, is, again, a significant part of the Ministry of Transportation on the move in British Columbia.

[1545]

All of these opportunities and all these investments that we can make provincially and in our communities are enabled by the sound fiscal plan, by the balanced budget that we have, by the continued focus and discipline on spending that is the hallmark of this budget and which is enabled by the measures that are in the Budget Measures Implementation Act. They implement import-
[ Page 10744 ]
ant components of the budget that help continue to build jobs and economic growth in the province.

I just did want to comment a little bit, and I know that my colleague from Kelowna–Lake Country, the Minister of Agriculture, will probably comment on it as well. One very important piece of the measures in the budget implementation act is around the ability now for the tax credit for British Columbia’s farmers who donate to food banks, to non-profit organizations. That was announced today to provide that additional flow of agrifood products to those food banks and to those non-profit organizations in our communities.

I know it is something that the agriculture industry has been looking for, for some time, and it is going to provide a significant benefit to those organizations who do so much great work in our communities in bringing fresh, local and healthy foods as a component of their work, and to provide those opportunities for farmers.

I know farmers around the province who are great, caring people. To be able to have this opportunity to provide additional support to those organizations, I think, is a very, very positive element of the Budget Measures Implementation Act and the legislative pieces that are part of this bill, Bill 10.

I was pleased to stand in support of Budget 2016 for all of the reasons that were outlined. I am also pleased to stand and support Bill 10, the Budget Measures Implementation Act, that implements important components of Budget 2016, and continue to build on that legacy of balanced budgets, of triple-A credit rating, of providing growth and economic opportunities throughout the province and the role that our ministry plays in contributing to that objective and that goal as well.

D. Eby: It’s an honour, as always, to rise and represent the community of Vancouver–Point Grey in this Legislature and on Bill 10, the Budget Measures Implementation Act, 2016. I bring the community’s thoughts to this place about the government’s initiatives around priorities that my constituents are concerned about.

There was a meeting last night in my constituency about public education. I wish the Education Minister could have been there with some of the answers he gave today in question period to explain some of the elements here of Bill 10 and some of the pieces that were missing, from the perspective of the parents. They are very concerned about increases in class size; about kids with special needs not getting the supports they need to succeed in our schools — those schools that need seismic upgrading; about schools that have some serious challenges because they aren’t being maintained the way they should be due to dramatic cuts that this government has implemented in these budget bills.

You don’t get 200 parents into a room on a school night if there’s not an issue. That’s what happened last night. The tone-deafness of this government and this bill to the concerns of those parents and other concerns that my constituents and people across the province have is quite astounding. I think the member for Vancouver-Kingsway and the member for Surrey-Whalley articulated those concerns very well. It was an honour to hear their speeches and the way they represent their constituents.

[1550]

I’d like to really start and focus on the housing issue, though. I was asked to focus on this by my colleague from Victoria–Beacon Hill, who led us off here, and I think she’s right to ask for that. We were told that this was the housing budget, and therefore, this was the housing budget measures implementation act. So the government deserves a review of what’s coming back after they have announced this so-called historic housing budget. I say it with a laugh, because it is anything but.

I’m going to start with a letter that was sent to my office today. This is someone who is paying attention to the housing issue in the province, certainly in Metro Vancouver, and who is paying attention to the government’s announcements around housing and their response to housing. I think it illustrates perfectly the failings of this government and this bill to address the housing crisis we’re facing in this province. I’m going to quote directly from the letter:

“I am a 38-year-old mother of two, and I work as a special needs assistant. I am incredibly fortunate that I have a job that I love, two healthy children, and I live in cooperative housing that is stable — at least until the land lease runs out. Without my co-op, I wouldn’t be able to live here, because according to some property owners and dubious politicians, I don’t ‘deserve’ to live here. Many, many people I know are far less fortunate, and I am seeing more and more people in my income bracket surfing couches or moving in with their parents — the ones that stay in the city, of course, since the rest have left.

“As you know, there is a collective desperation here, as people are pushed out of housing or unable to find it, either to buy or to rent. And since no one I know has even thought about a detached home, we won’t even go there.

“I’m curious as to how this situation is affecting the mental health of the residents of this city, since this seems to be a no-win situation for anyone that actually lives here. I really don’t believe that most homeowners would take equity over empty neighbourhoods, their adult children’s well-being and Airbnb rentals in their building; I just don’t. The thing that actually makes this a great city is that people here are generally decent people, I believe.

“I’ve been thinking about taking my kids out of this city in order to raise them away from a place that seems determined to drive itself as fast as it can into the ground. This city seems like it is infected with a greed that I can’t understand.

“The thing is that if it is sick and this is some kind of illness, it is treatable. In the last couple of months, there has been an incredible amount of data and information telling us what we all know: it doesn’t have to be this way.

“I have been living here for all of my adult life. I moved here when I was 18 years old, on my own, and it really wasn’t that hard. I have always lived in very modest accommodations, but I haven’t ever had trouble acquiring them. I know that with the available stock that we have in this city, people today could have the same situation, were the stock made available.

“No one that I know wants the big house and picket fence. They just want to stay in the city that they have been contributing to and have grown up in. I truly believe that to be a possibility, but it would take government intervention.”
[ Page 10745 ]

This bill, this budget, provided the opportunity for that government intervention. It’s not just, as the members across the way say, a few neighbourhoods in Vancouver or just Vancouver or just Metro Vancouver. This is an issue that raises its head in many different ways, in many different communities, across the province.

Let’s start by what’s not in this bill but should be there. We’ve learned about shadow flipping and rampant speculation driving up the price of housing across Metro Vancouver. Now, the government apparently believes that the existing Property Transfer Tax Act does not enable them to tax these shadow flippers each time they buy and sell homes like they’re penny stocks on the old Vancouver Stock Exchange.

Keep in mind that property transfer tax is a tax that the government feels perfectly comfortable charging to families trying to buy housing in the province. A hard-working family buying an older home or townhome or condo — you pay the tax.

But if you’re a shadow flipper, profiting off driving prices higher and higher in our market, does the Budget Measures Implementation Act say that each time you flip a family home, making it less affordable for people who live and work in Metro, you have to pay the tax too? No, it doesn’t. It doesn’t close this loophole at all — a loophole that could be costing government tens of millions of dollars that could be put back into affordable housing.

[1555]

Now, keep in mind that this government believes $50 million is an historic investment in housing. Imagine what they could do if they taxed these shadow flippers and put that money into affordable housing and rental housing in this province.

That’s not the only loophole in our property transfer tax that speculators and wealthy international investors are taking advantage of while everybody else has to pay this tax out, on top of out-of-control real estate prices. The government is aware of this loophole. In fact, in this bill, they say they’re going to study it. They’re going to collect data on it.

Keep in mind that this loophole has been notorious for decades. It’s called the bare trust loophole. The way that this works is you don’t actually sell the property; you just transfer what’s called the beneficial interest of the trust. You need a lawyer to help you do it, but if you do it this way, you don’t have to pay the property transfer tax.

That’s why we had a German billionaire buy the Royal Centre in downtown Vancouver for a couple hundred million dollars and not pay the property transfer tax. That’s how a group of Chinese investors just bought all four Bentall towers for hundreds of millions of dollars — some speculate as much as $1 billion dollars — and they, too, won’t pay the property transfer tax. On these two transactions alone, this government left $20 million on the table — while this bill that they’ve put before us proposes that they continue to study the issue.

Keep in mind that these are just two transactions of the many commercial real estate transactions that take place across this province — hundreds of millions of dollars. And this government thinks $50 million is an historic investment in affordable housing, while they leave hundreds of millions of dollars in forgone property transfer tax revenue on the table that could be put into affordable housing. Imagine what they could do if they taxed these international investors the way they should.

Now, there’s been a lot of ink spilled about a different kind of international speculation in our real estate market — in our residential market, including in our agricultural land market and in housing in Metro Vancouver.

This bill speaks to that issue. It proposes that rather than act to control this international speculation in our housing market, we put a new check box on a form that people can check if they’re not a resident so that we can continue to study this issue.

The concern that people have is not an idle one. On agricultural land, it’s that farmers won’t be able to ensure that their family members will be able to continue farming because of the cost of land. Young people who want to get into farming won’t be able to afford the land they need to get into farming. In Metro Vancouver, the way that this issue looks is that people who live and work in Metro Vancouver increasingly are abandoning the idea that if they work hard, they might actually be able to afford a place to raise a family, and many of them are voting with their feet.

If we didn’t know what to do, that would be one thing. But we know exactly what we need to do. Two esteemed economists at the UBC Sauder School of Business have reached out to the government with a clear, easy-to-understand proposal that would tax the problems, the activities that we dislike so much: international money coming into our housing market, not building anything, not contributing anything and, in fact, taking housing away from people who live and work here.

Their tax proposal is simple. You put a 2 percent property tax, in Metro Vancouver, on every property, and you refund it dollar for dollar through the income tax system. So if you’re paying income taxes, the tax is invisible to you. They propose that you would exempt seniors on fixed incomes who live in a longtime family home and let them transfer that exemption if they decide to downsize. You exempt those people who rent out properties so they’re not leaving them vacant; they’re expanding the rental housing pool.

[R. Lee in the chair.]

All you tax is the people who put their money into housing or property in Metro Vancouver exclusively as an investment and contribute nothing else except for high prices in our housing market.

[1600]

Now, this measure is a very modest measure — 2 percent. This is in a housing market where, year over year, across all forms of housing, not just detached housing, we’re seeing increases of 5 percent, 10 percent, 15 percent, 20 percent. So a very modest proposal. It would generate $90 million in Vancouver alone, more than $100 million annually, each year, across Metro Vancouver.

Now, this government, again, thinks $50 million is an historic investment in housing. Imagine what they could do if they had the will. A tax invisible to the people who live and work and help build our community. A tax that taxes the activities that we dislike: buying a property like it’s a stock or bond, using it as an investment, leaving it vacant and derelict.

This government, this bill, refuses to take that measure, which would provide far more accurate data than a check mark on a box on a form and would also generate revenue that could actually make a difference for families across the province. Instead, they prefer to stand by as property price records in Metro Vancouver are shattered, as are the dreams, as well, of many families that hoped to make their lives in Metro Vancouver.

Now, this bill today that I’ve had the chance to speak to, this housing bill, this bill which is meant to address housing affordability, which is the government’s response to out-of-control real estate in Metro Vancouver; to a shortage of rental housing across the province; to tent cities in Maple Ridge, Abbotsford, up the street here in Victoria; to not one but two court decisions finding the right to sleep outside because there’s nowhere else to go…. The constitutional right to sleep in a park — this is B.C.’s contribution to constitutional law in Canada.

This is a housing crisis we have in our province. The government had a budget, and they had the means to raise the revenue to do something truly historic about housing. But they chose not to do that. They chose not to do that, and it is my hope that in May of 2017, the people will choose to hold this government accountable for this bill, for this missed opportunity and for the ongoing housing crisis that this government is content to stand by and watch while real people suffer — like that woman who wrote a letter to my office.

This government had a chance to act, but they chose not to, for reasons known only to them, and that choice is a gross disappointment to families across the province.

Hon. T. Stone: I’m pleased to take my place in the speaking order here with respect to Bill 10, the Budget Measures Implementation Act, 2016, and I’m very pleased to speak in favour of it.

I did speak during the budget debate earlier, and I touched on a number of economic realities in both my community in Kamloops as well as provincewide — a lot of positive stuff that’s happening around British Columbia. I talked about how the unemployment rate in Kamloops today is amongst the lowest that it’s been in a very long time, hovering in the 6- to 7-percent range compared to about 14 percent in 2001. I talked about how there are a number of sectors in Kamloops and region that are doing very well.

When I think of technology, I see just how many new, thriving tech companies are popping up every other day. When you talk to those tech owners, they will tell you that they appreciate the fact that in this province, entrepreneurialism is encouraged and rewarded. We have amongst the most competitive taxes in Canada now. That’s very good for an industry like tech.

[1605]

They were very pleased and proud when their government introduced a $100 million venture capital fund recently, recognizing the gap in funding that was available for technology companies, particularly those that are trying to move to the next level.

We have world-class universities and educational institutions in this province which are the envy of the world. This is where a great deal of the ideas that tech companies then take and commercialize…. This is where it all begins — often on a university campus.

So when you take all of those different pieces, it’s no wonder that the tech sector is doing so well in Kamloops and Kelowna and Victoria and Vancouver and communities all over the province.

I talked about the fact that in Kamloops, housing starts are very, very strong. Airport numbers continue to climb. The wine industry is doing well. We have a number of wineries that are winning awards across the country. Business confidence in Kamloops is indeed high.

It is, I think, important to acknowledge that, yes, there are some sectors in the provincial economy that are facing some headwinds, particularly mining. And there are some others. This government has recognized that and has developed some targeted supports to assist those industries, and we will continue to do that.

We continue, in this province, to lead the country in so many different indicators. We were number one last year at creating jobs — 52,000 jobs created here in British Columbia. That was double the percentage increase of any other province in the country. We continue to be recognized for our commitment to not just talking about but also actually eliminating red tape here in the province.

We now have the highest-ranked provincial economy. We’re expected here in British Columbia, by all economists and many of the financial institutions, to lead the country in economic growth this year, next year and the year after. I think that’s a testament to what we are doing in this province.

While it’s often scoffed at on the other side of the floor, we are focused, as well, on paying down our operating debt. I’m very proud to be part of a government that is very close to eliminating British Columbia’s operating debt. When we do that, in approximately four years, that will be the first time since 1975 that this province has not had an operating debt.
[ Page 10747 ]

The reason that that is important is because that means that we pay way less than we otherwise would towards servicing our debt, debt-servicing costs. That means those resources can be pumped into health care, education and other critical services that British Columbians rely upon and need in this province.

That is the fiscal prudence that has enabled us to invest an additional $1½ billion in health care over the next three years. It is that fiscal prudence which is enabling us to invest $673 million in additional supports for the Ministries of Children and Families and Social Development and Social Innovation. It is that fiscal prudence which is enabling us to invest an additional $110 million in education.

It is that fiscal prudence which is enabling us to expand the eligibility for the B.C. training and education savings grant from January of 2007 to January of 2006. Again, that program is very, very important and very popular with British Columbians. It provides a one-time, $1,200 grant for every child in British Columbia that was born after January 1, 2006. That is a great start to the savings for that child’s education. I’m very proud of that.

We’ve provided dollars in this budget…. The rural dividend, which has been talked about — $75 million to assist communities in transitioning their economies and diversifying their economies, particularly in small, rural communities across the province.

While the previous speaker, the member for Vancouver–Point Grey, scoffs at the housing measures that we have moved forward with, when you get out and you talk to British Columbians, what we have done for housing is unparalleled in the country.

[1610]

The recent announcement of $355 million for more social and affordable housing across the province — a significant investment. And 2,000 additional units will be provided as a result of that.

The elimination of the property transfer tax on new homes valued up to $750,000. That covers most of the homes, certainly new construction in Kamloops and, I would argue, most communities outside of the Lower Mainland — in fact, probably outside of a few neighbourhoods in Vancouver and perhaps the North Shore. That’s a very good thing.

I can tell you that the construction folks in my constituency, and I think across the province, have applauded that initiative in this budget.

I’m very proud that this budget shines a greater light and provides more resources for emergency management. In fact, I think it is worth underscoring that British Columbia is the only province in the country that has not one, but two ministers who are both focused on emergency management.

I am very, very excited to be working with my colleague the Minister of State for Emergency Preparedness as, together, we work at building awareness for British Columbians, relating to natural disasters.

This budget includes $65 million of additional resources for flood mitigation and for the work that the men and women of search and rescue organizations around this province do selflessly to ensure the safety of all of the rest of us as we enjoy the back country.

I’m very excited to be working in the months ahead on a number of very important awareness initiatives and education campaigns with my colleague the Minister of State for Emergency Preparedness, as we raise awareness of just how important it is to be prepared.

I’d like to talk a little bit about infrastructure. As the Minister of Transportation and Infrastructure, I will first say that we have spent $18 billion on transportation infrastructure in the last 14 years — a significant investment in every facet of transportation in every corner of the province. I’m very excited about that.

I’m also excited about the fact that this budget actually provides for a lift for transportation infrastructure investment over the next three years — $3.1 billion in fact, $240 million more than was allocated in the previous three-year service plan.

That is going to represent the ability to accelerate some infrastructure investments in different parts of the province, whether it’s continuing to four-lane the Trans-Canada Highway east of Kamloops, towards the Alberta border — I know that that is very important — or perhaps more passing lanes on Highway 5 or more four-laning on Highway 97.

That lift is enabling us to move forward with projects like the McKenzie interchange here in greater Victoria, which represents the single-largest congestion point on Vancouver Island — in fact, outside of the Lower Mainland. That lift is enabling us to move forward with investments like the Belleville terminal upgrade that is long overdue here in Victoria.

More broadly speaking, the infrastructure investment that we’ve provided for in this budget is unparalleled in our province. All told, we are going to see $12 billion invested in infrastructure over the next three years — in hospitals, in schools, universities, the flood mitigation, as I talked about, and transportation.

That means being able to move forward with projects like phase 2 of the redevelopment of the Royal Inland Hospital in my constituency in Kamloops — and others across the province.

We are engaged with the federal government on infrastructure. We’re obviously very pleased that the new federal government has not just made it very clear that they remain fully committed to the existing Build Canada program and the allocations that have been provided to British Columbia but that, indeed, their intention is to spend even more on infrastructure — $6 billion per year, for each and every year over a ten-year period, on social, green and transit infrastructure.

[1615]

We are ready. We have made it very clear that we support the rapid transit projects in Surrey, for example, that we support the Broadway line in Vancouver, that we support an expansion of transit across the entire Lower Mainland, — not just those rapid transit projects, but more buses and more frequency on more routes. That’s important in communities like Port Coquitlam and Coquitlam and other communities in the Lower Mainland.

I’m very proud of the fact that for the last 2½ years — for as long as I’ve been the minister, anyway — we’ve been making the case with the federal government that ferry infrastructure needs to be included as eligible criteria under the Build Canada fund. I’m cautiously optimistic. I’m somewhat hopeful that in the not too distant future we’re going to have some good news from the federal government on that front.

That’s going to mean that B.C. Ferries is going to be able to submit worthy projects — of which they have many, whether it be vessel upgrades or, indeed, terminal upgrades — to the federal government for consideration. British Columbia will prioritize some of those projects, recognizing how important ferry infrastructure is to the provincial economy and communities all across coastal British Columbia.

The George Massey Tunnel replacement remains the province’s number one infrastructure priority. It represents a project that will solve the largest bottleneck in the Lower Mainland; 80,000 vehicles a day are trying to get to and from their home and work, and are often sitting idling in their vehicles because of congestion at the existing George Massey Tunnel. That’s unacceptable.

It has been dumbfounding to hear yet again the opposition not come out and strongly endorse a project which will enable 80,000 commuters a day to move more freely through this choke point, to spend a little bit more time with their families and their friends; to, in the process, reduce greenhouse gas emissions dramatically; and to facilitate rapid transit through this corridor. It’s quite amazing to me.

In fact, we shouldn’t be surprised today, I suppose, that the NDP continues to be opposed. I mean, their position on the George Massey Tunnel replacement project, as articulated by their candidate for one of the Delta ridings in the last election, was not to replace it with a tunnel, not to replace it with a bridge, but, in fact, to paint it. That, apparently, was the NDP’s plan for the congestion at the George Massey Tunnel.

We will continue to work with the Metro region and encourage their input and feedback on this. We’ve had no less than 20 meetings with Metro Vancouver over the last three years in regards to the George Massey Tunnel replacement project. There have been three public consultations, coming out of which, 3,700 pages of information have been released and are available for public consumption.

Of course, as everyone should know, the project is now in the environmental assessment process, which means that there are two public comment periods, opportunities for the public to weigh in. And there is a working group, as is the case with environmental assessment applications. The working group has representatives from the federal government, MOTI, a number of other agencies and, I will point out, Metro Vancouver. I’m not sure the mayors of Metro Vancouver are aware of that, but they actually have staff who sit on this working group as part of the environmental assessment project.

There will be many opportunities for the Metro communities, through their mayors, to continue to weigh in and ensure that their feedback is incorporated moving forward. But at the end of the day, we are going to move forward with this very significant project, this multi-billion dollar project, which, again, is going to save commuters 30 minutes per day on a round trip. It’s going to create thousands of jobs and reduce greenhouse gas emissions in the process.

It really, again, defies logic as to why the opposition is so opposed to these major infrastructure projects. We heard again earlier today, in question period, the members opposite stand up. They don’t just say….

[1620]

I mean, we heard some very thoughtful comments in some previous remarks by the member for Surrey-Whalley and others about how a vote against the budget is not a vote against individual line items and so forth. But at the end of the day, the members opposite don’t just vote against the budget and everything in it. They stand up, and every chance they get, they call into question these projects. They question the validity of these projects. They question the rationale of these projects.

The former Leader of the Opposition….

Interjection.

Hon. T. Stone: There we go. There’s the member for Saanich South, who apparently does not support the McKenzie interchange.

Interjection.

Hon. T. Stone: There’s the member. She stands up every chance she gets, and she votes no. She votes no to every project that we advance in this province.

L. Popham: Mr. Speaker, that’s a very untrue statement.

Deputy Speaker: It’s not a point of order.

Hon. T. Stone: Thank you very much, hon. Speaker.

As I said, the members opposite can sit there, and they can try and split hairs about how they vote and what it really means, but every opportunity they get, they stand up and speak against these projects. Whether it’s the McKenzie interchange or the Westshore Parkway in
[ Page 10749 ]
Langford, whether it’s Trans-Canada projects, whether it’s the George Massey Tunnel or whether it’s the Port Mann project, the members opposite routinely and consistently stand up, and they vote against them, and they speak against them. That is a consistent track record.

Interjection.

Hon. T. Stone: It is what you guys do. It’s what the opposition does. At least they’re consistent.

I had mentioned previously, in my previous budget comments, that I was very proud of the work that we were able to announce as part of our Highway 16 safety improvement strategy that was announced just before Christmas. That’s going to see about $3 million invested over the next three years to enable communities along Highway 16 to invest in community vans. There will also be expanded transit that will connect communities along that corridor.

The part of this that I’m so excited about is that these solutions were actually developed by First Nations and local governments together. What we announced was a culmination of a tremendous amount of conversation, a tremendous number of meetings and lots of thoughtful discussions.

While these things never happen as fast as you would like them to, at the end of the day, in this particular case, we got to an outstanding result. The ten-person advisory committee, which consists of First Nations and local government leaders, is now working diligently. They’ve had a number of meetings since Christmas, and they’re focused now on working with government to ensure the implementation, the effective and practical implementation, of these initiatives.

There was a much-appreciated lift in highway maintenance in the budget that British Columbians — I can tell you — who live across the province, particularly in the Interior and the north and the Kootenays, really appreciate. It’s $36 million over three years, which will result in improved standards for road maintenance.

I want to acknowledge the 2,000 contracted employees that, with their hundreds of pieces of equipment, do such a fine job each and every year, keeping our roads safe for the travelling public. In part, the good work that our maintenance crews do, coupled with the focus on road safety and a number of policies that we’ve introduced in terms of excessive speeding and drinking and driving and other policy changes, is why we have seen such a significant decline in the serious crash rates in British Columbia.

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In fact, if you look just at the Coquihalla Highway, for example, which is maintained by VSA, we’ve seen the serious crash rate go from 278 in 2006 to 177 in 2014. We’re tracking, I’m told, to be less than that for this year. So that’s very good news.

Speaking of road safety, B.C. on the Move, our ten-year transportation plan, which I was excited to launch on behalf of government about a year ago, has seen very targeted investments right across the province, not just in road rehabilitation and road capacity expansion but also in transit, ferries, cycling and pedestrian infrastructure, port expansion and so forth.

We also shone a brighter light on road safety. Part of that was a commitment to invest $25 million over three years for projects like variable speed zones. Now we’ve got three pilot locations across the province — one on the Coquihalla from Portia to the snowshed, one just west of Revelstoke and one on the Sea to Sky Highway. They’re each about 15 to 20 kilometres long.

The variable speed zone technology is very exciting, because it involves replacing the static signs with electronic signs. Then, through sensors in the roads and some other technology wrapped around that, we will be able to detect very modest changes in the weather conditions.

We’ll be able to detect volume changes in terms of traffic and other items that will result in us being able to dial the speed down if a lower speed is more appropriate at that particular time under those particular conditions. This technology is going to save lives.

Likewise, wildlife detection systems are being installed and will be piloted in the East Kootenays very soon. We know that too many British Columbians still suffer injuries — unfortunately, some deaths — as well as way too much damage to vehicles because of collisions with wildlife, and so we’re installing some state-of-the-art technology to reduce the prevalence of those types of collisions as well.

I would like to also touch on our province’s climate leadership, because it’s woven throughout the budget, and the commitments that our government has made. I want to start by applauding the work of the climate leadership team. Certainly, the 32 recommendations that they released focused, on the one hand, on carbon pricing as well as on taking action to reduce emissions in British Columbia.

I’m very proud personally of British Columbia’s track record on climate action. We’ve had a carbon tax in this province for over seven years. We were the first jurisdiction in North America to actually put a price on carbon, the first to introduce a broad-based, revenue-neutral carbon tax and the first to have an entirely carbon-neutral public sector. I’m very proud of that. The opposition ran against the carbon tax. That is forever on the record.

With respect to transportation, there’s no question that transportation plays a very significant role in emissions, and therefore, a good amount of the solution moving forward in terms of emission reduction will come in the transportation sector. In British Columbia, 37 percent of emissions are transportation-related, so there’s a tremendous opportunity for us to focus on a wide array of
[ Page 10750 ]
initiatives to drive those levels of emissions down further.

There are a good number of things that we are actively doing. We have a low-carbon fuel standard here in the province. I’m not sure how many other jurisdictions across Canada have a low-carbon fuel standard. We also have a very successful zero-emission vehicle program. There are more dollars in this budget to invest in electric vehicle infrastructure, charging stations and so forth, to encourage more uptake of electric vehicles, so that’s very good.

We also spend more than any other province on a per-capita basis on transit — an extremely good record on transit investment. We’ve seen a 42 percent increase in transit investment since 2001 and a corresponding 34 percent increase in transit ridership. That is a terrific way to keep emissions down.

[1630]

In fact, every community in British Columbia over the population of 10,000 has a transit service, and 92 percent of British Columbians have access to transit. That’s the highest in the entire country.

I’m very pleased that the budget provides for a lift for transit to allow for transit expansion. I’m talking B.C. Transit, outside of the Lower Mainland, initially — $12.7 million over the next three years. That’s going to mean more frequency and more routes and more handyDART in communities like Prince George, Kamloops, Nanaimo, Cranbrook and elsewhere. And we will continue to invest in transit in the Lower Mainland.

We are continuing to invest in cycling and pedestrian improvements. These are critical alternative modes of transportation in which, increasingly in communities across British Columbia, people want to see more investment. For example, with cycling, we’ve invested $160 million in cycling infrastructure since 2001.

I was very excited to announce, as part of B.C. on the Move a year ago, that we were going to increase the Bike B.C. budget over a three-year period by 50 percent. There’s now $12 million, including matching funds from local governments, per year being invested in cycling and pedestrian infrastructure in every corner of the province.

Part of the work that we’re doing is with the cycling organizations. I want to give a particular shout-out to my friends at HUB cycling, working together with them to ungap the map. We’re going to continue to make good progress on more cycling infrastructure.

Airport investments. We’re investing record amounts in airport infrastructure — the only province in the country to actually be investing in airport infrastructure. Those are critical investments in communities all over the province.

I guess I’ll end on this note. I’m very proud of the balance that we’ve struck with this budget. Balancing budgets and generating surpluses and having triple-A credit ratings and the like is good, but it is not the end. That’s the means to the end.

I got into politics so that we could make a difference, make people’s lives better. I believe that the fiscal foundation has to come first. That is what is enabling us to be very strategic now in investing in the services that British Columbians need — a record level of investment in infrastructure, more dollars in this budget for health care, education and social services. It is with a great deal of pride that I support Bill 10 today.

M. Farnworth: It’s a pleasure to follow after the Minister of Transportation for two reasons. He clearly established a precedent of a very wide-ranging scope of debate on Bill 10, which is actually the Budget Measures Implementation Act, and it was wonderful to hear his recitation of support for the budget and to confirm something else after listening to some of his comments, particularly when it comes to transportation and his government’s view on the government’s record.

Clearly, he has definitely contracted an acute case of the Premier’s disease. Some of my colleagues may ask: what is the Premier’s disease? Well, the Premier’s disease is an acute case of unparalleled hyper-hyperbolism.

If you listen to the members opposite and you listen to the Minister of Transportation, literally everything in this legislation is unparalleled. There is an unparalleled investment. In fact, no. That would just be hyperbole. The “hyper” comes from this part: it is an “unparalleled, historic” investment in housing. [Applause.]

[1635]

I see the member across the way applauding. Well, I guess when you’ve done nothing for 15 years, I guess when you’ve done nothing in the area of housing for 15 years, coming out and saying, “We are going to build 400 new units of affordable housing every year for five years” must qualify as historic, must qualify as unparalleled.

Well, unfortunately, I’d like to remind the member and the minister of some inconvenient truths, I guess. I remember a time when a government in this province was building 1,100 units of housing a year. That was historic. And they did it in partnership. They did it in partnership with the federal government. They did it in partnership with communities. But most important of all, they took a leadership role.

But that leadership role was forfeited under this government’s 15 years. They have done some things, but the reality is, when it comes to addressing issues of affordability around housing, when it comes to increasing the supply of social and affordable housing, unfortunately, this government’s record falls significantly short of the unparalleled hyper-hyperbolism of the Minister of Transportation, the Premier and other members of the government benches who have spoken on the budget and who have spoken on this particular piece of legislation.

It’s important to note. I use that to illustrate a point. It is a hallmark of this government that there can be a crisis in public policy, that there can be an issue that has
[ Page 10751 ]
grasped public attention. In this case, it is housing. We have seen it in the thoughtful, well-researched remarks of the member for Vancouver–Point Grey, who has put forward ideas and suggestions to the government, who has spoken to academic experts about issues around housing in British Columbia and who has raised questions in this House.

The government has responded, in essence, with half measures. They did not, in this budget or in this particular piece of legislation, really do the things that they could have, that were in their power to be able to address the issue, in a way that meant something to families in this province — to working families, to low-income families, to middle-class families in this province.

They have said that they’re going to start gathering data about: is there an impact? They’re going to study: is there an impact of offshore money impacting the housing markets here in British Columbia?

Well, hon. Speaker, if you talk to any economist, it’s not rocket science. I mean, money coming into a region has an impact. It has an impact on prices. It has an impact on the market. It’s the case in London. It’s the case in Sydney. It’s the case in Singapore. It’s the case in Hong Kong. It is the case in Dubai. It is the case in New York. It is the case in Los Angeles. It is the case in dozens of jurisdictions, and they recognize it — but not here.

For months and months that this issue was being raised, they didn’t want to talk about it. The Finance Minister: “Nope, not a problem.” The Premier: “Nope, not a problem.” But when it became an issue in the media: “Oh, there is a problem. We’re going to do something. What are we going to do? We’re going to go and say, ‘Okay, where are you a resident? Are you a citizen?’” A box to check.

It sounds good. But when you talk to the experts, there’s a key point missing, and that is a very important question. Where do you pay your taxes on your income? Where do you pay your income taxes? That would really tell us something.

Unfortunately, the government, for whatever reasons, has decided not to do that. They have said, to great fanfare, that they are removing the property purchase transfer tax on new construction, $750,000, and that will benefit some people.

[1640]

They trumpet: “Oh, $13,000 you’re going to save.” Well, only if you’re buying a place of new construction that’s $750,000, which for most people is not a first-time home and which for most young families is way out of reach. For example, in my own community of Port Coquitlam, an average new-construction house now is well over $750,000.

What people were looking for was a comprehensive plan in this budget to deal with issues around housing affordability, and it’s not there. Instead, what is there is acute hyper-hyperbolism — unparalleled. In fact, if I counted the number of times that members opposite used the terms “unparalleled” and “unprecedented” and “historic” in their speeches…. If I had a dollar for every time that was mentioned, you know what? I probably could buy a $750,000 brand-new home and pay cash for it.

Interjection.

M. Farnworth: Ah, I’ll be coming to the fantasy fund in a few minutes.

I wanted to address the issue of housing because the speeches from the government benches were very much focused on that. They seemed so proud of the fact that there was this unparalleled, historic announcement. I just wanted to put it into perspective. After 15 years of not doing anything, 400 units a year is not unparalleled. It’s not historic. While it is welcome, it is not going to deal with the problem, and it certainly doesn’t match efforts of previous governments in previous decades.

Nothing in my own riding of Port Coquitlam symbolizes that more than a piece of vacant land at the corner of Flint and Prairie. In 2000-2001, there was a former Minister of Housing…. Some people liked him; some people didn’t like him. But he tried to do his best. Along with a wonderful project, the Crossroads Hospice, the funding for that, he also approved an affordable social housing project in his riding of Port Coquitlam.

Interjection.

M. Farnworth: Who would that be? I’m giving the member some clues.

The reality was that I was minister at the time. I approved that project. I approved the funding for that project. What happened? This government — that is so committed to housing affordability, that is so committed to addressing the social housing needs of British Columbians, that is so committed to announcing the historic, unparalleled investment in social housing — cancelled that project. They cancelled the funding for that project.

L. Krog: Say it isn’t so.

M. Farnworth: Unfortunately, hon. Member, my colleague from Nanaimo, it is so.

Low-income families that could have benefited from that project, which was supported by the community, which was supported by the city council, which was supported by the GVRD…. It was cancelled. And guess what. That lot sits vacant to this day despite repeated efforts from those in the community to put a project on there. You would think that a project….

This government likes to say they listen to communities. This government likes to say: “Oh, we work with communities. We want to work with the councils. We
[ Page 10752 ]
want to work with the community groups that are engaged in helping to alleviate homelessness and the affordability crisis.”

You would have thought: “Hey, what a great idea. What a great location. Community support, city support, regional support.” For 15 years, no action. That, in my constituency, sums up this government’s historic announcement.

[1645]

People haven’t given up. They are still working on the project. They are still wanting to try and make that happen. I hope that eventually they succeed. I hope that eventually this government comes to its senses and says: “You know what? That really is a great project worthy of support.”

Hopefully, with their new-found faith in affordable housing and, perhaps, the fact that we have a new federal government that is committed to building affordable housing and is putting money on the table, the government may decide to participate in that. I am not going to hold my breath. It’s an issue I will canvass further when we get to the estimates process.

I just wanted to put that out, because I know the Minister of Transportation was very fond of saying: “Oh, the opposition’s opposed to this. The opposition’s opposed to that. They don’t support the government’s initiatives.” I just wanted to let him know, in an historical context, of his own government’s record in not just saying no but cancelling a commitment, tearing up a commitment, pulling the rug out from community groups that had worked really hard to make a worthwhile project happen.

I know that the Premier’s disease, as I call it, is spreading on the other side there — this acute unparalleled case. There seems to be more than one case of unparalleled….

Interjection.

M. Farnworth: That may well be, but that’s another issue, hon. Member.

In the meantime, it is the unparalleled hyper-hyperbolism around this budget and some of the measures contained here in Bill 10 that I will focus on. I’ll come back to your points, I think, toward the end of my remarks, because they are worthy of comment.

Again, the government makes much of their investments in infrastructure, and they say to the opposition: “Oh, you’re opposed to everything.” Well, actually, what we are opposed to is a government that just pulls things out of a hat and says: “This is what we’re doing.” When questioned on the rationale, when questioned on the various issues that go into making a decision on how the priority was achieved, they don’t really have answers. They don’t really have answers. Nowhere is this more true, when you look at this budget and how this Budget Measures Implementation Act relates to that…. And that is around some of the key infrastructure projects.

I’m not surprised, hon. Member. I remember…. I mean, the Minister of Transportation was probably a young Liberal at the time. I don’t know if he was a young Liberal in short pants, but he was certainly a young Liberal when projects such as the West Coast Express were being built by a government that had a long-term vision and a transportation transit strategy. The B.C. Liberals fought that every step of the way. They said no every time that West Coast Express came up for debate. Every budget where funding for the West Coast Express was in place, this government, when they sat on this side, said no. They said no every single time.

For the Millennium Line, the next logical piece on the SkyTrain line, on the SkyTrain system that this government wanted to do, they said no. They said no to the Millennium Line. They didn’t even know what they wanted. Some said: “Oh, we should have SkyTrain but not this SkyTrain. Some said: “Oh, no, there needs to be LRT.” They didn’t have a vision. It was a government that decided: “No. SkyTrain is a technology.” We put SkyTrain in place.

They said no to the widening of the No. 1, to putting the additional lanes in, which was what was wanted. They said no to that. They said no to the widening and the building of the Mary Hill Bypass. I remember being just a poor government backbencher and having to stand up to this barrage of criticism from B.C. Liberals going: “No. Building the Mary Hill Bypass is a waste of money.” That is the record.

[1650]

When the Minister of Transportation suddenly stands up and says: “Oh my god, we’re so great. We are so great. We are unparalleled in our historic….”

Interjections.

M. Farnworth: “We are so great, with our unparalleled historic investments in infrastructure.” There are many, many investments that have been conceived, started and built by New Democrats, by Socreds, by previous governments in this province that have stood the test of time. The Island Highway, as I remember. I see my colleagues from the Island nodding their heads. Again, it was members opposite, some of whom are still in this House, who fought that tooth and nail and said no. Sometimes you’ve just got to remind the members opposite that they do like to say no. They like to say no a lot.

They like to say no today as well. They like to say no when issues are raised about how they make decisions around projects. I mean, we’ve got a new government in Ottawa. They say that they’re big on transit, but you wouldn’t know it from the referendum that was put in place by the Premier. Where that came from, nobody knows. I think no one knows that more than the Minister of Transportation.

I think that was one of the most uncomfortable moments of his tenure in that job — the Premier’s insistence
[ Page 10753 ]
on that referendum and his having to go out and try to defend that referendum and having to work with mayors across the Lower Mainland to say: “Well, we’re not really against your plan. We’re not really against you. But nothing is going to happen until this referendum is out of the way. And this referendum is the be-all and end-all in terms of how transit is going to be decided in this province.” They have fought with mayors and the region in the Lower Mainland every single step of the way.

They have fought with them every single step of the way to the point that the mayors no longer have faith in this government. They no longer have faith in this government when it comes to transportation and transit in the Lower Mainland. There’s a real lack of trust. And nowhere is that more illustrated than just after the federal election.

The mayors have a regional plan. It is a plan that has been developed over a number of years, with actual consultations with the public.

It has taken into account the livable regional strategy. It has taken into account their experience in terms of developments, in the ability to use the existing transportation systems and the best new transportation alternatives or additions in terms of routes and the development that will accompany those routes — meeting those needs in terms of ensuring that not only are our economic objectives in the Metro Vancouver region met but our environmental objectives and our social objectives are met. The plan was developed in a way to do just that, with a lot of thought and input and expertise.

Yet that has been fought by this province. They have not really assisted at all. They have just made it more and more difficult. That’s because their view of the world and their view of infrastructure projects was really very much in tune with the Harper government in Ottawa. That was their approach to thinking. Some people, in fact, say that, really, this is the last bastion in the country of the Harper Tories.

Interjections.

M. Farnworth: Oh, I hear laughter from the other side. I hear laughter on the other side. Gee, I guess the member opposite didn’t read the Globe and Mail or the Province article about the number of ex-Tory aides that have fled Ottawa because they lost and have found service here in Victoria. They don’t want to talk about that.

[1655]

Perhaps if you want a better piece of evidence, it was the fact that when the Prime Minister, the new federal Liberal Prime Minister, paid his first visit to British Columbia after being sworn in and after the cabinet was sworn in…. On his first official visit to British Columbia, who did he meet with? Was it the Premier? No. It was the mayor of Vancouver.

If you know how the federal government has been operating, they have been engaged in extensive discussions with the urban mayors right across the country, especially here in Vancouver.

They have made it clear that their priority in terms of infrastructure is very much focused on urban transit needs. They clearly recognize that in terms of the growth of the Lower Mainland and the livability of the Lower Mainland, in terms of the economic, social and environmental growth that’s taking place and objectives in the Lower Mainland, urban transit is critical.

They know the mayors have a plan. They know that there’s public support behind that plan. They’ve indicated that they want to make those crucial investments in places such as Vancouver, in places such as Surrey.

I see the member giving a thumbs-up, and absolutely, he’s right. Surrey is a fast-growing community. If that growth is to be sustained, if that growth is to take place in a way that enhances not only Surrey as an economic generator but the Lower Mainland as an economic generator, it has got to be done in a way that enhances Surrey’s economy, its development ability, its social objectives and its environmental objectives.

The problem that we have from the government is that they don’t seem to be able to make their priorities on that basis. It is literally somewhere…. The Premier’s at a press conference and says: “Oh, I decided we’re doing this.” The next thing you know, it’s like: “Where did that come from?” It’s a project that’s like…. The Lower Mainland region has a list of, let’s say, 50 projects, and this is down on the bottom at No. 35 or 44. There’s no mention of the top four.

For some reason, they seem to have a reluctance to wanting to say to the mayors: “Okay. You’ve got the right priorities here. Those are you’re priorities. Those should be our priorities.” That is something that is missing. It is missing in this budget, and it is missing in the Budget Measures Implementation Act, which we are talking about. I am grateful to the Minister of Transportation for establishing such a broad scope of debate on this particular piece of legislation.

That brings me to the other part of this bill that I’d like to make a few comments on, because again, the Premier’s disease creeps into this particular bill the way it did with the budget speech and the throne speech. Again, for members who arrived when I first started my remarks, Premier’s disease is otherwise known as an acute, unparalleled case of hyper-hyperbolism.

During the last election, the Premier made an unparalleled — even I now have to use that word — play for….

Interjection.

M. Farnworth: It’s hyperbolism. It’s the plural, Minister, and you can check on Google.

Anyway, the Premier made a great big deal out of: “We’re going to have this prosperity fund, and there’s going to be $100 billion in this prosperity fund” — $100 billion, and it’s all coming from LNG.
[ Page 10754 ]

The latest phrase from the government is: “We’re getting rid of the operating debt for the first time since 1975.” I had a chuckle when I heard that from the Minister of Transportation. I’ve got to remind him: 1975, Dave Barrett, an NDP government, no operating debt.

The bottom line is this. All of a sudden, that’s their magic phrase — operating debt. The reason they’ve done that is because they suddenly, like on so many things, realized that they’re going to miss their targets. So they’re going to have to lower their targets.

When the Premier spoke, it was: “We’re getting rid of the debt.” Not only are we getting rid of the debt; there’ll be a chicken in every pot and a Ferrari in every garage by the time she’s finished. That was the tone that she used.

[1700]

There’ll be no Hydro debt and — who knows? — no sales tax. All of this was predicated on LNG.

Interjections.

M. Farnworth: I see some debate over there. No, hyperbolism is a word, hon. Member. Yes, it is.

Hon. B. Bennett: No, it isn’t. Cambridge dictionary.

M. Farnworth: Look at Oxford. I’ll take Oxford over Cambridge any day. Anyway, I do not wish to depart too much from my remarks, because it’s important.

I was commenting on the prosperity fund and the fact that it was going to have $100 billion and literally, literally, all our problems were going to be solved.

It was confirmed — the approach the government was going to take. The approach the government was going to take was actually confirmed in some remarks from the Government House Leader, the Minister of Finance, whom I have tremendous respect for.

Here’s what he said. This is May 25, 2015, just for members’ edification. “I don’t think I have ever been shy about acknowledging that the prerequisite to the creation of a sizeable prosperity fund in B.C. is positive investment decisions by proponents in the burgeoning LNG industry. But before the government asks the House to consider legislation relating to a prosperity fund, we’ll be asking the House to consider legislation to ratify the first project development agreement.”

That hasn’t happened. It has not happened. Yet despite those words from the Finance Minister, those words of reassurance to the House, those words of reassurance to the public of British Columbia that the goal the Premier set of $100 billion…. That nothing’s going to happen until the signature is on the paper, the ink is dry and the money is in the bank, so to speak…. Then and only then would we be getting a prosperity fund.

Well, what’s happened? Just that. Nothing. There is no agreement.

Hon. B. Bennett: That’s not hyperbole.

M. Farnworth: No, there is hyperbole, hon. Member. Hyperbolism is the continued use of hyperbole. And that’s what…. It is in the Oxford.

I see my time is done, so I look forward to comments from other members.

Hon. T. Lake: It is indeed my pleasure to stand and rise and speak to the budget implementation act.

First of all, as many do, they take the opportunity to thank people who are supporting them, and I’ll do that really quickly. I know our time is limited.

I just want to thank my family, obviously, because as many have noted, it takes a lot of support to do this job and keep the schedule we do. We’re often away from home, so I just appreciate Lisa, Gemma, Shannon and Stephanie and my dog, Pal, of course, who’s always there for me when I get home late Thursday night.

Also, I want to thank my constituency assistants, Kirsty Morris, Gill Yaron, who do amazing work. I know every MLA here knows that probably 95 percent of the way we help people that come into our constituency or call our office is done by our constituency assistants, and they do a remarkable job.

The staff. I have a large staff. I have political staff in my office. I just want to thank them, as well as people in the Ministry of Health. They do an amazing job.

British Columbia is acknowledged as an economic success story. We’ve heard it time and time again from our side of the House, so I won’t go into that, because I think we know that we’re doing very well, relatively speaking, compared to every other province and territory in Canada.

We are trying desperately to make sure that we do make life affordable for British Columbians. I don’t think that the word “tax” is a bad word. I should tell you that. I think taxes are the entry for a civil society, and I think it allows us to be able to look after those who need our help.

[1705]

You can only do that if you have a sustainable economy, if you have income coming into government that can then go out and support those who need your help, whether it’s in education, whether it’s in health or whether it’s in income assistance or people with disabilities.

I’m proud to say that I’m a fiscal conservative, but I’m a social liberal. I think a social safety net is incredibly important to our civil and just society in Canada. And I think that in British Columbia, we have been successful in achieving that balance between fiscal responsibility and providing needed services.

There’s been a lot of talk about costs for British Columbians. People have talked about hydro rates. There’s certainly no question that as B.C. Hydro invests in power for the future, investments drive costs. But we still enjoy the third-lowest rates in North America, and we do that in a very clean way. I’m very proud of that, actually.
[ Page 10755 ]

One of the proudest things I have done as an MLA is vote for a vision for the future of British Columbia in the approval of Site C. I’ll say this. As former Environment Minister, I thought long and hard about the impacts of Site C locally and provincially. I came to the conclusion that this was the single biggest way that we can ensure a clean, green supply of electricity for future generations. So I’m really proud of the fact.

Interestingly, I ran into the CEO of B.C. Hydro on my way back to Victoria this morning. We talked about all the people that were lined up for jobs and noted that there could be no better time to build the B.C. Hydro Site C dam, because there are workers available, obviously, because of the downturn in the Alberta economy and the oil industry. We have people that are available, that have the skills we need — and equipment that is available because it otherwise would be sitting idle. So I’m actually very, very proud of the decision to go forward with Site C.

We talked about ICBC premiums. We know that that’s driven by the greater number of injury claims, despite the fact that cars are getting better engineered, our roads are well engineered. We also know that people that are victims of car crashes need to be compensated, need to be looked after, and that has driven costs up. But we have a road safety strategy in place that has a goal to be the safest road regime in North America by 2020.

I met with our provincial health officer just the other day, along with the Transportation Minister, discussing his report that’s coming out soon. We see that between 2005 and 2014, road deaths have decreased by 36 percent. That’s an enormous decrease.

Since our government’s tough new approach to drinking and driving — and that was implemented in September 2010 — B.C. has seen a 52 percent reduction in alcohol-related motor vehicle fatalities. In fact, that roadside prohibition law has now saved 260 lives, something that is very personally meaningful to me, given the loss of my nephew four years ago.

We are said to be one of the economic leaders in this country in 2016, according to many, many different banks and think tanks. We know that we have a prosperous future ahead of us, in spite of a stormy outlook in some areas of the world economy.

I want to talk about health care. I had the opportunity to speak to the B.C. Patient and Safety Quality Council this morning in Vancouver — 900 people that came together across the health sector to talk about how we can make sure we have a very, very high-quality health care system and do it in a way that’s sustainable.

In fact, one of the key speakers from the U.K. talked about the need to keep costs manageable. Otherwise, if we just throw more and more money at the health care system, it will eat away all of the rest of our budget for education, for advanced education, for income assistance, for disability, for supporting people who are vulnerable.

We have to do it in a way that makes sense. So I’m very proud of the fact that British Columbia spends the third-lowest per capita in this country.

Now, some people will say: “You’re not spending enough.” We have the very best health outcomes in all of Canada, so I think we’re spending exactly what we need to spend. Actually, we can do more with the money we’re spending.

We can drive efficiencies. We can find better ways to look after people, not relying so much on the acute care system but providing care for people in their homes, in their community, to prevent them from having to tip over the edge and go to the hospital and have the high-priced acute care services. As valuable as they are, we should not have an overreliance on them.

[1710]

So when health authorities like Fraser Health open up over 400 new beds in the community — 400 new beds for elderly people and for hospice care — and close 80 acute care beds to pay for that and to rebalance the services between acute care and community care, that should be celebrated, not denigrated as we sometimes hear.

There’s been a lot of talk about Medical Services Plan premiums and a lot of debate about the best way to pay for health care. I just thought it interesting, because there’s been a lot of dialogue about it. There have been people who say we should just do away with MSP and put it in the tax system. I know that debate will continue, and I welcome that debate, because I think we always should be looking at the very best ways to provide government services.

I’ve got the Hansard from October 13, 1961, from Saskatchewan, when Tommy Douglas, the Premier, introduced public health care in Saskatchewan. I just thought it would be insightful for people to hear this, because this is something I think we’re all very proud of, the universal health care that we have in this country.

Tommy Douglas went…. It was a very long speech and very informative, a very interesting speech. Just an excerpt.

“Every person in the province who is self-supporting and able to pay a relatively small per capita tax will be eligible for care. Those who are not self-supporting will be covered by other programs. I want to say that I think there is a value in having every family and every individual make some individual contribution.

“I think it has psychological value. I think it keeps the public aware of the cost and gives the people a sense of personal responsibility. I would say to the members of this House that even if we could finance the plan without a per capita tax, I personally would strongly advise against it. I would like to see the per capita tax some day so low that it’s merely a nominal tax.

“But I think there is psychological value in people paying something for their cards. It is something which they have bought; it entitles them to certain services. We should have the constant realization that if these services are abused and costs get out of hand, then, of course, the cost of the medical care is bound to go up.”

I thought it was quite insightful to talk about that. He did envision, in fact, user fees and premiums. We’ve seen
[ Page 10756 ]
user fees, of course, disappear over the years, and premiums certainly are evolving. But when we look at the cost of health care…. A couple — my wife and I, for example…. We would pay $1,872 a year for MSP because we earn far more than qualifies for assistance. But when I think about the cost for someone my age, it’s far higher than 900-some-odd dollars, half of what my wife and I are paying. It is a nominal cost in terms of what the health care system provides.

If you are age 65 to 69, about $6,300 a year is spent on you, not $900. If you are a person that is 75 to 79, it’s $11,557 for health care on average, not $900. The MSP premium is a relatively nominal fee, but we recognize that for some people, it is a cost that we have to try to mitigate. We’ve done that with the progressive approach to increase the affordability for some people that are struggling with MSP premiums.

Is it the perfect system? Probably not. There’s going to be lots of debate around where we go from here, but I think we should recognize the historic value of MSP premiums and the fact that we are, in fact, reducing costs for those that are vulnerable.

That’s really all I have to say, because I know our time is short. I did want the opportunity to put a little perspective on health care and also, once again, thank all of the people in the health care system in the province of British Columbia, all the nurses, the physicians, the health care aides, the people who clean our hospitals, the people that administer our hospitals and the volunteers, primarily on health authority boards, and those volunteers who go into our hospitals that raise money for foundations.

We have a tremendous system, and I want to thank all of those people that are involved. With that, I want to restate my full-hearted support of the budget and the budget implementation act.

[1715]

B. Routley: It is indeed interesting to follow the other speakers that I’ve heard today and listen carefully to their views on Bill 10, the Budget Measures Implementation Act. They, I’m sure, will not be surprised to hear from me — well, they might be surprised at this part — that, in some ways, this B.C. prosperity fund gives me a little joy.

Why does it give me a little joy? Why would I actually be excited, and why would I go so far as to say that I just love that they’ve got this prosperity fund? Contrary to some of the other folks that have spoken about this, I just love it because this shows very clearly exactly the principle that I’ve talked about of jiggery-pokery going on in the province of British Columbia. I want to thank the members on the other side for keeping the whole thing going.

When I was a young lad, I used to love to watch western movies and that kind of stuff, and they invariably had a snake oil salesman who would roll into town and stand on the back of the covered wagon and say: “This elixir is going to cure everything that’s wrong with you. You can take one of these bottles home. Maybe you should buy two or three. Buy one for your mom. Buy one for your wife. Buy one for all your relatives.” And it worked. They sold like hotcakes.

You know, I experienced in my own life…. I don’t mind admitting this. I went to the PNE one day, and you may even be shocked and surprised that I fell for this kind of jiggery-pokery. But I was a young man, and I’d been away from my wife for a while, and here I saw this wonderful demonstration about mops.

What did I know about mops? I knew absolutely nothing about mops other than they had this wonderful orange mop, and they spun it around, and they cleaned from the tile all the way through the linoleum right into everything. They managed to mop everything up with this one single mop, and if I got in on the deal today, I could get two for $19.99. Two.

So there I was with my two mops, arriving at home from my time away. I fully expected my wife to be absolutely thrilled with my two mops. Well, I should tell you, it was a major disappointment. It wasn’t near the excitement that I expected. It was just the kind of jiggery-pokery that all of us can fall for from time to time.

And we hear this prosperity fund. You’ve got to love this. It’s presto chango. It was going to make billions of dollars. Oh, wasn’t it wonderful? It was so exciting. And just before the election, who knew that they could come up with such a wonderful idea as a prosperity fund with billions and millions of dollars?

And the best part was, there were going to be 100,000 jobs. Win a house. Win a car. Win a prosperity fund. Oh, it’s all going to be good, and we’re going to have jobs galore. It’s going to be so wonderful. You can hardly even imagine it.

And here we are today, and what do we have? We have a prosperity fund. Presto chango again. Oh, it’s a little smaller now. Yeah, we’ve got to change it up just a little bit.

[1720]

Oh, and I just love this. I want to say to whoever the bright lights are that work on behalf of the Liberal Party coming up with this stuff…. Really, I would love to meet you and shake your hand. It’s just so wonderful that you come up with these bright ideas. It’s great.

You spin it that we’re going to put $100 million in a fund. Here are the rules: 50 percent of the fund, $50 million, is going to take care of debt…

Interjection.

B. Routley: A certain kind of debt at least, to be sure, operating debt — I’m sure that we’re going to focus on that.

…or other entities in accordance with government’s strategic priority. Wonderful. Again, who could do better than come up with a plan like that to work on their strategic priorities? The first 50 percent….
[ Page 10757 ]

Now, I hate to think in an unpositive way about something I’m having so much fun with, but I really wonder: did the minister have to come up with this prosperity fund? Was this something that was in his letter from the Premier? It said: “You’ve got to come up with a prosperity fund.”

So here we are. We’ve got a prosperity fund, and the rule is 50 percent goes to other strategic priorities — at least 25 percent. Now we’re down to 25 percent that we’re going to save for accumulated earnings. We’re going to be accumulating earnings on the 25 percent, so $25 million. Meanwhile, they’ve got $70 billion in debt in British Columbia, $100 billion that they’ve spent on contractual commitments.

“Oh, don’t look over there. Look over here, in this pocket over here. This is where all the magic happens. It’s right here in the prosperity fund, and we’re stuffing a little cash in there. Just look in this one. Don’t look over here, whatever you do. We don’t want you to focus on this negative thinking. Oh my goodness. The other side thinks about negative things like facts.”

It must be so annoying to hear the truth fed back about the facts of what’s really going on. Again, I just can’t thank them enough for coming up with something that keeps jiggery-pokery alive in British Columbia. No question about it.

Now I want to read a little history, a little reflection. How bad was this jiggery-pokery, this razzle-dazzle, this new idea? Again, just before the election…. Don’t you think it’s odd, when you really reflect back on it? Don’t you think it’s just a tad bit odd that all of a sudden, just before an election, there’s this new windfall staring us right in the face? How could we possibly miss it? A windfall of such proportions that we’re going to have billions, maybe trillions, of dollars. Really, trillions of dollars. It wasn’t the covered wagon, but we’re going to get in the bus with “Debt-free B.C.”, and we’re going to run around B.C.

Let’s see what just a month…. Now, again, think about this. This is important to think about. One month before the election of 2013 — on April 29, to be precise — there was a CBC News reality team that waded into the spin of the B.C. Liberals. It was their job to look into this and to report. Was this hype or hope for British Columbia? That was their focus.

We had the Liberal claim of future liquefied natural gas sales that were going to pay the province’s debt. You know, I’ve got to give it to them. The Liberals even offered up a digital rendition of one of the five promised LNG plants in northern British Columbia. They had a nice picture to go along with it. They said that liquefied natural gas is the industry that will make British Columbia debt-free.

[1725]

Now, again, a wonderful dream. If I was standing on the side of that dusty trail there, watching the cowboy roll into town with his elixir saying we’re going to be debt-free, boy, would I be interested in this.

We’re going to have a plan to export natural gas — wait till you hear this; this is what the Premier said — at five times the price we can get here in North America. Well, who knew? Who knew that we had that kind of authority over the world that we could get five times what we can get here in North America? Wow, that was very nice indeed.

The site has been prepped on the first of five promised LNG sites. That means they’ve plowed a little dirt around, moved a little dirt around where the gas will be extracted, chilled into liquid form and shipped to Asia, where there’s a thirst for LNG after the 2011 earthquake. Apparently, they thought the Japanese…. There was going to be this huge demand. This was another statement when they got out of the campaign bus in Dawson Creek. “The hunger for the cleanest fossil fuel on the planet is almost unlimited.”

Now, really? Were they going on what was based on fact, what was based on the analysis by not just the pundits but real analysis that people knew about? No. Peter Hughes, a United Kingdom energy consultant who specializes in international trade for LNG — again, this is a month before the election in 2013 — said that Japan’s willingness to pay sky-high prices is not unlimited. He says the current system of LNG, based on the price of oil, could soon change.

B.C. has major LNG competitors: East Africa, Australia, the United States, Qatar. If Asia succeeds in creating a more competitive commodity market, countries that can produce LNG cheaply will have a better shot at the lucrative contracts.

On the campaign trail, the Premier stuck to the pitch. “Development in natural gas can stimulate $1 trillion in economic activity across the province, 100,000 new jobs, $100 billion in 30 years.” You look at today’s events in the context of what was said back then, and you do have to…. Well, maybe it’s only me that gets to be entertained, but I was very entertained by this new prosperity fund. I thought: “Wow, this is really outside-of-the-box thinking. How brave of them.”

How brave does it get to come up with a prosperity fund? They’re going to take $100 million, throw it in there and change the whole original context. Oh well, they can still say we’ve got a prosperity fund. There’s not a single nickel in it from natural gas — no. It can all be repurposed, and they’ve got wonderful language in there.

[Madame Speaker in the chair.]

What did Hughes have to say? He said: “It strikes me as a little bit of wishful thinking.” This is before the election of 2013. “B.C. has to compete for that market going forward and compete with a number of different potential sources of LNG and will have to do so on the basis of its cost-competitiveness.” He was just one of more than a dozen LNG analysts — now, this is important: a dozen LNG analysts — predicting that there was going to
[ Page 10758 ]
be a major price correction in an uncertain future market for LNG.

In Australia, a $45 billion project was scrapped earlier that month. I will remind you. That was the April of 2013. In March of 2013, there was a major project scrapped because of plummeting prices.

[1730]

Now, we had at the time, of course, said that was putting all of their eggs in one basket. It’s interesting that the Conservative leader was also pointing out that he didn’t believe this, and government still insisted that the first plant would be running in the next two years.

Again, when you play the tape back and you look at what was said, I think it’s fair ball. In fact, it’s our job as the official opposition to point out what the promises were or what statements were made — how that all worked out in the context of where we’re at today. We were told — the good people of British Columbia were told — that within two years, we were going to have the first plant up and running and two others would be shipping LNG by 2020. That’s at least within four years, we’d have to have three up and running.

“In setting out the amount of money that we’d be putting into the prosperity fund at $100 billion over 30 years, we’ve set a very conservative number.” That was the statement then. “Time will certainly tell.” However, the government has “a history of overestimating natural gas revenue.” And in the last two years — so that was the 2011-2012, 2012-2013 budgets — they projected “nearly double the natural gas revenues of what they actually took in.”

Furthermore, the Premier, at that point, had “yet to sign any actual deals with investors to build LNG plants in B.C., though talks with several companies are ongoing.” I mention that for a very good reason, for what I’m about to say in a few minutes here. In the end, the CBC reality team checked this out, and they found that the Premier was making claims with no deals in place. It was “more hype and hope than fact, and we’re calling them political spin.”

I shorten that down from political spin to jiggery-pokery. That’s what we had going on in the province of British Columbia — more jiggery-pokery. And I will call it their bargaining strategy. Wait for this. This was really good.

Now, think about it. You’ve told the people of B.C. you’re going to get 100,000 jobs, trillions of dollars, pay down all of the debt, and now you’re going go in and shake the dust off and bargain with one of the biggest LNG players in the world. You’re going to bargain with them.

You know, the thing I want to say about the government’s LNG strategy…. I used to negotiate with 52 different companies. In fact, I did negotiations with forest industry employers from 1985 right till 2009, and I dealt with a lot of interesting players, to say the least, in bargaining. But this LNG strategy can be summed up in four words: “We won’t be undersold.”

It’s really a great slogan if you’re selling furniture in Victoria. However, it’s not a strategy for the Premier to adopt as a bargaining strategy to be selling off natural gas resources of British Columbia to — again, think about this — the 12th-richest corporation in the world. Let me camp there for a minute and say that again, so everybody can really have that sink in.

We’ve just told the 12th-richest corporation in the world that we’re going to hose it to them. We’re going to really clean up. We’re going to have a prosperity fund that is going to make our future in British Columbia look rosy. And so, again, I look at it in hindsight. Sure, I guess it’s easier in hindsight to look back at these things.

You know, when the Victoria furniture store owner Gordy Dodd was saying, “We won’t be undersold,” he was really good at that, and he was successful. However, this government should know, as anyone who reads a business magazine knows, that these last four years have not been a prime time to be selling our B.C. natural resources to build a new LNG plant.

[1735]

That’s how I feel when I watch what went on with bargaining. Maybe I’m alone, but I’m one of many who looked at what went on and now feel very badly about what has happened to a resource in British Columbia at a time when we were on the threshold of a collapse and, in my view, should have known better than to say the things that we said. And to alert a potential bargaining partner….

Let’s look at what happened. Some were saying, at the time, that the window closed when we learned the world price had fallen dramatically and severely, way less than half of what the prices were. At the same time, signs were everywhere that the world was awash in an oversupply of LNG.

The Globe and Mail wrote in the summer of 2015 that in the current global context of “LNG and slumping prices for oil and gas, many observers say it’s unlikely that most of the…LNG projects on the west coast will get built at all.” Now, that’s what is our reality. Do we wish it was so? No.

Moody’s Investors Service Inc. said that in 2015: “The vast majority of North American LNG projects face cancellation. The energy sector is also under pressure to rein in spending in an environment of low oil and gas prices and overcapacity, and the companies have been delaying or abandoning projects and development projects.”

This government seemed to jump in, in a race to the bottom. That’s, again, just my view. I think it was a race to the bottom, to a “we won’t be undersold” attitude. Whatever the buyer wants, the buyer gets, including more than two years to make an investment decision. That was one of the conditions they demanded and got.

Does any government really want to stand up and tell us…? If this B.C. resource that we were selling at the time was gold, would we go in the middle of gold prices falling into recession and would we really run right out and
[ Page 10759 ]
give huge concessions to big corporations to build new gold mines? Would we really? Would we agree to lock in tax cuts for gold corporations, and would we promise to never raise corporate taxes on gold corporations for at least 25 years? Really?

Stopping the future B.C. governments…. That’s the other thing they negotiated. They stopped future B.C. governments from setting a fair share of British Columbian natural gas.

But now we have a prosperity fund. We have this prosperity fund, fantasy fund, that really is nothing more than a made-up scheme, a jiggery-pokery type of deal that really is illustrative of the fact that there’s no reality to the dream. We had a dream, and the dream was overstated. It was overpromised, and sadly, here we are.

When you ask yourself, hon. Speaker, did the 12th-richest corporation in the world…? Why would they even want to negotiate at the time? Well, they wanted to negotiate because they could get what I would call a concessionary deal, negotiate to give themselves that extra two years before they’d be on any kind of hook. Obviously, the 12th-richest corporation in the world was hoping to cash in big-time at B.C.’s expense, when the market turned. This would be, in my opinion, just like fleecing sheep. Sadly, this government couldn’t wait to get in line to be fleeced at a time when it was all bad, all wrong for British Columbia.

This government would have us all believe that they have some kind of profound plan. “Trust us. It will all be good. We won’t be undersold. That’s the plan.” Why would this government want to win the race to the bottom at all? It just makes no sense. But now we do have a fantasy fund.

[1740]

This government is putting the interests of the government ahead of the interests in British Columbia, in my opinion, by putting out a bargaining position and putting her political promises in front of the best wishes and the needs of British Columbians now and in the future, sitting down with the 12th-largest corporation in the world. The fact that the company played hardball in bargaining, back in 2004…. Again, reflection is interesting. You go back and look.

They announced in October of 2014, they threatened, that they would have a 15-year delay on the LNG project if a tax deal couldn’t be reached. Now, that’s what I call hard bargaining. I’ve done it before in the forest industry. We used to go out, both sides, and offer up press releases about how they were going to bargain hard. We would say: “Well, if you don’t sit down and deal with us, we’re going to have to get into a labour dispute.” That was not something we wanted to do, but that kind of thing.

In this case, there was hard bargaining, and it worked, because Petronas said that a multi-billion-dollar investment deal could be delayed by at least a decade unless an agreement could be reached. When we all recalled this, suddenly they dropped. By just a little bit? No. They slashed, by more than half, the original projections of how much we were going to get — more than half — plus piled on so many concessions and what I would call sweetheart deals that it’s hard to keep up with all of the agreements. Imagine asking for and receiving….

I wonder if they asked: “Do we get a corporate tax reduction, from 11 percent down to 8 percent? In fact, we want it cut in half.” I would imagine that if I were in the bargaining room and if I were bargaining for the company, I would have said: “Well, cut it in half for us. How about that?” Maybe they came back and said: “Well, no. We can’t really do that, but how about 8 percent? How does that sound, instead of everybody else paying 11? And we’ll lock it in for 25 years.”

I can imagine being the bargainer. But I would also know what it felt like, as a bargainer, what kind of position I would be in. Imagine if you were hired to go and bargain a deal after the person that needs the deal has run around and told the world, told the province: “We’re going to have billions of dollars. We’re going to pay off the debt. We’re going to do all these things.” Do you really think that we had a good hand? No. We’ve really got the hammer now. No, I don’t think so. Sadly, I’m really concerned about what has happened in this situation.

I really want to turn now to the millionaires getting their tax break, because it’s effective January 1 of this year. Did we get some crumbs from the table? Yes. Yes, we did. We got some crumbs from the table for people who are most in need. But I want to take the scales of justice. Let’s see these crumbs from the table, somewhere between 20 bucks and $77. And if you’re a millionaire, you get $17,000. It’s $17,000 for millionaires, 20 bucks to $77 for the poorest people in British Columbia that haven’t had an increase in nine years. Is it a move?

I’ve the heard justified indignation they feel. It’s terrible. “We’re doing something to help those.” But I do agree with the Finance Minister when he said it’s not going to make things necessarily better; it’s going to make things a little less hard. And that’s all they could come up with. But there is no problem for millionaires. Millionaires get, at the end of the day, a $17,000 break in their taxes.

I talked recently with one of the ministers in town, in Duncan, who was trying to keep up with the demand from people coming in looking for help paying everything from their hydro to dealing with all of their costs and choosing between whether they were going to have food or heat. Those are some of the choices that we have had.

We’ve seen increases, and this Bill 10 puts in place the tools to take more fees and deals with things like this prosperity fund that are not going help those people who are most in need.

[1745]

H. Bains: It is a pleasure, and I’m happy to stand again to speak on Bill 10, the Budget Measures Implementation Act, 2016.
[ Page 10760 ]

There are a number of interesting items in here, and I’m going to talk about one thing first. I want to talk about the prosperity fund, our favourite topic for this debate. Some call it a fantasy fund. You can name it anything you want, because at the end of the day, you won’t find anything in there.

You’ve heard the debates here. They say that they’re setting aside $100 million. Fifty percent of it is going over there; 25 percent is going over there; another 25 percent may go somewhere else. So where is this money? I think if you really look at it, what’s behind all of this is what the Premier said before the last election. She said: “We will have LNG plants all over the province, 15 of them. A few of them will be in operation by 2015.” And 2015 came and went, and 2016 came and is going to go — and no LNG. That prosperity fund was attached to the LNG, the revenue that would be coming from the LNG.

That’s what was promised, along with 100,000 jobs, a debt-free B.C., no sales tax. Everyone will be floating with money. That’s what was promised. That snake oil never came. That’s exactly what was promised.

Now, everyone is asking the Premier: “What about that promise?” So your record, because she knew…. This government’s record, since I’ve been following them — 2001, 2005, 2009, 2013, this last election…. They promised something different before the election, and then they did quite the opposite.

Their record is impeccable on that. They will say anything to win the election, and then after that, they’ll do quite the opposite. They knew. They didn’t mean to be serious about that. All they cared about was winning the election.

Let’s go back to the 2001 election. They weren’t going to sell B.C. Rail. Remember that? They were not going to rip up the collective agreements. Remember that promise? In writing, they will not do that. But right after the election, what did they do? Threw thousands of those low-paid, mostly immigrant workers from health care onto the streets. Some of them never found jobs. In some cases, the entire family was thrown out on the street. It was after they made the promise they’d never do that. They said they would never sell B.C. Rail; they did that.

In 2005, what kind of promise did they make at that time? Then in 2009: “We will not bring in the GST.” Remember that? Never bring in the GST. But right after the election, that’s exactly what they did.

Then the next one. “Well, our deficit will not be over $485 million.” Remember that? “Not a penny more that $485 million.” What we found after the election was it was almost a $2 billion deficit. So what they said before the election and what they do after the election is exactly the opposite.

Here it is again. In order to cover that stuff that they promised and weren’t going to deliver, now they’ve come up and created a fantasy fund, $100 million.

[1750]

It didn’t come from the LNG. Where did it come from? It came from the hard-working, taxpaying British Columbians. They dug deeper and went deeper into their pockets, dragged up a $100 million MSP premium increase and set aside this $100 million prosperity fund. That’s what it is.

Make no mistake about this. They can talk about a savings account. They can talk about prosperity for the future. They can talk about anything they want. The fact is they took money out of hard-working, taxpaying British Columbians, and they just created this phony account so that they could dip into that account and pay something else. That’s what they did. That’s what we have seen, what we have in front of us.

You know what? When they were making that promise before the last election, about LNG and how much money was going to come in, they knew that the United States was away head of us. They knew that Qatar was way ahead of us. They knew Australia was miles ahead of us.

They knew, or they ought to have known, that the United States is sitting on the largest deposit of gas in the world. They knew that. They knew that, and they knew that within ten years, the United States would become self-sufficient in energy. They knew that. So what would happen when the largest importer of energy was self-sufficient and then started to export? What would happen to those prices? They knew that, but they sold that snake oil.

I’m getting the nod, and noting the hour, I will reserve my time to speak again.

H. Bains moved adjournment of debate.

Motion approved.

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

Hon. T. Lake moved adjournment of the House.

Motion approved.

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

The House adjourned at 5:52 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF ENVIRONMENT

The House in Committee of Supply (Section A); J. Yap in the chair.
[ Page 10761 ]

The committee met at 1:37 p.m.

On Vote 21: ministry operations, $117,182,000.

The Chair: Minister, do you have a statement?

Hon. M. Polak: Just very briefly, I will introduce the staff that are in attendance, some of whom are behind me, some of whom are in the gallery.

We have Michael Lord, who’s the acting EFO in the natural resource sector. We have Gwenda Laughland, director of compliance policy and planning. We have Michelle Carr, assistant deputy minister of operations with the environmental assessment office. We have Kaaren Lewis, assistant deputy minister, environmental sustainability and strategic policy. We have Jim Standen, assistant deputy minister of B.C. Parks and conservation officer service; Mark Zacharias, assistant deputy minister, environmental protection; Kevin Jardine, associate deputy minister, environmental assessment office; and, of course, my deputy minister, Wes Shoemaker.

With that, Mr. Chair, we’re ready to begin our discussions around the Ministry of Environment estimates.

G. Heyman: I’d like to begin by thanking the minister for introducing the management team from the ministry. I’d also like to thank the management team, whom I won’t name individually without the list that the minister had. Many of you were in a briefing I received a couple of days ago, and I appreciate the overview that you provided and the time and the willingness to answer questions.

Without further ado, I intend to begin today with some general questions around budget and mandate. I’ve had a discussion with the minister. I may have a few general questions on climate change and the climate change secretariat later this afternoon, although I think I may save those as a group for Monday, when a representative of the secretariat is here. I will be moving on to environmental assessment this afternoon as well.

[1340]

My first question to the minister is with respect to the mandate letters. Can the minister please outline the steps she has taken to fulfill each of the instructions given by the Premier, as well as what amount has been budgeted in the coming fiscal year for each of these?

[1345]

Hon. M. Polak: I’m going to go partially electronic and partially on paper. Forgive the delay. As you can see from the size of the binder, for whatever reason, it took me awhile to find the last tab where it all was.

[1350]

I’ll go through these one by one. I’ll make one overarching comment, though, which is…. In terms of looking at each of the nine items, I can give you a general sense of where the budget for different pieces resides. But there are none that we’re able to identify that have a discrete line item. You’ll see why as we go through.

Balancing our budget — obviously, that’s pro forma. Every minister does that, or they don’t get their holdback. We intend to do that properly each year, and of course, it’s part of our regular operations.

Working with EMBC around what occurred in both the case of the Marathassa and also the Simushir. There have been some reviews already undertaken. That work isn’t complete. There may be recommendations that require a budget, but that remains to be seen. That isn’t complete at this stage.

What I’ll do is go through them all, and then if there are any particular ones, I think it might be easier if then we go back into it, if there are particular ones where you want to talk about specific action.

Number 3, working with the members of the climate leadership team in developing options for cabinet to move forward with the climate leadership plan. The member is probably aware we have a cabinet working group on climate leadership that the Premier chairs. We’re in the second round of consultation with respect to the climate leadership plan.

Again, we’re not aware of any discrete line items. This would be the ordinary work of our climate action secretariat. It would be undertaken with them. Of course, we’ve been indicating that we intend to put forward that final plan in the spring. Likely that’s somewhere between March and June. I’m thinking it’s probably more likely June.

Number 4, with the Premier’s office, prepare for and position B.C. to make a meaningful contribution prior to attending the United Nations Climate Change Conference, COP 21, in Paris this winter. Of course, we did that. Again, there wasn’t a specific budget for that. I can tell you that there was some from my ministerial office, some from the deputy minister’s office and then some from the climate action secretariat in terms of costs associated with doing that. But again, nothing specific. That would be ordinary operations.

Number 5, working with the Ministry of Forests, Lands and Natural Resource Operations, undertaking an analysis of the impact of lower snowpacks, retreating glaciers, on the forests of British Columbia, and make recommendations to cabinet on strategies to protect our forests from any impacts of climate change.

The work has been ongoing between our ministry and FNLRO. We have not reached the stage yet where we have been making recommendations to cabinet, but I’m advised by staff that they are currently developing the strategies to outline for those recommendations.

Number 6, work with the Ministries of Energy and Mines and Forests, Lands and Natural Resource Operations to provide options to cabinet on a wildlife access corridor in southeast B.C. This is work, as well, that’s been ongoing. There’s no specific budget for it.
[ Page 10762 ]
There would be if there was something established. As yet, though, that has not been finalized.

But discussions have been very productive, and, of course, I think the member knows that involves not just the ministries but also industry in the area, etc., who may also wish to contribute at some point. But again, it remains to be seen.

Number 7, complete the land-based heavy-oil spill response studies and consultations and make recommendations to cabinet on how to ensure our spill response regime requirements are consistent with the Premier’s five conditions for heavy-oil consideration. That, I’m sure, the member knows, because I’ve said it a number of times publicly. We intend to bring forward legislation in this session that will deal with that. That may result in a budget allocation in next year’s budget. It does not at this stage have an impact there.

Then, finally, work with Parliamentary Secretary Mike Bernier. I’ll just note that, of course, now it’s Parliamentary Secretary Jordan Sturdy and his Round Table on the Environment and the Economy. Again, not something where there is a discrete line item budget. It is just part of the ongoing work of the ministry, and any costs associated with the parliamentary secretary are absorbed by the budget that I have for the minister’s office.

We can go into any detail on any of those if you wish.

[1355]

G. Heyman: I will have some specific questions with regard to some of the points in the mandate letter. On the mandate point 2, which was to work with EMBC, can the minister tell us how far along the process of developing the recommendations is and whether there is any form of public consultation process associated with the work?

[1400]

Hon. M. Polak: First, with respect to the Marathassa. As a result of its location, in part, and also the nature of the incident, it involves quite a number of different players. In the after-action reports, they have been…. There’s an after-action report from the Coast Guard and also an after-action report from B.C. Together they amount to about 96 recommendations, some of which cross over.

The Coast Guard’s in and of itself amounted to about 25 recommendations. However, these right now are being developed with all the different agencies in integrated response planning. Some of the most important coming out of what British Columbia has been doing are around improving the notification system.

I know the member is aware that one of the major criticisms in the Marathassa incident was a lack of coordination in ensuring that all the different agencies were informed in a timely way and in who was responsible. That’s been a significant piece of the work. So in the Marathassa, that involved Coast Guard, Transport Canada, Environment Canada, DFO, and the province of British Columbia in a number of different areas, not just EMBC and Environment.

The Simushir focused more on the Coast Guard. It is their after-action report. In both of these cases, we are not at the point where recommendations have come to either federal or provincial cabinet. Although, as the agencies proceed, where they identify issues that are needing cabinet action — i.e., OICs, legislation — then they would make those recommendations.

Where they see that there are matters that they can deal with within their authority — for example, the Coast Guard — then they would take those actions themselves. Those would form a subsequent reporting out on the actions they’ve taken to respond.

So after-action reports on both. In the case of the Simushir, it’s an after-action report from the Coast Guard. And both are being worked on in the various agencies for potential recommendations to either or both federal and provincial cabinets with respect to improvements that cabinet may need to take action on.

G. Heyman: Thank you to the minister for the answer.

In terms of either the incident on the south coast or the incident on the north coast, is there any direct consultation with local governments in either region? And once the recommendations are completed…. I recognize that much of the response will be technical in nature and systemic in nature, but will the recommendations be put out for any period of public comment before being considered by cabinet?

[1405]

Hon. M. Polak: In terms of proceeding through the after-action reviews, I’m told that in both cases, both local governments and First Nations were heavily involved. There is some natural crossover with our role in the Environmental Management Act and what we’ve been working on, on the land-based spills response, because, of course, what happens in the water doesn’t typically remain in the water. It eventually makes its way to land. So there will be some crossover in that some of those lessons learned, as members will see when the legislation is introduced, have informed the work that we’ve done in developing a land-based spills response.

With respect to further consultation on the integrated response plan, we don’t know if the Coast Guard intends to simply finalize the plan through their consultations and then release it, or if they plan to release it for public commentary and then finalize the plan. We just don’t know the answer to that.

I can say, with respect to our work, that once our legislation is introduced and, hopefully, supported by the Legislature, we will be, of course, developing the regulations that go along to support that, some of which will cross over with some of this work. We will be engaged
[ Page 10763 ]
in very extensive consultations in line with what we’ve done, leading up to the legislation itself, with the intentions papers and also the different conferences, etc., that we hosted. We will be doing similar kinds of engagement going forward.

In terms of the integrated response plan, which would flow from this work in both of the after-action reviews, we just don’t know what the Coast Guard plans in terms of whether to have consultation before it’s finalized, or if they will simply finalize it based on the consultations they’ve done.

G. Heyman: Thank you to the minister. I am going to save questions for point 3 in the mandate letter for Monday, when we’re talking about climate generally.

With respect to point 5 in the mandate letter, which involves working with FLNRO for “an analysis of the impact of lower snowpacks and retreating glaciers on the forests of B.C. and to make recommendations to cabinet on strategies to protect our forests from any impacts of climate change,” I’m curious on two points.

What public consultations, if any, are planned with respect to this, and why, if the minister knows the answer to this, is there no mandate to examine the impact on water supplies themselves, whether for drinking water, agricultural purposes or hydroelectric production? Even if it’s not in the mandate letter, is that somewhere in the ministry’s workplan?

[1410]

Hon. M. Polak: The mandate letters direct a particular focus in a given number of areas. They certainly don’t limit what the ministry does. In this case, we were given the specific task to work with FLNRO around the impact of retreating glaciers on forestry.

But our work with the Ministry of Forests, Lands and Natural Resource Operations goes much further than that. They have, in FLNRO, their own climate action plans, most of which relate to adaptation, and we actively support them in that. We also do that more broadly. If you look at our service plan, we’ve been tracking for many years our work across government to help ministries develop those types of plans within their areas of operation, and we continue to do that.

In terms of water, it is a very big focus for us as we look to begin the implementation of the Water Sustainability Act. Of course, some of the elements of that are directly related to concerns around water availability — things like requiring decision-makers to consider environmental flow needs for the first time, requiring monitoring and reporting, doing the kind of work necessary to ensure that we have the appropriate levels of priority when there are times of drought so that we are able to manage water availability to meet the highest priority needs of those who are within a particular licence area. That’s an important move away from a purely first-in-time, first-in-right model, which was a very big feature of the Water Sustainability Act.

The work, with respect to the member’s question, is happening within our ministry and within others, notwithstanding that it’s not specifically mentioned in this particular item in the mandate letter.

[1415]

G. Heyman: With respect to point 6, on working with Energy and Mines and FLNRO on options for cabinet on a wildlife access corridor in southeast British Columbia, could the minister describe for us any public consultation or quasi-public consultation — for example, with environmental groups related to this — that is taking place or is planned and whether this will have any impact one way or the other on demands or considerations for a park and/or a wildlife management area in the Flathead?

Hon. M. Polak: I can provide a bit of detail on this, although the Ministry of Energy and Mines is the lead ministry, and we’re supporting them. We’ve had some initial meetings with Teck, the forestry companies — and I apologize I can’t name them all — and Ktunaxa, involvement from Wildsight. Our ecosystems group has been working together to support MEM.

I am aware that at this stage, Ktunaxa has indicated that they want a little more time to think about some of the early discussions we were having. They really were, at this stage, working to identify what the values are that we’re trying to protect in the area. We have not come as far as having discussions about any specific types of land designations. That may come. It may be that there are recommendations from those folks to look at different types of improvements to how we manage ecosystems in that area.

[1420]

We know that the Y-to-Y corridor is a really important piece that’s been talked about for many, many years by lots of folks, including the industry folks in the area. We’re happy to support MEM in it. But I would imagine that Energy and Mines would be able to provide you with a little bit more detail about where things are at right now in the discussions.

G. Heyman: I appreciate the answer. The minister is quite right; this area is unique and sensitive. It’s a wealth of biodiversity that may be unparalleled anywhere in the world and is critically important with changing climates. The groups that have been working on it have been working on it for years.

I think the minister is as aware as I am of the asks that have been made — some of them by myself in another role. Perhaps I would not have been as specific about the nature of the possible results had I looked carefully and thought through the fact that the lead is the Ministry of Energy and Mines. We’ll see how that goes.
[ Page 10764 ]

On point 9, it says: “To work with the Round Table on the Environment and the Economy to promote environmentally responsible economic development in British Columbia.” Perhaps the minister could provide a bit more detail about how much activity has taken place in this particular collaboration, what sorts of things are being looked at and how that affects the ministry, specifically, as well as the round-table work.

Hon. M. Polak: I can advise the member that they have had six meetings so far. They try to meet every three or four months — so six meetings so far. In fact, the most recent took place yesterday. They engaged in discussion reviewing the recommendations from the climate leadership team, with a particular focus on their impact on various sectors that have been identified.

The member will know from the recommendations — a lot of specific discussions around the built environment, the transportation sector and the industrial sector, for example. They have also discussed matters such as our spills response regime, liquefied natural gas, the Water Sustainability Act, parks funding and wolf management.

G. Heyman: Just for further clarity, would it be fair to say that responsibility for environmentally responsible economic development or green economic measures, as they’re generally referred to, rests within your ministry, or is it more of a cross-ministry initiative? If the latter, is it coordinated through your ministry and/or the parliamentary secretary?

My apologies for not directing the final part of the question through the Chair.

[1425]

Hon. M. Polak: As with many things in Environment, we play more of a facilitative role through policy support, policy guidance. For example, if you take the Ministries of FLNRO and MEM, they have sustainability plans where they try to incorporate environmental science and new knowledge into how they operate and regulate within their ministries. We help to support that with the expertise that we have.

Of course, something with respect to clean tech would be primarily the responsibility of the Ministry of Technology, Innovation and Citizens’ Services but, on the policy side, supported by work that we do around innovating in that space with respect to policy advice that we give, whether it’s GHG monitoring and reporting all the way into the science around species management. Our shop, which does strategic and policy development, plays a supportive role across government in the development of those kinds of initiatives, but there’s no specific area within the Ministry of Environment where clean-tech development would be housed within a particular department.

[D. Plecas in the chair.]

G. Heyman: I just want to pursue that a little bit. Perhaps the minister could give me an idea of what role the ministry plays with respect to promoting sustainable economic development or green economic development with the activities or planning of the Ministry of Jobs.

[1430]

Hon. M. Polak: I’ll expand, or try to, a little bit on my answer previously.

The Ministry of Jobs, Tourism and Skills Training is a part of other internal mechanisms that we utilize, such as the natural resources board and the deputy ministers committee on the strong economy. The Ministry of Environment is also a part of that, with other ministries.

We are the ministry that provides the scientific expertise and the best practices information. We are often called upon to assist ministries like JTST in reviewing materials that they are pursuing and putting a lens on it with respect to what we have as a knowledge base in various sectors. Again, it is that overarching facilitative role that we play in what is truly a cross-government effort.

G. Heyman: To pursue the question a bit further, I understand the facilitative role of the ministry. My question is whether the ministry actually engages any of the other relevant ministries or cabinet committees on a proactive basis based on….

Let me, for instance, use an example. Might the ministry initiate a discussion about the relative merits of infrastructure spending on transit to reduce greenhouse gas emissions versus roads or some appropriate balance or combination of the two as well as some analysis of the relative job numbers that could be created between the two modes — they’re not, strictly speaking, choices — of infrastructure spending?

Another example might be the employment value of more heavily investing in energy conservation, public-building retrofitting, commercial and private-residential retrofitting or encouraging building standards that actually help create and foster manufacturing in British Columbia and exports of B.C. products.

Is the ministry strictly in a facilitative role, a kind of on-demand role, or does the ministry actually see a role for itself in initiating those kinds of considerations?

Hon. M. Polak: The short answer is: it depends. Most often, though, it’s not generated by the Ministry of Environment — at least not purely. If it is generated by the Ministry of Environment, then that, historically, has been as a result of plans like the climate leadership plan, led by the Ministry of Environment. And then there’s a response from ministries.

For example, Transportation engages in its own planning about how to best see reductions in greenhouse gas emissions. B.C. Housing and the ministry responsible have engaged in that planning work themselves.
[ Page 10765 ]

We have worked very hard since the first climate leadership plan to ensure that ministries are not viewing the actions of government with respect to climate as those just belonging with the Ministry of Environment and then the rest have no responsibility. We’ve worked really hard to have ministries across government identify and be responsible for the areas that fit within their sectors. We’ve seen, I think, good success in having those ministries drive initiatives in their area. Of course, they have the bulk of the expertise in those fields.

It wouldn’t typically be Environment proactively approaching a ministry and asking them to do certain work. More often than not it would be us supporting them with technical expertise in planning that they are doing and driving within their ministries.

[1435]

G. Heyman: Every time I swear to myself that I’ve asked the last question on a particular point, I just get more and more intrigued.

Hon. M. Polak: It’s an interesting topic.

G. Heyman: It is. The minister is correct. It is an interesting and important topic.

My question is: is there a cabinet committee, or is there a body that she is aware of…? Is it a role for the climate action secretariat? Is it a role for the Round Table on the Environment and the Economy to attempt to do some coordination of overall jobs and development and policy planning of government, or is it more up to every ministry that is doing its planning to consult the Ministry of Environment, for instance, or other ministries?

Hon. M. Polak: There is a cabinet committee on the strong economy. It has attached to it a deputy ministers committee, and Environment is part of that. It’s part of how we bring the balance there. We also participate in the natural resources board.

With respect to climate in particular, of course, through the cabinet working group on climate leadership…. That will set out the updated actions that will flow from the new plan, so that in turn will drive new initiatives across government.

Staff were saying, though…. And I would observe this as well. I agree with them. If I think back to my time in this place, beginning in 2005 to now, we’ve reached a point where I would be hard-pressed to find an initiative of government that doesn’t find its home in some kind of overarching, multi-ministry working group of some kind. Almost everything that’s undertaken these days ends up having attachments to a number of ministries. There’d be very few things you could find, although I’m sure somebody will correct me and find one.

[1440]

But it’s harder and harder to find initiatives where you have one ministry only doing the work on something. Most of them do have a crossover.

I didn’t bring along with me the mandate that was provided to the climate leadership team, when we asked them to consider what recommendations they might make to government. While my deputy minister furiously searches for them, I can tell you, though, that there was reflected in that mandate the ultimate challenge. That was to make recommendations to government that will see us continuing to lead on climate, reach our targets and, at the same time, maintain a strong economy that includes the development of an LNG industry as well as adherence to our B.C. jobs plan. It was quite a staggering piece of work for them.

Here we go. I’ll just read a couple. They relate to the whole issue of balance. This is what they were asked to make recommendations on: “how to maintain B.C.’s climate leadership….” I’m going to paraphrase, because it’s too long if I just read it word for word.

Maintain B.C.’s climate leadership. Provide updates to our current plan that would see us adopt policies enabling us to meet our targets, while at the same time, within the context of economic growth, recommendations to achieve reductions in areas such as the industrial sector, the transportation sector and built environment. Then, of course, doing so in a context of enhancing government-to-government relationships with First Nations and also collaboration with other levels of government — local governments, for example.

It really is a part of overall government planning, in pretty much every department, that you are looking at sustainability — not just in, maybe, the old-time traditional sense but also in the sense of how it relates to climate as well.

G. Heyman: I noticed that the parliamentary secretary responsible for the round table just walked in and, unfortunately, missed our spirited discussion of the activities.

Interjection.

G. Heyman: Maybe. It’s possible.

Thank you to the minister for the answers. My next question is: have there been any fee increases or new fees imposed by the ministry, or are any contemplated? If so, for what? How much revenue will this generate? And how does this compare to the old fee, in terms of either a percentage or a dollar increase? If there are too many, let’s take the top ten.

[1445]

Hon. M. Polak: I’ll do the best I can, and if you need to delve further, we can do that. I will first say that I’m pleased to report there are fewer than I thought there were. That’s always a good thing.
[ Page 10766 ]

With respect to parks, we just announced another lift in about half of the parks that charge fees — not all for camping, but that’s what most people are familiar with. An average of $2- to $5-per-night increase for about a third…. I’ll back up. Otherwise, I’m going to make it sound way too obtuse.

There were fees raised last year, and this year’s increase only amounts to about half of our parks where there are fees charged. Of that group, of the half where fees are charged and that went up this year, about a third of those had an increase last year. The other two-thirds hadn’t seen an increase from, I think, 2006.

Overall, that should amount to just over $400,000 — probably about $410,000. You won’t see a specific line item related to incoming fees as a revenue because of the way it’s managed. We have park facility operators, and, in some cases, we make a deficiency payment if they haven’t taken in as much to cover their costs. In other cases, there is a return in terms of revenue. In the end, all of it is maintained within the park system for maintenance, for upgrades and for things like that. I know it’s always a confusion for folks to look in the budget list and try to link the numbers.

Next up would be water. Of course, the increase or the change already went into place for surface water. We are about to implement the regulations with respect to the Water Sustainability Act. That will bring groundwater in. The estimate is that we will start with about $8 million, in and around there — I think it’s $7.7 million — going up to $11 million annually.

However, the bulk of that, all but a very small amount, will actually go to Forests, Lands and Natural Resource Operations, because while we have the legislation, the Water Sustainability Act, and the policy aspect of that, it is FLNRO that handles the operational aspects for the most part. There are some aspects we handle, but the very large portion of that will be Forests, Lands and Natural Resource Operations, because they are the ones in charge of allocation and the water commissioner and things of that nature.

Then with respect to integrated pest management, here the fee is not actually going to change, but there will, of course, now be a new group of stakeholders who have to pay the fee if they wish to continue using pesticides.

[1450]

I’ll note that for the residential applicator certificate program, there actually is no fee — so no change in the fee under integrated pest management, but a broader group of people to whom the fee would be applied.

G. Heyman: I may have some more questions on water fees at another time.

Are there any ongoing reviews in the ministry, or have any reviews been completed in the past six months? If so, are they public, or will they be made public? I’m not asking about the reviews we’ve already discussed when we were reviewing the mandate letter.

Hon. M. Polak: Do you mean with respect to fees, or do you mean…?

G. Heyman: No, in general.

[1455]

Hon. M. Polak: Now, I may be defining review too tightly, so I’ll ask a question about that before I’m finished.

In terms of how I’m perceiving the question, there would be two areas. One has ongoing review, as I’m sure the member knows, not only with respect to the implementation overall of the Water Sustainability Act but specifically around pricing and, within that, a subset specific to those that are bottling water.

Part of that is dependent upon the new information we have as groundwater comes under the regulation. Of course, at this stage, we don’t regulate, monitor or track groundwater usage in a way that would allow us to identify, for example, water bottlers across the province if they are utilizing groundwater.

We also, of course, need to be reviewing that for consistency with cost recovery. The guidance with respect to fees charged is that they ought to be within 75 and 125 percent of operational costs. That’s something that has been highlighted by many who expressed concern about it in the public. They want to ensure that we’re charging sufficient for the water resource usage and that we can adequately provide for the management of the resource. That’s ongoing.

The other isn’t ongoing. It’s completed, but it has some continuous improvement efforts flowing out of it, and that is with respect to the environmental assessment office. There is ongoing work with respect to improving aboriginal engagement and collaboration on a government-to-government basis and, of course, predictability and transparency in the consultation processes.

It’s providing new and updated guidance on key milestones — including on how public consultation should be practised, decision-making, drafting of assessment reports, those kinds of things, for greater clarity, and trying to modernize the EAO web-based interface. It’s been getting better, but we are still challenged by providing to the public substantial amounts of information in a way that’s more easily accessed by them and is easier for them to read through and find what they want.

Now, I’m not sure if the member was interested in…. We have a whole bunch of internal areas that are being reviewed under the lean model. I don’t know if the member was interested in those. That’s really more operational. We can certainly list those if he wishes.

Those are the two that I’m aware of. Again, I will grant that perhaps I’m defining review too narrowly. To the member, if he can provide some guidance there, I’m more than happy to find other information for him.
[ Page 10767 ]

G. Heyman: I’ll take the minister’s questions in reverse order. I actually could have simplified it by asking my next question in conjunction with the one I just asked.

[1500]

I am asking whether, in addition to the reviews, there are any audits ongoing of ministry program performance or any internal ministry audits of program effectiveness and/or performance, whether these will be made public, or whether any are completed and have or have not been made public. Obviously, I think we’d know if they’d been made public, so that’s pretty self-explanatory.

Then back to the answer to the first question. Could the minister give a bit more clarity, with respect to water, about what she considers to be part of administration costs and, also, whether the review of water pricing is still going on? It was my understanding — I might need to be corrected — that it had taken place and was completed.

[1505]

Hon. M. Polak: I’ll deal with the water part first. Folks can be forgiven for thinking that that’s complete because, of course, we came out with water rates. However, as I was saying in the earlier answer, right now those are all estimates.

We’re estimating that the costs to provide the new programming are going to be in the range of what we’ve estimated for revenues — which is the $7.7 million or so, going up to $11 million, annually. Part of what we will be doing across the first year of implementation is seeing if we have been correct in those estimates, and adjusting accordingly, because we really don’t know.

We’ve made our best examination of what is going to be required, and we’ve made our best estimation of what revenues will be generated. But of course, being as we don’t currently monitor or regulate groundwater use, it is an estimate. It’s one where that review will be continuing and adjustments made if we find that the numbers are not consistent with one another.

In terms of what it covers, the best example is probably just on the staffing side, because of course, when we look at admin costs, that’s what we look at: its staffing expertise. In the area of water — the bulk of which is in FLNRO; some of it is in our ministry, though — it results in more than 80 FTEs being added. So significant additions in terms of staffing, in particular in Forests, Lands and Natural Resource Operations.

As far as examinations of program effectiveness or performance audits, there’s no process where we conduct an audit that results in a report. We do work on lean projects. The Public Service Agency has a lean project office, and every ministry has areas where we work through lean projects that then result in changes in practice sometimes. But there’s no report completed that’s handed out or filed or anything of that nature. There may be better specificity that you could get from the Public Service Agency.

If you’re interested, I could list off the number of areas where we’ve conducted lean projects, but it’s essentially operational, in that departments under a lean project would look at what they’re doing and see if they can do some things better, in its simplest form.

G. Heyman: Are there records kept of these reviews or communications to the deputies or email communications that we might access if we filed a freedom-of-information request?

[1510]

Hon. M. Polak: There are ongoing tracking documents. One of the wonderful things about being a minister and going through estimates is that you learn new things. Probably everybody else knows this — I did not — that the lean methodology is a continuous improvement methodology. Here’s the part I didn’t know: it was actually developed by Toyota and has now been employed across all sorts of corporate operations.

There are tracking documents maintained because it’s a continuing improvement model. We would have to, of course, make sure that they were appropriately looked at to see if there was any private information that should be severed, but certainly, those would be available through the appropriate FOI processes.

G. Heyman: Back to water. There was quite a bit of public outcry about the actual cost that was proposed to be charged to Nestlé, for example, for water. There was a general feeling in the public that it was low. There was much back and forth in the Legislature about it, and at one point the Premier said in response that it seemed low. The public was concerned, and she thought that number should be reviewed.

I’m wondering if the Premier, following that statement, had any direct or indirect communication with the minister about what her expectations were in that regard.

Hon. M. Polak: I can’t recall anything beyond the conversation. We certainly, as any ministry would, took the Premier’s comments seriously, and we added a specific look at water bottlers to our review. Again, as I’ve explained previously, there is some work that will have to, naturally, wait until we see some of the information coming in to give us a sense of even the number of those who are bottling within British Columbia and the amounts they are currently utilizing so that we can actually base our review on some data.

Interestingly, the only reason that we have data with respect to Nestlé is because they voluntarily provide it. Of course, one of the advantages to the new Water Sustainability Act is that industrial users such as water bottlers will be required to monitor and report their groundwater usage.
[ Page 10768 ]

I can’t recall anything beyond the conversation with the Premier. I don’t think I’ve received any document direction from her.

G. Heyman: Just so I’m clear, and I don’t want to put words in the minister’s mouth, there may be some variation in price depending on a calculation of what it costs to cover administrative fees, but absent any change in the parameters of how the pricing is calculated, there likely wouldn’t be any significant change in water pricing as a result of the Premier’s comment because the parameters that were used to set the price are, in fact, the parameters that the ministry and the government are sticking with.

Hon. M. Polak: That depends. It is open to government to determine a different scale with which one is meting out the different fees, different categories. That will also be an aspect of what we look at in the review.

[1515]

When we moved toward the new Water Sustainability Act, of course we were addressing a piece of legislation that was generations old, so we revised the categories, for example, that determine which category of usage is charged which fee. That could be something open to discussion based on information that we gather in this review.

Really, that decision has not been made yet. It remains to be seen how the new information we gather drives that decision-making.

The parameters that don’t change are with respect to: for what purpose do we charge fees globally? Do we charge those fees in order to recover our costs, which is our mandate? Or do we charge fees — in which case, they would be something different; they would be royalty fees, etc. — in order to drive a revenue stream that goes beyond cost recovery, such as we do in some of the other natural resource areas?

Now, that would be a policy change. It’s not a policy change that we have made at this stage, nor have we indicated an intent to do that. It is important, as many have raised in the field of water conservation, not to create an incentive for government to wish to generate revenue from a resource that we are trying to conserve.

It is also important that we maintain Crown ownership of water such that we are able to regulate it in the public interest. That is something that I know California has struggled with in their licensing scheme, where licences in California have truly become an asset that people buy and sell. We’re very conscious of the need to cautiously approach water pricing such that we don’t create unintended consequences.

Lastly, I will just note that in the public discussion and debate that took place with respect to this as recently as, I think, six or eight months ago …. When I was engaged in a number of radio interviews, proponents of a petition were also guests on many of those programs and actually took the same view that we should not be doing more than cost recovery. It was their belief that we were not charging enough to achieve the cost recovery, that it was going to cost us more.

We don’t disagree with that view. But our best estimate right now is the numbers that we’re using.

G. Heyman: Thank you to the minister. The minister has essentially repeated what she said in the House many times in response to questions primarily from the member for Vancouver–West End. Let me drill down a little deeper.

My understanding is that when the minister refers to cost recovery, she’s referring to administration. I’m wondering if the minister would consider cost recovery to also cover such measures as — and this would seem to me to be a reasonable fee to charge people who are making a significant profit from B.C. water — costs of remediation, costs of research into impacts of climate change, measures to mitigate and adapt, measures to ensure adequate water supplies in the future and purity of water. There are more I could add to the list.

If the minister considers that to be part of the costs, then that gives me a different perspective on it. If she doesn’t and it’s strictly the cost of administering licensing and monitoring usage, my question would be: why does the minister and the government not consider maintenance and improving the health of B.C.’s water supply to be a reasonable cost?

[1520]

Hon. M. Polak: The short answer is that it’s not up to the Ministry of Environment or, indeed, government to be the primary determinant as to what is considered an administration cost. It’s not a question of what is reasonable, although accountants might argue with me, but it is a question of accounting: what are you allowed to determine is an administration cost and still be following rules of general accounting, which governments have to follow and which are then reviewed by auditors, etc., and in the public domain?

One doesn’t, as a ministry, in any ministry, have the luxury of arbitrarily determining that a particular aspect of costs is administrative in nature. There are rules that govern, for example, what one can charge for and consider it administration. I will try to give as good an example as I can come up with.

Within the subject areas, some of which the member mentioned — remediation, adaptation and research — by all means, many of the 80-plus FTEs that will be added will be engaged in those types of activities. However, in terms of then broadening that out to be anything that has to do with remediation around water adaptation research, not all of those would necessarily qualify under a designation as administration.

There are all manner of things that are done across government, with respect to water, of a project nature that
[ Page 10769 ]
wouldn’t necessarily relate to an allocation of water. There could be health issues with respect to water that wouldn’t be considered administrative costs. So it isn’t a question of: does the minister think these are reasonable administrative costs? There are accounting rules around that.

[1525]

Within our review, if we identify areas that we think should be captured under that definition, we would certainly pursue that. Ultimately, though, it would be those who are expert in accounting principles and what is allowable to be declared as administration. Again, that will be considered as we go through the review process.

G. Heyman: Well, this is another example where the answer begs another question. I accept that there may be a limited definition of “administration,” but the minister has said that the policy of government is to recapture administrative costs. The policy of government could also be to recapture administrative costs and other costs that are associated with maintaining a healthy water supply in British Columbia, the benefits of which, in terms of profit, will be flowing to private companies. It seems reasonable that they share in the costs of maintaining the public resource from which they’ll benefit.

So let me simply ask the minister why it is not government policy to include those costs in the fees that are charged for use of the public resource.

Hon. M. Polak: I’ll try to unpack this in a bit of a different way. I’ll start, maybe, back to front. If we, in the process of reviewing of what we charge and what is necessary for us to manage the legislation, identify areas that we believe should rightly be included in administrative costs, we would certainly pursue that with people in the Ministry of Finance and, potentially, those in the Auditor General’s office.

Any time in any department in government when one is entitling something as an administrative fee, there are rules around that. We would have to ensure we are governed by those. Those aren’t rules that government makes up. They exist as accounting rules that government must obey.

Then there is, though, the policy question. The member is correct. It is open to any government to decide that they wish to charge amounts with respect to water that go beyond what would ordinarily be considered administrative fees and, therefore, contribute to the consolidated revenue fund and, therefore, the broader operations of government — in this case, around water.

Were one to do that, there is a risk associated with that. That is that you have then gone beyond cost recovery. A risk, then, occurs with respect to the commodification of water. We are very fortunate in British Columbia that, over these generations, we have maintained Crown ownership of water. It ensures that government has and retains the power to pull a licence at any time from any user who is not obeying the conditions of their licence.

Those conditions, of course, have become stricter now — or will become stricter with the implementation of the Water Sustainability Act. But that value of being able to regulate the use of water is important enough that that new policy direction would have to be very, very carefully considered with respect to its potential implications.

At this stage, our government has indicated that we are not willing to proceed down that path. We are insistent upon ensuring that we don’t imply, through the price signal, some type of ownership of the water resource and that, instead, those who have a licence are only paying a rental fee. They do not own the resource.

G. Heyman: Certainly, I don’t and, to my knowledge, the vast majority of British Columbians don’t want to see water treated as a commodity or be subject to trade agreements and rules in a way that negatively impacts government’s ability to publicly own, control and manage a resource that’s so fundamental to public health and life.

[1530]

[M. Dalton in the chair.]

But the fact remains there are private companies that are being given access, through water licences, to British Columbia’s water, British Columbia’s public resource. They are taking that water to make a profit, and they, along with everyone else, have an interest in maintaining the health of the water resource, whether that means remediation of some watersheds or whether that means research about future supplies in an era of climate change.

It seems to me that most British Columbians would believe that they should not shoulder those costs or let that research or remediation go undone, while others are able to profit, before we have the knowledge to know if it can be sustained. So I certainly hope the government will take a look at policy instruments that are consistent with maintaining our right to public control of water in the course of this review.

My next set of questions to the minister, Chair, will be with respect to environmental assessment. I don’t know if there’s a chair shuffle that she would like to make in the interim.

We’re good to go.

The Chair: We’re going to recess here for five minutes.

The committee recessed from 3:31 p.m. to 3:36 p.m.

[M. Dalton in the chair.]

G. Heyman: There has been a recent B.C. Supreme Court ruling that the province has breached the honour of the Crown by failing to consult with the Gitga’at and other coastal First Nations on the Enbridge northern gateway pipeline.
[ Page 10770 ]

The court ruling stemmed from the B.C. government’s agreement with Ottawa to hold a single environmental assessment process under the National Energy Board, rather than conduct its own process. It did this by signing an equivalency agreement.

The ruling of the court said that by passing off decision-making, B.C. failed in its duty to consult. Art Sterritt, of Coastal First Nations and a Gitga’at member, said that the B.C. government was “playing a bit of politics” by handing over its power at the environmental assessment stage, then opposing the project, essentially saying that the provincial government could say what its conditions were but had no actual means with which to impose them on the decision-making process.

The Attorney General has said the judgment won’t require restarting the pipeline approval process. She says that what the court has said is that we can rely on the process that was in front of the NEB, but we don’t need to make our own independent provincial decision based on our own provincial legislation. She said that the province hasn’t yet decided on whether to appeal, although she is fully committed to consulting with First Nations.

There seems to be a bit of a disconnect between the view of the Attorney General and most people’s interpretation of the court ruling.

I assume the minister has studied the Supreme Court decision. I’d ask the minister what she believes the impact on B.C.’s environmental assessment process will be and whether it will change because of this decision. If so, how? If the answer is that we’re still studying that, does the minister have some sense of the time frame and how that will play out?

[1540]

Hon. M. Polak: First, to be clear…. I’m not saying the member isn’t clear, but for anybody who’s listening and maybe the member, this was an equivalency agreement with the National Energy Board, so it doesn’t apply broadly to other projects that wouldn’t be the subject of a National Energy Board process. It’s specific to the National Energy Board.

In the judge’s reasons, the judge distinguished between process and decision. First, let’s deal with First Nations consultation. With respect to First Nations consultation, the judge provided reasons outlining our obligations with respect to First Nations consultation — and that those cannot be delegated to the National Energy Board or other body. We have a responsibility, as the British Columbia Crown, to consult with First Nations, and we will do that in any case.

With respect to the rest of the process, the judge actually was fairly complimentary about the idea of having a single process — requiring, though, in the judge’s reasons, two decisions: one from the province, one from the federal government.

[1545]

As to what process will be undertaken, that will be dependent upon the assessment of the EAO as to what information they require in order to make a referral to ministers for that decision. They must consider if the information that is before them is sufficient or if they need additional information. It is open to the EA to make that determination, not directed by the minister.

In terms of timing, it’s difficult to say at this stage, because the EA is currently in discussions with the National Energy Board around how to proceed from here. The judge did not specify timing, but certainly, EAO always works to conduct themselves with appropriate efficiency and tries to get to decisions within appropriate timelines and, again, is not directed in that regard by the ministers involved in the case.

In fact, British Columbia is the only province or territory in Canada that actually has an independent office of environmental assessment. They will conduct their work and assess what information they have or may need, and they will conduct themselves accordingly to achieve that and then, subsequently, make a referral to ministers for a decision.

G. Heyman: Will the government be appealing the decision of the B.C. Supreme Court or accepting it?

Hon. M. Polak: The appeal deadline has passed. We decided not to appeal the decision.

G. Heyman: The minister knows that there has been…. Notwithstanding that the equivalency agreement was restricted to the National Energy Board, in this case, there has been much demand and call on the provincial government and the federal government to have a single environmental assessment process — one process, one decision model. Does the minister believe, in light of this decision by the court, that that is a route to be pursued?

Hon. M. Polak: At this stage, we are working with the federal government under a substituted model. Now, it’s not one overarching arrangement. Each project goes through….

[1550]

We request that a project be conducted under substitution. I should clarify that with substitution, there is one process, but there are two decisions. This is very important, not only for us, but also for First Nations, for communities.

In the past, the work of doing double the assessment work was really becoming overwhelming for communities, for First Nations, and for proponents as well. But substitution has allowed us to provide the information necessary to the federal government. With each project, there is an analysis conducted to ensure that the information that we will gather and then provide to them is sufficient for their process.
[ Page 10771 ]

The member will be aware that the federal process requires assessment of some aspects of a project. If it was purely a provincial assessment, we wouldn’t look at it, so substitution arrangements involve that kind of analysis.

We have completed our first substituted decision-making, and that was with respect to LNG Canada. There were two decisions, one by us and one by the federal government. They were released on the same day.

Wood fibre is also a substituted project. Our decision has been released. Of course, there was a certain democratic event occurring federally, and so the decision on wood fibre federally is still one that we are awaiting.

There are a further 12 that we are now in substitute arrangements with the federal government on, but we, at this stage, are satisfied with the substitution arrangements that we have.

We’re also aware that other provinces and territories are talking with the federal government with respect to their interest in operating under a substituted model, but again, our advantage in British Columbia is that we do have an independent office of environmental assessment, which other provinces and territories don’t. That does advantage us in terms of being able to proceed along a substitute arrangement with the federal government.

G. Heyman: Could the minister clarify for the record, before I go on with further questions, what the key differences between a substituted process and an equivalency agreement are?

Hon. M. Polak: In an equivalency agreement, there is only one decision. In a substituted agreement, there are two decisions, a provincial one and a federal one. They rely on the same information. The same report of the assessment is provided to both the ministers provincially and then also to the Canadian Environmental Assessment Agency, which then provides that to their cabinet as that is required.

G. Heyman: Is the minister or the government considering entering into future equivalency agreements with the National Energy Board?

Hon. M. Polak: No, we have no plans to enter into any new equivalency agreement. We were only discussing current status, in that the entire equivalency agreement was not struck down. However, it has been amended to reflect the decision, and, of course, the discussions now with the National Energy Board will determine what kind of next steps flow from the decision of the judge.

G. Heyman: Does the minister believe that the equivalency agreement with the National Energy Board was more effective than separate reviews? Parallel processes? And if so, why? Or why not? And has her view been affected by the court decision?

Hon. M. Polak: The only difference in the case is whether or not there are two decisions.

[1555]

In terms of substitution, though, the assessment that we make is one that is involving the federal government at the very beginning, when the environmental assessment office works with the federal Canadian Environmental Assessment Agency to determine what is in the scope of the assessment, what information is going to be required from the proponent.

The advantage to all parties is that you are not duplicating processes but determining that information once and then providing it to all the parties. Insofar as the differences, though…. Of course, one of the interesting puzzles put to us now as a result of the decision is that, should the decision made by provincial ministers with respect to an NEB process that ultimately results in a favourable decision federally…. If there was a negative decision provincially, the indications in the decision are that that decision of the province would be of no constitutional effect.

While the province has the right to make a determination different than the federal government — in the case of an interprovincial pipeline, for example — it is likely that if that were the decision of the province, it would have no constitutional effect.

G. Heyman: It might take a phalanx of lawyers on both sides to actually determine whether the province has, within its legal and constitutional entitlement, the ability to conduct an environmental assessment of a project proposal with different criteria than a federal government may have chosen to use and actually have it have effect, based on the impacts within the province. I’m not saying it wouldn’t be challenged, but it would certainly be interesting. We’ll never know at this point, because it wasn’t attempted.

I referred earlier to Art Sterritt’s concerns about the government of B.C. entering into an equivalency agreement with the National Energy Board, essentially giving up the right to set conditions of assessment or have consultation with First Nations be meaningful in this instance. Yet the provincial government and the Premier of the province laid out five conditions and were very vocal about the five conditions with Enbridge northern gateway and said those were the province’s conditions for the project to go forth.

With respect to Kinder Morgan, those conditions were repeated and repeated. They formed part of the submission to the National Energy Board, but the submission was made without any power. The provincial government has had, and has, five conditions, and yet entered into an equivalency agreement rather than choosing to institute a made-in-B.C. assessment process that would have allowed those conditions to form part of the assessment and the provincial decision-making process.
[ Page 10772 ]

Notwithstanding the minister’s argument that it would be or could be argued by the federal government that a provincial decision had no constitutional meaning, or the province had no constitutional right to make a decision, the province certainly would have been in a position to take, at a minimum — and I would argue it would be more than a minimum — a decision and a position based on an assessment conducted by the province, based on the provincial government’s five conditions or any other conditions that were developed in consultation with First Nations.

My question to the minister is: why would the provincial government create five conditions, take a strong stand about those five positions, but not do anything meaningful in order to be able to give those five conditions power, meaning and life? Instead, it entered into an equivalency agreement with the National Energy Board and then found itself on the outside, writing letters and making presentations to the National Energy Board, protesting the inadequacy of the NEB’s process.

[1600]

Hon. M. Polak: First, it’s important to point out that the equivalency agreement was most recently entered into in 2010, so it predates the work that was being done by the NEB with respect to its evaluations of those projects that we’ve been discussing.

Some important things to note, though, with respect to the five conditions. The environmental assessment office is only one of the pieces of analysis and consultation that is conducted with regard to a project of this nature. There is a tremendous amount of permitting that has to take place subsequent to, and in some cases prior to, an environmental assessment certificate being granted.

The environmental assessment certificate is only one part of the approval, or lack thereof, with respect to a project. There is a tremendous amount of consultation and assessment work and evaluation work that takes place through the permitting process through various ministries — Environment, FLNRO, Energy and Mines — and the Oil and Gas Commission. There are any number of places where more consultation, more analysis would also occur.

With respect to the five conditions, though, we have actually been doing a tremendous amount of work, especially with respect to conditions 2 and 3. We’ve already spoken during these estimates about the piece of legislation that we will be bringing forward this session enabling the development of our land-based spills regime. In June, we announced the main elements of that. They will be reflected in the legislation with respect to marine spill response.

We first initiated the Nuka research report. Subsequent to that, there was further analysis conducted by Nuka which helped us to identify gaps that need to be filled if we are to see a world-leading spills response regime in the marine environment. We will continue to work with proponents who have projects to ensure that they do meet our five conditions if they are to proceed. We have said repeatedly — and the member has repeated it here — we will not be seeing projects proceed in British Columbia that do not meet our five conditions. To be clear, that is separate and apart from the work that the environmental assessment office does under the Environmental Assessment Act.

G. Heyman: With respect to the minister’s answer that the equivalency agreement predated the particular hearings, the minister knows full well that an equivalency agreement can be terminated with 30 days of notice. She knows also that that was the position of the opposition in the last election. It was our position that we would do that and substitute a made-in-B.C. environmental assessment process. Certainly, that option was open to the government. No matter when the equivalency agreement was entered into, it could be changed. All it took was notice from the provincial government.

With respect to the Supreme Court decision that we’ve already discussed, the minister has said that the National Energy Board and the provincial government are studying the court decision and trying to determine what measures to take to give it life. Practically speaking, can the minister outline some of the options that her government is considering in order to meet the terms that the court decision laid out?

[1605]

Hon. M. Polak: This is something that the environmental assessment office is considering, together with the National Energy Board. It is not something that I am consulted on, nor is it something that I direct.

G. Heyman: Does the minister have any specific knowledge that would relate to the question I asked, whether or not it is a position of the government or the environmental assessment office?

Hon. M. Polak: I don’t have any specific knowledge with respect to the discussions of the environmental assessment office with the NEB. To the extent that….

I’ll say this a different way. Government does not direct the EAO in regard to these things. They act with respect to their legislation, and they act in accordance with it. Should they arrive at a policy decision that is outside of their legislated direction, I know that they would then approach government for a policy decision. If and until such occurred, it is well within the decision-making of the EAO, independent of government.

G. Heyman: The government may not direct the EAO. But is the minister, in answering my question, saying that the government, or herself as the minister, is not privy to the factors or the options being considered by the EAO?
[ Page 10773 ]

Hon. M. Polak: What I do know is what considerations they have before them. They are, as I’ve outlined in part, previously…. I will do so maybe in more detail. It is open. Really, this would be…. Anyone could actually conclude this from the decision. It is certainly required that the EAO conduct its own First Nations consultation. It is required that they make a referral to British Columbia ministers for a decision.

As to how they arrive at that referral document, it is open to them. Outside of the First Nations consultation piece, it is open to them to determine to what extent they rely on the information that has been provided through the NEB process or to request additional information. That is up to their analysis, their decision-making.

Beyond that, they don’t share with me the details of their analysis. They certainly would not come to me or to government for direction, unless they encountered something for which there was no guidance provided in their legislation. Of course, guidance to the EA process is provided by statute, so that, I think, would be a highly unusual circumstance. It hasn’t happened as I’ve been minister, but it’s within the realm of possibility.

[1610]

G. Heyman: Perhaps the minister or her staff could help me understand and help British Columbians understand. If the court found that the duty of the Crown…. It is the duty of the Crown, through the government of British Columbia, to consult with First Nations. If that’s where the responsibility lies…. But if all of the responses to the court decision will be decided by the EAO with regard to its statute, how are any conflicts between the responsibility of the Crown and the decisions of the EAO to be resolved?

In other words, if it’s a Crown responsibility, what instruments does the Crown have to exercise that responsibility, given the comments of the minister?

Hon. M. Polak: In discharging its obligations as the Crown, it is the EAO that government uses — for lack of a better word — to fulfil that obligation.

On any given project that is the subject of an environmental assessment, it is the environmental assessment office that conducts that consultation and discharges that obligation on behalf of the Crown.

G. Heyman: And if the EAO fails to discharge that responsibility in a way that is acceptable to the courts, what is the response of the government at that point? Does the government consider changing the legislation?

Hon. M. Polak: I’m going to try and provide a thorough response to your question without taking all of the rest of our time. So bear with me.

There are some elements that are probably important to outline just at the beginning so that I don’t manage to confuse things for you later, the first being the role of the executive director.

[1615]

The executive director, although I’m sure he’d love to travel more, doesn’t proceed to go out all around British Columbia and conduct the assessments himself. There are teams who go about to conduct the assessments for whatever projects are there and that they are obligated to assess. At the end of that process, the executive director then reviews the assessment that has been provided. Part of that is a consultation record, a consultation report. All of our assessment reports include that documentation. There are, from time to time, additional submissions provided by First Nations as well.

The executive director then, in making a referral to ministers, must provide his — in this case, his; it could be a her — assessment as to the sufficiency of the consultations with First Nations. That forms part of the referral package to ministers. Now, in doing so, the executive director, as well as the environmental assessment office, has access, of course, to expertise within Justice and Attorney General, or the Ministry of Aboriginal Relations and Reconciliation if they feel they need that assistance. That referral package then provides a determination as to the sufficiency of the consultation.

Then it is over to ministers for a decision. There are three possible decisions that ministers can reach with respect to a referral of a certificate: to grant a certificate with conditions; not to grant a certificate; or to ask for further assessment. That further assessment could include further work to consult with First Nations if that was deemed by the ministers in the report referral not to be sufficient.

G. Heyman: I appreciate the answer. It’s quite clear, except for this one point: can the minister clarify for me how asking for further assessment from the executive director, but essentially from the environmental assessment office, differs from giving direction to the environmental assessment office in the first place?

Hon. M. Polak: It is not open to ministers to re-judge, shall we say, their technical expertise. However, it is open to ministers to find that within the referral, there isn’t sufficient information to reach a decision.

I’m trying to think of an example of a decision where we sent back for more information. On the Morrison decision, for example, it was our view as ministers — and the reasons for the decision are out there — that with respect to Morrison, we required more information with respect to the tailings storage facility, especially in light of what had taken place with respect to Mount Polley.

Initially, an AIR — an application information requirements document — is produced, giving the proponent the indication as to what information they are going to need to provide for the assessment.
[ Page 10774 ]

As you can appreciate, over that time it may be that things could change. It could also be, again, that for ministers, who are ultimately making the decision, they just do not find that, within the referral, sufficient information is there. But that is part of the role of the ministers as statutory decision-makers. It’s not open to us, though, to insert ourselves into directing the activities of the EA, as they assess, or how they might do that.

[1620]

G. Heyman: In this instance, then, is the minister, just for clarity, saying that the minister can’t direct the EAO but that the minister and cabinet can simply refuse to make a decision, not make a decision or defer a decision — which essentially creates an environmental assessment stalemate that, they presume, would lead to the information they require for a decision?

Hon. M. Polak: Actually, we must make a decision. In fact, it does not go to cabinet. Cabinet has no influence over these decisions. When ministers decide that they need more information, it is actually very specific as to what information they’re requiring. For example, in the Morrison decision, you can see that in the reasons for the decision.

There is quite a careful process of drafting and providing reasons for a decision to a proponent. But it is not open to the ministers to simply delay a decision. They must make a decision. If there are additional pieces of information required, ministers must be specific about that.

G. Heyman: I may have been confusing the decision-making process federally and provincially, and for that, I apologize.

So the minister can’t delay a decision but can ask for more information. At that point, the process gets extended until the information is received. Or if it isn’t received, presumably, at some point, the minister would decide that she can’t make a positive decision on the basis of the information in hand and, presumably, would decide to reject the proposal.

Hon. M. Polak: Before I go through this, I hope the member won’t take this the wrong way, but I know it’s a new role for him. Outside of the estimates process, if the member would be interested, EAO staff were just saying they’d be more than happy to do a specific briefing on the wonderful intricacies of EA and how the legislation works. I’m going to do my best here to give you how this all works together.

After three years, the application information requirements expire. It is open to the director — not ministers — to decide to terminate an application if it’s been inactive beyond that time. And in some cases, the director decides to do that.

When ministers make a decision to seek more information, it’s done through an order. The ministerial order will specify what type of information. For example, with Morrison, there was technical information on the tailings storage facility that was required but also a new First Nations consultation plan.

[1625]

That’s done under a section 17 order. In the act, section 17 lays out the areas where the ministers — or the minister — have responsibilities. And so it is delineated fairly well in the act what role the director plays versus what role the ministers play.

I should also say that when there is an order to provide more information, that also has time limits set out in the order. It’s all done very specifically and laid out, again, in the reasons for the minister’s decision.

G. Heyman: To circle back a little bit, my understanding of the B.C. Supreme Court ruling was that the provincial government needed to make its own decision based on consultation in order to meet its duty to consult.

The minister may not have that impression of the court decision, and if so, I’m sure she’ll tell me that. Or the government may not have that impression of the court decision, and she will relay that as well. But given that’s my understanding, and whether or not it’s her understanding, how does the minister believe, in practical terms, this process can proceed at this point? Does the review need to be restarted? Does it need to be reopened?

Hon. M. Polak: I absolutely agree that there has to be consultation conducted with First Nations and that we have to make our own decision as a province. Now that we are, essentially, under a substituted arrangement where the judge has said, notwithstanding the First Nations piece but in terms of the technical information, the EA could rely entirely on what has been provided through the NEB process.

However, the EAO could decide that there is additional information or assessment that they believe necessary in order for them to produce a referral for ministers. That means that now their activities are governed by the Environmental Assessment Act. They will conduct themselves accordingly, and they will ultimately then provide a referral package to ministers. That will include what we do in all of our assessment reports, which is a consultation record and consultation report with respect to the sufficiency of the First Nations consultation and our obligations there.

G. Heyman: Does that effectively mean that the equivalency agreement with respect to a single decision is dead?

Hon. M. Polak: Yes, with respect to a single decision. We are required to make an individual decision as a province, and the feds are required to make their individual decision.
[ Page 10775 ]

G. Heyman: In the minister’s opinion — and if the minister knows the opinion of this government, could she share it with us? — what would she prefer to see the EAO do in terms of its process and in reaching recommendations in order to be comfortable that the Crown’s duty to consult with First Nations has been met appropriately?

[1630]

Hon. M. Polak: First, let me say I have faith in the office of environmental assessment, but it is actually not allowable for me to express that opinion. If I did, poor Kevin and Michelle would have to leave the room because they may not be influenced by me in that regard.

It is a role specific to a statutory decision-maker, and they have their role to play, as set out in the act. Ministers have our role to play. And the decisions, or the actions that we engage in…. If we contravene those delineations within the act, then our decisions, certainly, would be open to legal challenge. So it’s very important for us to maintain our separate roles. I must not express to them my opinion as to what would be the best way for them to proceed.

G. Heyman: The government has certainly repeated its five conditions many, many, many times, including in submissions to the National Energy Board. Can the minister, under the statute, in her opinion, tell us what she considers sufficient information in this regard — northern gateway and Kinder Morgan?

[S. Hamilton in the chair.]

Hon. M. Polak: With respect to the five conditions, though, that goes beyond the environmental assessment office. In particular, with respect to conditions 2 and 3, that engages any number of other ministries and their regulatory authorities, as well as Environment. But the environmental assessment office conducts itself and conducts its assessments under the Environmental Assessment Act.

Now, for government to decide that it wishes to evaluate a project against five conditions that it has produced and promoted is in addition to whatever assessment the environmental assessment office may proceed with.

G. Heyman: If, in the context of the environmental assessment office’s process and considerations and consultation, First Nations still believe they have not been adequately consulted or, in fact, the minister believes that consultation could have been more fulsome, what measures outside of the process might she take?

Hon. M. Polak: Two different scenarios envisioned — one where the First Nations themselves do not feel that they have been adequately consulted, accommodated. In fact, in the case of submissions to ministers, the EAO provides an opportunity for First Nations to separately provide submissions to ministers ahead of a decision, even outside of the formal consultation process. So there is certainly opportunity for that view to be expressed.

If ministers find, in reviewing the referral, that they are not satisfied that the consultations are sufficient, then ministers could, such as we did with the Morrison Mine decision and through a section 17 order, require that a new First Nations consultation plan be developed and executed — in short, order that further consultations be conducted.

[1635]

In the case, though, where an environmental assessment certificate is issued and the director is, in his referral — and then, in turn, ministers — in agreement that consultation has been sufficient…. If, subsequent to that, a First Nation expresses the view that it was not sufficient and they have a concern about that, that then becomes a broader government issue.

It could find its resolution in any number of ministries, because it isn’t, then, purely about the environmental assessment office. It then becomes, depending on the project, a matter for any number of different ministries — perhaps even working with MARR or JAG — to attempt to resolve.

G. Heyman: Are there time constraints on that, from the minister’s perspective, given that she’d have received a certificate? Would you consider yourself time-constrained in terms of conducting an adequate consultation?

Hon. M. Polak: I think I can answer the question, but it depends on if I’ve understood it correctly. Do you mean with respect to post–environmental assessment certificate? Or do you mean as we’re in the process of reviewing the referral and reaching a decision?

G. Heyman: I mean reviewing the referral and reaching a decision.

Hon. M. Polak: There is a 45-day requirement, at which time ministers must render a decision. It is open to the minister to grant an extension. That can even be done retroactively. That could, of course, be done as a result of concerns around sufficiency with respect to First Nations consultation or, perhaps, late submissions. It is up to the ministers to determine if such an extension should be ordered.

G. Heyman: I may return to this particular line of questioning on Monday, but for now, let me move on to a recent decision by the new federal government to, as they said, restore credibility to environmental assessments and include an analysis of upstream impacts and greenhouse gas emissions.
[ Page 10776 ]

In doing so, they said that the public understands that upstream impacts and upstream GHGs are part of the whole package and they’re necessary to evaluate when considering the costs and benefits of a project. The federal government claims that in doing so, they’ve now caught up to public opinion.

Is the B.C. government considering doing the same — including upstream impacts and greenhouse gas emissions in their consideration of projects and assessments?

[1640]

Hon. M. Polak: There’s no final determination yet here as to how to proceed. I’m sure the member is aware that the discussion of upstream natural gas impacts or upstream GHG impacts from the natural gas industry was a significant part of the discussion with respect to our climate leadership team and their recommendations.

That is now the subject of public consultation work by government, leading toward potential inclusion of some measures dealing with that in our climate leadership plan.

With respect to the environmental assessment office specifically…. Already, of course, the environmental assessment office does consider GHG emissions from the specific projects under review. In light of the federal government’s announcement that they now wish to see modelling and estimation of GHG impacts from upstream natural gas — say, for example, with an LNG facility — the EAO, in a substituted process, would have to assess what was taking place in alignment with what the federal government wished to see in their report.

As to going forward and how that may impact our assessments in the future, that is ongoing work now between the EAO and the Canadian Environmental Assessment Agency on how they will proceed to align their work.

There are complications, though. The difficulty in determining whether or not upstream emissions from natural gas feeding an LNG plant, for example — how to determine whether those are incremental new emissions or would have been produced in any case but would have perhaps gone to a different market.

It’s also difficult to determine how one might place conditions on an LNG facility with respect to upstream natural gas if, in fact, they were not an integrated company with their own supply. So it’s not without its complications but, obviously, a policy decision that the Canadian Environmental Assessment Agency is taking. Our EAO will work together with them to ensure that our processes are appropriately aligned for substitution.

Insofar as actions to work on any reductions in the upstream, we certainly have an interest in that and are carefully considering what recommendations have been provided to us by the climate leadership team.

G. Heyman: Does the minister have any initial thoughts…? The minister referred that in looking at upstream GHG emissions for LNG plants, it’s difficult to determine if those are incremental and connected to LNG or to possible other purchasers through other forms of export.

I didn’t actually make my question specific to LNG. Or if I did, I didn’t intend to.

Hon. M. Polak: It was just an example.

G. Heyman: The minister has said it was just an example, so I accept that.

Does the minister have initial thoughts in terms of considering the recommendations of the climate leadership team about the advisability of considering upstream GHG impacts in all cases?

Hon. M. Polak: Well, it’s always a consideration. The question is: how do you consider it?

[1645]

With respect to our climate leadership plan, we have determined for ourselves some pretty challenging goals. Those include reducing our emissions significantly while at the same time growing our economy. That is very challenging in a province where we still derive much of our wealth from the production of resources and where, around the world, we have the chance to contribute to transitioning from dirtier fossil fuel.

It’s always a consideration. How do you consider it? Well, we are right now engaged in our second round of consultations, and that’s taking place in two parts. There is the broader public consultation. People can submit their ideas and commentary to the website.

There are also, at this stage, sectoral conversations that deputy ministers are having with their particular stakeholders in their ministries. In some cases, that is in respect of oil and gas companies. In some cases, it might be mining companies. It could be communities and local governments. It could be the tech sector.

In terms of the oil and natural gas sector, there are many opportunities there for reductions in emissions, some of which are going to be more challenging than others. That is part of the work that will be undertaken now as we review the recommendations from the team, conduct our discussions not only with the public but also with sectors, and explore what opportunities there are. There’s no question, though, that in order to achieve our goals, we’re going to have to see emissions reductions across all sectors. That includes oil and natural gas.

G. Heyman: Chair, if you just give me a second or two here. I have a mix of questions here, some of which I may save till Monday and lump them in with my climate questions.

I apologize for the delay. I think I will put off some of the questions till Monday. While they’re focused on environmental assessment, they’re pretty linked to both the
[ Page 10777 ]
recommendations of the climate leadership team and climate questions in general. So I was just trying to figure out if there was any piece of them I could ask today. As the minister knows, I spent much of my day preparing to focus on climate but decided, when informed that staff from the climate leadership team would generally not be available today, to move to this section. I will save these questions for later.

We have been discussing some significant considerations that the environmental assessment office will have to figure out how to address as a result of the court decision, potentially as a result of reports of the federal environmental assessment of Petronas, impacts of upstream GHG changes to the federal environmental assessment process.

Does the minister expect there to be consequential and significantly greater call on the EAO for resources that would require more staff? If that is a potentiality, will there be a budget uplift or the possibility of special funding to add more staff? Or does the minister believe that the environmental assessment office can deal with some of the complications and, perhaps, additional work that flow from both these decisions of the court and the assessments by the federal government with existing staff and funding?

[1650]

Hon. M. Polak: Don’t tell anybody, but in EAO they actually have been seeing a slight uplift pretty much every year. So don’t tell the Finance Minister; maybe he didn’t notice. But I’m hoping that continues. Over to him to decide that.

When it comes to a substituted process, then in fact the EAO will have to conduct itself according to the requirements of the federal analysis with respect to upstream natural gas. They will have to do that, and they will work together with the Canadian Environmental Assessment Agency to determine how best to meet those requirements for them and assess that.

But they don’t just use their own resources. In any environmental assessment they do, they draw on subject experts. If it’s a mine they’re reviewing, they will draw on expertise from the ministry that regulates mines, from Energy and Mines. In the case of dealing with, say, a natural gas project, they would work with the Ministry of Natural Gas Development, the Oil and Gas Commission, potentially Environment Canada. And if it was with respect to GHG emissions, then they would also work internally with our climate action secretariat. So they would draw on that additional expertise as well.

G. Heyman: I’m trying to determine if the answer is…. Well, I know this part of the answer is accurate. I should not share with the Finance Minister, notwithstanding the fact that I’m sure he’s monitoring this as we speak, that there have been small incremental uplifts over the years.

Am I understanding the minister to say that it’s too early to tell, until the EAO and the federal government reach some understanding of how they’re going to respond to the court decision, what additional resources may be needed? Or is she saying that they will get what they need once that decision is made?

Hon. M. Polak: Given the model under which EAO has been operating, I don’t anticipate that there is going to be a need for a substantial uplift in staff, in part because of the way they manage not only their resources but provide resources to other agencies.

[1655]

[P. Pimm in the chair.]

They do monitor the profile of projects that are coming through the environmental assessment office. They have currently allocated within their budget approximately $750,000 that they distribute to other agencies when there is a need for that expertise. They could certainly redirect that if the focus or emphasis of their work in EA changed and they had different requirements.

Nevertheless, while I don’t anticipate that there will be huge pressures in terms of staff, it is always open to us to go to Treasury Board and seek additional resources if we felt there was too much pressure being placed on the office and if it was hindering their ability to conduct their work.

The Chair: I recognize the member for Vancouver-Fairview.

G. Heyman: You guys get more shift breaks than we do, Chair.

Hon. M. Polak: Do you want another recess? We can do another five minutes.

G. Heyman: Why don’t I ask one or two more questions, and then we’ll do that.

Did I understand the minister to say, in response to one of my earlier questions, that given the court decision, the B.C. government would not be entering into any more equivalency agreements — that she did not foresee any more equivalency agreements or that they would now be substitution agreements?

Hon. M. Polak: We have no plans to enter into any new equivalency agreements. We’re satisfied with the substitution agreements that we are working under, and we would intend to continue in that regard.

It’s important to note that the substitution agreements are not a blanket agreement that from here on out, everything will be substituted. Each project is looked at, and with respect to each project, the EA works with the CEA
[ Page 10778 ]
to identify what requirements there will be, and they enter into an individual agreement as to how that assessment will be conducted.

G. Heyman: Thank you, Minister. Just to be clear, the minister does not foresee any need to expand resources beyond what’s currently planned for the EAO but would review it, based on the nature of the demands, through substitution agreements or not entering into substitution agreements and putting more demands on the EAO directly.

Hon. M. Polak: First, when we’re dealing with substitution agreements, part of the rationale for those is that in most cases, the vast majority of the areas assessed are those that are under provincial jurisdiction. In other words, they are areas that we would be assessing in any case. In the absence of a substitution agreement, the vast majority of that work would have to be conducted in any case.

Where we may see pressures would be if there were…. Maybe I’ll say it this way. If one were to look ahead and say, “Well, where might the EA see additional staffing pressures,” it would be less likely to be as a result of substitution and more likely to be as the result of an economic upswing that saw a large increase in the number of projects that were going through the process.

Even there, though, EA has undertaken to, in many cases, modify the way they structure their office so that they operate more efficiently. I would note, for example, that with respect to their approach to LNG projects, they altered the way in which they staffed those assessments such that they had teams responsible for specific areas that focused on an area of expertise, as opposed to teams that were allotted per project. That made their work more efficient.

So it’s not always the case that more work needs more people. Sometimes it needs different types of work. But they’re always monitoring that and, I know, would bring that to government’s attention if they felt there were pressures that they needed to have responded to with additional staff. I don’t anticipate that that would be resulting from substitution agreements.

G. Heyman: I think the minister suggested a short recess. That would be fine with me at this point.

The Chair: The House will stand recessed for five minutes.

The committee recessed from 4:59 p.m. to 5:06 p.m.

[P. Pimm in the chair.]

G. Heyman: Just a little bit more on environmental assessment. Can the minister outline what the most expensive EAO project was in the past fiscal year?

Hon. M. Polak: We don’t actually track projects in that way. So in my attempt to get an answer that I hope satisfies to a certain extent….

[1710]

If we look at resources devoted to it — number of people, staff time — probably the two in this last fiscal that have been the most resource-intensive would have been Ajax, and their application review, and Woodfibre. Primarily, that’s just because of the level of public interest.

Whenever there is a high degree of public interest and a large amount of consultation that results from that, you have people spending more time. In the case of Ajax, for example, four or five people are dedicated to it — and then a range of other staff in and around the EAO and other agencies. But a number of them travelled back and forth to Kamloops very frequently to be part of public discussions, meeting with agencies up there and meeting with community groups, etc.

Ajax and Woodfibre in the last fiscal — probably the most resource-intensive, but we don’t track a dollar amount attached to a project.

G. Heyman: The minister referred to the EAO relying on other resources available through other ministries. Does the EAO use any professional contractors? And if they do, does the minister know what the budget was for that in the last fiscal year or whether there’s a budget set aside for that in the coming fiscal year?

Hon. M. Polak: Yes, we do, when necessary. The budget for this year is $927,000.

[1715]

G. Heyman: A number of people have expressed some concern about the EAO’s professional reliance model for outside assistance. The minister referred to using some people from ministry staff, whether it’s the Oil and Gas Commission or FLNRO, for helping the EAO with certain assessments.

It’s difficult for us to know, when the EAO relies on contractors, where professional reliance comes in and what criteria the EAO may have to ensure that there is not a current or too-recent relationship of the contractor with interested industries.

Are there guidelines? Can the minister speak to them? Are there safeguards in place? What would the minister consider to be appropriate to ensure, where professional reliance is used, that there’s not either a real or an apparent conflict of interest?

Hon. M. Polak: I want to make sure we’re clear, though, that the consultants and the process by which the EAO hires professional expertise — consultants, certified professionals — to conduct assessment work is an entirely different thing from professional reliance.
[ Page 10779 ]

The professional reliance model exhibits itself, for example, in a case where, perhaps, one of the conditions of a certificate might be that a company, in fulfilling their obligations, must hire, for example, an environmental consultant who is then going to monitor and report regularly on their compliance with certain conditions.

In that case, in the conditions, the company would be required to maintain an environmental consultant. There could be any other number of people with expertise. They then would be regularly monitoring for compliance with conditions and reporting on it.

In this case, this is where the environmental assessment office hires professionals based on their certification — no different than if you were buying a home and you were to hire an engineer to examine the quality of the structure of your home. What you are then relying on are the qualifications and certification of that professional.

In the scientific disciplines, for example, if you are an applied biologist, you are then governed by the College of Applied Biology. There are ethics that you must abide by. There are codes of practice you must abide by. The same would be true down the line in the different disciplines.

But that’s not to be confused with the professional reliance model, where companies are asked to hire qualified professionals in order to monitor and maintain compliance with conditions and a certificate.

[1720]

G. Heyman: So with respect to contractors and not conflating contracting with professional reliance, the minister’s correct.

Are there guidelines or measures to address simultaneous contracts that the contractor may have which may result in a real or apparent conflict of interest? Are there time limits associated with the contractor having done work either within the industry sector or for the particular proponent?

Hon. M. Polak: It would be the responsibility of the governing body to ensure that their members are operating with all due ethical considerations in that regard in much the same way that those in the legal profession operate and are governed by their governing body with respect to their ethics in who they’re representing, when and any apparent conflicts.

G. Heyman: My question to the minister is: when the EAO is looking at contracting and considering a particular contractor, it simply relies on that contractor and the professional body to determine whether there’s a conflict, or is there a set of criteria that the EAO lays out for the contractor to either answer in a set of questions or be aware of when making the decision to apply for or take the contract?

Hon. M. Polak: It is important to recognize the role of the professional governing body here. If, for example, the professionals in EA became aware that there was an apparent conflict with a professional they had hired, they would be under obligation to bring that to the attention of the governing body for that profession. In fact, the professional in question, if they became personally aware of a conflict in regard of their work, would be under an obligation to advise their college, their governing body, and seek advice as to how to handle it.

[1725]

The EAO takes this very seriously. Although EA decisions are frequently challenged in court, staff cannot recall an incident where an issue of conflict has arisen with respect to any of the professionals that they have hired on a project.

G. Heyman: I’m not questioning the ethics of the professionals or of their governing body, but I am curious. For instance, in the House we have recourse to the Conflict of Interest Commissioner, both in terms of guidelines that he issues or questions that we ask, to help determine if something that we perceive may be a conflict or may be questioned is, in fact, a conflict or questionable.

My question was really whether the professional would simply go to the professional body if they had a concern, or if the EAO or any other arm of the ministry has some basic criteria for professionals to look at, to say: “Oh, in this instance, this is how I’m going to be judged.”

Hon. M. Polak: Actually, that’s a good example to draw the distinction. For example, with regard to members, we don’t have an outside governing body, so the Conflict of Interest Commissioner essentially becomes that. What does he look at? He looks at the Members’ Conflict of Interest Act — right? — and he gauges his decisions based on his guidance in legislation and statute.

Similarly, a professional body, a college, is in the best position, because of their knowledge of a particular profession, to provide that guidance to professionals in their field as to what would constitute a conflict, what would constitute inappropriate behaviour within the profession. Those self-governing bodies set up those codes of practice, those codes of ethics, and they then interpret and enforce those.

In many ways, it is similar to a Conflict of Interest Commissioner. If a fellow professional, for example, was concerned about the behaviour of a colleague, they would rightly bring that to the attention of the governing body, so in a not-dissimilar way to how our actions are judged. However, I think, very often, ours are judged much more stringently than most professions. I’m sure most professionals wouldn’t want to be considered to be compared to politicians, but that’s our fate.

G. Heyman: I’m going to ask some questions with respect to the conservation officer service now. As the minister knows, the CO service is effectively a law
[ Page 10780 ]
enforcement agency for natural resources. It looks at human-wildlife conflict response, environmental investigation and statutory compliance, and it may deal with everything from a bear attack on humans to an environmental violation or poaching.

The budget line for conservation officers is flat. Should we presume this means that there are no new FTEs? And can the minister confirm the number of FTEs and that none are expected in the conservation officer service except where there may be a vacancy? And if there are vacancies over the course of the year, is it the intent of the ministry to fill them as quickly as possible?

[1730]

Hon. M. Polak: The staffing has remained the same in the conservation officer service. We certainly do endeavour to fill vacancies as quickly as we can when they arise. However, it is a similar situation to that local governments find themselves in when they request additional RCMP officers. It’s not entirely up to us how quickly they arrive in our service.

G. Heyman: I assume that the number is 148?

Hon. M. Polak: There are 148 sworn officers and, then, seven civilians.

G. Heyman: The minister said last year that the numbers had been stable for a number of years. That may be true. But according to the union that represents conservation officers, there’s been a 10.3 percent staff cut since 2002. This number was based on the quarterly seniority reports that are supplied to the BCGEU by the Public Service Agency.

There is a significant demand on conservation officers. It has been rising. Does the minister consider the number 148 to be adequate? Did the minister consider the previous numbers to be more than necessary? If so, why?

Hon. M. Polak: It’s important to note that, over the years, the service, while it has experienced increasing demands on it, has also experienced a great change in the way services are delivered — for example, the investments that have been made into providing them with equipment that allows them to do much more of their work outside of the office.

Gone are the days when a conservation officer had to come from being out in the field and go back to the office to receive the appropriate information to go to another call-out. That has changed significantly — the time it takes for them to conduct their work. They also have been joined over the years by other enforcement staff on the ground, through the natural resource officers, who now take care of many items that in the past conservation officers would have had to. So the service itself has also changed.

The demands that are being placed on them I don’t think always have to be met with additional people. Very often they can be met with additional resources that provide them different means by which they can do their jobs. They do an amazing job for us.

As with any portion of any ministry, one always imagines the additional things one could do with more staff, but I do believe that we have a good, solid group of folks who are providing an excellent service. I believe that with the additions and resources they’ve received, their work is being performed quite well.

G. Heyman: I believe conservation officers do an amazing job. I’m also aware that not only has the number of conservation officers been cut, so has the number of administrative support staff. That has resulted in conservation officers and enforcement officers in other ministries being responsible for — I don’t want to call them routine administrative tasks — administrative tasks that they weren’t responsible for before, all of which cuts into their time, particularly at a time when their hours are controlled, in the sense that there’s certainly not a large amount of overtime being authorized.

[1735]

Does the minister not see some potential conflicts here in terms of actually getting to the places on the ground that need to be observed and monitored or where, in fact, there’s a particular alarm or call for enforcement that’s been made?

Hon. M. Polak: One of the things that we have undertaken over the last number of years is to really try and match the particular skills of a law enforcement agency with the activities that we’re asking them to undertake. There has been a very purposeful shift away from many of the more administrative-type duties that COs used to conduct. We’ve done things like establishing the major investigations unit, where you have a team that is very highly trained and specializes in the major investigations. That allows for the front-line folks to be able to spend more time doing that type of work.

There’s also a differentiation between the kind of work COs do and the kind of work natural resource officers do. Primarily, the difference is in investigative skills — gathering evidence, things like that. We are also now coordinating, through cross-training and other expertise-sharing, with other law enforcement across the piece. Whether that’s in gaming or corrections, we really are trying to take a best-alignment approach to how we are deploying our officers. We think that has resulted in a better alignment for the COs. They are being able to spend better time on the things that, really, are best suited to their particular expertise.

I would note, as well, that in terms of how we track what’s going on in the field, our enforcement outcomes…. We have not seen a drop in those. We’re still seeing en-
[ Page 10781 ]
forcement outcomes at a level that we would want to see.

We’re not, at this stage, seeing any significant problems in the field, but we’re always looking to enhance the way in which these various law enforcement agencies work together so that we do have the right people engaging in the right level of enforcement.

[1740]

G. Heyman: If conservation officers have been relieved of administrative duties that don’t best match their skill set and the number of administrative support workers has been cut, how’s that work getting done?

Hon. M. Polak: If what the member is referring to, though, is what most folks would envision in terms of administrative support and secretarial support — things like that — we’ve also enhanced the way in which they are able to, for example, batch reports and put them in for central data entry such that they’re not having to do an awful lot of that in their own particular areas. That may not be what the member meant, but if it is around secretarial support, there is a lot that has changed with respect to what they are technologically able to do now in terms of that reporting, which has reduced the burden on them.

G. Heyman: That was, in fact, what I was referring to. While I recognize there’s been a lot of change, even over the last two or three years, I’m also aware that conservation officers have repeatedly raised the fact that when they’re having to take on more of those duties — many of them say they have — it affects their ability to do the work in the field.

The minister referred to…. I can’t remember her exact words, but she referred to satisfactory enforcement outcomes. There’s a report all poachers and polluters program, a toll-free tip line. It’s called the RAPP program. The most common numbers of calls are on human-wildlife interactions. Those types of calls have been steady since about 2008. But in the areas of other environmental violations, there’s been a very significant increase in the number of calls since 2008, whether it’s waste and water violations, pesticide violations, other violations.

For instance, there’s been an increase in forestry-related violation calls of 75 percent between 2008 and 2014 and 338 percent in the realm of pesticide violations from 2008 to 2014. That’s a very large number — 338 percent. In terms of waste, it’s 101 percent. Water is a bit less, 28 percent, and wildlife, 24 percent. There were 51 court convictions, for a combined total of over $660,000 in penalties in 2014 and $392,000 and a bit more in 2008. Complaints have gone up significantly. Obviously, there’s been some increase in penalties.

Does the minister believe that between 2008 and 2014, with this very large increase in calls and complaints, the conservation office is actually sufficient to handle this volume adequately?

[1745]

Hon. M. Polak: If we consider the various areas that the member outlined, leaving aside there may be an exception, those types of calls — be they forestry, pesticide, waste, water — likely would not involve a conservation officer.

For example, even with respect to air quality calls that we would get, we have regional folks in Ministry of Environment offices who act in a compliance and enforcement role.

If, for example, a truck goes off the road and spills some things, that wouldn’t be conservation officers. It might be reported through the RAPP line, but it would be an environmental response officer who would report to the site and deal with that.

In these cases, it wouldn’t be conservation officers responding. There may be an exception, but for the most part they wouldn’t. So call volumes really don’t give the sense of what kind of pressures they’re facing on the ground.

I have confidence that with the staffing we have and the way we have conservation officers working with other compliance and enforcement agencies, they do have sufficient support with their staffing levels and also with the kinds of technologies that we’re providing to them and the kind of collaboration with other law enforcement agencies.

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

Motion approved.

The committee rose at 5:47 p.m.

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