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)

Tuesday, March 15, 2016

Afternoon Sitting

Volume 35, Number 6

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

TUESDAY, MARCH 15, 2016

The House met at 1:32 p.m.

[Madame Speaker in the chair.]

Orders of the Day

Hon. T. Stone: In Section B, the chamber of the assembly, I call continued committee stage of Bill 9. In Section A, I call the continued estimates of the Ministry of Agriculture.

Committee of the Whole House

BILL 9 — MOTOR DEALER
AMENDMENT ACT, 2016

(continued)

The House in Committee of the Whole (Section B) on Bill 9; R. Lee in the chair.

The committee met at 1:34 p.m.

The Chair: Bonjour. I call the committee on Bill 9 to order.

On section 24 (continued).

[1335]

M. Farnworth: In section 24, one of the issues that is contemplated or that this section addresses is around the issue of reconsideration and the powers of the registrar on reconsideration.

In terms of new evidence, for example…. The minister talked about that shortly before the break. Can the minister explain in further detail, perhaps through some examples, the threshold information that would be needed to qualify as new evidence as is set out in section 26.12, (a) and (b)?

Hon. M. Morris: That would be for evidence that was not available at the time and must satisfy the requirements of section 2(b): “Did not exist at the time of review or did exist at the time but was not discovered and could not through the exercise of reasonable diligence have been discovered.”

M. Farnworth: I appreciate that response from the minister. Again in relation to the further question I’ve asked, can that be reviewed by the Ombudsperson — a decision on the issue of reconsideration?

Hon. M. Morris: The process can be reviewed, but if they don’t like the decision, it has to go to judicial review.

Section 24 approved.

On section 25.

M. Farnworth: This section is perhaps one of the more interesting sections in the legislation, in the fact that it removes mention that the order issued by the registrar to a person under investigation be delivered in writing or by telegram.

I ask that question because I know, and I know he won’t mind me making reference to him…. This obviously anticipates the work being done by email, I would take it, as opposed to telegram or writing. I’ll just get that clarification from the minister.

Hon. M. Morris: Yes. You’re correct.

M. Farnworth: I’ll somewhat tongue in cheek ask: did the minister consult with the Minister of Finance, who recently stated that he doesn’t use email….? If he had, for example, an issue, how would we communicate with him if not by email but by either writing or by telegram? The minister doesn’t have to answer that. I just ask that tongue in cheek.

Just out of curiosity — this is updating legislation, and it gives some idea of how long legislation has been in place — when was the last time that the ministry used a telegram to notify? Is that information readily, handily available, or is it that long ago that we no longer keep records?

Hon. M. Morris: We haven’t had telegraph machines in this precinct for quite some time. Nobody knows for sure.

Sections 25 and 26 approved.

On section 27.

M. Farnworth: Section 27 makes a motor dealer employing an unlicensed salesperson an offence under the act. Given the fact that this is being added, how is this different from the existing legislation? Is this correcting a problem that already exists, or was there another way of dealing with this particular issue without the changes that are being made in this legislation?

[1340]

Hon. M. Morris: This section places the onus on the dealer to ensure that the salesperson is licensed.

M. Farnworth: Can the minister, then, explain the consequences in terms of if that is violated, if the dealer does employ an unlicensed individual?

Hon. M. Morris: There’s a range of administrative tools. There would be the compliance orders that would
[ Page 11468 ]
be applied first. But, you know, if a dealer repeatedly keeps on reoffending, then there are provisions here to take prosecution action against them.

M. Farnworth: I think it’s about a $100,000 fine that is the maximum and up to six months in jail. That is my understanding of what the absolute maximum is. What the minister is saying, then, is that there is, in essence, a progressive system of enforcement and penalty that will be in the act.

Could the minister explain: to date, prior to these changes, have those penalties had to be used that often? Has it been an issue that has been particularly problematic in terms of the number of times that someone has employed someone who is unlicensed?

Hon. M. Morris: The first part: the maximum penalties under the offence act are $200,000 for a company and $100,000 for an individual.

Getting back to your other question, there is no provision under the existing legislation to issue fines to an unlicensed salesperson.

M. Farnworth: Maybe I’ll phrase the question the other way. How significant has the problem been that has required, then, the introduction of this section in terms of the potential of the offences? Has it been a particular problem? Like, how many cases a year, for example, or over the last five years, do we have of individuals or dealerships hiring an unlicensed salesperson?

Hon. M. Morris: In a bad year, I’m led to believe there have been 300 of such cases. As we stated yesterday, there is, on average, about 20 to 30 per week.

M. Farnworth: I would say that is a not insignificant problem, and it’s one, then, that this section should be addressed….

[1345]

This comes back to the…. I guess a question arises out of this, and it would relate to the other sections in terms of revenue being spent on education.

The education programs, then, in place at the time, obviously, I don’t think would have been working quite as effectively as we would have hoped, if that’s the number of cases that we’re getting. The education programs, coupled with the fines and the penalties that we are dealing with in this legislation, the minister feels should be able to address that.

Does the minister feel, in essence, then, that there is enough of a program in place to communicate the changes and the importance of the changes and what these changes actually will mean to someone who is, in fact, engaged in committing these infractions? The reality is that if there’s no real penalty, obviously, people keep doing it because they figure they can get away with it and there’s no consequence.

Clearly, there’s a consequence, then. I would hope that the minister and the ministry would, in fact, step up the education initiatives and the communication in terms of: “Look, there are some real changes here, and you need to know they will impact you if you engage in these practices which you are not supposed to be engaging in.”

Hon. M. Morris: There are a series of bulletins that will go out to all the dealers and salespeople that are involved in that. As well, there will be a special report on all the legislation and the impacts that that legislation is going to have. There are education programs in place right now, and there will continue to be educational programs in place.

Up until now, there have been no consequences. You can tell everybody exactly what they need to do, but there are no consequences. This legislation will change that. In addition to that, all sales people need to take a course now. That course outlines all of the legal requirements and the ramifications for non-compliance.

M. Farnworth: Just to confirm, where we started at the beginning of the debate, as we are coming to the end of the debate…. I can see the minister breathing a sigh of relief on that.

These infractions, then, would be reported, and I guess the consequences that flowed from that would be reported — as we talked about initially, within seven days, quarterly and then annually. Is that correct?

Hon. M. Morris: Yes.

Sections 27 to 29 inclusive approved.

On section 30.

M. Farnworth: These changes provide for regulations to be made governing the new class of “license broker-agents, broker-agent representatives, salespersons and wholesalers” and the establishment of an enforceable code of conduct for licensees in the act.

That brings me back to a question I asked once before in another part of the act. Now this will apply to the code of conduct of the act.

[Interruption.]

Was that a ventriloquist?

[1350]

Anyway, the changes in the act, I think, are positive changes. They’re substantive changes, and they have the support of, I think, both sides of the House.

The minister has outlined that one of the problems is that if you are unlicensed, there were no consequences, and consequently, we could have 20 to 30 infractions a
[ Page 11469 ]
week. The previous agreement in place, in 2004, provided for the establishment of a code of conduct.

I’ll ask the minister again. I know he is new in this position. I know it was not up to him as to when or why this has taken place. The reality is, given those issues that are being addressed in this legislation by administrative penalties and actually having teeth in the legislation, why has it taken 12 years — from 2004, when the initial agreement provided the ability to do these kinds of things, until now?

Hon. M. Morris: I’d like to say that they were just waiting for me to come along, but I know that’s not the case.

The code of conduct is just one small part of this whole program. What’s been happening in the interim, since this came in, is there has been licensing of salespeople. There has been continuing education to get everybody up to speed — web-based learning and whatnot. But also, the Vehicle Sales Authority has been administering parts of the Business Practices and Consumer Protection Act as part of the entire process here.

M. Farnworth: I think I like the first sentence of the minister’s answer the best. I understand what he’s saying about the rest.

This is a challenge. The fact is that this is an important piece of legislation, and I will just end on this note. I’m glad these changes are coming. But I do think…. Let’s put it this way. It confirms what many people say about government. That is, it does work, but it works very slowly. In this case, 12 years is rather slow to bring the changes forward, but I’m glad these changes are coming forward.

On a final quick couple of questions. It has taken 12 years for us to get here. The code of conduct is going to be established by regulation. How long is it going to take to establish the regulations? Will it be 12 days, 12 weeks, 12 months or 12 years?

Hon. M. Morris: Of course, there is more than the code of conduct involved here. We’ll do things in a logical fashion, step by step. We have advised you that we’re also going to do a lot of consulting, both with the dealers and the consumers, but we will endeavour to get this done within the next 12 to 14 months.

M. Farnworth: I appreciate the minister’s answer. I would agree that step by step is the right approach to take, and consultation is always good, especially if the consultation is acknowledged and listened to. I will accept the minister’s answer of 12 to 14 months. I think that’s fine.

In 12 months, I look forward to asking him the status of where we’re at on the regulations.

With that, I am finished with questions on this section.

Sections 30 and 31 approved.

Title approved.

Hon. M. Morris: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 1:55 p.m.

The House resumed; Madame Speaker in the chair.

Report and
Third Reading of Bills

BILL 9 — MOTOR DEALER
AMENDMENT ACT, 2016

Bill 9, Motor Dealer Amendment Act, 2016, reported complete without amendment, read a third time and passed.

Hon. T. Stone: I now call continued committee stage of Bill 8 here in the chamber of the assembly, Section B. While the estimates of the Ministry of Agriculture are underway in Section A, when they are concluded, I call the estimates, after that, for the Ministry of Small Business and Red Tape Reduction and the Minister Responsible for the Liquor Distribution Branch.

Committee of the Whole House

BILL 8 — MINES AMENDMENT ACT, 2016

The House in Committee of the Whole (Section B) on Bill 8; R. Lee in the chair.

The committee met at 2 p.m.

On section 1.

N. Macdonald: Just for context, Bill 8 is the Mines Amendment Act, 2016. The intention of the bill is to amend the Mines Act by allowing for financial penalties for transgressions of permits.

Now, as the Legislature will know, currently compliance and enforcement tools under the act are limited to shutting down a mine through cancellation of a permit, issuance of a stop-work order or pursuing prosecution in the courts. The maximum penalty will be raised with this legislation from the current $100,000 up to $1 million, and from one year as a maximum penalty to up to three years.

With those tools in place, no prosecution under the Mines Act has taken place. This is intended to be a more effective tool for the minister, and it’s a tool that the opposition supports.
[ Page 11470 ]

Now, the other thing that the minister made a point of and that I’ll be referring to in the questions is that this act brings it in line with the Environmental Management Act, the Forest and Range Practices Act — which I will, from my time as the Forestry critic, be calling FRPA, if that’s easily understood by members — and the Oil and Gas Activities Act, all of which include administrative monetary penalties and still leave in place or have in place more severe penalties for court convictions.

This, of course, is introduced because of the Mount Polley tailings storage facility breach. So this is part of the recommendations.

Just moving to the questions under changes — section 1 in this act — to 36.1 in the Mines Act. It is being amended, and the first question is around subsection 36.1(1) which says the chief inspector — which I presume is the chief mines inspector — may apply an administrative penalty to a person after “giving a person an opportunity to be heard….”

The first question is: what specifically is the “opportunity to be heard”?

Hon. B. Bennett: The first thing that I think I should do is to make clear that this discussion on the changes to the Mines Act relates to compliance and enforcement — in particular, enforcement. The minister, under this legislation…. I’m not aware that the minister has any authority with respect to penalties. We’re going to have a close look at the legislation.

The ordinary course of business is that the statutory decision–makers make decisions about whether a mine is in compliance and whether a penalty is in order or not. It’s not something that ever has come across my desk before it happened. In other words, I’m not asked my opinion as to whether or not a mine should be penalized. I just want to make that clear.

The second thing, just for clarity’s sake…. I think the reference to the chief inspector is a reference, as the member said, to the chief inspector of mines, but it’s also a reference to the position or to the office. There are inspectors, of course, that are delegated by the chief inspector, who have the same powers under this legislation that the chief inspector of mines has.

To answer the specific question, in terms of the opportunity to be heard, the opportunity to be heard could be spelled out with more detail in regulation, but it’s not prescribed.

[1405]

It can take written form. It could take an oral form. It could be a telephone call. It could be an email. It could be a letter. That would constitute an opportunity, first of all, to be notified by the ministry and then, secondly, to be heard.

N. Macdonald: Well, thank you for the clarification on the chief inspector. So it’s not only the chief mines inspector. But as the minister has said, the chief mines inspector has the ability to appoint people, presumably within the ministry, that would operate in the same way.

Just to understand, it’s somewhat confusing to me that there would not be a more specific process. Now, possibly it’s coming in regulations, but we are talking about the possibility of substantial fines. There are rules that we will get to and that are in place, which are pretty specific about timelines for notification and so on. Can the minister not give me a clearer idea of the process that the ministry has in mind here? Can it be a written submission that is needed? Can it simply be a phone call?

We are talking about giving a person an opportunity to be heard. There must be something more specifically that is planned, other than the options that the minister has set out. I would think there has to be consistency in terms of how this is handled. Otherwise, it seems to me that when you are dealing with possible penalties of hundreds of thousands of dollars, you open yourself up to some fairly inevitable problems.

Can the minister be a bit more clear in terms of the discussions that he has had with those that have crafted this bill, in terms of the process that they see for giving a person an opportunity to be heard?

Hon. B. Bennett: It’s an understandable question in the context, particularly, of a large fine. It would be, perhaps, less of a concern if it were a fairly minor infraction and it was the first time and it was a warning of some sort. But in any case, the details that will be prescribed around the opportunity to be heard will be spelled out by regulation.

N. Macdonald: What the minister says makes sense, in the sense that when I go and I look at FRPA, for instance, and I look at the types of administrative penalties that are common, 90 percent of the penalties we’re talking about are less than $500, right? They are not these — in fact I couldn’t find any — really major fines. Most of them are of the nature that the minister described in his answer.

It does make sense, if we’re talking about relatively small fines, that you would have a relatively casual way of doing it. Does the minister anticipate that, in the regulations, there will be a financial limit that will trigger a different sort of response?

What I would anticipate, and I think most people would anticipate…. A $500 fine — well, you know, you can easily manage that. The process perhaps has to be less rigorous than what is anticipated by the legislation, which is the possibility of several hundred thousand. To me, that means a more formalized process.

Is the minister saying that in regulation, we can anticipate a trigger to a more formalized process? If it is more formalized, then what is the opportunity that a person can expect, as a process, to be heard?

Hon. B. Bennett: I think the short answer to the question is yes. The somewhat longer answer is that we would
[ Page 11471 ]
anticipate, through the drafting of regulations, the creation of a prescribed meaning for “opportunity to be heard” that would have different layers, depending on the severity of the penalty — which is, I think, what the member is asking. That is correct. That’s my understanding of what’s going to happen.

We have not drafted the regulations. We’ve promised that we’re going to consult with First Nations and the industry and give the public a chance to be involved in this in terms of the details, so I can’t speak to the range of penalties.

[1410]

I can’t really speak to the specifics, even, around how the opportunity to be heard would be prescribed. I can say that given there is a right of appeal in this legislation — which we’ll get to, I think, this afternoon — and because administrative fairness is the basis upon which companies could challenge the penalty, we will need to be careful and thoughtful about the way we design these regulations so that the process is fair, particularly for the larger penalties.

N. Macdonald: I would have anticipated that this would’ve been thought through. FRPA, in the legislation, has things through…. Having said that, I do take the minister’s answer that there is a period of consultation and that there is the possibility that the ministry needs a degree of flexibility.

I don’t think I’m reading into the minister’s words that it is anticipated that with larger fines, there will be a more formalized process. I don’t think the minister will correct me in saying that one could look for that when the regulations come into force — right? — there’s going to be a more formalized process.

The next question, then, is: is the process open to the public? Not in the sense, necessarily, that they would participate in the phone calls or anything like this, but do we anticipate that this is an officially recorded process that is then going to have the information and the discussion or elements of the discussion available on the public record?

Hon. B. Bennett: Two parts to the question. There is ample opportunity for members of the public or employees to report what they think are infractions today. In fact, it happens, from time to time. In the case of the Banks Island mine, that’s exactly what happened.

It was a member of the…. Well, we don’t know whether it was a member of the public or whether it was somebody who was working there who made an anonymous phone call to the ministry and got through, and that’s actually what instigated the investigation.

I think it’s fair to say that there’s nothing in the legislation that’s going to change the public’s opportunity to do that. That’s as simple as picking up the phone or sending an email.

With respect to the transparency, though, between the public and the chief inspector of mines and penalties that are levied, we are, as a ministry, doing our best. We are the smallest ministry of government, doing our very best to get everything we do up on our website. We’ve made huge progress, in that regard, since the Mount Polley accident.

It is our objective to be transparent, and I believe that we can fulfil the objective to be transparent around penalties, with the obvious limitations of privacy and perhaps legal considerations if a company is in the midst of an appeal or something.

[1415]

N. Macdonald: Just to be clear, we see more and more legislation that has the meat of it in regulation. It does make it difficult to do our job as legislators when we don’t have clear answers on a lot of things.

In the first questions, I asked about process, which I think is really significant. It would be to the people of British Columbia. We’re waiting on regulations there.

Now the minister says there needs to be consultation. Okay, but still, it’s pretty difficult to judge whether we are putting forward legislation that’s going to cause foreseeable problems, I would suggest, in the future, or whether it’s solid legislation.

On this count, I am talking specifically about the process. Here it may be that you again separate the minor and the more serious cases. I am talking not only about reporting out. The minister will know, with FRPA and with other types of legislation that he’s referencing, that there is a yearly report that indicates the fines and who’s paid them.

It’s not completely comprehensive, but I think it’s a fair question to ask the ministry. Is that what we can expect with this? Are there going to be records or information available to the public from these processes? Perhaps, again, as I say, with a threshold — you know, if we’re talking above 10,000 or above 100,000 — that the public can look at and other legislators can look at and get that information and do their job as those that are supposed to be overseeing the ministry and holding the minister to account. Is it anticipated that that is something that will come from this legislation?

Hon. B. Bennett: Two parts to this answer. I would refer the member to section 36.3, where it makes reference to the notice of contravention or penalty. There’s a little more detail there on the topic that we were discussing a minute ago. It ends with: “The chief inspector may make public the reasons for the decision and the amount of the penalty, if any.”

The ministry will want to make public every detail that we can about an infraction and a penalty. It’s hard to foresee what obstructions there might be around this, but certainly the legislation is clear that we have the authority to do that and will do it wherever possible, and I would assume that in the vast majority of cases, we will
[ Page 11472 ]
do that. It would have to be an exceptional circumstance, I’m sure, where we wouldn’t do that.

The second part of the answer, in relation to whether this legislation changes how the chief inspector of mines reports out on all of the activities of his or her department around compliance and enforcement…. The chief inspector of mines does prepare and file an annual report today. It is our commitment that we are going to revamp how that report is prepared. It will definitely be public, and it will list all of the various infractions and compliance orders, penalties, etc., from the previous year and will be on the ministry website.

N. Macdonald: Just one more question in this vein, and then we can move on.

Does the minister anticipate any of these interactions, no matter how large or small, to have a mechanism for recording what goes on in greater detail than simply putting out the result? If so, does the minister anticipate that the information gathered will be open to the public in a process simpler than freedom of information but simply as a regular, routine business that there will be a report — maybe a section in the mine inspector’s report that lays out in detail what exactly went on?

I would anticipate that the ministry has to do this anyway so that there is consistency in how they apply rules. A $500 fine should be something that comes from a certain event in the same way that if that same event is done, it should result in a $500 fine or changing with inflation.

[1420]

But there has to be that recording going on. Otherwise, for the chief mine inspector or the next chief mine inspector to be consistent, it just seems to me to be impossible.

If that’s being collected, will it then be available to the broader public so that those of us who have the responsibility to oversee have access to that information and can have informed views on what’s actually going on? That’s the question for the minister.

Hon. B. Bennett: Our plan — part of our response to what happened at Mount Polley — is to publish or publicize all of the orders made by the chief inspector of mines’ office over the course of the year. We’re going to be in a position to be able to do that, I think, fairly soon.

Again, though, I want to be really clear that there could be rare circumstances where a company might be appealing a penalty or may have lawyers involved, in which case it might not be possible, legally, for the ministry to post an order — at least for a while until the legal matters are resolved. But it’s our intention to put up on our website all of the orders that are made by the inspectorate.

I can tell the member that, when you look at those orders — when you look at any order — there’s sufficient detail to determine what the infraction was. Those orders will, in fact, allow the public — if they’re interested — to follow the narrative, essentially, on the compliance and enforcement efforts that are being made on a particular mine site.

N. Macdonald: The minister touched on the next question I have, which is that the same contravention may go also to court, presumably. While we are talking about a tool that the ministry will have — or the chief mine inspector will have — it’s a tool that could be paralleled by a court process.

Can the minister explain the thought that has gone into how that parallel process is going to be managed?

Hon. B. Bennett: I don’t know if the member wants to have a vote on that first section. We’re moving into 36.2, “Administrative penalties.”

While I’m on my feet, I might as well just read what it says in subsection (3): “In imposing a sentence for an offence under this Act, the court may consider an administrative penalty imposed in relation to the same matter.”

Subsection (4): “If a person is convicted of an offence under this Act, an administrative penalty may not be imposed on the person in respect of the same circumstances that gave rise to the conviction.”

N. Macdonald: I should have explained clearer. We will get to that section, and we will ask questions on how that works.

I’m thinking more of the minister’s commitment to open up material and make it available to the broader public. It is possible that you have a process in the administrative system that’s proposed here that, if that information becomes public, it takes away some of the rights that an individual accused in a court case would have.

The minister is a lawyer. I’m not. I’m just asking in terms of the questions I had about making this broadly public and putting everything out there in terms of….

[1425]

Basically, you are going to have the chief mines inspector perhaps saying that they are guilty of something — now on a different scale, a different way of judging it, like a balance of probabilities rather than what a court would have, right?

What has the ministry thought through in terms of: when releasing information, how is that managed if there is a court case going on? I should have been more specific, but that’s what I’m talking about here.

Hon. B. Bennett: I don’t know what section it is — we’re going to get to it — that deals with the right of appeal to an administrative penalty. But the right of appeal to an administrative penalty, based on this legislation, should it pass, does not include taking the province to court.

You know, it will involve a second administrative process — “it” being the appeals process — but it is not a situation where the ministry and the company would find themselves in court, because that’s actually not permitted under this administrative penalty scheme.
[ Page 11473 ]

N. Macdonald: I don’t know if I’m being obtuse here. What I’m talking about is parallel processes. The contravention takes place. We have here administrative penalties, but the administrative penalties do not preclude the government taking them into a court process.

Just to be clear, I’m not talking about the appeals. I am talking about parallel processes. Have I made myself clear? I am talking about: you have an administrative process that may move fairly quickly; that’s the intent of it. The minister, in estimates, expressed difficulty with taking it actually to court, that that’s a long process. So I’m not talking about the appeal. I’m talking about parallel processes that the government has in play.

The administrative process that is proposed here does not preclude the government also running a parallel court process. What I’m asking is: if you run the administrative process and then you put everything into the public realm, do you take away rights or, in some way, undermine the court process that could also be going on from the government — this is the government process — and has that been thought through? How is that going to work in terms of the release of information from the process that’s proposed here?

Hon. B. Bennett: I’m advised that it is consistent with other natural resource legislation to have these two sections in 36.2. “In imposing a sentence for an offence under this Act, the court may consider an administrative penalty imposed in relation to the same matter.” Then the next one: “If a person is convicted of an offence under this Act, an administrative penalty may not be imposed….”

Both of those sections are, apparently, contained within the other natural resource legislation — I think the Environmental Management Act and, probably, the Oil and Gas Activities Act.

[1430]

The way that these sections are written — they’re written across the board the same way. I’m advised that we don’t expect any particular legal difficulty with the way that they’re written.

N. Macdonald: I guess it’s possible that with this legislation it has been tested. From what I can gather, it never has been actually tested, where you’ve had administrative penalties and a court action in the legislation, that I’m aware of. Now, if that’s not correct, the minister could correct me. That’s what I think. But we can move on. The minister can correct me if that’s not right.

I guess the next question is slightly different. It’s a legal term, the minister will be aware, but just to put it on public record, and for me. In the first paragraph, it says that the chief inspector must find…. And they use the term: “on a balance of probabilities.” Can the minister put on the record what that term means legally?

Hon. B. Bennett: I was almost going to get some advice from the Attorney General, but she has walked away.

The balance of probabilities refers to the burden of proof. In a criminal case, the burden of proof is to prove a person’s guilt beyond a reasonable doubt. In a civil matter, typically — well, always — the burden of proof is less than that. And that lesser burden of proof is described in common law and also in the United States as a balance of probability.

It just refers to the burden of proof that, in this particular case, the Crown would have to prove in a case — in a court case or even in the case of levying an administrative penalty. It’s that burden of proof that has to be executed or exercised.

N. Macdonald: Let’s use FRPA for a while because this is what the minister says it’s based upon. Let’s just examine some of the ideas behind the minister’s explanation for balance of probabilities.

In FRPA, there is a list of things that have to be considered. I’ll just read from FRPA. This is directly from FRPA. It says that those administering the administrative penalty must consider “(a) previous contraventions of a similar nature by the person; (b) the gravity and magnitude of the contravention; (c) whether the contravention was repeated or continuous; (d) whether the contravention was deliberate,” and so on and so on.

I guess the question I have is: as this evolves, is it government’s intention to do something similar but to put it in regulation — I guess for the broader public — the guides, the statutory officer or decision-maker and the courts in the same way as legislation…? But it’s made or amended by cabinet without the Legislature being involved? Is that the government’s intention — to in regulation put more parameters to how one arrives at a decision as to whether a contravention has occurred or not?

[1435]

Hon. B. Bennett: I think if the member skips ahead to sub 38(2), he will see the powers that can be prescribed in regulation. In answer to his question, there is flexibility in this language in sub 38(2) to create regulations that will circumscribe or prescribe what the inspectors have to think about or consider before they levy a penalty.

N. Macdonald: I guess the questions are, because so much of this is in regulation…. Presumably, the ministry is in a place where we are going to get the regulations fairly quickly. And presumably, there is thought that has gone on. So I do know that there is the ability to do something like this.

I guess the question is: is it anticipated that you will have a framework similar to FRPA, similar to what you have in legislation, in regulation? Surely we’re in a place where this is going to come into practice fairly quickly. So that’s the question for the minister. Is it his intention,
[ Page 11474 ]
through regulation, to come up with a framework that is not dissimilar to what you would have in legislation in FRPA?

Hon. B. Bennett: My staff make an important distinction between the Mines Act and FRPA, in that FRPA is not responsible for health and safety. Under the Mines Act, the ministry is responsible for health and safety.

The second part of the answer would be just to repeat the fact that it is our plan to consult, specifically, on what regulations we should have and how they should read — not necessarily how they should be applied but how they should be written.

We expect to do that this summer and probably into next fall — given that the health and safety aspect is there in addition to the mining part of it — and to have these regulations in place not later than the beginning of 2017.

N. Macdonald: Thank you for the explanation and the timeline. It was one of the questions I had.

The minister, if he wouldn’t mind, can explain the added responsibility of health and safety and how that has implications for the regulations that are drafted.

I’d just be interested. I’m just curious as to how that works and what the conflicting pressures are, under the Mines Act, that have to be reconciled with the regulations.

Hon. B. Bennett: I’ll try this. I don’t know of it’ll be a sufficient answer or not. If the member considers the complexity and the comprehensiveness of the WorkSafe B.C. legislation and regulations and then thinks about the fact that those regulations and legislation do not apply to the mining industry, he will get a pretty good idea as to how complex and how comprehensive the health and safety portion of what this ministry does is and also why it’s going to take some time to consult on regulations.

[1440]

It’s one thing to consult on regulations that go to the design and construction of a tailings storage facility and the maintenance over the years and lifts to that facility and dust control on the site and what happens in the mill and what happens in the mining process. All of those kinds of things relate to mining, obviously. But the health and safety component is very, very complex, and it will take that amount of time that I mentioned — from, probably, starting in June through the fall, early fall, and then the regulations would be drafted to be ready for January 2017.

I hope that gives the member some sense of why it does complicate the situation and make it different from FRPA.

N. Macdonald: Okay. That actually was very helpful.

The minister talked about the consultation process. I don’t think it was a comprehensive list, but involved in the consultation will be, presumably, unions that are often representatives at the mines and are often at the forefront of many of these issues. Is that the intent? And what’s the formal process for doing that?

Hon. B. Bennett: The consultations that are taking place today on the code, the mining code, do involve union representatives. In fact, they have for many decades and, I’m sure, will continue to involve union representatives.

The development of regulations will be no different. It would make no sense to not have union representatives consulting with government and with the industry on what the regulations should look like. We’re envisioning a web-based consultation process for these regulations, so actually anybody that is interested can have a go at looking at what’s being proposed and telling the ministry what they think.

In addition to that, though, we would have some targeted consultation exercises that would involve industry and the unions and First Nations.

N. Macdonald: In subsection (2) of this, these first amendments to the Mines Act, it talks about a corporation contravening or failing to comply, but it is the directors, officers and agents who are held responsible. I guess the question is: why is that? And can more than one person be held responsible for a single contravention, or is there some focal point within an organization that is held responsible? I just want to know how that works. I’ll just stop there.

Hon. B. Bennett: This section is common in not only natural resource legislation but other legislation that includes penalties or compliance and enforcement aspects. The idea here is to hold individuals accountable. If they attempt to hide behind the so-called corporate veil, this is the way that the ministry and/or a court would pierce that corporate veil and say to the subject director or directors, officers or agents of the company: “There was a mistake made. There’s a fine payable. If the company is not able to pay the fine, then you must.” That’s the purpose of it.

N. Macdonald: Just to understand, this is not that they necessarily personally would pay it, right? It would be the corporation. But if the corporation were to go bankrupt or to try to do something else to evade responsibility, the responsibility would still follow responsible people within what was that corporate structure so that you would have — I shouldn’t use the term “fines” — penalties that would still be applied. Do I understand that correctly?

[1445]

Hon. B. Bennett: The answer is yes to the question. The member, I think, fully understands the intention of section (2).
[ Page 11475 ]

Maybe to just provide a little bit more value in my answer, subsection (3) actually works the opposite way around, so if an employee, contractor or agent of the corporation contravenes some section or contravenes some sort of an order, the corporation is responsible for that.

N. Macdonald: I was going to ask about that too. The minister has answered one part of the question.

The other part that I have is: if there’s a contractor, is it possible for both the contractor and the business that has contracted that company…? Are they both able to be held responsible under the administrative penalties?

[R. Chouhan in the chair.]

The Chair: Minister.

Hon. B. Bennett: Hon. Chair, I actually haven’t had the opportunity to apologize to you since we were in the House together and I used profane language. I do apologize for that. You were in the chair. I’m sorry about that.

In subsection (3), an employee would not be held responsible for the actions, even for their own actions. The corporation would be held responsible. A contractor…. It’s a legal answer. It’s one of those “it depends” answers.

It depends on the legal arrangements between the contractor and the corporation as to whether or not the ministry would be able, legally, to find the contractor and collect from the contractor or whether the ministry would be limited to go to the corporation. The same thing is true of an agent. So it really would depend on the circumstances as to whether or not you could hold a contractor or an agent of the corporation legally responsible for an infraction that they might have been involved in.

N. Macdonald: I just want to understand the possibility of multiple penalties for one offence. Are we talking about finding one person within a corporation that’s ultimately responsible? Are we talking about anybody who, like, ordered…? I think the exact language gives a number of different wordings.

Are we talking about anybody involved being held responsible in the administrative penalties, or are talking about there being one focal point that is the representative for the corporation and ultimately would be deemed the most responsible? What is anticipated in terms of holding people responsible? This is under subsection (2), I think, or subsection (3).

Hon. B. Bennett: What these two provisions — actually all three provisions — in 36.1 do is establish the authority for determining liability. In subsection (2), if a corporation contravenes the act and is unable to pay a fine or penalty, then a director, officer or agent could be held accountable. In subsection (3), if an employee, contractor or agent contravenes the act, then the corporation is responsible. It establishes who the Crown can go after in the case of an infraction.

[1450]

As to the member’s more specific question about how many of these different parties could be penalized, it isn’t spelled out, but there is lots of common law that would provide direction. It would obviously have to be reasonable under the circumstances, whatever decision is made in the case of an administrative penalty by the chief inspector of mines.

When I say “reasonable….” First of all, they determine if there’s been an infraction, on the balance of probabilities. They then look to the corporation to pay the penalty. If the corporation is unable to pay the penalty, then they look at directors, officers or agents.

I’m not going to say that it would never happen, but it would be unusual for various parties to all be subject to a penalty, particularly if the corporation was able to pay the penalty. But under unusual circumstances, where a corporation is trying to evade accountability, it is possible that you could have multiple parties involved and the Crown actually trying to collect from multiple parties. It’s unlikely but possible.

N. Macdonald: It probably again is rooted in common law, in terms of what the term means, but in subsection (2) it states that a person contravenes by acquiescing to contravention, which is similar to wording in FRPA and other legislation.

I guess the question is: what is the legal meaning of “acquiescing”? Is it being aware and doing nothing, or doing something, or allowing it to happen? Is it that they should have been aware; is that acquiescing? Is it not refusing to follow directions from a superior — that is, in some way, a person should have said no? What does it mean specifically?

Hon. B. Bennett: Just to keep things rolling, I’ll just say back to the member that we’re checking to see whether the word “acquiesced” is used in the other natural resource legislation. If it is, we may be able to provide the member with a bit more understanding of how the word is used.

But in a general way, as long as it’s used someplace else in legislation, I’m sure it has been interpreted many times by the courts. That’s where a person would have to go to determine what it actually means: it’s what the courts have said it means in other cases. As soon as I get the answer on whether the word is used in the other legislation, I’ll let the member know.

N. Macdonald: We were going to support this section, so it’s not a matter of having to stop this section. The minister can just tell me when he gets the information. So we can move along and move to 36.2, the second section of this bill, if you want to have the vote now, and then we can move to the next set of questions.
[ Page 11476 ]

The Chair: Shall section 1 pass?

So ordered.

On section 2, Member.

N. Macdonald: Section 2 deals with changes to the Mines Act — 36.2 — and it addresses administrative penalties. Subsection (1) gives the chief inspector the right to “impose an administrative penalty.”

I guess the question is: how is the amount determined? What are the ranges of penalties? I suspect that this is part of the consultation process, but I’ll still ask the minister to put it on record, to answer those two questions.

Hon. B. Bennett: The member is correct in assuming that the details of penalties will be fleshed out in regulation.

What I can say in terms of guidance that I am providing to those who will actually create the regulations is that we have to have penalties that are small enough to allow inspectors to use them for what might be classified as minor infractions, because sometimes minor infractions can lead to bigger problems. If the fines are too high, it’s possible that inspectors might be less inclined to levy them. So I think that we should have some smaller amounts for those situations.

[1455]

On the other hand, I think that we definitely need to have penalties that are large enough to get a company’s attention if there are serious contraventions of the legislation. We’ve looked at the oil and gas legislation, the forestry legislation and the environmental legislation to get a sense of the range of penalties that exist in those acts. Through our knowledge of what other ministries have done with their legislation and through the consultations, we’ll determine that full range of penalties, all the way from a relatively small penalty up to a much, much larger penalty.

The Chair: Member, just for clarification, are we discussing section 36.2 or doing section 2 on page 3?

N. Macdonald: It’s section 2 on page 3, and the change to the Mines Act is 36.2. That’s the section that’s been amended.

The Chair: Continue. Thank you.

N. Macdonald: The minister raises a challenge. Is it anticipated, then, that one of the considerations for the imposition of the mine will be the impact it has on the particular business? That means, if it is a small business, a $10,000 fine can change behaviour. If it is an international world-class-sized corporation, a $10,000 fine would not change behaviour. Is the ministry anticipating that one of the considerations for the imposition of an administrative fine would be the impact it would have on the business — therefore, the size of the business — and the fine being big enough to actually change behaviour?

Hon. B. Bennett: I’m not quite sure where we’re at. Section 2 actually deals with sub 37(3) of the Mines Act. That gets into the prosecuted offences, and I don’t think the member is there yet. So maybe we could just make sure we know where we’re at.

N. Macdonald: I apologize, I’m still on section 1.

The Chair: Okay, so we are back on section 1.

Member, is this subsection 36.2 now?

N. Macdonald: It is 36.2. My apologies.

Hon. B. Bennett: I think that the question is: what sort of flexibility would the chief inspector of mines have in determining the amount of penalty? I think I heard the member ask whether the size of the company would have a bearing on the size of the penalty.

I’m talking about something that hasn’t been created yet. I want to be really clear that the regulations have not been created yet. But in terms of principles, the principles that will be applied in the creation of these regulations will be based upon the threat to the environment or to human health and safety. If the threat to the natural environment or to human health and safety is significant, the fine will be higher. I don’t believe that the size of the company is nearly as important as the degree of risk to the natural environment or to human health and safety.

N. Macdonald: My apologies for the confusion over the sections.

As I say, we’re supporting this, but I still have a question. All of the acts, the legislation that the minister has cited — the Land Act, FRPA, the Wildfire Act, the Oil and Gas Activities Act, the Environmental Assessment Act — that have administrative penalties…. Each year there is a report the government puts out, and the library, of course, found it easily. I thank them for providing it for me.

Now, what they had there was a lot of information about the nature of the acts. I could look up and see that the ministries in 2013-14 had 85 administrative penalties. It totalled $48,000, with almost 90 percent under $500. The report really breaks it down. It tells what acts were the most common. For instance, the Lands Act was the most common.

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I guess the question I have for the minister: is it anticipated that the Mines Act would have a similar reporting-out process? Would it participate in the same process that these other acts use so that the public could get a clear understanding of what is going on with these administrative penalties?

Hon. B. Bennett: The answer is yes to that question.
[ Page 11477 ]

Following up on the member’s question about the word “acquiescence,” the word is contained in FRPA and also in the Environmental Management Act. I wouldn’t, I don’t think, attempt to describe the meaning of it for purposes of any of this legislation. I would refer the member to the case law in which it’s been interpreted to know exactly how a court might interpret the meaning.

N. Macdonald: Just coming back to something we’ve talked about before. Even with the administrative penalties in subsection (2) of 36.2, a person could still face charges in court. Can the administrative penalty still be applied before court proceedings? Is it completely separate, or will one wait until the other process takes place?

Hon. B. Bennett: If I understand the question, it is: can an administrative penalty be levied prior to a court prosecution or, perhaps, prior to the conclusion of a court proceeding? In either case, the answer is, yes, an administrative penalty can be levied before court prosecution has started or before a court prosecution is concluded.

N. Macdonald: In subsection (3), it says that the court may consider administrative penalties. Does that mean that the court does not necessarily need to consider them, and why is that flexibility given? I have no opinion as to whether the flexibility is a good thing or a bad thing, but I am curious as to why that flexibility is given.

Hon. B. Bennett: This subsection (3) in 36.2 is the Legislature’s attempt to guide the court in a case where there is a legal prosecution for an offence under the act. It simply allows the court to consider whether an administrative penalty that’s been imposed should be taken into account for the court-imposed penalty or in regards to the court-imposed penalty, or not. It essentially leaves that question up to the court and makes it clear that the court has the authority to consider that.

N. Macdonald: And 36.3 is about notice of contravention or penalty. Just to be clear, the chief mine inspector must give notice if they find a contravention and, separately, another notice if they impose a penalty. After notice of contravention, the person has a right to be heard. Or does that take place before this notice?

I just want to understand. Does there have to be a formal notice and then the person has a chance to be heard? Or does that happen beforehand?

Hon. B. Bennett: Before I answer the question, hon. Chair, could we vote on 36.2?

The Chair: Have we moved from 36.2?

N. Macdonald: We voted on section 1, which includes all of these, so we’re actually a bit cockeyed here.

The Chair: Minister, subsection 36.2 is part of section 1, so we’ll deal with the whole section entirely before we vote on it.

[1505]

Hon. B. Bennett: Do I really have to answer questions if we voted on this already? Just some humour, hon. Chair.

The Chair: Yeah, section 1 has several subsections to it, so we are dealing with one subsection at a time. Once we complete all subsections together, then we will vote on the complete section 1.

Hon. B. Bennett: This provision sets out how the chief inspector of mines and his or her delegates provide notice to a mining company that they have contravened some portion of the act, and that an administrative penalty is being applied. The opportunity to be heard has already happened by the time the notice would be given and the ministry has made the decision to levy a penalty.

N. Macdonald: The minister did talk about this somewhat before and said that it’s yet to be decided. Is it anticipated that a notice given is going to be a registered letter or some formal equivalent? Given that we have timelines, there has to be a record of when it was given. There’s got to be some mechanism for doing that. Is that the intent?

I guess a further question: Is that notice then within the public realm?

Hon. B. Bennett: I’m not quite sure whether I’m answering the question or not, but once the offending party has had the opportunity to be heard and the chief inspector of mines decides, on a balance of probabilities, that there’s been a contravention of the act and has decided that a penalty will be applied, then notice is given to the offending party. It spells out in some detail in 36.3 what that looks like.

Given that it’s a penalty to the mining company, it certainly would be a formal notice. It would absolutely be in writing. The details of notice could be fleshed out further in regulation if the lawyers who advise us on these things said that we should do that, but it would be a notice in writing, and it would obviously be quite formal.

N. Macdonald: In subsection (b) it says: “may make public the reasons for the decision and the amount of the penalty.” You have “may” there, very specifically. Could the minister give me a list of scenarios where not making either the decision or the amount of the penalty public would be in the public’s interest? Why would you not do it? Why is there the term “may” very specifically in the language there?

Hon. B. Bennett: I can provide the member with the example that comes to mind. That is the situation, which
[ Page 11478 ]
we have discussed already, where there is a legal prosecution against the company. It may be that it is not legally possible for the Crown to disclose, at least for the time being, the reasons for a decision or the amount of the penalty until the court prosecution is over.

There may be other situations where it would not be possible either, but the intention, clearly, is to make public the reasons for a decision and the amount of the penalty wherever possible.

N. Macdonald: In 36.4 — that’s the section about the due date of the penalty. This amended section of the Mines Act says that the penalty must be paid in 40 days. I just wonder. Is this a standard period of time? Does it correspond to other acts? How does one arrive at the 40 days as the length of time chosen?

[1510]

Hon. B. Bennett: I’m advised that this is an improvement over existing natural resource legislation in that the time for appeal is 30 days. Therefore, we won’t land in a situation in this ministry where the time to pay is 30 days and the time for appeal is 30 days and you have a company not paying and filing an appeal and having to be involved in expensive court proceedings.

By setting the time for payment at 40 days, that gives the company the opportunity to file an appeal within the 30 days, which keeps the two different dates separate and the process a little simpler.

N. Macdonald: Okay. Just 36.5, which is the enforcement of administrative penalties. In 36.5, subsection (1), it describes an administrative penalty as “a debt payable.” Again, it’s a legal term. What does that mean in layman’s terms?

Hon. B. Bennett: It’s important to use the words “debt payable” so that all of the remedies available to a creditor would be available to the Crown, should a company or individual fail to pay the debt payable.

N. Macdonald: In FRPA, still on 36.5, there’s a special fund to take administrative penalties. If there is an administrative penalty and money is collected, it goes into, I think, an environmental mitigation fund.

So I guess the question is: is it anticipated that administrative penalties under the Mines Act are going to go into a special fund for a particular purpose? Or will they go into general revenue, or will they come back into the budget of the ministry?

Hon. B. Bennett: The money collected from penalties under this legislation would go into general revenue, not into a special fund. It’s not intended to be a revenue generator. It’s intended to help the ministry with the compliance and enforcement effort.

The mere existence of the authority for administrative penalties and the regulations setting out what those penalties look like…. We are hoping — and, certainly, with experience in other ministries and other provinces — that the operators will, where necessary, change behaviour and we actually won’t need to fine them.

N. Macdonald: In 36.6, it talks about the limitation period in terms of how long the chief mine inspector has to deal with the situation, and it puts the term of three years. Is that consistent with FRPA and other similar legislation? And if not, why the difference?

Hon. B. Bennett: The limitation period in this piece of legislation is consistent with the Environmental Management Act, the Forest and Range Practices Act and the Oil and Gas Activities Act.

N. Macdonald: In 36.7, it deals with the right of appeal. Subsection (2) says that a person given notice may appeal to a tribunal.

[1515]

So they’ve gone through a process that has found them with an administrative penalty given to them, and they can go to a tribunal. The question is: what is the makeup of the tribunal? Here I’m looking for: is this a group of professionals? Are there rules about this group of professionals having no professional relationship with the company or with things? Is it independent of government? Is it appointed by the minister? If the minister can just sketch out the thinking on the tribunal.

Hon. B. Bennett: Always wanting to save the taxpayer money, we will utilize one of the existing boards or tribunals. We have had conversations with the Oil and Gas Appeal Tribunal and also the Environmental Appeal Board. We have not made the final decision on which agency we would rely on in this legislation, but we will obviously be doing that in the next six months.

It’s a question that we’ll work at by talking some more with these two boards and tribunals but also doing the consultation with everyone who’s interested in this, to determine what would be the best agency to send appeals to.

N. Macdonald: Not being completely familiar with the two tribunals that the minister is thinking of, the expertise they would have is…. Do they have some legal training so that they have expertise in dealing with legal arguments? What is the type of expertise that the minister is looking for? Do they need to have specific mining expertise to properly judge what would be put in front of them? That’s the question for the minister.

Hon. B. Bennett: I’m advised, or I should say reminded, that the people who sit on the Oil and Gas Appeal Board
[ Page 11479 ]
are the same people who sit on the Environmental Appeal Board. I’m also advised that they consist of a broad range of expertise and experience. There are lawyers, accountants, engineers. I would assume people with environmental expertise would sit on the board.

How it works is that the chair of the board or the tribunal appoints those members that are going to hear an appeal. We will ensure that the expertise required to sort through these issues is there, with respect to non-compliances in the mining industry. We do have the opportunity to add people to the tribunal or board if we find that there is some specific expertise that’s still required to make sure that they can work through these appeals in a rational, informed way.

N. Macdonald: Finally, with subsection (4)(a) and the same question with subsection (4)(b). It says that upon appeal, the tribunal may confirm, vary or rescind the decision. I guess the question is: is the practice, with other legislation and with this legislation, that that decision is then made public? If it is public, in what form? Where is it posted?

Hon. B. Bennett: Subsection (4) states: “On an appeal under subsection (2), the appeal tribunal (a) may confirm, vary or rescind the decision that is the subject of the notice.” In other words, it “may” confirm, vary or rescind the penalty that’s been levied by the chief inspector of mines. If it said “must,” there wouldn’t be any point of having the appeal. You’d just have to go to the appeal board and apply, and your penalty would be overturned — unless I’ve misunderstood the question.

[1520]

N. Macdonald: I guess I wasn’t clear. What I mean is: you’ve gone through this process, and the tribunal has looked at the penalty and decided to, let’s say, rescind it. Is that, then, in the public realm immediately? If it is in the public realm, that decision, then is it posted somewhere? That’s the question.

I understand they have the ability, of course, to do these things. But if the public is trying to follow or the legislator is trying to follow, how would we follow the process to its conclusion?

Hon. B. Bennett: Well, the use of the word “may” in this subsection 4(a) relates to the decision. It doesn’t actually relate to any notice, but I can tell the member that the Environmental Appeal Board, for example, posts their decisions.

I’m sorry that I don’t know how promptly. They do post their decisions — I’m assuming that it’s fairly promptly — on their website, so the decisions in relation to appeals under this legislation would also be posted there.

Section 1 approved.

On section 2.

N. Macdonald: Just a quick question here. We have, changing from $100,000, up to $1 million as the outer limits here. Then we also have “one year” to “3 years.” The presumption is that the administrative penalties would go up to $1 million, but I’m not clear on that.

Of course, the jail sentence would be within the court system. Can the minister lay out the range of penalties? What is part of the administrative penalties process, and what, of course, would be part of a more rigorous court process?

Hon. B. Bennett: The reason that this is a different section…. This is section 2 — versus section 1, which we’ve been spending our time on up to this point. It’s that this is a completely different enforcement process. This is the process relating to court prosecutions. We just finished discussing the administrative penalties section.

There is no connection, actually, between the size of penalty here in the court prosecution section and the administrative penalties section. I hope I understood the question properly.

N. Macdonald: That is helpful. I knew, of course, that the jail time wouldn’t be. I was unclear as to, with the administrative penalties, the range of penalties that were being considered. I thought that it was possible that we were talking about hundreds of thousands of dollars.

I guess that the next question for the minister…. While it’s slightly outside of the realm of this question…. I clearly understand that this is all in the courts. But with administrative penalties, are we clear, or is it anywhere stated, what the range of penalties is that we’re talking about? Or is that something that, within FRPA, is actually laid out?

As I say, it wasn’t clear to me whether the $100,000, up to $1 million, was actually administrative penalties. Although now, as the minister has pointed out, it’s clearly in the courts. I understand that. Beyond the range of this specific section, can the minister give me a sense of the administrative penalties, which we’ve spent so much time on? What is the range of penalties that are actually anticipated? What sort of money are we talking about here?

Hon. B. Bennett: I gave a couple of fairly fulsome answers on this question while we were working through the sections on administrative penalties. I’ll try to be as succinct as I can be.

The range of administrative penalties is not established yet. They will be established by legislation. I’m hoping — well, not hoping…. I can assure the House that there’ll be a wide range of penalties in terms of smaller penalties that can be used, hopefully, not frequently but used where necessary if there’s minor non-compliance, all the way up to very costly administrative penalties. Again,
[ Page 11480 ]
there is no chart. There is no list at this point in time. We haven’t yet done the consultation.

Section 2 approved.

On section 3.

N. Macdonald: I think that the minister has been fairly clear on the timeline. I mean, section 3 changes section 38. It basically gives cabinet the ability to make regulations.

[1525]

The minister has talked about a timeline, given the complexity of what’s trying to be accomplished, of next fall, right? The fall of 2017? That’s a reasonable timeline? Is that what the minister has said, or am I misspeaking — that the regulations should be finished by that period?

Hon. B. Bennett: To be clear, what I said was that the regulations will be complete and in effect by January of 2017. My reference to the fall was…. There’ll be a point, and I can’t say exactly when it will be, but we’ll transition from the consultation process into a drafting process. That will take place at some point this fall.

Sections 3 and 4 approved.

Title approved.

Hon. B. Bennett: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 3:26 p.m.

The House resumed; Madame Speaker in the chair.

Report and
Third Reading of Bills

BILL 8 — MINES AMENDMENT ACT, 2016

Bill 8, Mines Amendment Act, 2016, reported complete without amendment, read a third time and passed.

Hon. T. Lake: I now call second reading of Bill 2, intituled Great Bear Rainforest (Forest Management) Act.

Second Reading of Bills

BILL 2 — GREAT BEAR RAINFOREST
(FOREST MANAGEMENT) ACT

Hon. S. Thomson: I move that the Great Bear Rainforest (Forest Management) Act be read a second time.

[R. Chouhan in the chair.]

This is a very proud moment for all involved who have worked so hard to see this legislation brought forward into the House. I really look forward to providing comments in second reading here and then dealing with the specifics of the legislation during the committee stage.

This act takes forest management in the globally significant Great Bear Rainforest to a higher level and cements British Columbia’s role as a global leader in sustainable forest management. It enables the implementation of ecosystem-based management in the Great Bear Rainforest, an area that covers 6.4 million hectares along British Columbia’s north and central coast — an area the size of Ireland.

The region is traditional territory for 26 First Nations and contains one-quarter of the world’s coastal temperate rainforest. Last month, the Premier and I were honoured to be joined by representatives from First Nations, from environmental organizations, from forest companies and from interested parties to celebrate the land use order and agreements that protect much of the region while allowing opportunities for economic development.

The Great Bear Rainforest (Forest Management) Act allows our government to make the vision that everybody had, in working through the process, a reality and completes the many, many years of moving from conflict to collaboration. The act supports implementation of strict ecosystem-based management rules in the Great Bear Rainforest that go beyond existing forest management requirements.

[1530]

It gives the legal authority to make sure we can apply both the new rules and the existing rules under the Forest Act. This is a unique model of forest management, one that supports both ecological integrity and human well-being.

The act also supports another unique element of the Great Bear Rainforest agreements: a negotiated maximum allowable annual cut of 2.5 million cubic metres for the next ten years. This acts as a cap for the rate of timber harvesting from the current timber supply areas and tree farm licences across the entire area. After ten years, the annual allowable cut in the Great Bear Rainforest will once again be determined by the chief forester under section 8 of the Forest Act, as is the case in other management units.

Bill 2 enables the establishment of new timber supply areas, reconfiguring existing ones, and it allows partitions of the annual allowable cuts to be established. It also provides for the designation of eight new special forest management areas that prohibit commercial timber-harvesting activities while allowing mining, hydroelectric development and tourism. Those areas cover over 295,000 hectares.

The Great Bear Rainforest is a global ecological treasure. When we announced the collaborative agreements on February 1, there were headlines around the world.
[ Page 11481 ]
I’m really proud of what all the partners have been able to accomplish, and I want to acknowledge the leadership in achieving this historical agreement: the leadership of environmental organizations through the Rainforest Solutions Project, with Greenpeace, ForestEthics and the Sierra Club of B.C.; and the industry, led by the Coast Forest Conservation Initiative, with the companies Interfor, Catalyst, Western Forest Products, Howe Sound Pulp and Paper and B.C. Timber Sales.

I had the opportunity to attend the follow-up gathering. Or probably “gathering” is understating it. It’s probably more aptly described as the celebration event or the celebration party.

I had the chance to hear so many of the stories of the history that led us to where we are today. Stories like meetings in neutral locations, out of sight and out of mind, meetings of people who weren’t supposed to be meeting and didn’t want to see, as they were working through this process, that they were there developing relationships that went from what some people told me was visceral dislike of their respective positions to one where it moved from that to agreement to work together, to build their relationships, to build the understanding, to develop the science that ultimately led to the joint solutions project and the initiatives that got us to where we are today.

I’ve heard so many stories and anecdotes about the process, starting with where the name was developed on the back of a napkin, I think, in a restaurant in California where the name was developed, to meetings, to processes, to great, great work.

I stand here today, thinking very much about the significance of what we have achieved here, and I was really proud to be able to have shepherded the process from those initial agreements, from the agreement that was reached in 2006 and in 2009 as we moved through the process, to bring it to the point today where we have the legislation here in the House in front of us to provide the legal framework for all of that work that was done by so many people over such a long, long time.

I heard stories and things about the number of years…. Some people talk about the decade that it took. Others reflect all the way back to the original start — probably over 20 years of work to bring us to this day. It’s something that we can all be proud of.

[1535]

I had the opportunity to travel into the Coastal First Nations communities, up into the Heiltsuk community to join them in a celebration with the community. I could see firsthand in that First Nations community the opportunity and the sense of excitement that they see in the future because of the human well-being component of this agreement that is providing those opportunities for all of those First Nations throughout the coast.

We need to acknowledge and recognize the leadership of the First Nations in achieving the work that we have here today — the Nanwakolas Council, the Coastal First Nations, the umbrella organizations that brought all of those First Nations together to achieve the components of the agreement.

This is something that will leave a legacy for our children, for our grandchildren and for our province, for our country and for the world. Eighty-five percent of the area’s forests are protected; 15 percent, or 550,000 hectares, are available to support forest activity. We’re able to offer stability, economic opportunity, certainty for local communities, local First Nations, local forest companies — along with their employees, investors and customers.

This legislation really is the culmination of working together for a common purpose, a process that took it from conflict through to collaboration, through collective work to agreement. As we have said in so many opportunities as we’ve been through the process, this really is — and what’s captured in this legislation is — a unique solution for a unique, important region of the province, a unique, important region in Canada and a unique, important region in the world.

This legislation, as I said, provides that framework to complete the agreement. When we met with all the groups, we recognized that there is significant work to continue, to implement the agreement, but with the model that we’ve developed here — the collaboration, the relationships that we have developed — I am confident that we will move forward in implementation, following the completion of the legislation, in that continued approach of collaboration and trust that has been built by all the parties.

This really is something that we can celebrate, something that we can be very, very proud of as a province, as a government, to have completed.

I know, when I look back, there were other leaders in the process who did a lot of heavy lifting and a lot of work. I had the honour to be able to come into the process and assume the responsibility of the Minister of Forests, Lands and Natural Resource Operations at a time when this was moving forward, and I want to acknowledge all of that previous work. I’m really proud to be able to stand, to have brought this legislation in.

I look forward to the comments from all who are going to speak to the legislation, and I will certainly look forward to the committee stage. It’s a technical bill that implements significant agreements, so I expect there will be comments and questions as we go through that process.

As I said, this is really something that leaves a legacy in this province for our children, for our grandchildren, and something that is to be celebrated, acknowledged, recognized. I know that all of the parties that worked so hard to do this are excited for the opportunities that this will bring to the region, to the coast, to the First Nations communities.

[1540]

The certainty moving forward, the protection of these unique ecological, cultural and social values in the region,
[ Page 11482 ]
is something that we can all look forward to and all celebrate. I know everybody is ready and willing to get down to work to implement the agreement with the framework of the legislation.

With that, I’ll look forward to comments and continued debate on this bill. I’m very, very pleased to be starting the process of second reading of this very, very important, historic legislation and historic agreement that this legislation provides the framework for.

G. Heyman: As the minister has said, it’s an honour and a source of pride to speak to a bill not simply because of the content of the bill but what the bill itself represents, which will be, I suspect as it was for the minister, the subject of the debate for so many of us. I should add that I am the designated speaker on this bill.

It’s not often that we can rise in this House and reflect in discussion on legislation something that is the process of so many years of hard work, so many changes in perspective, such demonstration of people finding ways to move from…. The phrase the minister used was “conflict to collaboration.” That’s a phrase that many people have used to describe the lengthy — over two decades — negotiation process that went into the forming of the Great Bear Rainforest agreement and, ultimately, this legislation.

It not only is significant because of the values that are being preserved in the Great Bear Rainforest…. The ecological values. The ecosystem integrity. The species. The ways of life. The importance of old-growth forest both for its own intrinsic values and its support as a home for so many species. The importance to the integrity of those species and their ability to maintain life. Also, for the significant role as a huge carbon sink that’s formed by these centuries-old trees in such a massive area.

All of these values, I think, represent, in some ways, the dichotomy that many British Columbians have grown up with, that many of us have experienced in our lives as British Columbians, where we grow up surrounded by natural beauty and splendor.

We are aware of our surroundings and the rare beauty of those surroundings because that’s part of the lore with which we grow up. We talk about British Columbia as a place of great beauty, as super, natural B.C. We profess and try to live our environmental values, our desire to be in and part of nature, our pride at showing off to the world what we have. But we also have been for virtually our entire existence, since colonization, a society based on resource extraction that has been overlaid over centuries and centuries of First Nations life and values on the land.

Many of us have lived the duality of both appreciating nature and making our living in resource extraction. Many of us have considered ourselves miners and environmentalists. It may seem like a contradiction. Many of us have been loggers and environmentalists. I’ve talked to many a logger who talks of their awe and wonder at being in the forest, while at the same time making their living from cutting down part of it.

I’m leaving aside for a moment the whole issue of First Nations rights, title, the history of caring for the land and the environment that they have always lived and from which there is much for us to learn. I’ll set that aside for a moment, as important as it is.

[1545]

I will speak to it, but of course I cannot bring to that discussion the same authenticity that people born with First Nations heritage can bring. I can just bring my perspective and my appreciation.

For many years, we experienced what seemed like an irreconcilable dichotomy. People saw it as their responsibility, their duty and their passion to speak up for and to defend environmental values, to defend special places. Much of conservation history and environmental history is place-based. It’s about a particular valley. It’s about a particular watershed. It’s about trying to preserve a piece of the wonder of the planet from being added to the list of many other places of wonder on the planet that have been despoiled.

On the other side, we often had people who said it wasn’t that they weren’t appreciative of that. It was that they were part of communities that needed to sustain themselves, communities that needed to know that there was a way to make a living — ideally in harmony with nature, but as we all know, very often, as our values have changed, we’ve seen that harmony with nature was not always possible.

It’s always been a learning process. Part of that learning process has been brought about by people who took fierce and passionate positions and protested, blocked roads and engaged in campaigns to protect a particular swath of forest, a particular value in the forest. In many ways, it came to a head in the area that came to be known as the Great Bear Rainforest.

Over 20 years ago, a group of environmentalists felt it their duty to bring to public attention that the area now called the Great Bear Rainforest represented 6.4 million hectares, or one-quarter, of the world’s coastal temperate rainforest. Think about that: one-quarter of the world’s coastal temperate rainforest in one area of what we now know as British Columbia — home to First Nations for centuries, an area that had seen logging but where there were still large tracts of unlogged old growth that were still intact.

What environmentalists saw was an opportunity to try to protect that, for a whole range of reasons — partly because it represented one-quarter of the world’s coastal temperate rainforest; partly because of the majesty of the trees that were being considered for logging; partly because of the growing awareness of the interrelationship of species and ecosystems; partly because of the growing and increasing awareness, which has only escalated, of the importance of trees in sequestering carbon and protecting our planet from runaway climate change.
[ Page 11483 ]

If we flash forward to today, to this bill…. The bill is significant, but what is even more significant is the over two decades of talks, of conflict, of negotiation, of campaigns, of accommodation, of mediation, of learning, of listening, of not listening — of taking a step forward and a step back, taking another two steps forward and another two steps back. Later in my remarks, I will quote extensively from some comments by people who lived this process for the better part of two decades and who took great lessons from it.

The significance of this bill is the significance of the agreement itself. It’s the significance of people who were, as the minister said, entrenched in their opposition to each other — in some ways, they saw themselves as irreconcilably opposed in values, as almost contemptuous of each other, filled with raw emotion, much of which was anger — and learning that in order to achieve their goals, the time had come to talk. In order to talk and to find solutions, one has to listen.

[1550]

It was a long process, obviously, and not an easy one. But out of that process came not only the protection of 85 percent of this 6.4 million hectares from logging. It also includes an entire new system of forest management and logging, to which the minister alluded — ecosystem-based management, rules that move beyond the current legislation and regulations that we’ve seen in place through evolution of forest practices over many, many decades.

It also assigned an initial annual allowable cut of 2.5 million cubic metres per year for ten years for the entire area. For the forest companies, this was significant. This is certainty that there is an area, within a context of ecological values, to which they do have access in a different form of logging.

It’s not unrestricted. It’s built around specific protected areas. It allows partitioning. It allows focusing on protection of unique pathways that species may need to travel. It recognizes many, many values that have to be taken into account when trees are designated or areas are designated for harvesting.

That is, in fact, what the negotiations were about. They were based on science. They were also based on human well-being, which means the well-being of First Nations in the area; economic opportunities for First Nations; respect for their history, their rights and title; as well as an understanding that in a modern world, they had to have ways to support their communities with economic activity — not economic activity superimposed upon them but economic activity to which they agreed, to which they said: “This suits our culture. This suits the future we envision for our people. This suits the values and the rights that we believe we hold and which we want to carry forward into the future.”

And for others — for the companies who have investments, for workers who are employed by those companies — it was an understanding that there was something to be gained by ending conflict through negotiation and collaboration. That was not only the certainty that there would be an industry but an added certainty — what was often called during negotiations “the value proposition.”

Not only was there an end to market campaigns against their products as being unsustainable or not environmentally friendly; there was actually a premium for their product once it could be demonstrated that the product was the result of a process that was protecting an area of such global significance, that was setting a model of environmental and economic sustainability in this small area of the world, notwithstanding its global significance as one-quarter of the world’s coastal temperate rainforest. It formed a model.

The companies will find that instead of buyers turning away from their product because of market campaigns or their own values or the values of their customers, saying, “We don’t want products that are based on extermination and liquidation of old-growth forests and important areas of ecological significance,” they will now find that these products have an enhanced market because people understand that the companies are operating with a high degree of ecological integrity, a high degree of respect for First Nations and a high regard for the important environmental values that they have, through discussion and through looking at the science, agreed are worth protecting.

I also want to take a few minutes to talk about the Great Bear Rainforest negotiations as a model. This is not the only area in British Columbia or around the globe where there is conflict over resource extraction and ecological values, whether it’s protecting water or fish, preventing the liquidation and extermination of species, looking at cumulative impacts of human activity in a range of regions, looking at the impacts on climate change of any particular economic activity — whether it be the product itself, the emissions involved in harvesting or the opportunities that exist, in this case in old-growth forest, for sequestering carbon.

[1555]

A lot of people took a chance. They moved beyond their comfort zone. They moved beyond what they were used to doing and what they were comfortable doing. They moved beyond in a way that said: “If we want to achieve our goals, we understand that we can’t simply rely on ultimately being the victor and the other parties ultimately being the vanquished. We need to find a way to move forward together. We need to find a way to reconcile our values, our beliefs, the science upon which we rely, our economic interests and our ecological interests, and that will not be easy.”

Again, as I said, I will, at some point in my remarks, take some time to talk about and read some of the comments that have been recorded by people who took part in this process.
[ Page 11484 ]

Let me take a moment, because this is a significant bill. It’s the culmination of and government’s recognition of the contributions of First Nations, of environmental groups, of forest companies who decided to chart a new path. They weren’t sure they’d be successful, but they decided to chart a new path to see if they could reach an agreement, as opposed to entrench a conflict.

Many, many people were part of this process. I will apologize in advance for not naming some of them, but I think it’s important to read into the record of Hansard the names of some of the people who perhaps played — I won’t say more significant roles; many people participated for a very short period of time but played a significant role — a significant role over a lengthy period of time.

I will say, as the minister knows, that before coming to this place, I spent four years as executive director of one of the organizations that was a part of the environmental coalition that took part in the negotiations. I worked with a number of these people on every side of the issue. I met a number of them. I learned firsthand, by sitting down with them at the table, how difficult it was to reach agreement on certain points and push past barriers and how successful they were, ultimately, at finding a way forward, even when it looked like there was a stalemate.

Let me start by talking about some of the First Nations people who played significant roles in the creation of this historic agreement and, ultimately, the government-to-government agreement that gives it life.

You can have environmental groups and forest companies negotiate an accord between themselves — a way to stop conflict, an agreement to move forward — but ultimately, environmentalists and companies, while representative of interests, are unelected representatives of interests; whereas we have, in this House and in the government, a formal representation of all of the people of B.C. with First Nations. We have both the traditional and elected leadership of the First Peoples of this place, who have title, who have rights, who have history and to whom what we call the Great Bear Rainforest is their home. It is their place. It is theirs.

The minister mentioned that the Nanwakolas First Nations, as well as the alliance of First Nations known as Coastal First Nations, were absolutely critical at every step of the discussions and the negotiations. Among the individuals…. Again, I will end up leaving names out, and I apologize. The only way to avoid that is to probably read 200 names into the record of Hansard. Perhaps others will add some names to the list at another time.

Dallas Smith certainly deserves recognition and has been in the forefront of a number of announcements at different times, at different stages of this process, at different milestone agreements as well as at the final agreement.

[1600]

Art Sterritt of Coastal First Nations, Garry Wouters, Marilyn Slett, Dan Cardinal, Merv Child, Ted Nash — these are people that my colleagues have said were instrumental in these agreements being reached.

Let me also add the names of some of the people — most of whom I know personally, although not all — who were, over many years, part of the environmental groups who brought pressure to bear to, let me say, give the forest companies an incentive to look for a negotiated way forward, through campaign planning, through market-based campaigns. Also, the people who spent long, long hours researching, studying the science, making plans, mapping, figuring out bottom lines for ecological protection and sitting at the negotiating table — sitting at an often frustrated negotiating table.

[R. Lee in the chair.]

Jody Holmes is a name that comes to mind. Jody was active almost from the very beginning. There was a hiatus when she dealt with some very, very serious health issues. I know that hiatus coincided with most of the period of time during which I was with Sierra Club B.C. I know from talking to my colleagues how valued her contributions were, how she was seen as a calm and steady influence, as somebody who could always refocus people on what was necessary to move ahead and stay on track and make a deal.

Valerie Langer, who I think is well-known to British Columbians, has a history as somebody who has been a principled, fierce defender of forests, a fierce defender of environmental values, but also a very down-to-earth and pragmatic person, a person of great principle and, from my experience, a very good and calm negotiator. Valerie Langer has filled that role mostly through ForestEthics Solutions.

Eduardo Sousa of Greenpeace, as well as other people from Greenpeace, like Karen Mahon and Stephanie Goodwin, played important roles.

My good friend Jens Wieting came to Canada from Germany for what he thought was a couple of years and found in British Columbia a home in which he wanted to raise a family — and a sense of grandeur and nature which he felt a duty to use his passion, his skill and his knowledge to help defend. Jens is an incredible human being. I know the minister has met him, and I’m relatively sure the minister would agree with me that he played an important role in bringing this agreement to fruition.

Chris Allnutt served for many years. Chris is an old colleague of mine, not just from environmental issues but from labour issues. Chris Allnutt played an important administrative role with the Rainforest Solutions Project in coordinating the activities of environmental groups, as well as fundraising activities.

Rachel Holt. Merran Smith, who was involved from very, very early days, is of course known to many people in British Columbia and in this House, having moved on to be a passionate spreader of knowledge, as well as activ-
[ Page 11485 ]
ity, around climate change issues and clean energy issues.

Tzeporah Berman is, I think, known to most British Columbians as a colleague and a compatriot of Valerie Langer’s in the early disputes at Clayoquot Sound, on the west coast of Vancouver Island, but has gone on to speak pragmatically and in a very principled way about climate issues and other environmental issues. She most recently served on the climate leadership team of the government, along with Merran Smith.

[1605]

Lisa Matthaus worked at Sierra Club for ten years as campaigns director and was intimately involved in the negotiations and the planning for the Great Bear Rainforest campaign and then ultimately the Great Bear Rainforest negotiations. She then went on to lead a coalition of environmental groups who come to this place to meet regularly with government-side members as well as opposition members to talk to us about what environmental priorities are in B.C. and how they see the work of legislators contributing to that.

Amanda Carr is also a name that I should mention, as well as Marlene Cummings and Caitlyn Vernon, who now serves in the role that Lisa Matthaus once filled at Sierra Club as campaigns director.

Let me talk about some of the people from the forest industry who learned early in the process that they could stonewall, they could fight an entrenched battle, or they could take an entirely different approach. It was a different approach that I’m sure they had some fairly intense discussions about in their organizations, as others did.

Ultimately, they chose a path of trying to seek consensus in order to stop conflict, in order to protect their markets, in order to gain economic certainty. I think that as time went on, they — at least in the conversations I’ve had with a number of them — took pride in reaching an agreement that not only protected their markets and gave them some economic certainty and protected their companies and organizations but also contributed to agreements that respected First Nations rights, respected First Nations well-being, contributed to First Nations well-being, as well as contributing to the ecological and environmental integrity of the land base on which they’re working.

Some of the names that come to mind are Rick Jeffery, from the Coast Forest Products Association, who joined the negotiation table as the lead negotiator, around the same time I went to Sierra Club, and shepherded the forest industry team — in many ways, herded the forest industry team together, led them through some difficult times, through some rocky shoals, and steered them to agreement.

I’ve come to know Rick, somewhat, over the years, and when I last saw him at the party celebrating the agreement in Vancouver, he was pretty happy. He was ecstatic. I’ve talked to Rick many times. I think there were times that he wasn’t sure people could get to the deal, but he was, clearly, convinced that people had to get to the deal, that too much effort had been put in. Too much was at stake to let things fall apart. I saw in Rick real pride in the accomplishment.

Rick Slaco, Karen Brandt, Bob Craven, Shannon Janzen, Jonathan Armstrong, Kathryn Willis, Graham Kissick. Patrick Armstrong was a key player and someone else for whom I have…. I have respect for all of these people, but someone who I’ve known both in this context and also from a context of the steps that her company, Catalyst, took to deal with their emissions in an era of climate change, is Lyn Brown. All of these people contributed, and many more from the industry side, to reaching this agreement, and they deserve acknowledgment because the work they did was important.

On behalf of the province of B.C…. I’m not going to mention various ministers by name. Besides, I’m not permitted to in this House. At other times, people who’ve held elected office may be recognized by speakers, but some of the names that I know personally and that others have indicated to me deserve special recognition are Rory Annett, Dorthe Jakobsen, John Sunde, Gary Gwilt, Craig Sutherland and Doug Konkin.

I hope, Minister, that if I’ve missed people you consider were critical to this agreement, you will urge some of your colleagues to add their names to the record as well.

[1610]

Someone who played a very, very critical role in this agreement being reached was Dan Johnston. Dan Johnston is a very skilled mediator. I think that anybody who’s watched lengthy, difficult, protracted, multiparty negotiations of any kind would recognize that there are times when it takes a skilled mediator to reflect back to the other side both what they’re saying and how they’re being heard, as well as to help them understand what the other side is really saying.

Too often in negotiations, and I’ve experienced this on far too many occasions, people react to words. They fixate on words. They fixate on positions. They fail to actually hear beneath the words, hear beneath the positions and understand that the position and the words represent a real interest, something that has to be addressed for the person opposite to be able to move forward and find a way to reach agreement.

There are times…. It’s only too easy, in negotiations, to get emotional. I have seen…. I’ve not only seen. I’ve probably been guilty of this behaviour myself, of taking so much offence at the way somebody opposite me on a bargaining table has presented a position. Something that wasn’t particularly important to me becomes what is known in bargaining language as a hill to die on, which is not a very productive way to conduct discussions.

What we need are mediators who can calm the waters, who can dig beneath the words, who can calm the parties down and remind the parties of what they believed a day ago, what’s really important to them and how it is
[ Page 11486 ]
not impossible to achieve that interest while at the same time finding a way to answer the concerns and interests of the other parties. In that regard, Dan Johnston was instrumental, and I think everybody would say that was the case.

Finally, one of the critically important pieces of this agreement was the issue of human well-being and economic certainty for First Nations. It’s not acceptable, and we certainly…. At least, I hope we don’t think so today, although there are times, honestly, that I wonder. Certainly, 20 years ago it was not as common as it might be today — part of the reason for this is a number of court cases — for people to understand that environmentalists or government or industry can’t sit down and decide the future of a land base to which First Nations hold unceded rights and title and interest.

People can’t, in a patriarchal and patronizing manner, make decisions for the First Peoples of this land. For the First Peoples of this land to look at the negotiations that were taking place, even if they believed that ultimately the goal of significant conservation in the Great Bear Rainforest was a goal worth pursuing….

It was important that there be a way forward for First Nations as well. First Nations would see that if such a deal was made, and they agreed to it on behalf of their people, there was well-being for their communities ahead, there were opportunities for new economies, and there was an opportunity to support their people to make livings. We’ve seen this in many ways, but instrumental to this….

I will give, I think, environmental groups significant credit for this. The coast opportunity fund of $120 million was raised by environmental groups from significant funders on this continent and elsewhere in the world to help provide opportunities for Coastal First Nations in this transition. People who were instrumental in setting up this fund, as well as the funding, were Ross McMillan and Scott Rehmus.

[1615]

Rudy North of the North Growth Foundation is somebody who I think is well known to British Columbians as a person who has both helped grow the economy of British Columbia but has also taken the wealth that he and his family earned and given a very, very significant amount of it back to protect the conservation values that he holds dear, whether it be the Great Bear Rainforest, whether it be species like grizzlies and fish or whether it be rivers and waters through his support of the Rivers Institute.

The Tides Canada Foundation, the Hewlett Foundation, the Packard Foundation, the Moore Foundation, the Wilburforce Foundation, the Brainerd Foundation — all of these people came together to provide funding for the coast opportunity fund and to allow the financial aspects that had to be in place to support developing and finding new opportunities for First Nations to go forward. Of course, many of these foundations also helped the environmental groups support the staff that it took to undertake these protracted negotiations.

It’s interesting, and I’ll digress for a moment. It’s these very groups, these very foundations, these very funders who were so fundamental to helping develop the conditions and the infrastructure and the support for the negotiations that led to this historic agreement, this agreement that people on both sides of the House hold in high regard and in which we place great value and, I think, in which British Columbians for decades to come will place great value — and not just British Columbians but people around the world.

It’s these very foundations that until recently were reviled and held in contempt by the recently departed federal government of Stephen Harper. It was incredible to me to listen to statements made by ministers of the Crown federally that portrayed the activities of foundations that were established by people who were trying to take some of the wealth that they’d made and use it for progressive social good and environmental protection and conservation….

They were reviled. They were portrayed as people who had an ulterior motive instead of people who were contributing to the well-being of Canada and British Columbia, the well-being of our heritage in British Columbia, our natural heritage, as well as, ultimately, of our forest industry and protection of our species, which can only be to the benefit of people both socially and economically as well as, in a very holistic way, our future health.

These people were not enemies of Canada. They weren’t people with ulterior motives. They weren’t people who were trying to stop important economic development in Canada. They were people who were trying to give back and trying to support people who were trying to achieve something historic. And something historic was achieved.

To those people, I say thank you. To the recently departed Prime Minister and the ministers of the federal Crown who failed to appreciate the significant contributions not only of the funders and the foundations, whether they were Canadian or from the United States or from Europe, but the contributions of environmentalists, activists and employees of environmental organizations who found a way forward to achieve conservation values in concert with development and economic values and respect for First Nations…. To those people who tried to drive a wedge between Canadians and showed such tremendous disrespect to people who acted in good will to advance appropriate values, I say simply: you were wrong, and goodbye.

Let me move on now to talk a little bit about some of the very significant aspects of both the negotiations and this agreement. Let’s look at some of the features of this agreement.

[1620]

There were a number of things that were put in place that needed to be put in place to make this happen. First, let’s talk about some of the significant features of the agreement that are reflected by this act. I think the government has talked about the region that’s being protected, protected significantly as an ecosystem but not totally preserved from any economic activity or not totally barred from any economic activity. Rather, instead, it has been given the gift of sustainable economic certainty.

We’re talking about an area that’s larger than Switzerland and that holds the largest tracts of intact coastal temperate rainforest on the planet. It has been home to First Nations for thousands of years — an area larger than Ireland.

The tremendous accomplishment of this agreement is to take 85 percent of this area and say that we will concentrate our economic activity in the remaining 15 percent. We’ll do it with new ecosystem-based management logging practices. We’ll do it in a way that is responsive to the needs of particular species that need to be protected. We’ll do it in a way that we believe is sustainable, both economically and ecologically.

An achievement that many people thought was impossible within this context was achieved, and it was based on science. The science said that to maintain species and ecosystems, to maintain the integrity, we had to protect 70 percent of old-growth forest. That was a larger figure than one that was initially being discussed early on in the negotiations, but at the end the parties, in good faith and with much good will and much hard work, were able to reach exactly that agreement.

What’s significant about this is it’s a figure that science dictated needed to be reached. It wasn’t arbitrary. It wasn’t, for instance, an arbitrary figure of, let’s say, 50 percent: you get half; we get half. Nor was it a figure of: we’ll protect it all because none of it should be taken. It was a figure based on science, which said that with the proper logging practices, regular review and good oversight, this is what can be logged while, at the same time, protecting the ecosystems and species in question.

It’s 3.1 million hectares, the size of Vancouver Island. That is what’s represented by this 85 percent of the coastal temperate rainforest which, I’ve previously pointed out, is one-quarter of the world’s coastal temperate rainforests.

Ecosystem-based management includes, in this case, protected areas covering 38 percent of the land and 42 percent of the region’s rainforest. More forest habitat and cultural values will be set aside under the ecosystem-based management logging rules.

What is ensured by this agreement is that enough rainforest will be protected from logging across all of the ecosystems to ensure healthy ecosystems. It’s important to examine what that means. It’s one thing to say that we’re going to protect X percent or 12 percent or so many hectares — “We’ll just take that block, and we’ll set it aside.”

That’s maybe a good thing, but it may do nothing for species protection. In fact, what may be necessary for species protection is migration corridors, the ability for species to move as climate changes — not just fauna but also flora. The interaction of various species that support each other and are integral to each other’s well-being. That’s the kind of thing you accomplish with very specific measures rather than arbitrarily marking amounts or blocks.

[1625]

Part of this is logging companies being legally required to develop reserve designs for the areas that will be set aside. As I’ve said, the logging will be limited to 15 percent of the forest under designations called managed forest. These will be subject to the most stringent commercial legal logging standards in North America.

These standards were agreed to by companies over many years and approved, ultimately, by First Nations and the government of British Columbia. As I’ve said, this outcome allows for long-term forestry with certainty as well as greater benefits for First Nations who’ve entered into new forestry agreements with companies and the B.C. government.

I wish I could speak with more direct and personal knowledge of exactly what this will mean to First Nations. Perhaps others in this House will be able to do that. I do know how significant that factor is for not only the First Peoples themselves, for individuals to see an economic future that’s consistent with the values they have inherited for many generations, but that it allows them to plan for a modern future for their communities.

It’s probably impossible to overstate the significance of that, and I’m sure the minister would agree that without this, there could be no agreement. We can reach any agreement we want between environmentalists, logging companies and the government of British Columbia. If it doesn’t meet the needs and the approval of First Nations, if it doesn’t meet their free, prior and informed consent, it can’t ultimately succeed. It’s not just. It’s not fair. It won’t work, and it ultimately would send us all back to the drawing table.

To the parties who recognized that this was necessary and that ultimately government-to-government negotiations were necessary, I say: well done.

Let me take a moment to just look at some of the history of how we got here. I mentioned early in my remarks that sometime around 1995 some environmentalists who believed that we needed to stop logging in the Great Bear Rainforest, because of the ecological values that were at threat there and because of the prospect of unlimited logging going forward, tried to figure out how they would do that.

They took a clue from marketing and industry, and they decided what they needed was something that was a little more snappy and likely to grab public attention than: “Let’s stop logging in the midcoast timber supply area.” They decided they needed a brand, and the brand they came up with was the Great Bear Rainforest, ob-
[ Page 11488 ]
viously in honour of the iconic bears whose home is among this old growth — not just the grizzly bear but the iconic spirit bear, the kermode bear, the black bear with the gene that results in white fur.

They coined the term “Great Bear Rainforest.” They campaigned on the basis of saving the Great Bear Rainforest, and it took hold. In fact, if I actually look at this, this goes back to 1993. Some of the groups that were involved early in the discussions about how to protect this area were Greenpeace, Coastal Rainforest Coalition, the Natural Resources Defense Council, and Rainforest Action Network.

[1630]

They began by focusing attention on what was at risk in the Great Bear Rainforest by unrestrained and continued logging. They focused on the buyers of forest products in Europe, the United States and Japan — what’s known as a market campaign. They did this intensely. They did this with persistence. They did this with effectiveness. They did this at length. And it had an impact. It got people’s attention.

Companies like Home Depot, companies like Staples, purchasers of paper, Lowe’s and companies in Europe responded to approaches from representatives of environmental groups, who said: “This is what you’re buying when you buy this product. You are buying the destruction of habitat. You’re buying the destruction of ecosystems. You’re buying the destruction of species. You’re buying the destruction of the largest remaining intact coastal temperate rainforest on the planet. If you want us to campaign against your products, then you will make products out of that timber. If you want us to say that the products you’re selling are sustainable and worthy of purchase, you will buy your timber elsewhere.”

The companies in question made a very logical, market-based decision. They said: “Why, if we have alternatives, would we buy a product that is controversial and buy a product that is produced directly in contravention of the values that many of our purchasers hold, many of our customers hold?”

We talk about the term “social licence” these days. We talk about it a lot. It has entered the lexicon. In the early ’90s it wasn’t so common, if used at all, but basically that’s what the companies who were the targets of the market campaign came to understand. They came to understand that they would lose market share and it would cost them money if they operated without social licence, and they delivered that message to the forest companies who were supplying the timber and the timber products.

Some of the things that happened between 1994 and 1995. There was a PacBell shareholder resolution to end the use of old-growth fibre in their directory. It failed. But as a result, PacBell endorsed significant changes in Clayoquot Sound forestry. This, as an example of marketplace actions related to old-growth logging, began to expand, and they began to dominate activist strategy.

In the United Kingdom, Scott Paper decided it would no longer purchase pulp from British Columbia. Think about that. Think about the impact that had on British Columbia, that it had on the pulp industry. It served its purpose: it got people’s attention.

As a result, the Premier at the time led a delegation to Germany and the U.K. to promote B.C. forest practices. There was beginning to be an understanding that in order to protect the resource industry in British Columbia, there had to be some active convincing of people that forest practices were sustainable.

Greenpeace went on to stage protests at embassies in the United Kingdom and Europe, which had a significant effect of leveraging these events with media and customers. Industry officials visited customers throughout Europe, and along with the Canadian government, they hosted numerous customer field trips to British Columbia.

The B.C. government and MacMillan Bloedel accepted without conditions the reports of the Clayoquot Sound scientific panel and the B.C. government signed an interim measures agreement with First Nations of the Nuu-chah-nulth central region. The controversy in Clayoquot Sound, as a result of these agreements, was significantly reduced.

[1635]

We were beginning to see the first testing of market campaigns, the response of the government, the attempts by the industry and government to counteract the impact that these campaigns were having on the sale of B.C. products. But ultimately, the thing that had the impact was an agreement to change practice.

It was around this time, in 1995, that environmental groups launched the Great Bear Rainforest campaign, and they focused almost exclusively on customers. The initial demand was a complete end to logging in old-growth temperate rainforest, and they specifically were targeting undeveloped watersheds in the central and north coast region. So in 1996 and 1997, the 64,000 square kilometres of the Great Bear Rainforest became the focus of a global environmental campaign.

I think all of us now know and understand that Greenpeace is a global organization, a global environmental organization. It has tremendous impact. It has many campaigns. It has been very successful. It significantly impacts government and industry decisions elsewhere.

What many people know, but not everybody knows, is that Greenpeace actually began in Vancouver, in British Columbia, and grew from there to become a global environmental influence, a very significant influence across Canada, across the globe. The fact that, at this point, Greenpeace took up this campaign was significant.

Again, marketplace campaigns were launched primarily in the U.K., in Europe and the United States, and customers were becoming increasingly concerned about logging of coastal old growth. Industry and environmental groups began to engage in an increasingly polarized
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debate. They were doing it in the marketplace. They were doing it in the media. They were doing it with customers.

At this point, when we talk about “from conflict to collaboration,” this was solidly in the camp of conflict. It was not getting anyone anywhere, except as laying down the conditions that ultimately led to the decisions of both parties to have discussions and to talk.

It was around this time that the B.C. government implemented a forest practices code to govern forest practices on public land. The B.C. government launched a multi-interest land and resource planning process for the central coast, but environmental groups did not participate in the process, would not participate in the process, unless logging was deferred in all of the undeveloped watersheds.

Throughout May and July of 1997, Greenpeace launched actions at Western Forest Products and Interfor operations in the central coast and, in fact, blockaded forest product shipments at ports in B.C., the U.K., Netherlands and Germany. At this time, a number of First Nations also joined these protests.

Targets of the market campaign included municipalities in the United States, tissue-makers in Italy, German papermakers and magazine publishers, DIYs, Home Depot, Lowe’s and major U.S. homebuilders.

It was in 1998 and 1999, 18 years ago…. We’re looking at a process that, as the minister said, was two decades long. It actually began a little bit longer ago than two decades. It was about 18 years ago that the first de-escalation of conflict began.

The market campaign was continuing throughout 1998 and 1999, but at this time, the World Resources Institute published something called The Last Frontier Forests report, using mapping technology to depict the decline of old-growth forests worldwide. Doing this was significant because, as I’ve said, one-quarter of the world’s coastal temperate rainforest is in the Great Bear.

By showing the decline worldwide, it heightened the importance of maintaining this largely still-intact coastal temperate rainforest, the home of majestic old growth. It gave it a context. The Great Bear Rainforest was featured in this report as one of the last areas of old-growth forest in the world.

[1640]

In 1999, an executive delegation from the German papermaking and magazine publishing industries toured the Great Bear Rainforest with Greenpeace. Following their four-day tour, the German delegation met with environmental groups, with provincial and industry officials, and they demanded that the parties work together to end the conflict.

This is significant, because not only were these publishing industry representatives saying to the companies and to government: “We’re not willing to buy products made with controversial old-growth timber.” They could have left it at that, but they didn’t. Instead, what they did was tell the parties — environmental groups, industry and government — that they wanted to see a resolution. They said: “End the conflict.”

At this time, Home Depot announced a global policy change to eliminate sales of forest products from “endangered areas.” This was widely interpreted as an end to purchasing of old-growth products, and many similar policies were developed by other major forest products buyers.

The companies, in turn…. This is significant, I think. Many choices could have been made at this time, but for whatever reason — obviously, one of the reasons was to maintain markets; another reason was long-term survival; another reason was to try to find some form of agreement that could lead to sustainability for their industries — the companies recognized a need for change in approach to the escalating conflict. In other words: “We’re not going to win by just fighting. We’re not going to win by simply lobbying back.”

They met for two days to develop a strategic approach to resolve the conflict. This gave rise to a group called the Coast Forest Conservation Initiative, otherwise known as CFCI.

The CFCI companies and the environmental groups — Greenpeace; ForestEthics, now known as ForestEthics Solutions; the Sierra Club; the Natural Resources Defense Council; and the Rainforest Action Network…. The three groups that continued throughout the rest of the 17 or 18 years of negotiations leading to today in British Columbia were, of course, Greenpeace, ForestEthics Solutions and Sierra Club.

They reached an agreement. The agreement was to defer logging in intact areas in the Great Bear Rainforest. In other words: “We’re going to have some negotiations and discussions about how we’re going to resolve this conflict, but let’s not make the discussion moot by continuing to log the very areas we’re talking about. If we do that, we’re going to have to continue our market campaigns because that’s the weapon that environmental groups have.”

The commitment was to defer logging in intact areas in the Great Bear Rainforest and to end market campaigns that were targeting the Coast Forest Conservative Initiative companies as well as their coastal forest products. They committed to work together in the public planning process that had been set up by the government.

Now, that was just before the year 2000, 16 years ago. I think there are members in this House who were still in high school when that agreement was reached, so that’s a long time ago. I wish I could say that I was in high school or university, but nobody would believe me if I said that. But I do remember witnessing both the conflict, the tremendous angst, understanding the values that environmental groups were trying to promote and also understanding, because I spent many years living in resource communities….
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I was a logger myself. After my active logging days, I made a living in other aspects of the industry. I understood that people still had to make a living and that, ultimately, none of this would work unless agreements could be reached around maintaining environmental values while finding ways to employ people productively, with more ecologically sustainable practices, as well as transition and adjustment provisions where there was going to be significant impacts in an area or in parts of the industry.

[1645]

There were setbacks. Nothing is smooth. Certainly, my experience is that negotiations have a pace and rhythm all their own, and it’s rarely a direct line. It’s rarely all the way up. It’s up; it’s down. Sometimes it’s the breakdowns that lead to significant breakthroughs that allow parties to move forward together.

In 2000, two companies withdrew from the agreement. As a result of the two companies withdrawing from the agreement and beginning to log, Greenpeace temporarily withdrew from negotiations and renewed their market campaign, specifically targeting the two companies that withdrew. At that point, a group of coastal community mayors, supported by the labour movement, launched Operation Defend in response to the agreements between industry and ENGOs.

At this point, the Joint Solutions Project, which was a project of Greenpeace, ForestEthics Solutions and Sierra Club B.C. was formally established. Sorry, the Joint Solutions Project was a joint solutions project of those three environmental groups and the companies in the coast forest conservation initiative. We had the coast forest conservation initiative, we had the Rainforest Solutions Project of environmental groups, and then they came together to form the Joint Solutions Project.

What they were saying to the world and what they were saying to each other is: “Let’s approach this as a collaboration as well as a negotiation. We’re in this together if we really want to find a solution.” I don’t want to make it seem too Pollyannaish. I understand these were still very tough negotiations. People weren’t exactly dancing around the fire holding hands, but they did recognize that if they were going to reach a solution, it was going to take hard talks and they should think of it as a joint process. Ultimately, the joint solutions project is what gave rise to success.

In 2001, the first phase of a central coast process was completed, and the landmark protocol between the province and Coastal First Nations was ratified. As a result of the reaction in key markets in Japan, the United States and Europe, the companies that had pulled out of the coast forest conservation initiative, and then Greenpeace, rejoined the process. So the temporary breakdown, in some ways, led to a breakthrough. When withdrawing from the collaborative process didn’t yield the results that the companies thought they would get by just plowing ahead, and Greenpeace had responded to the companies’ decision to plow ahead by saying, “You plow ahead, and we’ll plow ahead with our campaign,” both parties said: “Let’s go back to talking and see if we can get a deal.”

At this point, the companies and the environmental groups negotiated with other stakeholders on an interim land use agreement for the central coast. This included recommendations for protected areas, further planning and development of an ecosystem-based management approach. This is where the ecosystem-based management approach was starting to take shape. Then they continued some time-limited logging deferrals.

As we continue on in 2001, the province accepted the planning process recommendations and signed a land use protocol with Coastal First Nations that was known as the Turning Point initiative. This was just before the first election of the current government. It was the last days of the previous New Democratic Party government. At this point, the province really engaged.

The new government was elected and agreed to continue the land use planning process. At this point, with funding from industry, as well as environmental groups — I think I mentioned the role that environmental groups played in approaching funders and foundations south of the border and in Europe to support the processes that were needed to get this deal; there was also support from the province and the federal government — the coast information team was created to provide independent scientific guidance for the development of ecosystem-based management.

[1650]

Coast information team products were meant to represent the best available information for use by both parties to provide information in which both parties could have faith.

I want to just take a moment to talk about this, because it is, I think, critically important. Whether it’s the Great Bear Rainforest negotiations or any other decisions that we will make about resource development in an environmentally sustainable way in an era of climate change; development of a gas industry; further development of any fossil fuel, and in the context of transitioning to clean energy; the development of mines, of smelters, of manufacturing plants, of anything else, I think, and I think most British Columbians believe: let’s make those decisions based on the best evidence.

Let’s not pretend science is the enemy. Let’s accept science as the trusted, best available information that can guide us to make wise decisions that will allow us to employ people, that will allow us to develop our economy without damaging the ecological and environmental legacy which our children must inherit and in which they must live.

This was an important initiative — the coast information team. The concept of best available information to guide negotiations, to guide planning, to guide decision-
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making is critical and it is one of the greatest, I think, legacies of the Great Bear Rainforest negotiations to all of us — to the people of British Columbia, to government, to industry, to environmental groups.

It is one of the great legacies that, if we are smart, we will pay attention to this model. We will understand that the concept of best available information, of scientific advice to guide our planning…. Not simply to say yes or no but to say how. How can we develop our economy in a way that is consistent with ecological integrity, consistent with emission reduction and consistent with protecting eco-systems and species?

Why wouldn’t we see science as our friend? The companies and the government and the environmental groups clearly did see science as our friend, as their friend, in this process. We could do well to learn from that. Too often, we substitute political decision-making for wise, informed, carefully thought-out plans that can achieve social licence by giving unbiased, neutral information that can help us decide what to do, when to do it, where to do it, how to do it and how to manage the impacts.

I could go on about this, because I’m passionate about this issue. It is frustrating to me, it is frustrating to British Columbians, when people simply stand and have uninformed arguments based on their own, personal, uninformed opinions about what the right way forward is. It is far, far more sensible to rely on independent, best available information and science to guide us. We should never, never be afraid of seeking that advice or heeding it.

If we move on to the 2002 and 2006 period, we see that at this point, much of land use planning was completed. Central coast and the north coast planning processes continued their work, leading to consensus recommendations in the spring of 2004. The coast information team completed its work and delivered final products, including the Ecosystem-based Management Planning Handbook that would guide implementation of EBM. This was done by early 2004. As these plans were completed, the participants asked the joint solutions project to recommend a protected area system and a means for implementing ecosystem-based management.

[1655]

The joint solutions project recommendations were accepted and incorporated in the final consensus recommendation. The province and 24 First Nations began government-to-government deliberations based on the consensus recommendations of the public planning process. Customer, environmental group, and industry representatives toured the area and pressed for ratification of the plans.

By the end of 2005, the government-to-government discussions led to agreements between the province and 16 First Nations. It’s significant. It’s an accomplishment. It’s one to be proud of — all parties should be proud of, all British Columbians should be proud of. Again, it is one of the significant features of the Great Bear Rainforest negotiations and agreements — as well as that it’s reflected in Bill 2 — that could guide us not just for this historic agreement but other agreements in future years, whether it’s on land use, whether it’s on logging or whether it’s on other forms of development.

In February 2006, after nearly two years of government-to-government deliberations, the province ratified land use plans that remain materially consistent with the recommendations from the public planning processes. Good job — that’s what I say. The province, First Nations and all stakeholders agreed to fully implement the plans and ecosystem-based management by March 31, 2009.

That’s a date that has particular significance for me. In the years between 2006 and 2009, there were a lot of negotiations between the industry, between environmental groups, involving the province and First Nations, to actually reach some form of agreement on how to implement the plans and ecosystem-based management. I know that those talks pushed right up against the deadline of March 31. What’s significant about it for me was that it was the day after the deadline, April 1, 2009, that I began my role as executive director of Sierra Club, B.C.

One of the first duties I had was to help celebrate the agreement and to speak about the significance of the agreement from an environmental perspective. It was a pretty overwhelming event to deal with on the first day on the job, the first week on the job. But what struck me was the elation of everyone who’d been involved in that process. At that point, that process had been going on for…. You can choose a date — whether it was 15 years or whether it was 17 years — but it was significant.

It was made even more significant by the fact that, like many deadlines, people didn’t meet the deadline with a lot of time to spare or a lot of leeway. They didn’t meet the deadline with a month or two months or lots of breathing room. Let’s just go right up to the deadline.

There’s something about deadlines that focus peoples’ attention. They are useful. They can be less useful if they’re not met. We’ve all see what happens in negotiations when deadlines come and go or parties can’t reach agreement. But if you want to get a deal and you’re coming close to the deadline, I can say from experience that nothing focuses attention and hard work like the looming of that deadline and the thought of the unknown that lies on the other side of the deadline. So kudos to everybody who met the deadline.

In the period of 2006-2008, leading up to that deadline, a number of things took place to ensure that elements of the coastal agreements were implemented. An initial suite of legal agreements relating to implementing ecosystem-based management were developed through government-to-government deliberations, as well as consultation with stakeholders.

Protected areas that were recommended by the planning process and government to government were legal-
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ly designated. The coast opportunity fund, about which I spoke earlier, the $120 million fund, was established to assist with economic development and transition in First Nations communities. This was tremendously important.

[1700]

The use of the context of these negotiations taking place and the engagement of environmental groups with forest companies, but particularly the understanding of environmental groups that none of it would mean anything the only economic development option that remained for First Nations was to do what went against, perhaps, their own beliefs about what was best and to simply continue logging business as usual — perhaps with a greater stake or with ownership — because nothing else was available to them.

The establishment of the fund to assist with economic development and transition was very significant. Half the fund was made up of private philanthropic investment and half was from public funding. It was also at this point that the multi-interest ecosystem-based management working group was established to guide implementation of the new management practices.

The joint solutions project agreed to a set of milestones to get to full implementation by March 31, 2009. This is how the parties approached getting to that deadline of March 31. They set milestones to get to implementation, and progress against the milestones was independently monitored and publicly reported.

At this point, the World Wildlife Fund awarded its most prestigious prize to the province, to the environmental groups, to the coast forest conservation initiative of the forest companies and to First Nations in recognition of their collected efforts toward conservation.

When we talk about the significance of the Great Bear Rainforest agreement — the significance of the negotiations and the significance of Bill 2, which is what is legislatively required on behalf of the province, the government and all of us to give life to this agreement — we’re not just talking about the economic opportunity or the protection of ecosystems or the tremendous contribution to fighting climate change that maintaining this old-growth forest will represent. We are talking about something of global significance that was recognized with a prize called Gift to the Earth.

Again, in the 2006-2008 period, the joint solutions project hosted a round-table discussion in Vancouver to promote the coastal agreements with customers. This was the first substantive effort of the companies and the environmental groups to jointly explain the collaborative process in which they were engaged and to do it to customers.

Now, I know, from the times that I was at the table, that the forest companies repeatedly referred to what was called their value proposition. For them…. They needed to trust and believe that when it came time to talk about the agreement in a way that gave them the certainty that they needed and sought, which had led them to the table in the first place…. They needed a full partnership with environmental groups to explain to customers, in the same way the market-based campaign had explained that something was wrong with logging practices in the Great Bear Rainforest, that now something was very, very right.

There was a useful, collaborative process in place that was bringing people together, that was protecting this ecological treasure of the world, that was respecting First Nations’ values and rights and economic future. It was respecting people who made a living in industry and made a living from the land base in a way that did not threaten the ecological integrity of the area, that did not threaten the ecosystems, that would not threaten the ability of species to maintain life, going forward into the future, and that was sustainable.

Make no mistake, when we talk about logging being restricted to 15 percent of the land base — it’s protection of 70 percent of old growth — what we’re really talking about is a transition.

[1705]

We’re talking about an industry that agrees that it will have annual allowable cut certainty that’s very clearly defined for a ten-year period and will be re-established, based on scientific evidence, going forward. But they will be transitioning to an era of cutting second growth. The rewards are perhaps not as rich, monetarily, in the initial stages, but when you create a product that has international acceptance, the rewards are certainty, and therefore, they’re also economic in nature, as well as being able to take pride in contributing something substantive to the ecological future of the area and the future of the planet.

The companies and the environmental groups began to explain what they were doing together, publicly, to the companies’ customers, which is another very, very significant feature of this deal.

Hon. Speaker, 2008 to 2009, as I mentioned, was…. You had the deadline. You had the run-up to the deadline. You had all the things that go along with trying to make the deadline. Three forest businesses operating in the central coast were seeking Forest Stewardship Council certification for the midcoast timber supply area. The goal, full implementation of the coast land use decision in the ecosystem-based management, was reached by March 31, 2009.

Over the next four years, there continued to be very, very tough negotiations around the implementation of the March 2009 agreements. It is significant that though March 31, 2009, is recognized, in many ways, as the reaching of a deal and the reaching of a goal, there was still a lot of work to decide exactly how this would look on the ground, exactly how it would be given life, exactly how it would be implemented in a way that the companies…. They were very concerned about their future and whether they could actually make an economic go of
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it, in terms of the ways in which these agreements were implemented.

The environmental groups were concerned that the science that went into setting the benchmarks and the milestones and reaching the figure of protection of 70 percent of old-growth forest would actually be followed — that they wouldn’t somehow get reeled back into a partial agreement that was better, perhaps significantly better, than what had been possible before but didn’t meet the goal of fully protecting ecological integrity in the Great Bear Rainforest.

Both parties bargained hard. I know that from this period of time, there were times when senior people from the environmental movement and senior people from the companies were called in at critical junctures of the negotiations to actually look across the table and say: “This is what we really need in order to be able to go forward and complete this deal.” Each side talked very clearly about the stakeholders behind them and what the stakeholders were saying to them, about what the bottom line was for those stakeholders for reaching an agreement.

It was not easy. It could’ve broken down and almost did numerous times. Creativity found a way. Goodwill found a way. These weren’t necessarily people who liked each other a whole lot. They weren’t necessarily people who, you know, left the bargaining table and went for a beer later. Nor were they necessarily people who didn’t learn to respect and understand the values that the other party was bringing to the table.

These were tough talks, but they were also talks between people who had spent, by this time, well over a decade with each other, trying to make something happen, trying to make something work, trying to create something that would meet, from the environmentalists’ point of view, their goals of ecological integrity and sustaining ecosystems in the Great Bear Rainforest, protecting old-growth forest, protecting a unique area of the world from destruction.

[1710]

From the point of view of the forest companies, they were trying to find a way forward to have a sustainable and viable industry that could support them, could support workers, could support the workers’ families, could support economic partnerships with First Nations and operate in an international marketplace in a way that turned enough of a profit for them to proceed.

The final agreement. I’m jumping ahead a little bit here, but I think the fact that a final agreement was reached is a clear indication that it is possible, that they found a way, and that they were deeply invested in finding a way, not just to solve those local problems. Over time, I think any of us, in whatever field, who have worked long and hard to solve a problem, to reach an agreement, to find an accommodation, occasionally find ourselves working on something that, if we stand back for a moment…. Maybe we don’t get to stand back till we’re finished.

Often — sometimes — you look back on a life’s work, and you look at something you may have been engaged in many years before, and you think: “You know, we tried something new,” or “We did something new,” or “We made something new,” or “We found a different and better way to solve a problem or a different and better way to live together as a community or a different and better way to resolve differences.”

Sometimes people actually get to look and think, “We’ve done something of global significance,” whether it’s protecting an area like the Great Bear Rainforest, which, with one-quarter of the world’s remaining coastal temperate rainforest, is clearly of global significance — in an era of climate change, it’s clearly of global significance — but also to create a model of conflict resolution based on interest-based negotiations, founded on interest-based negotiations instead of on conflict. As the minister said, conflict to collaboration.

The easiest thing in the world, in my experience, is to never, ever, modify one’s position; never, ever change one’s mind; never, ever do the hard work of finding different ways to achieve a goal that may appear to others with a more rigid view to be a compromise. The easiest thing to do is to just not do that and leave the problem to somebody else.

The hardest and most valuable thing is to take some chances, to keep your eyes focused on what is the common good, to not worry about what people will say to you, but to do what you believe is the right thing to do. Not to sacrifice your values, but to find new ways to give your values life in a way that has integrity and meaning. That, I think, is the message of this agreement, the Great Bear Rainforest agreement.

From 2009 to 2014, all that hard work, all those hard negotiations continued, and ultimately, agreements were reached. Ultimately, systems were put in place. Ultimately, government-to-government negotiations approved the agreements that have been reached over many, many years at the bargaining table, and we have what we have today.

We have an agreement of global significance. We have an agreement of tremendous significance to First Nations in British Columbia, to people who care about the environment in British Columbia, whether it’s people whose life’s work is to care about the environment or even people like us in this chamber and those we represent back home in our constituencies who care about the environment but who also care and work on a number of other issues.

It’s also of significance to the companies that were involved. They’ve achieved an end to conflict over their products. They’ve achieved the pride of being able to say to their customers that they’re operating in a sustainable way, based on science.

[1715]

They’ve achieved market certainty, which, from an economic point of view, is clearly something that has great, great value.
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I think it’s worth it, at this time, to just look at some of the aspects of this agreement. We’ve talked about how 85 percent will be off-limits to industrial logging. The remaining 15 percent will be subject to the most stringent legal standards for commercial logging in North America.

We’ve talked a little bit, but perhaps not enough, about how this plan solidifies First Nations shared decision-making with the province over land use and traditional territories and contains measures to improve the well-being of their communities. This is important. This is First Nations territory. It’s First Nations land. It’s their home. It’s been their home from time immemorial. It is their right. That is the principle of government-to-government negotiations.

It is the right of First Nations to say yes or no. The fact that this agreement involved First Nations at every step…. I know in the initial stages there was some feeling among First Nations that the companies were talking, the environmental groups were talking, and: “You know what? It’s our land. What are you doing talking about us without us?”

I think it’s a credit to the companies and environmental groups that they recognized that would not fly and that it had to, in the end, be an agreement that was supported by First Nations.

I know other speakers later will talk about…. There are people who will say that this agreement is not a good one. There are some First Nations that may say that. There are some environmentalists or environmental groups who may say that, and there are some companies that may say that.

It’s difficult to get 100 percent agreement or consensus on anything. But I think — and I’m sure the minister would agree with me, although I won’t speak for him — that the level of agreement and acceptance and valuing of the Great Bear Rainforest negotiations and agreement is so high and so significant that in anyone’s books, it should rank as a tremendous achievement.

We came out of the 1990s, which was a period that was just completely overcome with industrial conflict in British Columbia. We’ve heard about the wars in the woods. We know about conflicts with First Nations. We know about people who were chaining themselves to trees and logging equipment in order to save what they thought were irreplaceable areas.

Here we have an agreement that found a different way, that said: “Instead of blocking roads, let’s voluntarily say, for a period of time, we will set aside further logging. On the environmental side, we will set aside our market campaigns against the companies, and we will find a way, if at all possible, to reach agreements that we can both be proud of, that reflect our values, that reflect our economic interests, that are acceptable and reflect respect for the well-being, the future, the rights, the title and the values of First Nations and can be a model for the world.”

It’s significant. It is simply, in some ways, so unbelievable that this deal was reached that I’m sure it will be written about, analyzed and talked about for decades to come.

Whether it’s legal requirements to maintain areas of cultural, ecological and economic significance to First Nations…. Whether it’s the offering of economic opportunities for the communities that include revenue-sharing and access to timber as well as the coast opportunity funds…. Whether it’s the absolutely clear recognition that no deal could be reached without respect of the First Nations as governments in government-to-government negotiations…. Any one of these would be significant.

[1720]

When you put it together, it speaks to the recognition of the parties, of everyone involved, of the complex and multilevel interests that needed to be addressed in order to protect this tremendously, tremendously significant area of British Columbia and the world.

Let me talk a little bit about climate change. Every now and then somebody might say to me: “What’s so special about old-growth forest anyway? You cut it; it grows back.” Well, it does, but not in the same way — not as quickly; not with the same size; not with the same history; not with the same ability to protect, maintain and sustain ecosystems and ecological integrity and, particularly in the case of B.C.’s coastal old growth, their ability to store incredibly high amounts of carbon per hectare. This has been sequestered over thousands of years.

Now, we know that wood products also sequester carbon, but there is something unique and special about the carbon sequestration ability of old-growth forests that — with the challenges facing the planet, with the challenges facing Canada, with the challenges facing British Columbia — is very, very substantial.

This increased protection of old-growth forest, the protection of 70 percent of old growth in 85 percent of the territory, results in an immediate reduction of carbon losses — immediate, substantial, immensely valuable, and not just because of the damage that will be prevented to the planet in terms of environmental damage. Whether it’s unpredictable weather, whether it’s raging forest fires that get out of control because of heat, whether it’s droughts in our agricultural areas or whether it is the significant impact of people to the south of us, who will inevitably need to move north and strain resources in other parts of the world….

All of these are important. But the economic consequences of not addressing climate change are huge. It’s not cost-neutral. It’s not just that it’s going to be less comfortable. It’s going to be less comfortable, less safe and very, very, very expensive.

That’s why the carbon storage values of old-growth forest and the value of the Great Bear Rainforest agreement in ensuring that those carbon storage values are maintained is also a very, very critical and valuable part of the agreement for everyone. It is being recognized in a number of ways in terms of human well-being and First Nations’ economic futures.
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I want to read some quotes from people who are involved in the agreements.

I mentioned earlier in my remarks Rick Jeffery, who is president and chief executive officer of Coast Forest Products Association. Rick is somebody I came to first know, I think, about five or six years ago. We meet occasionally and talk. We don’t necessarily approach the world in the same way at all times, but I’ve come to appreciate the effort and the integrity that Rick brought to this process. I think Rick is one of the people, as I’ve said previously, who really made this work, who really helped this agreement take place.

Rick wrote a blog about the Great Bear Rainforest called “A 20-Year Exercise in Relationship Building.” He starts by talking about “a cold, damp Monday morning, typical of a mid-winter Vancouver day.” He talks about going to the Museum of Anthropology. As he drove there, under the trees that lined the road, he was reminded of the trees in the Great Bear Rainforest, where he’d visited a few days before.

He talked about the experience in Bella Bella. This is language, frankly, that I’ve never heard Rick use in a conversation with me. He said: “It was nothing short of magical.” He said that it took him a full 24 hours to really come to terms with the gravity of the day’s events.

[1725]

When he was invited to go up…. He was there with the minister, I believe. Several others flew up and were welcomed by the Heiltsuk band and community, who were one of the 26 First Nations groups who signed the Great Bear Rainforest agreement.

Rick says:

“I was honoured to have been invited to join this small group. My role, as lead negotiator for the Coast Forest Conservation Initiative, was to work towards creating certainty and predictability for forest products companies so that they could sustainably operate in the region that we today call the Great Bear Rainforest.”

He lists the five companies: B.C. Timber Sales, Catalyst Paper, Howe Sound Pulp and Paper, Interfor and Western Forest Products.

“CFCI had been given a mandate by First Nations groups and the provincial government to solve what had become an international controversy in the 1990s in the region. Instead of playing into the us-versus-them approach laid out through the public campaigns, CFCI opted to focus on collaboration, which later proved to be a very successful approach.”

I talked earlier about the significance that parties chose negotiation. They chose to pull back from their tactics: the tactics of the market-based campaign, on the one hand; the tactics of continued logging and discrediting environmental groups, on the other. They chose to take a leap of faith.

They chose to pull back a little bit, to agree to park their interests — in the case of the companies, to agree to defer logging while discussions went on. As I’ve said earlier, there’s not a lot of point of discussing how you’re going to preserve old growth if it’s being cut down while you’re talking about it. The environmental groups agreed to hold off on their campaign if the companies did that, and to enter into negotiations.

I think the minister alluded to the early days of the negotiations. Nobody trusted anyone very much. They didn’t like each other. They didn’t think they had any common ground. They probably each thought that the other side was, in some way, the personification of evil and that they would never reach agreement. Yet they persisted.

I can only speculate that they persisted because they realized how important the stakes were. They realized, initially, I would say, from the company’s perspective, that their economic future was at stake, whether it was immediate or long term. From the point of view of environmental groups, they knew what they wanted to achieve, and they had to think: “Can we win it all? Can we take an absolute hard-line position that nothing will ever, ever be touched in this area, or can we rely on science to say how much we need to protect? Can we trust ourselves and the companies to reach an agreement?”

It was from those decisions to take risks that the parties were able to continue and move ahead with negotiations. Over time, they learned to talk and listen to each other. Over time, they realized…. I know, from being in caucuses with environmental groups, that even when people thought things were going off the rails, they still had faith that if they could just get it back on track, if they could just get the company to understand why what they were asking for was important and how it could be accommodated within a scientific framework and an economic framework that worked for them, that they could succeed.

Of course, this bill that we’re discussing today is really a testament to that belief that they can succeed, and they did succeed.

Let me read a few more words from Rick Jeffery. He goes on to say, after he said it proved to be a very successful approach: “Collectively and over a period of decades, that group dedicated millions of dollars and countless hours to arrive at a consensus with Greenpeace, Sierra Club and ForestEthics.”

He writes some more. He talks about the impact that being at the First Nations ceremonies had on him, the feelings he had when the traditional dancers were moving to the beat of drums. As he says:

“The rhythmic beat of drums reverberated in my ears long after they had gone silent.

[1730]

“After we left on the plane to return home, it struck me that the celebration signified much more than the signing of the Great Bear Rainforest agreement. It was a celebration of the culmination of a full 20 years of relationship-building, negotiation, research, discussion, frustration, persistence and, eventually, compromise that led to consensus.”

That pretty much sums up the phrase “from conflict to collaboration.” As I mentioned, I saw Rick Jeffery at the celebration, about a month ago, of the final agreement,
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and he was floating. He was not only floating with the end of a decade of hard work; he was not only floating with the sense of the deal. He had — and it was obvious, as everyone in that room had, whether they were from industry, government, First Nations or environmental groups — a tremendous, tremendous sense of accomplishment.

Let me read few remarks from Valerie Langer, who was for many years one of the initial movers of the campaigns that led to negotiations and then one of the three key negotiators at the table for the last decade. Valerie Langer says about the deal: “It is structured specifically to allow for a viable forest industry. They have reduced the total amount of harvest, and First Nations get a bigger piece of the pie.”

[R. Chouhan in the chair.]

She goes on to call it “globally significant” and points out that the Great Bear Rainforest agreement “actually consists of 26 separate agreements between the province, First Nations, forest companies and environmental organizations.”

That’s the context of Bill 2. The context of Bill 2 is that you often will debate legislation in this House that is whole and complete in and of itself. It arises from discussions within government and some consultation with stakeholders. It sets everything out, and it is the totality of what is going to be the law or the practice, going forward.

In this case, Bill 2 is significant because it recognizes and gives life to a two-decades-long process of resolving significant conflict about environmental values, ecological integrity, economic well-being of existing industries and future economic well-being of First Nations people — who have had an interest in the land, the trees and the ecology forever and whose well-being is so central to any final deal that an agreement or practices on the land would not be meaningful without it.

Valerie Langer goes onto say: “When you look at the land use objectives that have been signed into law, the whole first section of the new logging rules is First Nations cultural values, so this is dramatically different from how forestry is operated across the province.” She talks at length about the relationships with the companies, about the relationships with the Heiltsuk First Nation and the role the Heiltsuk First Nation played, as well as other First Nations. This is an interview is actually within a First Nations blog from Bella Bella.

She emphasizes that cooperation is key to the agreement. She says: “The rules are structured so that forest companies are able to get out a particular wood flow. There is less logging, but it is structured to be more operable so that everybody walks away with the possibility that what they are interested in can happen — business and First Nations having shared opportunities on their land base and environmentalists knowing that the forests and the species within them will be healthy.”

I mentioned earlier in my remarks that one of the key actors on the environmental side was Jody Holmes. She was a calming influence. She had scientific expertise in her own right. She had a clear sense of what she wanted to accomplish, but she also had a way of bringing the team together and keeping people focused.

[1735]

Let me read some comments from Jody Holmes that were quoted in an article, I believe, in the Globe and Mail a number of years ago by Justine Hunter. Jody said: “It was a major shift for the environmental movement to accept that it would have to find a balance that would not bring the forest industry to its knees.”

That seems pretty obvious, but we all know, I think, how people get when they get so focused on their own goals and values that they forget that other people have legitimate interests. She says: “Environmentalists also have to grow up in the process. We had to evolve from: ‘We are good guys, and they are the bad guys.’”

She goes on to talk about the role that Rick Jeffery played when he was brought in as the lead negotiator for the industry. The article goes on to talk about the investments of both environmental organizations and industry.

Finally, it includes another remark from Mr. Jeffery: “We get a stable working environment with a known set of rules for that area, and we get the ability to operate in the Great Bear Rainforest and be able to tell the world that this is part of our world-class forest management system.” That is the industry recognizing the importance of what they were achieving, the importance of what they set out to do.

Let me close this set of quotes with a quote from Kumi Naidoo, who is Greenpeace International’s executive director, after he had toured some of the Great Bear Rainforest. Mr. Naidoo said: “We have already learned some lessons coming out of the Great Bear Rainforest.” The first lesson, Mr. Naidoo says, is “how important it is to work with indigenous communities who are the rightful titleholders to lands never given up in treaty. Ultimately, they are the best stewards of their lands. This is important from both a social justice perspective as well as an environmental perspective.”

I know my time to speak is coming to a close. I barely sense that I’ve been able to touch on the features of this agreement, the significance of this agreement, its global importance, the hard work that was put in by so many people to make this deal a reality. But it’s not the deal. The deal is significant, but it’s what the deal represents in terms of protecting such an important, significant area of heritage to the world — of history, of majesty, of natural beauty, of ecological importance, of importance in a context of climate change — as well as what the deal signifies in terms of a road map.

It’s a road map in two senses. It’s a road map about how important it is to find ways to work through conflict in society. In this case, it’s a conflict around industrial de-
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velopment versus ecological values, but it doesn’t matter what the conflict is. We have enough conflict; we have too much conflict in the world.

When people decide that it’s better to find ways to talk about their legitimate interests and work through conflict rather than continue the conflict — even when things look dark and look as if there is no way to resolve the differences, that the gulf is simply too wide and too deep — people can actually act in good faith, suspend their mistrust or at least move it a little bit to the side and in good faith sit down with each other and try to find an agreement.

It doesn’t have a winner and a loser but has a lot of winners — not just among the people in B.C., not just among the people who are involved in the Great Bear Rainforest, not just among environmentalists, loggers, forestry companies or First Nations, but winners around the globe who see the model and who experience the benefits of maintaining an area of global significance and an area that is critically important in a period of climate change.

[1740]

That is truly significant. That is truly a gift to the world.

This bill, insofar as it recognizes and, on behalf of the government and the people of British Columbia, gives real life to this deal, is a bill that I will gladly support. I know my colleagues will gladly support it. I think people in British Columbia and Canada and around the world will give thanks to everybody, the hundreds of people who were part of making these negotiations and this agreement to preserve the Great Bear Rainforest in a context of acceptable and sustainable economic development a reality.

It’s a gift to the world. It’s a gift of tangible achievement as well as process, and a landmark.

With that, I’ll take my seat.

Deputy Speaker: The member must be very tired now, speaking two hours.

D. Bing: On behalf of my constituents in Maple Ridge–Pitt Meadows, I am pleased to speak today in support of Bill 2, the Great Bear Rainforest (Forest Management) Act.

British Columbians recognize that we live in one of the best places on earth. Our natural environment is the marvel of people around the world. The Great Bear Rainforest, which covers 6.4 million hectares and makes up one-quarter of the world’s coastal temperate rainforest, has been recognized as a global treasure. There is no doubt this area is a jewel of our province.

To understand how large this area is: it is an area that is similar in size to the country of Ireland. It is the largest intact temperate rainforest in the world. We value our natural environment immensely and feel a shared responsibility to preserve this magnificent and pristine land for future generations of British Columbians.

We also value the importance of preserving land and working with First Nations as partners in understanding how to maintain the land sustainably. This is why our government has committed to creating special forest management areas in the Great Bear Rainforest, totalling 273,000 hectares, where commercial timber harvesting activities will be prohibited. The act will ensure that we preserve this spectacular rainforest while continuing the ancient tradition of making a living off the land.

The proposed act achieves ecosystem-based management in the Great Bear Rainforest by carefully balancing ecological integrity and human well-being. This eco-sensitive-based management is the result of extensive collaboration and consultation between government, 26 First Nations groups, industry and environmental organizations. A joint solutions project was set up for forest companies, environmental organizations and First Nations to provide input.

Industry was represented by the Coast Forest Conservation Initiative, which included B.C. Timber Sales, Catalyst Paper, Howe Sound Pulp and Paper, Interfor and Western Forest Products. Environmental NGOs were represented by the Rainforest Solutions Project, which included ForestEthics Solutions, Greenpeace and Sierra Club, B.C. The Coastal First Nations and Nanwakolas Council were also part of the joint solutions project.

Due to this collaboration, the Great Bear Rainforest Act is able to achieve ecological preservation of this magnificent forest without hindering the growth of industry. The act will provide for the designation of new, special forest management areas that prohibit commercial timber harvesting activities. The amount of protected old-growth forest in the area will be increased from 50 to 70 percent. In addition, eight new areas of the Great Bear Rainforest will be protected from logging.

The boundaries of the Great Bear Rainforest will be better reflected by this act, which will establish new timber supply areas and reconfigure existing ones. The act provides forestry companies with a defined forest management area of 15 percent of the Great Bear Rainforest where logging activities will be allowed to occur. Coastal forest companies operating in the area will benefit from the certainty that comes with a secure land base, leading to more secure jobs and investment.

[1745]

In order to ensure the protection of the Great Bear Rainforest, the proposed act will set the annual allowable cut at 2.5 million cubic metres per year for a period of ten years. This number was decided upon after consultation with the chief forester, who was heavily involved in the forest analysis that contributed to the recommended annual allowable cut.

This will be a decrease from the existing annual allowable cut, which is currently 3.2 million cubic metres per year. The chief forester will continue to be an active participant in discussions about the annual allowable cut for
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the Great Bear Rainforest throughout the ten-year adjustment period. After the adjustment period, the chief forester will resume authority for determining the annual allowable cut for this area.

The proposed legislation will continue to build on the principle of environmental stewardship, which has been a priority for this government. Through agreements reflected in the act, the amount of forest carbon that will be sequestered in the Great Bear Rainforest is projected to increase to 640,000 tonnes per year.

Forest carbon credits will be shared with the Coastal First Nations and the Nanwakolas tribal council through the atmospheric benefit sharing agreements. These forest carbon credits will be used by the Coastal First Nations and the Nanwakolas tribal council to offset economic development projects that are of interest to them, thus encouraging the continued growth and prosperity of their communities.

Our government has continually proven that environmental protections and economic opportunities are able to be achieved together through prudent legislation. The proposed Great Bear Rainforest Act exemplifies this careful balance through an ecosystem-based management approach.

The act will provide a secure land base for forest companies to carry out a limited amount of commercial logging activities while increasing the protection of old-growth forests in the area. This will ensure that the Great Bear Rainforest remains as magnificent and pristine as we found it so that it can continue to awe and inspire British Columbians for generations to come.

I want to thank our Minister of Forests and all the groups and First Nations involved in this process for their hard work and belief that an agreement was possible. This landmark achievement is recognized all over the world. For these many reasons, with my constituents of Maple Ridge–Pitt Meadows in mind, I’m proud to speak in support of this act today.

B. Routley: I, too, want to congratulate those who were involved in what was obviously a difficult negotiation. I do know something about that, having been part of the CORE process back in the early days, even back in the 1990s.

I want to start by going back a little bit further than that to give you a bit of a context of what I observed, having started in the forest industry in September 1970, working in a mill. It was the very next year, as a matter of fact, that the first Nitinat Triangle…. It was B.C. Forest Products that I was working for at the time. I remember the company talking about the loss of eight million cubic metres in the Nitinat Triangle, and I remember management saying: “Well, one of the problems is it’s an area right next to Pacific Rim Park.”

It’s a park that…. By the way, I and my friend Mike, who was a first-aider, went out and decided we were going to actually see this West Coast Trail. We went out to Pachena Bay, I think it was called, and went out and hiked from there down towards the Nitinat Gap and stopped at a place called Tsusiat Falls along the way, as well as several other wonderful camping spots.

What’s interesting is I recall that the West Coast Trail back in those days — and I’m talking back in the 1970s — was pretty rough. It was very rough, in fact. I got to do a part of the trail that.… I mean, I certainly am not in the shape to do that today.

I had a pack on. We went up and down trees. There were winds that had come through the area and blown cedar trees, with all their branches, right over top of the trail. It probably took us the better part of a day to do about two miles on that trail. It was brutal — up and down and around and around these trees.

[1750]

It wasn’t the Cadillac treatment that I think some trail-goers get to see today. We actually had the old hand-by-hand trolley over the river. I remember doing that as well.

I remember when management was talking about this Nitinat Triangle and the loss of eight million cubic metres. That was a lot of wood. That was enough to keep the Youbou mill at the time going, probably, 16 years. I hadn’t quite grasped the whole thing with the loss of this Nitinat Triangle park. I remember, again, being told that hardly anybody ever goes there. The only people that probably get into the Nitinat Triangle, one management fellow told me, was…. Maybe David Suzuki got to fly in there with his helicopter or something and land. There were no roads.

I remember that some of the old loggers that I talked to at the time said: “Wouldn’t it be a terrible thing if there was a lightning strike, and because we hadn’t built any logging roads to get out there, they could lose the whole thing?” It could all burn up, and there was going to be no effort to preserve all this timber — eight million cubic metres of timber. I started to understand that as I worked on the booming grounds and got to do that.

In the ’70s and early ’80s, we started not only with the West Coast Trail, a park that I very much supported, but, as I said, the Nitinat Triangle. Then there was all this talk about other parks that were quite nearby, like the Carmanah. That one was the beginning of my career. I had started working in the union office in 1985. So from basically 15 years, I was now the vice-president of the local union.

We had all of the loggers that were involved in the Caycuse, the Port Renfrew area and the Honeymoon Bay logging operation, as it eventually became. They were concerned. We were hearing about the Carmanah to start with. I remember MacMillan Bloedel picked me up in a helicopter and flew me in to see these big Sitka spruce that were down there. I, too, marvelled, I must say, when I got out, just like somebody was saying about Rick Jeffery. I’m sure big trees affect all of us the same way. The
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loggers call them berries. Big berries like that, those huge, big Sitkas right down by the river.

It made sense to me too. I thought: “Well, gee, we can give up some areas like this. Surely there’s lots of timber.” Back in the day, we used to think there was a surplus of areas to go. Of course, we were promised. It was the Social Credit government then. I can’t even blame the other side. It was the Social Credit government.

I remember they came into the basement of our union hall. The fallers at one time were saying, in Renfrew: “Boy, we’re concerned, because this could impact us. There is all this environmental pressure. People want to save things. We get it.” As the speakers before me…. My colleague had said yes, there are loggers that think very environmentally, in terms that they have great respect for the woods. They, too, want to see some areas preserved in perpetuity, some spectacular regions.

As I can attest to, there’s old growth, and then there’s old growth. Let me explain that, just camp on that for a minute. When I was on the committee in 2012…. The Ministry of Forests, Lands and Natural Resource Operations then had put together a committee of both NDP and Liberals to go and look at timber supply. We were in the Interior, an area that I had never been in. The local forester there said he was going to take us in and show us some old growth We got out of the truck and walked into the forest.

[1755]

I was in there for a few minutes, wandering about. I finally looked at him and said: “Well, where the heck is the old growth?” He said: “You’re in it.” I looked around, and these were what we would call peewee-type trees. To all my friends in the Interior, I’m not picking on your trees. I know you have some beautiful trees. There are some big trees, actually, in areas up there and some great areas. But in this particular area, we had second growth that was bigger than this old-growth tree.

In fact, I haven’t heard of a lot of environmental groups getting all excited about the real small old-growth stuff. There may be. That seems to have changed over time, because the focus was always on the great big trees, and that’s carried on. We’ve got the Avatar forest. They come up with different names for areas, and the next thing you know, it’s become a park.

Now, I want to fast-forward to 1990. I’d already experienced some of this, some parks, and I also knew that this was a very real challenge. I had been reading about the Brundtland report and the need to save 12 percent of representative ecosystems. Again, I don’t know how many of you have heard of the Brundtland report, but at that time, that was kind of one of the in-vogue things to look at.

The Brundtland report suggested that we ought to be moving in that area of having at least 12 percent of representative ecosystems. It wasn’t just old-growth forests we were talking about. We were talking about forest and range, of unique dry areas or wetlands. All of these things needed to be looked at, and we needed to take a different look at the environment. That was what the model was calling for.

I remember well because this was in the 1990s. We already had the pressure on the Carmanah, and that was essentially going to be a park. I looked it up here. They actually backdated it, because they called it the Carmanah Walbran, 1990, in Wikipedia. But the money…. This is an important thing to note. The NDP were in the forefront of dealing with parks like the Carmanah Walbran, and they actually paid MacMillan Bloedel $83.75 million to take back the park.

That was 1999 that they agreed to pay. They even paid interest retroactively to the company for the fact that it had been kind of held. Everybody said: “Stop. Don’t go and log that. It’s too controversial. Let’s go and have some discussions.”

Now I can fast-forward to one of the…. I remember old Jack Munro. Actually, my first set of negotiations was Jack Munro’s last, and boy, did I ever learn a lot from Jack. He sent over, in 1991, to our local there in Duncan, a representative. Claire Dansereau was her name. Now, I don’t know how many of you remember Claire. Some of the older members on this side of the House might remember Claire. She worked for Forest Renewal B.C.

She was sent over by Jack Munro to meet with me and a group of different environmental groups to see if we could hammer out some kind of document that showed respect for each other’s interest. Isn’t it interesting that today we’re here and we’re celebrating — and I, too, am celebrating — the fact that they have accomplished the Great Bear Rainforest. I still think it needs some tweaking, and we’ll talk some more about that later, about what might be missing.

I have heard about all of the interest groups that were there. The environmental groups were certainly represented. The industry was certainly a stakeholder at the players…. The First Nations, absolutely. They have to have First Nations there to resolve their long-standing issues. But along with the industry, from my point of view, there should have been some stakeholders from the workers.

[1800]

[Madame Speaker in the chair.]

They’re the ones that ultimately…. When the lofty decisions get made and the photo ops are taken and everybody pats each other on the back and then jumps in their cars and heads off into the night, it’s the forest communities and the forest workers that ultimately end up paying the price.

What I don’t know…. I’m going to ask the minister about this when we get to the next stage in talking about this bill, and that is: has there been any discussion about mitigating issues for the workers that may have been impacted by this?
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I know you had Western Forest Products. You’ve got Interfor. I know that a lot of the mills left on Vancouver Island are Western Forest Products mills. I know that that timber that they did in mills like Chemainus and mills like Saltair and Cowichan Bay…. That wood comes from all over the coast of British Columbia.

Will this have an impact? Will it cause shifts to go down? Are there any plans, whatsoever, to mitigate the impacts to the workers?

Back to my Claire Dansereau part of the story. I think it’s worth reading into the record the fact that there was a…. They have the Big Mac and then they have the…. What do they call them? Buddy Burgers. This isn’t even the Buddy Burger of agreements, because it’s only two pages long.

Instead of ten or 20 years, we spent maybe ten days altogether, over several weeks or months, meeting with these different environmental groups and hammering out an interest-based agreement.

The groups that I’ll name here that signed on to this, at the end of the day…. We signed this on September 6, 1991. It was the Western Canada Wilderness Committee; Clinton Webb signed it. Friends of the Carmannah-Walbran — Bobby Arbess and Amanda Cantelon signed it. Also, it was Carmanah Forestry Society, Saul Arbess; Environmental Youth Alliance, Nathan — I can’t read that signature; and the Sierra Club. I think it was Warrick Whitehead of the Sierra Club of south Vancouver Island.

Let me just take a moment to mention the highlights in this accord. It was called the south Island forest accord. This was the precursor to all of what came next and all of the bargaining. We’re talking in September 1991. I do want those who are hearing this debate today to know that there were people of goodwill realizing the need to sit down and try to bargain a very, very tough issue. There’s no question that the need to have some old growth was important. At the same time, I had an interest of: what about jobs, and what about employment opportunities into the future?

The south Island forest accord says:

“A crisis in our forests is causing intense and unacceptable land use conflicts. Decades of government and industry mismanagement, overcutting and environmental degradation have seriously depleted both employment opportunities and original old-growth forest.”

By the way, I’m blaming the Social Credit government; they were the “decades” at that time. Anyway:

“Wilderness preservation is not the greatest threat to forest industry jobs. However, preservation could worsen an already bleak situation, unless drastic changes are made now.

“Consequently, IWA-Canada Local 1-80; CLC; the Carmanah Forestry Society; the Environmental Youth Alliance, south Vancouver Island; the Friends of Carmannah-Walbran; the Sierra Club of Western Canada; and the Western Canada Wilderness Committee hereby publicly declare a common ground and unity of purpose in demanding the following changes in the management and stewardship of British Columbia’s forest heritage.

[1805]

“(1) Some old-growth forest ecosystems must be protected in perpetuity to maintain the health of the biosphere. In order to determine how much should be set aside on south Vancouver Island, we urgently require: (a) a complete socio- and bio-physical inventory of all forest lands and (b) job creation strategies which utilize the untapped possibilities within the forest industry to offset potential job loss arising from the protection of additional areas.”

Again, this is of interest to me, because I would hope that the negotiators who were involved did look at mitigating strategies for workers and communities and look at job creation strategies. I look forward to that in the next stage of debate.

Carrying on here:

“When the foregoing conditions have been met, we can then jointly seek the protection of additional areas.

“(2) The purpose of harvesting the forests of British Columbia is to promote and enhance long-term community stability through the creation of jobs. We must create more jobs per cubic metre of wood.”

I wonder if the Minister of Forests is thinking that boy, he’s heard all this before from me. There’s kind of a recurring theme here.

Anyway, back to it:

“New jobs can be better created through the use of the forest resource. Better forestry uses include value-added manufacturing, environmentally appropriate logging systems, commercial thinning, intensive silviculture, land and habitat restoration, old-growth forest research and ecotourism. All exports of raw logs and cants must be immediately stopped.

“(3) Government forest policy must be changed to ensure that decisions are no longer made without active and authoritative participation in all levels of planning by all concerned.”

Now, I would think the Minister of Environment might have heard this out of me lately, talking about the need to have local control and the provincial interest.

Carrying on:

“Local control must be balanced with the provincial public interest. Informed communication and accountability by all concerned is essential. Decisions with negative impacts on workers and communities must be accompanied by economic development strategies to offset those impacts.

“(4) Some logging practices must be changed to protect all forest functions, including, in particular, wildlife and fisheries habitat, river systems, biodiversity and soil productivity. Such changes must ensure a safe working environment.”

Final point:

“(5) Outstanding native land claims must be fairly and expeditiously resolved.”

Again, that was 1991, in September, but we understood very clearly at the time that there were still ongoing, unresolved issues that must be resolved and that we were not the sole parties involved — that First Nations had to be involved and consulted and resolved agreement with them before we could go any further.

“The foregoing changes cannot result without the strength of legislation and a forest service of sufficient size to monitor and enforce that legislation. This accord is the first step in an ongoing dialogue regarding matters of mutual concern. The parties are committed to working together for constructive change.

“Executed this 6th day of September, 1991.”

I had no idea at the time. I was still a fairly young man in 1991. I was standing outside this Legislature with all of this group of forest workers and their families, along with all of these environmental groups who were involved in
[ Page 11501 ]
signing this accord. The news thought this was a big deal. Here’s a local Woodworkers union rep and all these environmental groups signing this accord.

Back in that day, we didn’t have cell phones, so when I got back to my office, the phone had been ringing off the hook. I was summoned to the Caycuse logging community. I knew, the next morning, that there were going to be some angry loggers waiting for me.

[1810]

I’ve often been asked: what’s the tougher job? This, working as an MLA, or was it representing forest workers? Well, that was the day for me that I’ll never forget as long as I live. I arrived in a logging camp, and there were 450 angry loggers in the Caycuse Community Hall. That was pretty well all it could hold. In fact, there was standing room only.

As I marched up the stairs to go into the hall, one of the biggest fallers I’ve ever seen in my life turned to his partner and said, “Get the rope,” and he meant it. He was not looking like he was ho, ho, ho, at all. He was very upset and angry with me. I got called names about what kind of a green person I was. All the way to the front of the room, people were hanging from the rafters, practically, upset about what I had done signing this — what I’ve just read to you. After I passed out these copies to everybody, and I explained it….

I’m sure it’s the same conundrum that’s facing the negotiators today of this deal. There’s no question that there are impacts. Is it 40 percent of the cut that’s reduced as a result of this — somewhere in that range? Then there’s a ten-year period where you’re going to be able to cut 2.5 million cubic metres, I think it is, but then after that, it’ll be up to the chief forester.

There’s no question that there are impacts, not just to the environment but certainly to the future forests and communities. The companies, I understand, were bargaining the best deal they could get. Others have said there was this countering war in the woods. I was very much there and saw firsthand. I got to sit at the table and hear the conflict firsthand and try to work through it.

I do acknowledge and thank those who had the patience to spend the time working through this all of these years. Obviously, the value was seen by the province in finding an accommodation that could bring about some harvesting in that unique area but, at the same time, also respect the other values that are equally, if not more, important, in some ways.

I would certainly argue that First Nations values and the issues they’ve been waiting for — in some cases, for more than a century or more; maybe it’s two centuries — are long overdue in trying to sort out some kind of a negotiated settlement. That is a good thing. I think that speaks well to those who were involved in that.

We will be supporting this, at the end of the day. I do want to talk about possible amendments or changes if we’re not satisfied that there has been accommodation for the workers and communities involved. Again, it’s early days for us. There have been people at this for years, and now we’re going to find out more of the details. While there are press releases, as they say, the devil will be in the details when we see the actual legislation, which as I understand it is actually…. I’m not clear on whether there’s legislation or regulation coming later, but there will be more to come.

We have this long history of dealing with these things. Mike Harcourt’s government, back in the 1990s, actually did two things that started the government on the process on Great Bear Rainforest. The first was the protection of the Kitlope Valley, which is part of the Great Bear Rainforest. I guess the Kitlope is on the east side, I think, of the Great Bear and was one of the first areas that was identified that needed to be included.

The second was the CORE process, the Commission on Resources and Environment process. While the CORE process had its detractors, it followed a lot the same model that the Great Bear Rainforest did — and that’s bringing together key stakeholders: the environment, the industry, First Nations and community groups. As I said, they added the forest workers’ representatives to that model.

[1815]

I will add that I actually had the experience of going to Europe, paid for by…. Then the provincial government and the federal government banded together to send a group of forest workers, contractors, small business owners from the forest industry, a nursery owner….

We went to Europe and to Scandinavia. We went to Europe to talk to groups from Greenpeace, and we took along a lovely book that showed the planting of areas and how they had regrown — that the forest had come around and that we weren’t the entire wasteland that we were being portrayed as in some parts of the world. I got to see up close and personal how difficult it is to try to persuade people to look at what you’re doing as sustainable.

Were there times when we weren’t doing everything right? Absolutely. Have there been dramatic changes and improvements in forest policy? Yes. Do there need to be more? Absolutely. We’ve got a long list of ideas on those kinds of things, and I know the minister has heard us before talk about those kinds of issues.

In finishing up, I do want to say that I do think it’s a worthwhile effort indeed. For the province of British Columbia and for the industries involved and for First Nations, it is a good day indeed to see conflict avoided and to find that that kind of collaboration can win the day and have a result that works for everybody.

My fear, I do have to say, is: will it survive forever? I remember an old-time logger saying: “They’ll get one more park. They’re going to stuff it in their pocket and quickly forget about it, and then they’ll want another one.” I do get it. People find an area. They get out in the wilderness and find some big berries, as I talked about earlier, and
[ Page 11502 ]
they want to talk about them. I think that kind of pressure will forever be there.

Again, congratulations to those involved in this process.

J. Thornthwaite: I am very proud to be able to stand up and support this bill.

I’ve actually been to the Great Bear Rainforest. I’m probably one of the few people here in the Legislature, besides the people that live up there, that has actually been there.

To give a plug to the people that took me out there, two of my constituents, Trish and Eric Boyum, who run the bear-viewing company Ocean Adventures, actually, out of North Vancouver–Seymour…. Just to read you a little quote from their website, there are no set itineraries. “We…enjoy each day based on the tides, the weather and what we have seen the day before,” just like the wildlife does along this coast. I felt very fortunate that I was able to experienced bear viewing in the Great Bear Rainforest.

With that, Madame Speaker, noting the hour, I’d like to reserve my right to resume my comments. If it’s all right with you, could I move adjournment of the debate?

J. Thornthwaite moved adjournment of debate.

Motion approved.

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

Hon. M. Polak moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:19 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF AGRICULTURE

(continued)

The House in Committee of Supply (Section A); D. Plecas in the chair.

The committee met at 1:35 p.m.

On Vote 15: ministry operations, $64,948,000 (continued).

Hon. N. Letnick: If I may, in the spirit of cooperation on this Francophonie Day, I’d like to provide the public and the member opposite with the 2015 stats on bees. How’s that for quick service?

As we described this morning, in 2014, beekeepers had achieved a record year of 2,405. In 2015, the number is 2,363. Number of colonies in 2014, 44,999; in 2015, 45,571. Production of honey in prior years hovered around 1.8 million pounds. In 2013, it was just over two million pounds. In 2014, it was just under four million pounds, or 3.84 million pounds. In 2015, it’s hovering around the same amount again, just under 3.7 million pounds or 3.692 million. The value of honey in 2013 was $10.58 million. In 2014, the value of honey was $12.617 million. In 2015, the value of honey recorded here is $19.471 million, almost double what it was in 2013.

So a lot of good news on the honey front.

L. Popham: I would like the minister to give me an update on small hive beetle in the Fraser Valley.

Hon. N. Letnick: Thank you to the member opposite for the question.

[1340]

Small hive beetle — I’ll use SHB, for short — was confirmed in British Columbia. The Minister of Agriculture informed B.C. beekeepers and other stakeholders outside of British Columbia — in particular, in Alberta. Our response included a comprehensive fall survey to determine the distribution and prevalence of SHB.

We developed a framework of inspection standards and protocols to permit the movement of colonies between provinces, which was really important, because there was some threat of Alberta closing the door, which they have not done. We developed an inspection program that will incorporate testing for SHB, and we provided beekeepers with material to help them detect and control SHB.

Those efforts worked — a great thank-you to all our staff, including the assistant deputy minister, the deputy minister and, of course, our chief apiarist, talking to their colleagues in other provinces. B.C. and the western provinces have developed and agreed on inspection standards and movement protocols that will permit colonies to return to their home provinces after completion of the pollination services. It’s obviously very important to our crop producers here.

To meet the inspection standards and facilitate the movement of colonies to other provinces, B.C. has committed to providing necessary resources for inspection services during the short three-week period this spring.

L. Popham: What’s the number on the extra resources that the minister is providing?

The Chair: Minister.
[ Page 11503 ]

Hon. N. Letnick: Thank you, hon. Chair, Monsieur le Président, Journée de la francophonie.

It will be covered within the ministry budget. What specifically will be covered is…. During the two to three weeks between mid-April to the end of April, the plan is to bring three to four extra resource people from other parts of the province down to the Fraser Valley to assist our chief apiarist in that inspection service.

L. Popham: Is the minister not hiring new inspectors? He’s just using the ones we currently have?

Hon. N. Letnick: That’s correct.

L. Popham: Is the minister under the same impression I am that the honey producers in the province would like to see more inspectors?

[1345]

Hon. N. Letnick: Thank you to the member opposite. As the member knows — she’s heavily involved with bees and has a great reputation in the bee industry — the peak hive inspection periods are between March and late June each year.

The program offers services in beekeeping regions on Vancouver Island, south and Gulf Islands, Powell River and Sunshine Coast, Fraser Valley, Kootenays, South Okanagan, North Okanagan and Shuswap, Thompson, Cariboo and central north.

Some of these are new and have been filled. However, we still have one vacancy on Vancouver Island, central and north. My hope is to have that vacancy filled as quickly as possible, and then we’d go on from there.

L. Popham: When the hives that are moving across the border from Alberta into B.C. — generally early season, pollination season…. Is the minister saying that that period is just three to four weeks, and we’re going to move our inspectors from other locations down to focus mostly on the transfer of hives over the border? If that’s the case, what’s going on in the areas of the province that those inspectors are coming from?

I’m just going to finish off with…. Has the ministry increased its budget around apiary, bees and honey production and pollination? Has there been an increase in the budget at all over last year?

Hon. N. Letnick: It’s interesting to see other provinces and what they do, and in particular the western provinces, since this is what we’re talking about when we’re talking about the hive issue.

In Alberta, beekeepers are expected to do their own inspections and disease control. In Saskatchewan, there is no dedicated inspection program at all. In Manitoba, the recent expansion of the apiculture inspection program increased from one to two people. When you compare us to these other provinces, well, I think the member opposite can do the math.

In particular, on the question as to how we are going to manage this, there will be some of the time that’s been allocated in the different parts of the province for those people to come down to the Fraser Valley during the critical time that we’re all concerned about with this issue.

Now, the ministry will manage that in two ways. One is within the budget of the ministry, so there are no new dollars provided to the apiarist to do this. It’s going to be managed within the complete budget of the ministry. And two, those people that are leaving — those two to four people that are leaving their home turf, so to speak — will be asked to do their inspections before they come down to the Fraser Valley and then catch up after they finish in the Fraser Valley.

[1350]

That’s how we’re going to manage their workload back home and still be able to provide the extra services to the people in the Fraser Valley.

L. Popham: I’m going to translate what the minister just told me into: “We’re lucky to have what we have, compared to other provinces. It’s good enough to do the job, and we don’t need to worry about the spread of small hive beetle because we’ve got it under control.” Is that what you’re saying?

Hon. N. Letnick: What I’m saying is what I said, hon. Member.

The system will be one of taking members who are working in other parts of the province down to the Fraser Valley — two, three or four — to assist our chief apiarist to manage the inspection process. They will be asked to do their local inspections to accelerate those before they come down and then to catch up after they finish that two- to three-week critical period in mid-April to the end of April.

The amount of dollars that will be required for the extra work that they’ll be billing for will be covered within the ministry budget.

L. Popham: Does the minister believe that the honey producers in the province are going to be happy with that answer, or do they expect more?

Hon. N. Letnick: I guess if you look at any program that government delivers, whether it’s municipal, of which I’ve had the privilege of serving, or provincial, of which I now have the privilege, and federal, of which I will never have the privilege of serving, before you ask, there are always requests for more services, and I appreciate constituents asking for more.

The question being: in my discussions with people in agriculture, are they looking for more? I would say they’re consistent with most people. They would like to
[ Page 11504 ]
have more. However, the chief apiarist tells me that for the most part, people who are working with him, consulting, providing him information from the industry, are relatively happy.

There is, again, that gap on Vancouver Island, which we acknowledge, and we are working hard to fill that gap for inspection services.

L. Popham: I just want to confirm on record that the minister is saying that the resources we have in place right now are…. We have enough resources to control disease with bees in British Columbia, including small hive beetle.

Do we have enough resources in place to make sure diseases don’t spread?

[1355]

Hon. N. Letnick: I’m confident that our government’s response to control this disease is appropriate. I’m also aware — as the member opposite is, as well, I’m sure — that industry also has a responsibility to play when we talk about transmission of diseases.

We are there to assist the industry on the issue of diseases in the question of bees. We actually provide our apiarists and other experts free of charge for their services, and we don’t charge lab fees either to people who need services from the lab. I think that’s very appropriate for government to do, and I see nothing in this year’s budget that would change that.

L. Popham: Does the provincial apiarist have any restrictions on his travel?

Hon. N. Letnick: In the essence of time, I’d just say it’s the same principles that we discussed yesterday regarding the different levels, whether it’s within the province, outside the province — who would have sign-off. The chief apiarist has advised me that he’s never had any travel request refused inside or outside the province.

L. Popham: I think that’s all we’re going to do on bees today. Thank you for coming in.

My colleague from Delta South is going to ask some questions.

V. Huntington: I would have asked these yesterday….

Interjection.

V. Huntington: We’d like more of them, yes.

These questions relate obtusely to the ALC, and I don’t believe you’d need staff, but I was unable to be here this morning.

The minister’s 2015 mandate letter requires you to “report to cabinet any benefits or challenges” that you and your ministry find that arise from the amendments to the Agricultural Land Commission Act. Have you and your ministry identified any of those challenges or benefits yet? Will you be reporting on them publicly?

Hon. N. Letnick: The mandate letter says exactly that. We are still working on putting the reply to cabinet together. Indeed, even some of the changes went into effective use last week. It’ll take some time, but it will be available to cabinet before the deadline of the mandate letter. After that, it’ll be a submission to cabinet and will follow all the same rules for reports to cabinet that all other reports to cabinet follow.

V. Huntington: We are unlikely to see any official considerations on how the act is unfolding and whether you feel it’s a challenge to the farming community this year at all. Is that correct?

[1400]

Hon. N. Letnick: Our target is to deliver a report to cabinet sometime this summer. The answer is yes. We plan to provide a report this year, so the member doesn’t need to be concerned.

V. Huntington: This member would just like to know what’s in the cabinet report; that’s all.

I’ll move on to the RB Group. Reckitt Benckiser put its purchasing program, presumably, on hold last June. We later found out, as the minister knows, that three separate purchases of approximately 4,000 acres were subsequently purchased after their moratorium was announced — presumably because those sales were in the works. The minister had said to the House that he would be working with the Agricultural Land Commission to determine whether or not RB Group was in compliance with the legislation.

I’m wondering if you and the ALC have been working to ensure that the ALR land isn’t being planted with trees designed for carbon offset schemes, regardless of whether those schemes require covenants or were for internal company programs, as was the case with RB.

[1405]

Hon. N. Letnick: Yes, hon. Member, we are working with the Agricultural Land Commission. We have been, since the early days, on that. Currently we are working with the commission towards resolution as to how we come up with a more permanent solution than the one that we have right now, as the members said.

They haven’t bought any new land since those last pieces. They committed to not doing anything with those properties until they figure out what their options are and are able to channel those options through their leadership team. They are in regular communication with the deputy minister.

I have every confidence they will follow through on their commitment. Also, I believe, from communication
[ Page 11505 ]
that I’ve seen, that they recognize now the special relationship that British Columbia has towards its agricultural land reserve, which they didn’t know before, and will continue to respect that until they come up with their permanent solution to the lands that they do own.

As I said at the beginning, we are continuing to work with the land commission on a more permanent solution to try to avoid these kinds of events in the future.

V. Huntington: Could I ask just ask the minister very briefly, then: what is his estimation of the permanent solution? Are we or are we not going to be in support of enabling agricultural land to be used for carbon offset purposes? What do you see as the long term?

Hon. N. Letnick: When this issue was first brought to my attention by Minister Rustad when I did a tour of the province at that time — it’s a couple years ago, I think — and then brought again to my attention a few months after by the Minister of Small Business….

Interjection.

Hon. N. Letnick: Yes, of course — and you as well. But I want to make sure that I put it in the sequence in which it was brought to my attention: the Minister of Aboriginal Relations, then the Minister of Small Business and then, very loudly, of course, the opposition. And that’s fine.

We looked at the legislation, which was passed unanimously in this House by most people that are in this room right now — or at least the majority of — back in, I think, November of 2011.

Basically, we said: “If you are going to be planting trees for a long term, 100 years, to do so for carbon credits, you need to put a covenant on the land, and if you’re going to put a covenant on the land, you need to go to the ALC for permission.” That’s the law that we changed back then.

Of course, this business said that they weren’t going to apply for a covenant because they weren’t trying to get the actual carbon credits, as the member has clearly said is true. Therefore, they didn’t think they would have to get permission of the commission.

In the long term, we need to resolve that issue. Where someone can come in and even though they are not going to apply for financial credit for the planting of the trees, we still should have some way of ensuring that the act is respected by all people from anywhere.

D. Donaldson: I have a question dealing with the 2016 farmers food donation tax credit.

As the minister knows, the food donation tax credit was advertised as something that will enable families who use food banks and charities and local school lunch programs to have further access to fresh, healthy and local food.

The tax credit is open to individuals and corporations donating a qualifying agricultural product to a registered charity. The agricultural product may include meat, and a credit is worth 25 percent of the fair market value of the qualifying agricultural product.

There is fair market value now on farm-raised venison. I’m saying that because my question has to do with wild meat. The Guide Outfitters of B.C. have conducted a fair-chase food and meat donation program since 1993. Since then, they estimate that they have donated 425,000 pounds of wild meat to families in need and local charities in British Columbia. In fact, in 2010, they donated 900 pounds of wild, free-range, organic meat to the Salvation Army food bank in Kelowna.

[1410]

The Minister of Forests, Lands and Natural Resource Operations was at that event to witness the donation of that amount of wild meat. As well, the Kelowna ministries of the Salvation Army located on Rutland Road South, which perhaps is in the minister’s constituency, or nearby, wrote a very enthusiastic letter of appreciation.

My question is to the minister. Considering that wild game meat is natural, organic, has no steroids, artificial colours, hormones or other chemicals and exactly suits the intention of what this program is about in creating further access to fresh, healthy and local food, did the minister consider the small business owners and the guide-outfitters industry when considering this tax credit? If so, why weren’t they included? And if not, under this budget cycle, will he commit to including them in the food donation tax credit so families have further access to healthy, fresh, wild game meat?

Hon. N. Letnick: Yes, the location that the member so eloquently articulated is like a 9-iron from my riding boundary, so I know the Sally Ann very well, and actually, I was with the Minister of Forests, Lands and Natural Resource Operations when those meat donations were provided to them over those two years. It was a great donation, excellent for our community, and again, I want to thank all the hunters that did their job to provide that donation.

Specifically to my mandate letter, it says: “Work with Finance to implement the 25 percent tax credit on the value of farmed food donated to non-profit organizations for Budget 2016-2017.” The key words there are “work with Finance.” This is a Ministry of Finance question. You should direct it to the Ministry of Finance estimates.

G. Holman: I had a question regarding fish farming. I realize that maybe you don’t have staff there, but you could take it on advisement.

There have been a number of committees, inquiries that have looked at the issue of moving the industry to closed containment regarding concerns around disease and sea lice and those kinds of issues. The most recent was the legislative all-party committee that was struck in the mid-2000s. My understanding is that that commit-
[ Page 11506 ]
tee, as well, recommended moving towards or providing support for, incentives for moving to closed containment.

My question to the minister is: is there anything within your budget that provides such support to try and encourage or move the fish farm industry towards closed containment or to pilot closed-containment projects? Is there anything in your budget that supports those kinds of recommendations that have come forward?

[1415]

Hon. N. Letnick: I do understand the member’s question: specifically, is there support or has there been support for closed containment of salmon in British Columbia? Yes, there has been. We’ll have to check the numbers, as the member has given us that latitude to go and get him the exact numbers. My memory, if it serves me well, is something like around $300,000, but we’ll get you the right numbers. It comes from the Investment Agriculture fund and was to help with…. I believe Kuterra was the recipient. We’ll get you the numbers.

The other piece is our strategic growth plan that we announced. I think it was in December. It calls for us to look at expanding the Growing Forward or whatever the next suite of provincial-federal agriculture dollars is going to be. Right now we have Growing Forward 2 — approximately $3 billion across the country, $375 million right here in British Columbia.

A majority of that is in BRM, business risk management, programs. But about $110 million of that is in innovation funds. But it’s specifically for agriculture. Part of our plan is to advocate with our colleagues across the country, some of whom are actually receptive, especially those that have ocean on their borders, to see that suite expand to include aquaculture as well.

There, if we are successful, we might see more opportunities to partner with the federal government on providing innovation dollars for things like Kuterra, Taste of B.C., I think it’s called, Steve Atkinson in Nanaimo and some of the other people that are doing closed containment.

I also have to reflect on the premise that is that it’s either farmed salmon in the open nets or farmed salmon in closed containment. We don’t look at it that way. There’s a role for closed containment, absolutely, and there’s a client base for it. But we look at it as more complementary, where we can have a growing environmentally responsible open-net industry on our coast.

Right now I don’t know if the member realizes that if you look at all our commodities, the top commodity that we have in agrifood receipts is dairy. Number 2 is farmed salmon. It’s a very important industry on our coast, especially for First Nations, and we want to make sure that the open-net industry operates in an environmentally responsible way.

We have resources for that, not only for the closed containment on the land but also the open net, in our lab in Abbotsford. Two of the only board-certified fish pathologists, I believe, in Canada are right here in British Columbia, working with our industry. They’ve committed to achieve the highest standards in the world by 2020 on all their farms.

[1420]

Again, I think we need to look at the closed net as an opportunity, for sure, on land, to continue to grow that part of the industry. But it’s not in replacement of; it’s more complementary and moving together. I want to see, and I’m sure all British Columbians want to see, continued good protein provided to British Columbians and to our markets.

The food supply security question that’s throughout our agrifood plan for the next five years talks about increasing productivity and increasing production in all our commodities. I think farmed salmon — both on the ground, on land in closed containment, as well as those that are done environmentally well in the right place, of course, in our waters — have a role to play in achieving that.

L. Popham: I’d like to ask a couple of questions about the Investment Agriculture grant that was given to Sunshine Organics. Can the minister tell me why this grant was clawed back?

Hon. N. Letnick: Thank you to the member opposite for the question.

The Sunshine Organics application was done through the Buy Local program. That’s the $8 million, four-year now Buy Local program, which is leveraged. We estimate that by the time the $8 million is issued, it’s close to $20 million in total local promotion and other acceptable pieces that apply to the Buy Local program.

The Buy Local program is administered by the Investment Agriculture fund. As I understand it, the foundation held discussions with Sunshine Organics about their project, and the company’s application for funding was revised from $100,000 to $50,000. It wasn’t clawed back. The application was revised.

The company’s project promoted locally grown organic foods on the Sunshine Coast and the Comox Valley. The foundation worked with the company over a period of time and has received appropriate records of expenses for the $50,000 that the company did receive.

L. Popham: Originally, it was $100,000. So $50,000 of that has been paid back and recovered by government?

Hon. N. Letnick: No, there is no clawback. The original application was for $100,000. IAF met with the foundation to help them revise their application. Their application was then for $50,000. The $50,000 was awarded. They have since provided expense receipts, and all the appropriate records are correct.
[ Page 11507 ]

L. Popham: So only $50,000 was exchanged by government to the grant recipient.

Hon. N. Letnick: That’s absolutely correct.

L. Popham: Does the minister know of any other circumstances where this happens at Investment Agriculture?

[1425]

Hon. N. Letnick: I’m going to clarify my answer from before just to make sure we’re clear on the process. In the process here, IAF awarded $100,000 to Sunshine Organics. They then started providing receipts that did not meet the criteria, according to the Buy Local program. IAF then worked with Sunshine Organics to revise the award. The award was then reduced down to $50,000, and IAF had qualified receipts for the $50,000.

Does that happen in other cases? Yes, I’ve been advised that there are many cases where an applicant will make an application, get a preliminary award of whatever it is — $50,000, $75,000, $10,000. They start providing the receipts for the expenses that do not meet the criteria that is set out, and then IAF will work with them to complete the rollout of their project. It could be very well, and has happened, where that amount of money is less than what they were initially awarded, based on achieving this criteria that’s in the application.

L. Popham: Just a quick answer. I just want to confirm that Sunshine Organics was never asked to repay any money.

[1430]

Hon. N. Letnick: If I can apologize to the member opposite and the public. I had the wrong answer before. IAF did ask Sunshine Organics to repay the $50,000 that was advanced to them.

[G. Kyllo in the chair.]

L. Popham: Thank you for that clarification.

I’m going to switch to my last two questions. I don’t think I have time to wait for an answer, so I’m going to ask if the minister could give me the answers to these questions in writing at a later date. I’d also like to say that my colleague from Delta South and I will be submitting other questions to the minister regarding estimates, which I hope he’ll accept after the break.

Interjection.

L. Popham: Okay.

This line of questions is regarding the College of Veterinarians. I’m doing this on behalf of another colleague, so I’m going to read it right off this paper.

“After permitting the college of vets to appeal a significant Human Rights Tribunal ruling that was ten years in the making, he said he was going to take action by setting out expectations that the college follow the human rights code and implement a culture of non-discrimination to regain public confidence. Aside from the fact that accepting the HRT ruling would have been the right thing to do to regain public confidence, the college was instructed to report to the deputy minister in 60 days on how it was meeting the expectations set out by the minister.”

I’m just wondering if there’s an update available. The letter said: “Please provide an update to Mr. Sturko within 60 calendar days of receipt of this letter.”

Question two. This ministry’s own briefing notes admit that the government provided an indemnity to backstop the college during the HRT ruling. I quote from a briefing note from the 2013 estimates:

“The CVBC’s financial challenges are a result of the costs of legal actions and college administration complaints. The ongoing threat to legal action has also undermined the ability of the college to obtain indemnification insurance coverage by the private sector.

“Given the risk to the province of potentially having to assume administration of the veterinary profession, Agri sought and confirmed Ministry of Finance support for extending the term of the indemnity to the CVBC’s insurance company. This provides flexibility for CVBC to extend the time frame needed to capitalize on their own captive insurance fund through registrative levies.”

How much has been paid out of the indemnities provided to the college and its predecessor, the B.C. Association of Veterinary Medicine?

Vote 15: ministry operations, $64,948,000 — approved.

Vote 16: Agricultural Land Commission, $4,524,000 — approved.

The Chair: I’ll now call a recess just for a few short minutes.

The committee recessed from 2:35 p.m. to 2:38 p.m.

[G. Kyllo in the chair.]

ESTIMATES: MINISTRY OF
SMALL BUSINESS AND
RED TAPE REDUCTION

On Vote 40: ministry operations, $3,862,000.

The Chair: Minister, do you have a statement you’d like to provide at this time?

Hon. C. Oakes: I do, if that’s okay.

The Chair: Of course.

Hon. C. Oakes: Thank you very much, hon. Chair.

I would like to start by introducing the staff that we have with us here today. It’s always important, as we go through these very important estimates, that people
[ Page 11508 ]
understand and know who the team is who are supporting us as ministers.

Of course, Deputy Minister Tim McEwan. Blain Lawson is here — the general manager and chief executive officer of the Liquor Distribution Branch. Roger Bissoondatt, chief financial officer of the Liquor Distribution Branch. Doug Scott, assistant deputy minister of the liquor control and licensing branch. Welcome, Doug. Elaine Vale, acting director of policy, planning and communications for the liquor control and licensing branch. Tracy Campbell, acting assistant deputy minister of the management services branch.

[1440]

As the Minister of Small Business and Red Tape Reduction and the minister responsible for liquor, I oversee two branches of government responsible for the beverage alcohol industry in British Columbia: the liquor control and licensing branch and the Liquor Distribution Branch.

The liquor control and licensing branch oversees the regulation and supervision of the liquor industry in British Columbia, with a mandate to support public health and safety when it comes to the production and sale of alcohol.

As the sole buyer and reseller of liquor in the province’s mixed public-private model, the Liquor Distribution Branch is one of the largest liquor purchasers in the world. The LDB is proud to contribute nearly $1 billion annually to the province of British Columbia, helping to provide financial support for vital public services, such as health care and education.

One of the main focuses of my ministry and of government is the implementation of recommendations made by a parliamentary secretary through the liquor policy review of the MLA for Richmond-Steveston.

We’ve listened to British Columbia as part of this process, and we are making changes to the liquor laws that are increasing consumer convenience, cutting red tape for B.C. businesses and supporting the breweries, wineries and other producers that contribute to the cultural development and economic growth of our province.

With that, I look forward to estimates.

D. Eby: I thank the minister for her opening remarks, and I certainly welcome all the staff members here to support the minister today. You’ve got important work that you do, and I thank you for it, on behalf of the people, certainly, of my constituency and on behalf of the opposition.

I’d like to start off with a question for the minister in relation to the net revenue received by the Liquor Distribution Branch for this year. The minister knows that the government increased the cost of beer, increased the cost of hundreds of different liquor items, eliminated discounts for family businesses across the province and, as a result, has experienced a net income increase of $89 million more than they expected to take in.

My question to the minister is: was this part of the Ernst and Young plan contained in the report that she refuses to release?

[1445]

Hon. C. Oakes: Thank you to the member opposite for the question. I think what’s really important to perhaps qualify a little bit is…. Part of the work that we’ve done is to look at how, when we did the separation of the wholesale and the retail structure, it placed liquor retailers on equal footing. While the provincial government has seen, as the member opposite alluded to, an increase in revenue, above what was forecasted, of $89 million, we also have found it’s been a fantastic year in sales right across the board.

If you look at the other volumes that we’ve seen in the private sector, what you have seen is an increase in volume. Part of that comes…. I ask the question, when you start seeing revenues like this above what is average. We had a fantastic tourism year. Our tourism stats…. A lot of that has to do with the strong Canadian dollar. If you look at what is happening currently in the Okanagan and Whistler and some of those primaries, we’ve seen, obviously, an increase in tourism revenue that was significant. That has played its course out in what we’ve seen on the revenue and the volumes. As well, I should note that we had a very hot summer.A hot summer also leads to the fact that you have higher volume sales.

D. Eby: Well, it was certainly a hot summer for British Columbians that enjoy packaged craft beer. As the minister knows, her government’s policies jacked the prices on B.C. craft beer. This is the exact product that the minister says her government is supporting. They were hurt the worst by these price increases that have led to the minister declaring a record $89 million surplus over her own projections in profit. She says it was a hot summer. Well, that is certainly a very hot summer.

I guess I’d like to bring the minister back to my question. Was it in the Ernst and Young report — that was paid for by the public, that was commissioned by a public Crown corporation — that was given to the minister, advising on this program of eliminating wholesale price, increasing prices to consumers and retailers, that resulted in this surplus…? Was it in that report that the government could expect a surplus like this through this hidden tax increase on consumers in B.C.?

[1450]

Hon. C. Oakes: No.

D. Eby: In the Ernst and Young report, were there any projections whatever about revenue that the government could expect after eliminating the wholesale price discounts to retailers across B.C. and increasing the cost of beer and wine?
[ Page 11509 ]

Hon. C. Oakes: Thank you again to the member opposite for the question. Again, last year the Liquor Distribution Branch created a clear separation between wholesale and the retail arm of the branch. It was really driven by industry, which for many years had asked for that separation so that there would be clear transparency to support.

Industry had requested that. We followed through with a commitment from government to ensure that there was fairness and transparency. In fact, LDB went as far as to create separate reporting systems and distinct executive roles that physically moved retail and wholesale staff to ensure that they are not co-located.

When the methodology was designed about this new wholesale method — I think it’s important to note — yes, the intention was to be revenue-neutral. We have found that the performance in the marketplace and the buying behaviour of individuals has changed. That’s where you see the increase in revenue to government.

D. Eby: I’m looking at the minister’s own actual per-square-foot sales numbers for stores: a decrease of $257 per square foot in in-store sales, 2014-15. When you compare with what they were forecasting, $1,300 per square foot was what they were expecting. They got $1,046 per square foot in B.C. liquor stores.

The minister is standing and saying that this increase is not due to the fact that they eliminated the discounts for cold beer and wine stores, for wine stores, and that they increased the cost of beer, increased the cost of wine and so many products. She’s saying it’s due to increased sales, yet I’m looking at the minister’s own sales numbers here, and there is a decrease in per-store sales.

When I compare…. She’s probably going to stand up and say, “That’s because they separated out the wholesale,” yet they used the old, pre-existing forecast number to say: “Oh, we only made an extra $89 million.” They didn’t shift that number at all.

I guess what would probably make this easiest for everyone is if the minister simply released the Ernst and Young report that, I can almost guarantee, told the minister that if she got rid of discounts and if she increased prices, she would increase revenue, which is exactly what we saw here. Will she do that?

[1455]

Hon. C. Oakes: There are a couple of layers to the question. The first is the question about releasing the Ernst and Young report. It is under privilege, so I can’t release it. But I would say to the member opposite that it was a small piece of the decision point of the separation of wholesale and retail. Again, going back, industry had been asking for many years to have that separation of wholesale and retail.

I think it’s also misleading from the member opposite when we look at how we talk about the new discounts or the removal of discounts. I think what is important to note is that when we went to the new wholesale model, part of that was ensuring that there is uniformity in a new wholesale price. So whether it’s, you know…. It just created, well, a wholesale price, which had been asked.

The other one, around the square footage, I think, again, is a little bit misleading as well. What the separation of wholesale and retail did, especially in rural agency stores, was it eliminated a lot of the LRSs in rural stores from actually being the wholesale…. It eliminated the wholesale on their sites. So the square footage changed because they’re now doing that directly through wholesale.

D. Eby: For the life of me, I have no idea what industry the minister is talking about when she said the industry asked for the elimination of their discounts when they were purchasing from the LDB. The minister and her colleagues have achieved the unthinkable, which is that the BCGEU and the Alliance of Beverage Licensees are actually working together because of these changes that the minister has brought in, because they are so opposed to what the minister and her colleagues have done.

[1500]

I struggle a little bit with knowing what the heck the minister is talking about when she’s saying that industry asked for this. I guess she means that in the sense of they deserved it. It’s a very strange suggestion, given the response of industry to the changes the minister has made.

The minister also says…. Maybe I can encourage her along these lines if it’s her understanding that she can’t release this report. Actually, she can. The act provides the government with the ability to claim exemption from releasing documents, but they can waive those exemptions, and they regularly do to release documents that may otherwise be withheld, legally. Under the act — I’m not suggesting the withholding is illegal — they can legally withhold it, but they can also waive that privilege and release that document.

If that’s the case, I’ll ask the minister again. Can she investigate waiving these claims of privilege over this document and releasing this document? There is a lot of speculation, in the same industry that I believe the minister is talking about, that this document told her exactly what would happen when she eliminated these discounts and when she increased the price of alcohol products in B.C. — that, no surprise, she’d take in additional income.

Hon. C. Oakes: The hon. member opposite is quite right. We can waive privilege. We will consider what the member has asked, and we will get back to the member.

I would like, though, to clarify again what…. The member challenged us on what industry has asked for. Industry did, in fact, ask for a separation of wholesale and retail. They wanted that transparency. The introduction of a new wholesale pricing system was a big step forward in ensuring that liquor retailers were placed on an equal
[ Page 11510 ]
footing and were able to provide competitive service for consumers. Overall, retail prices in B.C. appear to be remaining relatively stable. There are normal fluctuations in prices. There are, with any type of product in any given month, price changes.

I would also note to the member opposite that the LDB has a good working relationship with the BCGEU. We’ve been listening to them. You have Sunday openings. We have refrigeration. You’ve seen, both on the wholesale and the retail side, that folks have the ability to be more competitive, and you’re seeing the volumes display that.

[1505]

D. Eby: I do appreciate that the minister will consider that. Her ministry has known that we’ve been asking for that report for quite a long time now. I do hope that she is true to her word and actually considers waiving this privilege and releasing this document, which is of great interest to people, especially given that the minister has experienced an increase of $89 million that she didn’t expect following these revenue-neutral, we’re told, changes.

Given that the minister has made an extra $89 million that she didn’t expect, perhaps now is the time to consider a discount for hospitality, for restaurants. She talked about tourism as being important and, obviously, the close link between B.C. wines and B.C. spirits and B.C. beers and tourism, as we see in other jurisdictions around the world.

Yet in British Columbia, we actually charge restaurants and tourism service providers full retail cost, and then they put their own markup on it in selling to their customers. So when people come from around the world to B.C., they say: “We’d love to try that B.C. wine, but it’s ten bucks a glass. We’ll have the $5 Chilean wine.”

I think the important question here for the minister is: will she take this unexpected windfall of $89 million and turn it into something useful for restaurants and tourism operators in British Columbia?

Hon. C. Oakes: The parliamentary secretary, the MLA for Richmond-Steveston, finished the consultations with stakeholders in the fall. It was identified on the hospitality side that that is something that has been raised through recommendations. We are currently analyzing these options, and it will be part of the comprehensive response to the recommendations.

D. Eby: Now, it was July of 2015 when the member for Richmond-Steveston told the media that government would be releasing changes — when did he say? — in fall of 2015. Yet since then, no answer for the craft brewers, who have been dealing with a spike in their packaged product costs; no answer for the hospitality operators, the restaurant operators looking for a break on the outrageous prices they have to pay for product when they’re in a very tight-margin industry.

I don’t know what the member for Richmond-Steveston is doing, but it’s been since fall of 2015, and here we are coming up on a year past the deadline, once we get through the summer, which I know is a very busy time for government. I guess my question for the minister is: what’s the delay? If the member for Richmond-Steveston is holding the file on the hospitality price cut, what’s the delay? Restaurant operators are waiting.

Hon. C. Oakes: This, for me, is a new portfolio — since August. It was clear that we wanted to ensure that we were reaching out to stakeholders, that the consultation was being revisited and that we have a very thorough understanding of what craft brewers were saying.

[1510]

We have been listening. We heard from the craft brewers that they wanted to grow at their own pace without concerns for financial cliffs. We’ve certainly heard that. We’ve responded to that by graduating their wholesale markup.

We also heard about the challenges with distribution and wanting to get their product on the shelf without a lengthy listing process, and we responded just before Christmas to give local craft breweries the opportunity to showcase their products at their local B.C. liquor store.

We heard from craft brewers and others that only being allowed to sell products they made themselves was a barrier. We responded that, now, if a group of people want to go to a brewer’s on-site lounge and a few of them might not be keen on beer, they can order a glass of wine or other drink with their friends — and enjoy a beer.

We also heard from consumers that they wanted craft beer to be part of the buy-local movement, and we’re working closely with the Ministry of Agriculture on that. We’ve also responded by allowing craft beer sales at artisan and farmers markets, as well as Christmas markets.

We will continue to work closely with this very important, growing sector in British Columbia. In fact, I would note that since 2015, there has been a 34 percent increase in the amount of microbrewed beer sold in British Columbia. We’ll continue to work with them. We’re just working, finalizing the analytics, and we are confident that it will meet the needs of the craft breweries.

D. Eby: The member for Richmond-Steveston is, generously, six months late on his review. Where is that review?

Hon. C. Oakes: Again, what we’ve heard…. I’ve just responded. I could go through the list again of what we heard from the craft brewers.

We heard from craft brewers that they wanted to grow at their own pace, without concern for financial cliffs. We responded by having a graduated wholesale markup. We heard about the challenges, as we’ve gone through consultations by the MLA for Richmond-Steveston, about wanting to get their products on shelves without a lengthy
[ Page 11511 ]
listing price. We responded before Christmas to give local craft breweries the opportunity to showcase their products at the local B.C. liquor stores.

We also heard, through the consultations that have been ongoing, that only being able to sell products…. They wanted to be able to sell products at farmers market, at craft sales. Christmas time was a great opportunity for a lot of our local artisan markets to showcase some terrific product.

As the parliamentary secretary has gone out and done consultations, we’ve listened to what the craft brewery sector has said. We have been making gradual changes along with what we’ve heard, and we are continuing to look at the analytics of what we’ve heard. We will be coming out shortly with more changes.

D. Eby: I can tell the minister that she doesn’t have to repeat herself. It’s not necessary. The question is quite straightforward. Where is the report? When will we see it? What’s taking so long?

Now, I know that the minister has heard a lot of things. I read the paper too. In the paper, when you open it up and it talks about craft beer prices, the craft beer producers say: “We are getting burned on packaged product. Our prices have gone up significantly. This is making us less competitive.”

This is a sector that the minister says she wants to prioritize. I can’t imagine what the minister is expecting to hear from restaurant operators when she goes to consult with them on reducing the price they have to pay for beer and wine. Is she thinking that they’re going to say: “No, we don’t want a reduction in the price that we pay for beer and wine”? What is the consultation here?

I try to understand how a government could put in place a wholesale price reform, without consulting on it, that increases the price of products, that results in an $89 million surplus that they didn’t expect, that hurts small businesses. Yet when it comes to reducing the prices for craft brewers, reducing the prices for restaurant operators, they say: “We need to consult.”

Perhaps the minister can clear up that contradiction for me.

Hon. C. Oakes: Again, I will repeat to the member, we did consultations in the fall. We heard the changes that we could make leading up to Christmas. We have made those changes. We are also in the process right now of doing the analysis, and the report will be coming out this spring. But we want to make sure that we get it right.

[1515]

D. Eby: I’ll await that report in the spring. I thank the minister for that.

I see that the LDB is expecting administration costs to increase from $127 million to $136 million in two years. That’s a $9 million increase. Why is that happening?

Hon. C. Oakes: We would expect, with the volume prices that we’ve seen go up, that we would see the additional administration costs. Bank charges, keep in mind, are up $1.9 million, driven by sales on credit cards. We all know that there is a cost to using those credit cards. Freight, of course, has also been increased. Storage has increased. It’s tied directly into the increase in volume.

D. Eby: The minister seems to have a breakdown of that administration expense. Would she be prepared to release that to the opposition?

Hon. C. Oakes: We’d be happy to provide that.

D. Eby: I thank the minister for that.

The government is planning an auction of licences for grocery stores to be able to sell wine. I’ve heard a number of different numbers. I understand that this will be an auction of six licences. Can the minister tell me where these licences come from?

Hon. C. Oakes: The licences that are being auctioned off are dormant licences that have existed since 1987, when the free trade agreement came in. It can be up to 18 licences that we are auctioning off.

D. Eby: I’ve heard a number as high as 24. Is the minister saying that the maximum number of dormant licences is 18?

[1520]

Hon. C. Oakes: We are confident that we will be within our trade obligations with the decision of going with up to 18 of the dormant licences.

D. Eby: I’m trying to figure out how the minister got to that answer from what I asked. If they’re dormant licences…? I mean, how many dormant licences are there? Are there 18, or are there 24? Or are these not dormant licences? Are these new licences?

Hon. C. Oakes: Thank you to the member opposite for the question. I think what is critical is that we need to ensure that we are meeting our trade obligations. That’s both with CETA and the free trade. At most, we have made the decision to ensure that we are within alignment with what our trade obligations are and that we will be auctioning off up to 18 dormant licences.

D. Eby: Now, in Ontario, they are doing some very similar initiatives to B.C, but in their model, as I understand it, they’re selling beer in grocery stores, whereas we’re going to be selling wine in grocery stores. In Ontario, what they did was they said: “It’s really important to us that it’s not just the big fish that get access to these licences. We want independent grocers to have a
[ Page 11512 ]
shot as well.” So what they did was they reserved a set of licences for small and independent grocery stores.

Now, if you look at the trend lines for the minister’s program, it is not a good trend line for small and independent grocery stores. In fact, only one grocery store chain has all of the licences so far. Overwaitea has every licence.

The minister’s going to auction off some licences here. My question is: what about the small and independent grocers? Are they going to be protected? Are there going to be licences exclusively available to small and independent grocers, or should we expect Overwaitea to pick up all of these licences as well?

[1525]

Hon. C. Oakes: I know many jurisdictions right now are…. You’re seeing significant changes in other jurisdictions. What I can tell you is that staff have met on two occasions with the general stakeholders — large, medium and small — and their affiliates.

To be clear, the auction will be open, fair and transparent. The six auctions that are currently underway right now, with up to 18, will be run through B.C. Auction, an agency through the Ministry of Technology, Innovation and Citizens’ Services. It’s not restricted to the large grocers. In fact, we’ve had technical briefings. We’ve supported anyone who is interested in finding out more about how to get engaged with this process. We’ve met with, again, the small, medium and large stakeholders in advance of the technical briefing.

D. Eby: I guess it’s all about your definition of fairness, really. In Ontario, fairness meant recognizing that a small independent grocery store is not going to be able to pay the same amount of money as Overwaitea Foods is, which will budget this as a capital expense over many, many years. So a ma-and-pa small-town grocery store versus a huge company bidding on the same licence. It’s not hard for me to figure out what’s going to happen here.

Is the minister saying that she is perfectly content if all of the licences under her program end up in the hands of a single company?

[1530]

[J. Martin in the chair.]

Hon. C. Oakes: What is really important here is that we wanted a process in British Columbia that was open, fair and transparent. We have met with both small, medium and large grocers, and we encouraged everyone to look at the opportunity of these six licences, up to 18 — six licences at this point, to be clear.

I think it’s also important to note that we currently have 1,500-plus liquor establishments in British Columbia that support a wide range of businesses across British Columbia, and we’re talking about six licences.

D. Eby: I hear the minister saying that this is just six licences, and then, well, actually, it’s going to be 18 licences. Let’s be honest about where this is going. This is going to a model of selling alcohol in grocery stores like in Washington state and other jurisdictions. That’s where it’s going. The minister’s direction is clear.

She talks about trade obligations. We know what the trade obligations are going to result in, which is the opening of the grocery store shelves. That will be, initially, all B.C. products. Then it will be all products. So if it’s all wine products, then it will be international wine products as well, because it is very difficult to justify, under trade obligations, anything else. We’re in a softwood lumber dispute.

It’s very clear about the direction that this is going. When I asked the minister about fairness for small grocery stores, for fair treatment for small grocery stores, it’s not about six licences. This is about where the minister is going with this program.

That is why so many small wineries are incredibly alarmed with the minister’s plans. All you have to do is look at the Penticton VQA store as a case in point. You have a group that just sprang up, out of the minister’s initiatives, called the Responsible Liquor Alliance of B.C.

It’s a group of small wineries that opposed the idea that Penticton would allow wine to go into grocery stores without a one-kilometre restriction. They were very much in favour of that one-kilometre restrictive zone in order to protect their VQA store, because they were worried that it was going to disappear. It’s an incredibly important part of the local economy there.

[1535]

Maybe the minister is willing to address the issue of the Penticton VQA store and to tell the people of Penticton exactly why it is that her government would support a policy that would close this independent store and move it into a major conglomerate grocery store chain in the name of progress.

Hon. C. Oakes: I would like to clarify something that the member started with. The framework that we chose is, in fact, not like what is happening in Washington or other jurisdictions. We have a two-part framework that we have developed here, a B.C.-specific model. I think it’s important that we do review that.

We have the wine-on-shelves model, which is eligible in grocery stores, which we’ve been discussing — the member opposite. That is where we are currently auctioning six licences, up to 18. The wine-on-shelves model is really a limited amount of what we are talking about. I think it’s also critically important to note that.

I encourage the member opposite to go and visit one of the wine and grocery stores Kelowna opened in Orchard Park. I think it’s critically important for the wine industry to…. When you actually go into these grocery stores, you’ll see 700 to 900 SKUs. It’s fascinating to see so many.
[ Page 11513 ]
In one of the stores I went in — 700 small- and medium-sized wine SKUs of wines that I had never seen before, representing a very dynamic, growing industry in British Columbia.

I think it’s a great opportunity too. When you look at 700 to 900 SKUs…. If you look at, I think, the statistic that was provided previously…. If you’re looking at what is in a government liquor store or a private liquor store and what the shelf space offers, it’s really interesting to look at the fact that you can get 700 to 900 small and medium wines on shelves in their SKUs.

The other thing that I think is important, the second element of that, is the store-within-a-store model. That is where you have a variety of domestic and international beer, wine and spirits that are operated through different cashiers.

We’ve been really clear, as we’ve been working through these processes and around understanding the trade obligations, that we’ve kept those separate. Again, when we talk about wine in grocery and we look at…. Again, we are auctioning six dormant licenses, up to 18. There is up to…. We’ve talked about 1,500-plus liquor establishments. I think it’s important to put that all into perspective.

[1540]

D. Eby: I just want to read here, for the minister, a quote from a small winery owner-operator named Kim Pullen from Church and State Wines.

“B.C.’s small and medium-sized wineries have had guaranteed shelf access to specialized VQA wine stores, and the system works well. Our own local VQA wine store at the visitor information centre in Penticton will be severely jeopardized if wine is sold in grocery stores in Penticton.

“Local wineries have little to be gained from the wine-in-grocery model in its current form, but there is much to lose. The consequences could be dire. Local wineries could be forced to lay off staff or some close completely.”

Our local VQA wine store may close, and jobs would certainly be lost in local liquor stores.

I think it’s important for the minister…. Although she has a lot of reassurances for people about what’s going on, she needs to look at the actual outcomes of what her policies have been. We’re talking about the closure of independent, small businesses, VQA stores across the province, and the sale of those licences to a single grocery store chain.

When you look at the Kelowna licences, when you look at what happened in Victoria — the closure of small, independent businesses that service the local wine industry as their main focus and the sale of those licences to one of the biggest companies in British Columbia and one of the largest grocery store chains in Canada — this is the outcome of the minister’s initiatives.

Now she’s going to auction off additional licences in a manner that makes it totally unavailable for small and independent grocery store chains, even, to have a shot at this. What she is doing is closing independent businesses and transferring the benefits that were set up for small, independent businesses and for the B.C. wine industry directly to one of the most profitable chains in Canada.

I guess my question is, for the minister: if she’s going to tolerate this process, if this is something she is in support of, will she, at least, look at the idea that, when these licences are sold to a grocery store chain — to one of the biggest grocery store chains in B.C., if not the biggest — will she remove the benefits that come with the VQA licence? Will she remove the discounts and the incentives that were set up for small and independent businesses and have now been transferred directly to a major grocery store chain?

[1545]

Hon. C. Oakes: I think I will answer this in three points. Again, first, I do want to correct the member opposite that the auction of the dormant licences up to the six, right now, and up to 18…. Again, it’s a transparent process that small, medium, large…. There are opportunities for everyone on that.

I think it’s also critically important that the B.C. Wine Institute, which represents about 94 percent of small, medium-sized and large wineries — which is also the trade association on record for B.C. wine — is supportive of the decisions that we’ve made.

I think the third question is: what about the business decision around the wine and grocery — and the concern that you mentioned from the owner of Church and State about how are the terms and conditions are going to be different? The terms and conditions through both the B.C. Wine Institute as well as the six auctioned licences that we are going to now are the same terms and conditions — that small, medium-sized and large wineries need to be carried.

I would note that Church and State is currently carried at the grocery store at Save-On-Foods. Oh, and you know what? It’s an opportunity, as well, for me to do a little bit of a quote, since the member did a quote, and to really see…. I get that change, as we’re going through this process, requires us, as a government, to ensure that we are communicating very clearly. It is something we are absolutely committed to continue to support.

There is an article that was released today by a successful Richmond business owner, who has actually sold their licence to one of these. One of the things I think that’s important to…. You know, lots of experience. I think it’s important what he said. “Despite selling his VQA licence, Wosk is optimistic about the future for the wine consumer. ‘My crystal ball is that the wine consumer will be better off. I know that the Save-On grocery stores that have opened B.C. VQA-wine aisles are doing extremely well. And they also hired the staff that operated at the local VQA stores.’”

D. Eby: It’s hard to know where to begin. First of all, the minister starts by celebrating, again, the closure of an
[ Page 11514 ]
independent store and the sale of the licence to one of the biggest grocery store chains in B.C. — and a licensing process that is totally unavailable to small and independent stores. Everyone is equally able to buy a Ferrari or a Lamborghini or a McLaren or whatever it is they want to buy. Everyone is equally allowed to buy it, but they’re not equally able to buy it.

The idea that a small grocery store chain in British Columbia or even an individual grocery store could compete against Overwaitea in an auction for a licence…. The minister cannot be so naive as to suggest that this is a process that will result in a distribution of licences across all different size grocery store chains in B.C.

Surely, she’s not suggesting that, because it’s not what’s going to happen. We’ll see it in the licensing process when we come back next year, I guess, and I can say, “I told you so.” But it will be cold comfort for the fact that this process has been put in place and has been exclusively enjoyed by one single grocery store chain.

I want to get into that a little bit. Also, I guess I have to point out to the minister that the VQA licences have many exemptions that other licences don’t. They’re exempt from the one-kilometre rule. They pay differently. They’re entitled to different discounts. I don’t know why the minister would say that that’s not the case.

[1550]

The VQA licenses are all being sold to a single grocery store chain.

We’re told by the VQA, through the media, that no other grocery store chains are interested in purchasing these licences. I find that very difficult to believe.

I would FOI this institute which is selling public licences to Overwaitea, but the minister’s colleague the Minister for Advanced Education exempted the B.C. Wine Institute from FOI just before this process started.

I’ll ask the minister: why would she exempt the Wine Institute from FOI during the exact time when they are administrating so many public benefits and selling them to a single grocery store chain?

Hon. C. Oakes: The FOI exemption is something that we’ll take on notice, and we’ll have to get back to you.

D. Eby: The minister’s predecessor, still the Attorney General, was kind enough to provide me with a list of the net margins per category for spirits, wine, beer and refreshments and non-liquor. I wonder whether the minister would provide me with that table again for the most recent set of numbers.

Hon. C. Oakes: We’d be happy to provide that to the member opposite.

D. Eby: I’m going to take the minister now to an issue she touched on earlier, which is packaged–craft beer prices. Can the minister commit, on the record, that her budgetary plans for the coming year include a reduction in packaged–craft beer prices to make them competitive again with packaged beer from international producers?

Hon. C. Oakes: We’re finishing our analysis on that and will have a decision in the spring.

D. Eby: It’s disappointing that the minister isn’t sure whether or not she’s going to help our local beer producers. I know they’ve been very successful, on the draft side. I will acknowledge that there are changes that this minister made that are helping these breweries.

Yet simultaneously, when they try to transition into packaged product, this minister’s wholesale price changes hammered these breweries. Yet the minister, despite an $85 million windfall, is unwilling to say that she’s going to address this issue.

I’m going to give the minister one more shot. I’m not trying to catch her out or anything. I just want her to provide some assurance to the industry in British Columbia that if they move into packaged product to compete with breweries across Canada and across North America…. There’s a great appetite for these small breweries’ products all the way across North America, but you can’t do the draft tasting room that you do in British Columbia all across the continent. You need to put the beer in packaging and sell it.

[1555]

Will the minister commit to providing that support? They’re going to start locally in B.C., and then they’re going to expand their packaged product out. But if they’re not starting in B.C. because of the minister’s changes, they can’t expand to export, and they can’t expand to go across Canada. Will she commit to fixing this issue?

Hon. C. Oakes: Thank you to the member opposite again. Consultations happen in the fall. The analysis is currently happening now. We will have a response to the recommendations this spring. But again, I think it’s critically important…. You know, since we made the decisions last April, we’ve seen 17 new breweries come into effect, with more to come. We’ve seen nearly 50 new breweries in the past two years. Craft beer sales have almost tripled in the past five years.

In an industry that is estimated to employ over 2,500 people, we are seeing significant success since April of 2015. There has been an actual 34 percent increase in the amount of microbrewed beer sold in British Columbia. On top of that, there are 24 new breweries that are currently on the horizon.

Again, as we’ve gone through and we’ve consulted closely with the sector and met with the craft breweries, we heard that the craft breweries wanted to grow at their own pace without concerns for financial cliffs. We responded by ensuring that we had a graduated wholesale markup.
[ Page 11515 ]

We heard about the challenges that were happening on the distribution, of wanting to get on the shelf without a lengthy listing process, and we responded before Christmas to give local craft breweries the opportunity to showcase their products at their local B.C. Liquor Store.

In Prince Rupert, I know that the member opposite — the MLA from Prince Rupert, North Coast — was talking about how proud she was of her local craft brewery. I’m incredibly proud, in Quesnel — Barkerville brewery. In our community, we are seeing a thriving, growing craft beer sector. As the province of British Columbia, we’re going to continue to listen, to work closely with them to ensure their success. We will be seeing more changes to come in the spring.

D. Eby: Now, the minister, or at least her predecessor, knew within three weeks — there’s a briefing note; we have it; we have the date — of the April 1 price changes that those price changes had an impact on packaged products from B.C. craft brewers. It wasn’t a small impact. It was a significant impact on a sector that is already more costly than major macrobrew production that comes from international breweries.

The reason it’s more expensive is because they use B.C. products, because our labour costs are higher than many jurisdictions where beer is packaged internationally. They are at a competitive disadvantage with some of these breweries. When the minister’s changes came in, within three weeks, this government knew that they had inadvertently increased the price of craft beer packaged product.

It’s important for the minister to know that that was a year ago that that happened. That was a year ago that the government knew that this happened, yet nothing changed, and now there’s been $85 million surplus that the minister has enjoyed, partially at the expense of this unintended increase to B.C. craft brewers’ packaged products.

[1600]

For all the reasons that the minister listed, all the excitement that we all have about our local craft brewers, all the delight that we get that local people are doing this stuff, that is why the minister needs to act to fix this and why she needs to commit to fix this issue.

Just because I think the minister may not have understood that the government has known about this for a year, I’ll ask her one more time: will she commit to fixing this issue?

Hon. C. Oakes: The packaged product of beer was raised in the consultation as part of the recommendations. As I mentioned previously, it is part of the analysis that is currently underway. I think it’s important to know that we have a fantastic working relationship with the guild and really want to thank them for their support, for bringing forward ideas that we could move on.

In fact, it was when I visited the guild that they raised the fact: “Wouldn’t it be great if we could get some of our local B.C. craft beer on shelves by Christmas at our local government liquor stores?” We were able to make those changes, the changes we made around removing some of the financial cliffs.

These are things that we heard from the guild and the sector. We are committed to working closely with them. I’m sure that the member opposite will be pleased with the work that will be announced this spring.

D. Eby: I hear the minister celebrating getting some craft beer products into government liquor stores, which is certainly something I appreciate as well. I wonder whether she’s considered the fact that there are so few craft distillers in government liquor stores and why that may be.

[1605]

Certainly, through my discussions with craft distillers, they tell me in no uncertain terms that when they move their product out of their distillery and into a government store, the markup is punitive and makes them not competitive.

Has the minister looked at addressing the issue faced by craft distillers of getting their product onto the shelf in government stores or in private stores, for that matter?

Hon. C. Oakes: Thank you to the member opposite for bringing forward another important sector — the craft distilleries in British Columbia.

It’s interesting to note that there has been significant growth over the past 18 months. We’ve gone from five to 30 craft distilleries. I think that’s another success story that we’re seeing in British Columbia, and it is part of the work that has come forward through the recommendations that the parliamentary secretary and the MLA for Richmond-Steveston is looking at.

D. Eby: Another important sector, I would argue, is B.C. ciders, produced with B.C. apples. I have a few favourites. I’m sure others in the chamber do as well. Sea Cider, Lonetree, Left Field — all wonderful B.C. ciders.

I wonder why it is that these ciders are dealing with markup in the same kind of category as mass-produced, sugary, alcopop drinks. Why are they not in their own category, like beer, like craft distilleries? Will the minister be addressing that issue?

[1610]

Hon. C. Oakes: B.C. cider is…. The classification is it’s a refreshment beverage. We all enjoy a nice cup of cider on a hot day, not just in the summer. I agree with the member opposite. It’s a great product.

They do have access to the same markup-free opportunities if they’re a land-based winery. So that is an opportunity for B.C. cider.

D. Eby: Mr. Chair, you reminded me of Merridale Cider. Of course, I don’t know how I could have over-
[ Page 11516 ]
looked that. If we reach a point of agreement today with the minister, it’ll clearly be that B.C. cider is a year-round drink. There’s something that we can all nod our heads at.

I wonder about, though, beyond the land-based winery model, whether the minister has looked at packaged markup discounts similar to the treatment that she may be anticipating for B.C. craft beers — a similar type of treatment for B.C. ciders, in the same way, given the remarkable similarities between the two products.

Hon. C. Oakes: Currently, that is not part of a submission that was made to the parliamentary secretary, the MLA for Richmond-Steveston. We’re happy to look at that, so thank you to the member opposite for bringing that forward.

The Chair: One more?

D. Eby: I just, Mr. Chair, wanted to put on the record that I expect that I may actually be able to wrap up today. I know that some of the staff here may have travelled to be here today. If we keep going at this pace, I should be able to wrap up by the end of the day, if they want to make travel arrangements.

If you wouldn’t mind, if we could take a brief break, I’d appreciate it.

The Chair: We’ll take a five-minute recess.

The committee recessed from 4:13 p.m. to 4:20 p.m.

[J. Martin in the chair.]

D. Eby: I’m going to ask the minister a question about the LDB warehouse. It was August of 2014 when the government sold the LDB warehouse to a coalition of First Nations. At that time, the government said the LDB would be moving into a new warehouse by 2017.

In April 2015, their annual report said the LDB warehouse would be operational by 2018. That was a year later, and it was going to be a year later. Then in July of 2015, the minister at the time, the Attorney General, told the Vancouver Province that “the LDB expects to be fully operational” in a new warehouse location by 2018. Now it’s 2016, and in February, we’re told that the government plans to be in a new warehouse by September of 2019.

We have moved a full two years in real time. Simultaneously, we’ve moved the goal for being in a new warehouse two years down the road as well. Can the minister explain what the delay has been in moving into a new warehouse and why the LDB is paying rent for a warehouse that we used to own? What was the rush in selling it?

Hon. C. Oakes: Thank you for the question. The Liquor Distribution Branch distribution centre project is a very major capital investment, and it’s important that we do this process right. The LDB is currently developing a business plan for the long-term warehousing solution for 2019, as we well know. We’ve certainly outgrown that space. If the member opposite would like to visit the location to understand the dynamics of what we’re faced with, I would certainly offer that.

The branch has issued — just an update — requests for a proposal for advisers that will inform the business plan and help plan for the future. It is to ensure that the branch can continue to support B.C. businesses and support consumers with their choice, for British Columbia. The business plan will thoroughly examine forecasting of the future, which will, in turn, inform the requirements that support the long-term goals of the LDB.

[D. Ashton in the chair.]

D. Eby: Taxpayers are paying rent to occupy a building that we used to own. It was sold way back in August of 2014. My question to the minister is: why did LDB management, why did the government, sell the warehouse with no capital plan in place, no strategy in place?

Now it’s just 2016 that they’re doing the work — the very careful planning, the minister says — about where we’re going to end up. I say this because, as I understand it, the LDB’s lease in this warehouse expires in August 2019. Time is running out for the minister. You can only kick this ball down the road so many times.

[1625]

There is absolutely no money in the budget, as far as I can see, for capital for a new warehouse. My question to the minister: if there’s no capital in the budget for a new warehouse, how is it that this major capital expense is going to be undertaken?

Hon. C. Oakes: Thank you to the member opposite. Again, I think it’s important to note that the Ministry of Technology, Innovation and Citizens’ Services does have the lead on the sale of provincially owned land.

But I think, equally, it’s important to note that we have seen a significant population growth, an increased consumer base, and the current warehouse just simply does not have the capacity to serve the thousands of businesses that currently rely on it. I think the member opposite would agree that this is an important part of ensuring that we’re supporting those small businesses.

Our goal is to have a long-term warehouse solution in place by 2019. The current agreement with LDB has a lease agreement with the new owners for three years, with two one-year options to renew, which will expire in August 2019. Again, we are going through the business plan process right now, and once we have that business plan, we will be moving forward through treasury.

D. Eby: Mr. Chair, why do I feel like a year from now, I’ll be asking the same question and getting the same an-
[ Page 11517 ]
swer, just like has happened every year for the last two years, since the government sold the warehouse?

I don’t think it’ll be a surprise to the minister to hear that there’s a lot of speculation that it’s government’s plan to actually privatize the warehouse. Is that the government’s plan?

Hon. C. Oakes: There is no plan to privatize.

D. Eby: When the government looks at the mix of revenue that comes from wholesale and retail sales and the LDB over the coming years, what is the proportion of revenue that it sees coming from those two sources? Will it be primarily revenue from wholesale, or will it be primarily from retail? Or will it be a mix, and if so, what will that mix be in the business plan of the government for the budget?

[1630]

Hon. C. Oakes: I’d like to be able to give you the exact specifics, but if you don’t mind, can we take that on notice? We’d be happy to give you the actual breakdown on the wholesale and retail mix.

D. Eby: I certainly would appreciate receiving that from the minister. The numbers that I’m looking for, I guess, then, would be the net revenue from the wholesale versus the net revenue from the retail arms of the LDB.

Taking the minister to the issue of capital spending, we saw that the minister had reduced the anticipated capital spending for 2015-16 from $90 million that they were planning on spending down to $75 million. Can the minister explain why that was reduced?

Hon. C. Oakes: As the hon. member opposite alluded to, because of the process that we’re currently going through on the business plan for the Liquor Distribution Branch’s warehouse, we felt it was best to free up the capital and move it to other priorities.

D. Eby: Well, that invites the question of what the other priorities are. And I misspoke. I said that it was reduced from $90 million to $75 million; it’s $90 million to $65 million. That’s the number. I’m referring to page 129 of the budget and fiscal plan document, which is the anticipated capital expenditure of the government for 2016-17, ’17-18 and ’18-19.

The minister is planning on spending $161 million on capital for the LDB. Can she tell us what priorities it’s going to be spent on? Where is this money going to be spent, and how?

[1635]

Hon. C. Oakes: Some of the priorities, of course, when we look at the point-of-sale system…. There were significant upgrades on the PeopleSoft upgrade project. That’s the phrase project, the Oracle R12 ERP upgrade project — the retail pricing and point-of-sale upgrade.

There were some intangible assets that were made priority. Some of the operating equipment for the warehouse was in there — information system hardware, mobile equipment. Tenant improvements — of course, we have refrigeration now in our government liquor stores. Demand planning purchasing. A project to look at enabling future technologies.

I think it’s interesting. Because of the amount of considerable investment that we’re making on the warehouse, if you start looking at some of the large retailers and how you get product to market and how you get…. There is so much innovation that is happening right now. We want to make sure on the technology side that we’re looking at those types of efficiencies. So that’s where the priorities on the spending have gone.

D. Eby: Does the minister have a breakdown of the line items that she just went through that explain these numbers and that she’d be willing to provide?

Hon. C. Oakes: We’d be happy to provide a high-level overview. I think on the capital side…. Sometimes with the capital projects, there can be changes over that, but we’d be happy to provide you an overview.

D. Eby: I thank the minister for that.

I’m looking at page 160 of the estimates for the fiscal year ending March 31, 2017. In it, under core business, there’s a $318,000 disbursement under capital expenditures for the liquor control and licensing branch.

Can the minister explain what that is?

Hon. C. Oakes: That money is for vehicles for the liquor inspectors that travel throughout the province.

D. Eby: I’m going to move on to a new topic. I’m going to move to the issue of ID checks. The minister reduced her forecast compliance rate for ID checks in stores.

[1640]

Now, the original target was 82 percent, but the minister has reduced her forecast compliance to 69 percent. When I look at 2016-17, the original target was 84 percent ID checks, and now the target for 2016-17 is 73 percent.

Why is the minister reducing her targets for identification checks, which seems to me to be critically important?

Hon. C. Oakes: Thank you to the member opposite for your patience. I think it’s clear that we have a social responsibility. No one wants to see liquor sold to under-age youth.

Initiatives. We are looking at the types of initiatives that we are providing as a government around ensuring that we are meeting those obligations. One of the things that we have moved to is to more risk-based checks, and
[ Page 11518 ]
we continue with the random-driven numbers. I think that’s important.

The other thing that we’re looking at is looking at a holistic approach as well. In September 2015, based on what we heard clearly out in British Columbia around this particular issue, we changed the Serving It Right program. We enhanced it and expanded to include that everyone who sells or serves alcohol in British Columbia understands specifically, from education and communication, our responsibility around ensuring that people know their responsibility for not serving under-age youths.

[1645]

D. Eby: I know that the government is looking at the suggestion that has come forward around the sale of marijuana potentially being in both B.C.’s public and private liquor stores. That proposal has come forward to the government.

I think, in that context, a target rate…. This is the target. This isn’t even the rate that we’re hitting. The target is 73 percent age-checks.

I’m trying to understand how the minister finds it acceptable that the target across all liquor retailers isn’t significantly higher than 73 percent and why it is that her investigators are finding such low compliance with this very important issue, which will only become more important in British Columbia if, in fact, that proposal comes to fruition.

Can the minister explain why it is that her targets are so low for checking the age of people who are buying these products?

Hon. C. Oakes: Thank you to the member opposite.

Actually, what you’re seeing on the stats is…. When somebody is found to be non-compliant, that’s what drives the stats down. We’ve taken a focused approach. It is targeted at those who…. Perhaps we have information that they may be selling to the under-aged. We’re taking a much stronger approach on being targeted. That’s why you see the reduction, actually, in this. If it was just random, that’s where you’d see a much higher number.

D. Eby: Can the minister then assure me that she is doing random checks and that she is seeing higher compliance among random checks? If that’s the case, will she release those numbers to me?

Hon. C. Oakes: I should stand corrected. We do still do random. I think the member opposite identified an issue. We, too, have found that currently the random and the targeted are not separated. But my commitment to the member opposite is that we are moving forward. We are going to ensure that we are separating both random and targeted so that we understand the compliance. We’d be happy to provide the member opposite with that information going forward.

D. Eby: I have an interesting question. I imagine the minister is going to have to take it on notice. But I’d invite her to give me an idea, if she can, about the system that’s at work here.

There’s a Return-It depot in Burnaby-Edmonds — this is one of those recycling depots — where they receive a significant number of beer bottles and cans as part of their work. Now, for some reason, every Return-It depot in B.C. is not automatically entitled to recover the deposits for beer bottles and cans that they receive.

[1650]

I understand they’ve received about 1.65 million cans and 480,000 bottles in 2013. Yet I’ve got correspondence here that indicates that somebody in Alberta that works for a group called the Brewers Distributors Ltd. is telling this depot that they’re not entitled to receive the full deposit back.

Try to imagine this. A consumer pays a deposit on a bottle. The money goes into, I presume, the bank account of this Alberta Brewers Distributor Ltd. Then a depot collects the bottle back, gives the consumer back the dime for the bottle, yet the Brewers Distributor Ltd. then refuses to provide that refund back to the depot. It seems remarkably unfair.

The minister can probably see why she might need to take this question on notice. I would ask that she look into this and perhaps, if she can — just by way of background for me — explain to me how it could be that someone in Alberta decides who gets to receive these refunds, which are collected and held in trust from consumers, and why it would be that that wouldn’t be a British Columbia decision.

Hon. C. Oakes: We were hoping that we would be able to find an immediate answer for that, but we will take that on notice and connect with our colleague.

D. Eby: I’ll provide the minister with the paperwork for that. That issue was raised by my colleague from Burnaby-Edmonds.

I note that there’s a half-million-dollar decrease in actual employment expenses for 2014-15 compared to the forecast, and there’s a $14 million increase in forecast employment expenses for ’15-16. Can the minister explain what’s going on with employment costs?

[1655]

Hon. C. Oakes: I’ll answer the question of the $500,000 decrease this year in employment costs. Our total labour cost budget is $190 million, so the $500,000 decrease is a really small piece of that.

Why are we looking at an increase in ’15-16? Well, we are projecting a couple of things. We know that we are seeing an increased volume. As we’ve canvassed earlier, there are increased labour costs that we currently have at the warehouse. It is very labour-intensive to get the pro-
[ Page 11519 ]
duct out to consumers. It does require increased labour to get the type of volume that we’re talking out to consumers.

As well, I think it’s important to note we also had increased costs on labour because we’re open Sundays. Government stores are now open on Sundays, and of course we have to staff them accordingly. Again, there is increased volume, which creates the additional requirement of labour at the government liquor stores as well.

D. Eby: I was surprised to see…. I’d like the minister to explain to me the logic behind the decision to stop collecting customer satisfaction data from wholesale customers. Now, I’ve read what’s in the report, which is to allow wholesale customers to settle into new processes. I really suspect that, actually, the minister knows, as I know, the wholesale customer satisfaction would be down significantly by the changes that the government has made in relation to the wholesale price.

Can the minister explain to me in some more detail why it is that the LDB would be so rigorous around collecting some metrics throughout this process but would abandon wholesale customer satisfaction data at the exact time when they need to know whether what they’re doing works?

Hon. C. Oakes: Great idea. We’re going to reintroduce it, actually. Just to clarify, we are actually reinstating the customer service surveys through the wholesale. What we did want to do is to provide the new team the opportunity, over the last year, to look at the market, allowing it time to settle, and to ensure that the data we’re collecting is more accurately reflective of what is happening. But we are reinstituting the wholesale customer service surveys.

D. Eby: What is the minister’s target for the satisfaction rate on that reinstituted survey?

Hon. C. Oakes: We’re projecting a 90 percent satisfaction rate on the new wholesale customer service survey.

D. Eby: Well, the minister is nothing if not ambitious. I can certainly give her credit for that. I will look forward to seeing how the results come back.

Last time I was here, with a different minister, we talked a little bit about an operating margin for retail stores. We had a bit of a disagreement about how much operating margin retail stores need to operate and break even. In any event, during that conversation, the minister advised me that she was targeting an operating margin in retail stores of 18 to 18½ percent.

[1700]

Is that the same operating margin that the minister is targeting, and is she realizing that margin in the stores right now — or less or more?

Hon. C. Oakes: Again, it almost goes back to our original conversation about the separation of wholesale and retail. Up until last year, we did report publicly on the markup and the retail margins of the B.C. Liquor Stores. However, since all retailers in British Columbia now purchase products at the same price and set their own retail margins, it would put the B.C. Liquor Stores at a competitive disadvantage to disclose this information.

I can tell you that the retail margins do fluctuate with market conditions. However, as I’ve mentioned, the margin that the government liquor stores add to the new wholesale price will not be publicly disclosed due to competitive reasons.

D. Eby: Well, I have to say I disagree profoundly with the minister’s logic here. The idea is that you’re protecting the B.C. Liquor retail stores from competition by not telling the public what the operating margin is for those stores. But the reality is that that means the only people who know what the margin is are the competing stores.

The private stores know exactly what the margin is on each product, because they are paying, as the minister says, the same cost as the B.C. Liquor Stores. The only people who don’t know what the operating margin is, as a result, is the public. These are public stores that the minister is operating on behalf of the public, and the minister is telling us here that she can know and her government can know and the private store operators can know, but the group who can’t know is the public, who actually own the stores.

I’m going to ask the minister to reconsider her answer, given the reality that it’s very easy for the private stores to figure out what the operating margin is, because they know what the cost is. But they’re the only ones who know. The public does not know. Will she tell the public what the margin is in the retail stores?

[1705]

Hon. C. Oakes: Your point is taken, and we’ll take it under consideration.

D. Eby: I’m afraid I don’t know what that means — that the minister is going to take it under consideration. Is she going to provide me an answer in writing? Or is she…? I don’t know what that means. Maybe she can tell me what she means by that.

Hon. C. Oakes: Yes.

D. Eby: Just so that we’re all very clear about what’s going to be provided in writing, the minister will provide me with the operating margin for the stores and the operating margin for the distribution centre. Is that correct?

Hon. C. Oakes: Actually, what we said is that we will provide you an answer as to the consideration of your request.
[ Page 11520 ]

D. Eby: I mean, it’s not much…. I won’t waste the minister’s time or her staff’s time by asking them to send me a letter that just says what the minister told me on the record in estimates. It’s a waste of everybody’s time. So if the minister is not going to provide me with the answer, then I would appreciate it if she would stand up and say: “No, I’m not going to give you that information. That’s available to the private stores. That’s available to me and my government. That is not available to the public.” I just wish she would go on the record and tell me whether or not she’ll provide me with this answer.

Hon. C. Oakes: Again, your point is taken. We will take it under consideration. You raised a point here. We are going to review that, and we’ll get back to the member.

D. Eby: One of the challenges faced by small companies that either do importing or that produce here in British Columbia is that the government is requiring them to pay full retail cost for the bottles of their own product that they use for sampling. I know this issue has been raised before, because I’ve raised it before with the government. The government still hasn’t fixed it.

[1710]

Try to imagine, Mr. Chair, that you’re forced to buy at full retail value your own product back from the government in order to give people the opportunity to sample it.

Has the minister been briefed on this issue since she’s taken on the portfolio? Is she addressing this issue?

Hon. C. Oakes: Thank you to the member opposite. Thank you very much for your patience as well. With some of the changes that we’re making, we have to figure out if they’ve been announced yet. On this one, though, I will say that we have heard what you have raised, and it is certainly something that we need to review. So thank you.

D. Eby: The minister should not hesitate to make announcements today, especially if they’re good news for the industry.

I’m going to take the minister back to the issue of the new warehouse. What are the total planned capital and administrative costs for the new warehouse? If she could break those out, that would be helpful, but a global figure would be fine as well.

Hon. C. Oakes: As we are currently moving through the business case, it’s premature to look at the capital breakdown of that. It’s just too early in the business case planning process.

D. Eby: Last year, the minister was able to give me a figure of $262 million. Can the minister advise where that figure came from, and whether that’s an upper limit? Why was I able to get a number last year, but I can’t get a number this year?

Hon. C. Oakes: The business case, again, will flesh out the numbers of the specific costs. At this point, I’m not sure where the $262 million came from.

[1715]

D. Eby: Well, me neither, Mr. Chair.

How much has the LDB paid to lease back the warehouse that used to be public but has since been sold, from the date of sale to the most recent date the minister has?

Hon. C. Oakes: It’s $1.4 million a year, and that’s what is market rent.

D. Eby: When the government sold this warehouse…. There have been a number of different figures given for the value of the sale. Last year the Attorney General said that government received $36 million from the sale of the LDB warehouse. That’s a $900,000 difference from the LDB’s annual report, which said that the LDB received $36.9 million for this sale. That’s a $1.9 million difference from the records that were posted on B.C. OnLine, which has the sale recorded at $38.808 million.

I’m curious about why there are three different figures for the value received for the warehouse, ranging from $36 million to $38.8 million. That’s a lot of cash to be wondering about.

Hon. C. Oakes: The net gain of the sale was $36.9 million.

D. Eby: Can the minister explain why the records posted on B.C. OnLine say that the sale was made for $38.8 million, and why there’s a difference of — I can never do math on the fly — about $2 million? Let’s leave it at that.

Hon. C. Oakes: It’s through the differences based on commissions and depreciation on the capital.

[1720]

D. Eby: The difference between commission and depreciation on the capital. So after the sale was made, there was a commission that was paid, I presume, then, to a real estate agent of some type, a commercial real estate agent.

Then I would assume that the depreciation on the capital was some kind of adjustment to the final sale price after the building had been inspected. Can the minister give me a bit more idea about what she means by “commission” — who was the commission paid to? — and “depreciation of the capital”?

Hon. C. Oakes: We can take it on notice and refer it to MTICS.

D. Eby: I want to explain a little bit why I’m surprised about the state of planning — that there’s not even a
[ Page 11521 ]
ballpark estimate of the capital and administrative costs for the new warehouse. It was in 2013 when a group called Sedlak Management Consultants was hired as a facility consultant to assist the LDB in finding a new warehouse. Their initial contract expired in October of 2015 with the option for a four- to six-month renewal at the discretion of the LDB, and a maximum payment of $350,000 is set.

Given a two-year contract that could have cost taxpayers as much as $350,000 in relation to establishing a new LDB warehouse which has still not been established or even a budget set, can the minister explain to me what Sedlak Management Consultants were doing and how much they billed taxpayers for?

Hon. C. Oakes: I think what’s important to clarify is that there is a difference between building a box and figuring out what the actual material looks like inside that box. We all know that the retail market landscape has changed considerably.

[1725]

You look at the new retailers — Canadian, Lululemon — and what their new retail landscape looks like. Really, Sedlak is a specialist in this subject matter — of making sure that we look at whether it’s the automation or what have you within the actual confines of the warehousing aspect of this project. That is the contract that we are working with Sedlak on.

D. Eby: Has the Sedlak contract been extended beyond the initial expiry date of October 27, 2015?

Hon. C. Oakes: Yes, that has extended, but the contract did allow for that.

D. Eby: Can the minister tell me how much has been paid to Sedlak to date?

Hon. C. Oakes: We want to make sure that we provide you the accurate numbers, so with your leave, can we provide that and take it as a point of following up?

D. Eby: I’d appreciate the minister’s response in writing, and I appreciate her offer of that.

The other reason why I was surprised to hear how little progress has been made on the warehouse file is because last year, when I was here in this same place asking questions of the minister’s predecessor, I asked about the increase in administrative costs for the LDB. I was told by the Attorney General, the Minister of Justice, that a significant portion of the increased administrative costs — it amounts to about 30 percent over the coming years, including this current year that we’re in — was planning and preparation for the new warehouse.

I assume the contractors billed close to what the contract was for, which was $350,000. You’ve got a significant increase, in the tens of millions of dollars, in administrative costs for the warehouse preparation, yet we still don’t have a budget or a vision or a site for the warehouse.

Can the minister explain why I would be told that administrative costs were going up so much due to warehouse preparation, yet there’s still no budget or site?

[1730]

Hon. C. Oakes: Could the member opposite provide us maybe a little bit more clarification? We did answer the administration question before. Could you clarify your question, please?

D. Eby: Mr. Chair, with your leave, I’ll just take a moment to read off a screen, with apologies.

In the last set of estimates, I said to the minister: “In the summary financial outlook on page 12 of the service plan, the minister has set out operating expenses, administration…. When I look at the numbers, I see a steady climb from $97.1 million in administrative costs in fiscal 2013-14 to a projection, in 2017-18, of $126.2 million in administration costs. This reflects an increase of 30 percent. What does the minister attribute this increase in administration costs to?”

The minister responded: “Quite a lot of that is associated with the costs for the plan to move into the new warehouse. There will be extensive new systems required, preparation, planning, thinking, and so on. That’s why the administrative expenses are expected to be higher.”

My question to the minister is: if that money has been spent on the new systems, the preparation, the planning and the thinking, then why is it that we’re still so far behind in this project?

The Chair: Member, thank you very much, but I would just draw your attention to the Speaker’s memorandum. It says that unless otherwise permitted, electronic devices must be not be used by a member who is in possession of the floor. I would just remind you of that.

[M. Hunt in the chair.]

Hon. C. Oakes: Again, just a reminder that we have committed to you that we will provide you with that overview of the operating costs. That will be provided.

Just to recap, where you see that increase in administration costs, it is around credit card fees. You have the new point-of-sale system, and with that come licensing fees and depreciation fees. But our commitment to you is that we will provide you with a more fulsome overview.

D. Eby: I thank the minister for that.

In addition to Sedlak, the minister has also, with the LDB, put out a request for proposals for a land adviser, a quantity surveyor and a facility consultant to help with the new warehouse project.
[ Page 11522 ]

Let’s start with the land adviser, which I understand the LDB told Bob Mackin they were expecting to be in place by March 11. Is there a land adviser in place, and if so, who is that, and how much is that person being paid?

[1735]

Hon. C. Oakes: The RFP closed on March 11, so we are in the middle of the process of evaluating what has come in. I estimate that that will take approximately one month to do the evaluation. I would let the member know that this is an open, fair and transparent process through Partnerships B.C.

D. Eby: Can the minister explain the LDB and the government’s logic in selling, in the Vancouver real estate market, the property in 2014 and then waiting two years before getting back into the market without lining up some land? Why is it on March 11 that the government is now moving to find land for this warehouse, during which the Vancouver real estate market…? I don’t know. It’s gone up — what? — 40 percent in those two years.

Hon. C. Oakes: On the specifics around the sale, I would…. Again, it was through MTICS, the ministry, for the specifics of that.

[1740]

I think it’s important to note that the terms of the agreement really allow the flexibility as well as the competitive process so that we make sure we’re the right-sized fit for the future — 20 to 30 years. Again, when you go and tour the current warehouse, you…. I think it was built in the ’60s, and our province has certainly changed a lot since the ’60s.

When you look at the opportunities moving forward…. One only has to canvass what has been raised here today in estimates — to talk about the growing wineries, the growing craft beer, the growing distilleries, the cider products. The wholesale market and the fact that you need space for the future has certainly changed — and for consumers. To make sure the consumer has great access to products is, I think, something that we take incredibly seriously. We’ve done a really thoughtful process of ensuring that the terms of the agreement allow for that. The RFP, like I said, has gone out. It closed on March 11.

I guess the final thing to note is it’s not just the area of Vancouver that we’re looking at. We’re looking at, actually, the Lower Mainland as an area. I like to tease them. To be fair, I thought Quesnel would be a great place. But again, we’re looking at the Lower Mainland.

D. Eby: I have bad news for the minister’s prospects for real estate in the Lower Mainland. It’s an expensive place to buy land right now.

I note that the government rushed to sell this property in August 2014, for $37 million, to a group that included a major donor to this government — the Aquilini Investment Group. Yet there seems to have been no rush in finding replacement land. That has cost taxpayers a lot of money. When the government gets back into the land market, I think the minister will see that.

I’m curious about this land adviser. Is that a real estate agent? Is that what a land adviser is, or is this a consultant? Why is the minister not going to her colleague at the ministry for citizenship and technology to say: “Hey, do we have some public land that we can use?” Why hire yet another consultant on this project?

[1745]

Hon. C. Oakes: When we’re looking at site selection on a project like this, it certainly isn’t easy. We’re looking at…. There are specialized requirements about a preload area in conjunction with specialized pads, and we are working closely with MTICS and Partnerships B.C.

I think it’s important to know that…. When you’re looking at bringing to bear a project of this scope and size, it’s important that we use multiple resources, and we look at evaluating everything to the fullest extent. That is why an executive project board has been established to provide direction and oversight through all the phases of the distribution centre project and to fill the reporting and financial reporting requirements.

The ministry’s approach is based on sound fiscal and risk management, is aligned with the government direction for capital projects and will ensure that the Liquor Distribution Branch can continue to provide the highest-quality service to its customers.

D. Eby: Who are the members of the executive project board?

Hon. C. Oakes: The members of this board will be made up by the deputy minister of small business, red tape reduction and liquor distribution, Tim McEwan; the CEO, Blain Lawson; the acting ADM, Tracy Campbell; the vice-president of Partnerships B.C., Mike Houle; and associate deputy minister through the Ministry of Technology, Innovation and Citizens’ Services, Sarf Ahmed; and support staff.

D. Eby: Has this board met yet?

[1750]

Hon. C. Oakes: The committee has been meeting regularly since the fall.

D. Eby: I’m wondering about the three consultants that, I assume, then, the executive project board is looking at hiring here: the land adviser, the quantity surveyor and the facility consultant.
[ Page 11523 ]

The facility consultant, it would seem to me, is actually Sedlak. Is this a separate contractor? What is the purpose of that contractor, if it’s different from what Sedlak has been doing? A quantity surveyor — I don’t know what a quantity surveyor is. That could be…. I mean, in liquor, it’s a bartender, but I don’t know what it is in this particular situation. Again, a land adviser — I don’t know what that is. Is it a real estate agent, or is it someone with an expertise in distribution centre siting?

Can the minister clarify about these three roles?

Hon. C. Oakes: The land adviser is the person that looks at site selection, the logistics, the traffic flow and zoning. Is it specific for what you’re looking at? The quantity surveyor breaks down the premises, the size, the actual box itself. The facility manager is really the engineering company that looks at the HVAC systems, the washrooms, the set-backs — what it looks like. Then finally, the company of Sedlak, again, is the inside. It’s the actual mechanization of getting that product through the warehouse.

D. Eby: How much is the minister budgeting for these three consultant roles in relation to this facility?

Hon. C. Oakes: Because we are in mid-process of RFPs going out, we can’t taint that process by providing an end budget.

[1755]

D. Eby: We’ll move on to a different issue. This is a case-specific issue.

In Vancouver, there is a wine store called the Wine Cellars, which is run by a gentleman named John Clerides. This government’s changes to wine store licences mean that Mr. Clerides was hit twice. He lost his discount. He used to be able to buy product at a 30 percent discount. Then he was told that the one-kilometre exemption for wine stores was being eliminated.

Mr. Clerides has been on Davie Street for decades now. He’s across the street from a cold beer and wine at a bar that came in after he was in his location. Now he’s being told, because he’s within one kilometre of that cold beer and wine store, he’s going to have to move. I’m sure Mr. Clerides is not the only wine store operator in this situation.

Is the minister familiar with this issue? If so, what is she doing to grandfather these stores that have been there for a long time but now find themselves next to a cold beer and wine store, which is no longer acceptable under the government’s rules?

Hon. C. Oakes: Thank you for bringing the question forward. We have been meeting actively and working closely — the deputy minister, the ADM and the CEO — with Clerides. My commitment to both the member for Vancouver–West End and the hon. member for Vancouver–Point Grey is that we’d be happy to sit down, if you would like to meet with staff to go over where that file is and some of the things that we’re looking at. We’d be happy to set up a meeting if that would work.

S. Chandra Herbert: Thank you to the minister and to my colleague from Point Grey for raising this question. I think the key thing, for many people in our community, is that it’s such a popular wine store. It’s its 30th year. It was really kind of the pioneer, so to speak, for wine stores in B.C. and provides incredible selection with an incredible staff.

The concern we have is that with the one-kilometre rule, there really doesn’t appear to be many places at all in Vancouver that you could site such a store, and certainly not in the West End, where I live, because there’s just no more land — unless you put it out on a barge somewhere, which I don’t think the minister is going to suggest. But hey, maybe.

[1800]

Really, I guess the question is: what is the timing in terms of this desire to basically shut down the store, if that’s where the minister is going? I’m hoping the minister is not, that she will understand that this store was here first and that it deserves the care and attention it should have been given before these rules came in.

I certainly will follow up with her, but I just wanted to ask on the record, so we’d get a sense of what the timing is. As you know, sometimes we can be told all sorts of things, but if it’s not the record, it may never have even happened.

Hon. C. Oakes: Just to provide you, maybe, with some certainty and clarity, first of all, I should point out that it is business as usual. There is nothing that would suggest that the business would need to close.

We do recognize that when we made the change to wholesale, we did reduce the 30 percent commission. We understand that as a small business…. What we wanted to provide for a few of the small businesses that were affected by that change in commission rate were a couple of options. The options that we provided were that if they decide…. They can move and become a full liquor store so that they could sell all products. They have ten years to make that decision, if they would, in fact, like to change their licence for that.

We’re looking at some other supports with a few of these independent wine stores that have been affected. Because we do, as a small business, recognize what the member has brought forward.

Again, I encourage the member opposite. We’d be happy to sit down with you and to listen if you’ve got other suggestions. We’d be happy to listen and to work closely with the small business.
[ Page 11524 ]

S. Chandra Herbert: Just to ask: what are the other supports that the minister refers to?

[1805]

Hon. C. Oakes: Thank you to the member opposite.

Some of the other things that we are looking at supporting. We’ve heard and we are currently evaluating the request for a fee for tasting high-end products that had been raised by some of the independent wine stores. We are also offering to the independent wine stores the option to go wine and grocery, and they have six months to execute that. Finally, it had been brought forward that they would like to be an agent of record, and that is being evaluated.

D. Eby: This is in relation to — I’m going to be delicate in how I phrase this, Mr. Chair, because the minister and I have had differences over this — how the LDB calculates commissions to wineries, whether they do it on the wholesale price or whether they do it on the retail price.

There was a cost of $5.3 million attributed to a decision to calculate this on the retail price instead of on the wholesale price. The minister, I’m sure, will correct me if I’ve got my description of this process wrong, but can she tell me whether that cost of $5.3 million has been confirmed to be the entirety of the cost? If so, where does it show up in the budget documents? Also, whether or not it has become the practice of the LDB now to calculate on the retail price instead of the wholesale price.

Hon. C. Oakes: B.C. commercial wineries do receive a 7 percent commission on their direct sales to wholesale customers. As part of the move to a new wholesale pricing model, the LDB reviewed all sales agreements. During this review, the LDB did determine that the commission to commercial wineries was based on a product’s retail price and not its wholesale price.

While it was originally characterized as a technical error, a further review found that this was not factually demonstrable, as the commission had not been paid on the retail price during the entire lifespan of the program. Despite this, the LDB believes and continues to believe that going forward, it is more appropriate to base the commission on a wholesale amount.

D. Eby: Can the minister advise whether that $5.3 million amount was, at the end of the day, the difference for the seven years that the commission was based on the retail not the wholesale amount?

[1810]

I can rephrase that question if that doesn’t make sense to the minister. I’m trying to be clear — maybe failing at the end of the day.

Hon. C. Oakes: If the member opposite would permit me, I put a “not” in one of the parameters. So it had been paid on the retail price during the entire life span of the program — the commission. My apologies for that.

The member asked if it was $5.3 million over seven years. That is correct.

D. Eby: Has the LDB put in place some type of a review process to catch similar interpretation issues that may be identified in other agreements and other commission payments that are made by the LDB? I’m curious about how this went on for seven years before it was detected, whether there’s a lesson that has been picked up from this and whether there are other reviews that have been done.

Hon. C. Oakes: Thank you for the question.

As part of the separation of the changes that we’ve made on retail and wholesale, we have changed the review process. We thoroughly review all of our contracts. It goes through a finance team, a regulatory team, legal, and then it goes to the executive, so a thorough review process is in place.

D. Eby: That concludes my questions.

Just before I close off, I wanted to thank the minister and her staff for their prompt answers, which enabled us to get through today rather than extend this over two days. I really appreciate that. I found the answers very instructive, and I appreciate that very much, all of you — for coming and being so frank in the responses.

I also wanted to take a moment to thank all of the liquor store and distribution centre employees for all of their hard work slaking the thirst of British Columbians. I wanted to recognize all the small operators across B.C. running stores, working in stores — B.C. producers big and small.

[1815]

I know we’ve got a couple of macrobreweries in British Columbia as well as a whole bunch of craft microbreweries, as well as the wineries, all the wine store workers and the craft spirit producers.

I’m sure I’ve missed some. I wouldn’t want to miss the hospitality workers that drive our tourism industry and make our province an exciting place to visit. Thank you to all those people who make the system work. It’s a challenging system. It’s a system where there’s a lot of room for improvement. I hope that we can get to that place with a cooperative spirit, which is certainly what I saw here today.

Hon. C. Oakes: If you would permit me, I would like to, on the record, make a quick clarification for the record that, in fact, licences can’t be sold. The business is sold, and the licence is transferred. The general manager must approve the transfer of the licence. That was in regard to an earlier question.
[ Page 11525 ]

I, too, if I may be permitted just a quick comment, say thank you very much to an amazing team of staff that have worked very hard on significant changes that we’ve seen in the liquor world, both on the wholesale and on the retail side.

To the member opposite: I know that while you and I don’t always necessarily agree on a direction, what I certainly know is that you and I are both passionate about supporting the industry and want the best for it.

I know that the member opposite, as do I…. I am incredibly pleased. When you see the amount of growth and you see what is happening in multiple sectors of beverages in British Columbia, it’s an interesting time for us. We’ll continue, through the changes, to make sure that we are supporting our small businesses.

I would like to close with the same compliment to the members of our liquor stores, our employees, who do a tremendous job for us. We thank them very, very much for the work that they do.

With that, I move that the committee report resolution of Votes 15 and 16 of the Ministry of Agriculture, progress on the Ministry of Small Business and Red Tape Reduction and liquor distribution, and ask leave to sit again.

Motion approved.

The committee rose at 6:17 p.m.

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