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)

Monday, April 11, 2016

Afternoon Sitting

Volume 36, Number 9

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

MONDAY, APRIL 11, 2016

The House met at 1:36 p.m.

[Madame Speaker in the chair.]

Routine Business

Introductions by Members

Hon. R. Coleman: Joining us in the House today are Morris and Dalene Yelland. Morris and Dalene are from Prince Albert, Saskatchewan. They are the uncle and aunt of my wife, Michele, who’s also joining us in the gallery today. Michele and I will have been married 42 years in August. The only thing that bothers me is that when I look at her every day, she looks younger, and I look older. I’ve determined that the elderly part on me is because of the pressure from the opposition.

Would the House please make them all welcome.

V. Huntington: This morning I had the pleasure — as, I think, the Opposition House Leader also had the pleasure — of speaking to students from Simon Fraser University’s Political Science Student Union. I understand they will be going on a tour of the building after question period. I hope the House makes them feel very welcome.

Hon. T. Lake: April is Parkinson’s Awareness Month, and it’s my pleasure to introduce and welcome to the House representatives from the Parkinson Society of B.C. Established in 1969, the society aims to ease the burden and, ultimately, find a cure for the disease through advocacy, education, research and support services.

Parkinson’s disease is a progressive neurological disorder resulting from the loss of dopamine in the brain. It’s characterized by motor symptoms, including tremor and balance problems. In 2013, there were 12,847 British Columbians with Parkinson’s.

Joining me for a meeting this afternoon and here in the House today are Jean Blake, the CEO of the Parkinson Society of B.C.; Dr. Martin McKeown, who’s the director of the movement disorder clinic at the UBC Brain Research Centre; Kristen Sundvick, research assistant at the movement disorder clinic; Paddi Wood, who is a person living with Parkinson’s disease. Her husband, Brian, and her daughter Kate are here. And supposed to be here but, unfortunately, unable to come is Steven Pohello, who also is a person living with Parkinson’s disease, a very close friend of mine and a great advocate for advocacy on behalf of Parkinson’s.

Would the House join me, please, in making them feel very welcome today.

C. James: I have two constituents who are visiting in the gallery today. I believe it’s the first question period for one. I’m not sure about the other. I think that for both of them, it might be their first time. They’re both incredibly active in our community. Would the House please welcome Paul Jorjorian and Allen Godfrey to question period.

Hon. P. Fassbender: I have two guests in the House today, Wolfgang Richter and Nick Gudeville. Wolfgang and I had lunch today, and we spent most of the time talking German, because he is a fellow countryman. We talked about our experiences coming to this country. I would like the House to make both my guests feel welcome.

N. Macdonald: I just noticed, up in the gallery, a good friend from back in his Kootenay days, Troy Sebastian. He’s had a leadership role, and continues to have, with the Ktunaxa. He’s here studying law and will do fantastic things going forward with that degree, I know. To welcome Troy Sebastian, I ask you to join me in making him welcome here.

[1340]

M. Farnworth: It’s my pleasure today to introduce a class from Simon Fraser University of political science students. I had the opportunity to speak to them this morning about the work that we do. They’re here to learn about the parliamentary system and to watch question period and all of the issues that flow from that. I would ask the House to please make them most welcome.

D. Barnett: Today in the House are two great people from Bridge Lake in the Cariboo. They have lived there for quite some time. They’re great community volunteers. Today is one of their birthdays. We have with us Manfred and Helga Zeiner. It is Helga’s birthday. I ask this House to welcome them and wish Helga a happy birthday.

Statements
(Standing Order 25B)

100 MILE HOUSE WRANGLERS

D. Barnett: It gives me tremendous pleasure to share the great news that in my hometown, the 100 Mile House Wranglers are this year’s winner of the Cyclone Taylor Cup.

This means the Wranglers are the B.C. Junior B hockey champions in only their third year of existence. They defeated the host, Victoria Cougars, yesterday in a thrilling championship game that was decided by a 5-4 score, their third straight win by a single goal.

This means the Wranglers are on their way to Regina to represent British Columbia at the Keystone Cup, which is the Western Canadian Junior B Championship, with teams from B.C., Alberta, Saskatchewan, Manitoba and northern Ontario. The Wranglers play their first game Thursday afternoon against Thunder Bay, Ontario.
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The season has been a dream come true for 100 Mile House, the Wranglers’ players and coaches and owner. He says he’s not the owner, but he is — Tom Bachynski. First, they won the 20-team Kootenay International Junior Hockey League playoffs before travelling here to Victoria last week for the four-team B.C. championships. The Wranglers have energized the whole community, with game after game of exciting hockey played in front of noisy capacity crowds. I know because I was there for some of them.

I ask you all to join me in throwing your support behind the 100 Mile House Wranglers as they try to bring the western Canadian Junior B hockey championship back to B.C.

Go Wranglers, go.

SOFTBALL TEAMS

J. Wickens: I had the pleasure this weekend of attending Coquitlam’s fourth annual celebration of softball. It was a fun event, where the opening ceremonies commenced with a parade of all of our Coquitlam minor softball teams. It included the singing of our national anthem by Mark Donnelly and a special appearance by Bob the Bear from the Vancouver Canadians.

I was so excited and proud to be able to watch my six-year-old little girl play alongside her new friends. I was happy to see older girls teach younger girls the skills of running around the bases, throwing and catching the ball and running and sliding.

I have played softball since I was my daughter’s age, and what I know is that being a part of a team can be transformational for our young people. When you’re young, you learn the importance of working with others for a common goal. When you learn the importance of sportsmanship and that winning with integrity is far more fulfilling than winning without it, I believe it builds your character, and it teaches you about what is really important in life.

Nelson Mandela said: “Sport has the power to change the world. It has the power to inspire. It has the power to unite people in a way that little else does.” I couldn’t agree more. We are so incredibly lucky to have groups like the Coquitlam Minor Softball Association bringing together volunteers, coaches and families so that girls and young women can be a part of a team, make lifelong friends and learn the valuable lessons that sport can teach.

I am looking forward to my new role as a mom on the benches, and I ask the House to join me in thanking the hard-working volunteers of the Coquitlam Minor Softball Association for all that they do for our community.

[1345]

STEVESTON HISTORICAL SOCIETY

J. Yap: As much as we like to look ahead to the future, it’s important that we always reflect on our past. Locally, groups like the Steveston Historical Society help us do just that. Since 1976, the society has worked hard to preserve and promote the rich history of our community, which began nearly 100 years earlier with the arrival of the Steves family from New Brunswick and evolved into a bustling village of canneries filled with First Nations, Chinese, Japanese and Euro-Canadian workers.

The community has been through decades of boom and bust, from a thriving fishing industry to the expansion of local farming, from the Great Depression to Japanese internment. The stories of Steveston’s past are captured in the heritage character and waterfront that many visitors today enjoy and in the many initiatives and projects of the Steveston Historical Society.

Most recently the society initiated the redevelopment of the Steveston town square, which will create park areas and accessible spaces that are adaptable for a variety of year-round activities. What’s more, the Japanese heritage of Steveston will be honoured by adopting a Japanese-garden approach to the materials.

Congratulations to president Loren Slye and his board, executive director Sarah Glen, the city of Richmond and others who have played an instrumental part in this project, which will be completed at the end of May and officially open to the public on June 4. I know the Steveston community will make great use of this space, which pays tribute to our past and helps residents and visitors make the memories of tomorrow.

TLA’AMIN TREATY

N. Simons: I’d like to take this time to inform members of this House of an historic event that took place in my constituency this past weekend.

On Saturday, the Tla’amin Nation celebrated the treaty they signed with the province of B.C. and Canada. Hegus Williams — hegus meaning the old and the new name for chief or community leader — spoke about his hope for the future of his community, invoking the memory of his father, the first chief elected under the Indian Act.

It began with a ceremony outside the nation’s new legislative building, a beautiful wood and glass structure just off the highway leading to Lund, in front of which are five totems, each with specific messages and meanings, paying respect to the ancestors and giving hope to the young, and welcoming visitors.

Following the totem unveiling, about 800 people gathered at the Evergreen Theatre, where chiefs from across B.C. and other parts of Canada came to celebrate the historic achievement, including Sechelt Chief Calvin Craigan and Klahoose Chief James Delorme, among others. Speeches, dancing and drumming entertained everyone who assembled.

Key witnesses were called forward to remember and tell of the events they witnessed, including Sophie Pierre, former chief commissioner, and former mayor of Powell
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River Stewart Alsgard, who is widely credited with being a leader in municipal First Nations relations.

The treaty was in the making for 22 years, and the pride of the accomplishment was clear on the faces of all those who came together.

A key comment came from Grand Chief Ed John, when he pointed at the empty chairs of the recently departed ministers and said: “This is not just Tla’amin’s treaty. This is the treaty of Canada and of British Columbia as well.”

In other words, the honourable implementation of the treaty is required for it to be considered and seen as part of the reconciliation process. Also required is an indication that the 41 percent of First Nations who are actively involved in some process of treaty are in a process that will result in positive outcomes. That can be done through the appointment of a chief treaty commissioner.

In a move made last year, the province suspended the appointment of George Abbott prior to him taking on the role, and the role has remained vacant.

BULLYING PREVENTION INITIATIVES
AND WORK OF TAD MILMINE

J. Thornthwaite: B.C. is a leader in bullying prevention and was the first jurisdiction in Canada to develop a comprehensive approach to this important issue. Initiatives like the ERASE Bullying strategy have helped schools throughout the province focus on prevention and early intervention to resolve problems before they escalate and to ensure that students have a safe, inclusive learning environment.

Our efforts are also supported by programs like Bullying Ends Here, which was started by Tad Milmine in November 2012 after the suicide of Jamie Hubley, an Ottawa teen who was bullied relentlessly for years.

[1350]

Tad, who himself was a victim of bullying, shaped Bullying Ends Here into a one-hour presentation aimed at exploring all forms of bullying and cyberbullying. By relating his story, as well as Jamie Hubley’s, Tad is able to show students that they are not alone in how they feel and to empower them to reach out and ask for help.

Bullying Ends Here is a registered charity, and all donations, as well as revenue from the sale of Tad’s book, go towards helping those who need it most. Since starting almost four years ago, Tad has spoken to students in every province and will soon be making his presentation to students in Amsterdam. Last year alone he spoke to more than 95,000 Canadian students and was recognized by the Senate for his amazing work.

Perhaps the most moving part of this story is the 36 messages Tad has received from parents over the years thanking him for saving their children’s lives. That’s 36 youth who are alive today because of his powerful, resonant one-hour presentation.

I ask the House to join me in thanking Tad for his commitment to ending bullying and empowering those who are suffering. Bullying isn’t a rite of passage or something everyone has to go through. Tad has proven that by reaching out, raising awareness and sharing stories of our own struggles, we can do more than make things better. We can save lives.

KOHAN REFLECTION GARDEN
IN NEW DENVER

K. Conroy: In 1942, Canadian citizens of Japanese heritage were forcibly resettled in the B.C. interior. The New Denver camp, now known locally as The Orchard, was one of the largest, home to over 4,000 internees during World War II.

In 1989, the Slocan Lake Garden Society chose to honour these citizens by creating the Kohan Reflection Garden on land at the south end of the camp along the shore of Slocan Lake, a peaceful place to contemplate and to enjoy the beauty of the plantings and their setting.

The garden, from conception and design by local horticulturist Ray Nikkel to the planting of the first tree by Mrs. Kamegaya, has been developed by local fundraising, government grants, employment programs, contributions from countless residents and visitors and, most notably, the generous support of the village of New Denver, the site proprietors.

The garden is upgraded and sustained through countless efforts of the garden society and volunteers and residents who continue to nurture and maintain it weekly. The concept is that of a strolling garden where visitors can experience many different opportunities for contemplation and reflection.

The original tea house and cherry trees are the focus around which the garden was created. Developed over time, the gatehouse, lanterns, stone wall, lily ponds, water basin and bridge form the hardscape for surrounding plantings, notably azaleas, rhododendrons, grasses and several varieties of Japanese maples.

The garden is host to many international visitors, photographers and practising artists. As well, it is a popular venue for weddings, concerts, art exhibits and memorials. I have been at a number of events there and have, at times, just gone to have my lunch or have a restful break, enjoying the stunning beauty of the lake and the gardens. Kohan garden is open year-round. Entrance is by donation.

I want to thank all of the many volunteers who have developed and continue to take care of this beautiful garden. If you ever get out to New Denver, please stop by and enjoy the beauty while honouring the history of the Japanese in this province.

Madame Speaker: The member for Vernon-Monashee begs leave to make an introduction.

Leave granted.
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Introductions by Members

E. Foster: It’s a great pleasure to introduce a very special person in my life today, a lady who was recently nominated as Woman of the Year by Vernon Women in Business. She is my long-suffering wife of 31½ years. I would like to make my wife, Janice, welcome to the House.

Oral Questions

B.C. HYDRO MANAGEMENT AND
DIVIDENDS TO GOVERNMENT

J. Horgan: It’s no surprise to members of this House and members of the public that the B.C. Liberals have been turning B.C. Hydro into a cash cow over the past number of years. They have been characterizing the dividend as earnings by the Crown corporation, even though a former Auditor General said it gave the appearance of profitability where none existed.

Between 2011 and 2014, $1.1 billion has been transferred from B.C. Hydro into general revenue on behalf of the B.C. Liberals’ bottom line. But what’s new is that last week the Minister of Energy finally admitted to the practice and acknowledged that for the past number of years, and for two years going forward, 100 percent of the money that’s transferred from B.C. Hydro into general revenue will be borrowed money. So $863 million will be borrowed by B.C. Hydro on behalf of its ratepayers and transferred to the B.C. Liberal government.

[1355]

My question is to the Minister of Energy. Does he really believe that he’s protecting ratepayers when he asked the utility to borrow money to shore up the B.C. Liberal bottom line?

Hon. B. Bennett: That’s a good opportunity for me to explain to the public and to the members on both sides of the House that this particular policy, this dividend policy, has in fact been around in B.C. for about 25 years. In fact, it began when the Leader of the Opposition and my B.C. Hydro critic…. I could be wrong about the timing, but I believe they were both advising Premiers and Energy ministers at the time. At the time when they created this policy around dividends, they were actually quite proud of themselves.

Their former party president, Mr. Sihota, said in Hansard — I’ll quote him; he’s a very articulate individual: “We have placed a challenge in front of B.C. Hydro saying that yes, there are some dividend obligations to the provincial Crown. We’re proud of initiating that kind of reform with respect to rate restructuring in British Columbia.” The policy that they are so critical of they in fact created.

On the other side of the ledger…. This government, on this side of the ledger, actually created a policy to back away from those dividends….

Interjections.

Hon. B. Bennett: I don’t know why they think that’s funny. It’s the right thing to do.

Interjections.

Madame Speaker: Members, the Chair will hear the answer.

Hon. B. Bennett: I don’t know why they think that it’s funny. B.C. Hydro has its marching orders. Starting in 2018, they will pay $100 million less a year until the dividend goes to zero. We did that. The B.C. Liberal government did that. We did not create the policy, but we are going to get rid of it.

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

J. Horgan: St. Augustine is in my mind again. Earlier this week, someone referred to: “Give me chastity, but not just yet.” I think that speaks perfectly to the Minister of Energy, who goes down memory lane, as is the tendency of the B.C. Liberals, not wanting to live in the here and now.

Interjections.

Madame Speaker: Members, this House will come to order.

J. Horgan: The question to the minister was not about 1980. It was not about 1990. It was about the time that the member for Westside-Kelowna, who wasn’t from there earlier on, became Premier of British Columbia. Since that time and going forward, she will have asked B.C. Hydro to borrow several billion dollars that they don’t have. Who’s going to pay for that? Will it be the member for Westside-Kelowna? I highly doubt that. It’s going to be the ratepayers that support B.C. Hydro.

The challenge we have here is that the minister doesn’t want to be responsible for what he did yesterday. I’m apparently responsible for things that happened 20, 30, 40, 50 years ago, but that minister is not responsible for what he did yesterday.

My question to the minister: how much more will B.C. Hydro ratepayers have to pay to meet the obligations that he has made to the Minister of Finance?

Hon. B. Bennett: Well, the fact of the matter is that when the NDP was in government, they borrowed money to pay dividends. They did exactly the same thing that B.C. Hydro has done from time to time. They don’t have to borrow money every time to pay dividends, but they have had to borrow money to pay dividends. We recognized, immediately following the 2013 election, that we had to
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find a way to correct the practice that was created by these folks on the other side of the House back in the 1990s.

Interjections.

Madame Speaker: Members.

Hon. B. Bennett: It was a practice that needed to be addressed. We’ve addressed it. We’ve done, actually, four different things.

[1400]

First of all, we got B.C. Hydro’s operating costs down. We found almost $350 million over three years so that they could take some pressure off rates with their operating costs. We dealt with executive salaries. We dealt with water rentals. Tier 3 water rentals are going to disappear in 2018, and as I said earlier, dividends are going to drop by $100 million a year starting in 2018.

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

J. Horgan: Some of the other things that the minister is doing. He’s paying $17 million of ratepayers’ money to IPPs to not deliver power to B.C. Hydro, because we’re swimming in it. We’re buying power at $60, $70, $80, $90 a megawatt hour when the market price is $35. The great business people on that side of the House have been buying more power than we need for a decade, and now they’re telling them: “Don’t deliver it. We’ll pay you anyway.” That’s the business acumen of the people on that side of the House.

Deferred debt. It’s not really debt. It’s just debt that we’re going to put to one side.

The minister said three years ago that we were going to bring that down over time. It’s going up and up and up. In fact, he admitted last week that over the next two years, another $1 billion will be borrowed because they have to give money to the Minister of Finance to meet their obligations fiscally.

Now, I think that is a bit sideways, and I think that people that depend on B.C. Hydro will be looking back on the 28 percent rate increases with some fondness because there’s no other direction to go but up on this B.C. Liberal watch.

A simple question. I’m hopeful that, for a guy who is steeped in the 1990s, perhaps he can get to 2016 and 2017. Tell the people of B.C. how much more they’re going to have to pay for their hydro because you can’t manage a peanut stand.

Madame Speaker: I’ll caution all members to direct their comments through the Chair.

Hon. B. Bennett: I find that when I’m communicating with the opposition, I have to really make a serious attempt to use plain language and be as simple as I can because…

Interjections.

Madame Speaker: Members. The Chair will hear the question.

Hon. B. Bennett: …they clearly don’t understand basic business.

Interjections.

Madame Speaker: Just take your seat.

Please continue, Minister.

Hon. B. Bennett: I’ll take another leap at trying to educate the opposition. My critic — who may decide to pursue this later this afternoon in estimates — and I went back and forth on this, and I tried to explain it to him, unsuccessfully, on Thursday.

When you’re looking at a balance sheet or a statement of income and expenses, you need to look at both the income and the expenses. In the case of the biomass program that B.C. Hydro has…. Incidentally, the Leader of the Opposition thinks that renewable energy is “junk power.” The way that particular program works is that…

Interjections.

Madame Speaker: Members.

Hon. B. Bennett: …when there is inexpensive power available to B.C. Hydro that they can utilize for ratepayers, particularly in the spring when you have the spring freshet, they will turn down electricity from the bioenergy producers. That is part of the contract. They will pay the fixed costs. Last year this program saved the ratepayers of British Columbia $8.6 million.

A. Dix: Well, there you go. According to the Minister of Energy, the freshet is in March. The government has lots of power. They’ve got a lot of power. They can name Phil Hochstein head of the Turkey Marketing Board, but they can’t move the freshet two months.

I mean, it is laughable. It’s laughable that this minister blames this incompetence on the NDP.

[1405]

Of all the Premiers in the history of B.C., only one has claimed $2 billion in dividends from B.C. Hydro, and 100 percent of that has been borrowed — 100 percent. That’s the record of this Premier and this Minister of Energy.

You may ask how they do this, hon. Speaker. How do they do this? It’s called deferral accounts. Take all the deferral accounts in the history of all the governments of British Columbia. That’s 4 percent up to 2004 — Liberal,
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NDP, Socred. That’s 4 percent. Then you take the rest of it, 96 percent of the deferral accounts. That’s these guys. They’ve increased 40-fold. They’re borrowing money and claiming it’s income.

The Minister of Energy said this. He was going to make B.C. Hydro operate like a commercial corporation. What commercial corporation on earth behaves so irresponsibly?

Hon. B. Bennett: In the spirit of trying to keep it simple for the opposition, because they do struggle to understand this stuff, let me….

Interjections.

Madame Speaker: Members, this House will come to order.

Hon. B. Bennett: I assume there are some folks over there that have had a real job. I don’t know that many of them have, but I’m assuming that some of them have.

It’s a little bit….

Interjections.

Madame Speaker: Please take your seat.

Please proceed in a parliamentary fashion.

Hon. B. Bennett: It’s a little bit like a mortgage. When you buy a house…. Presumably, some of the members on the other side have gone through that exercise. If you pay…. Well, I shouldn’t use a number, because where I live, the number would be a lot lower than where many of the members on the other side live.

When you buy a house, you don’t pay cash for it, typically. I doubt that anyone in this House, with the exception of maybe the member from Capilano over here, who may at some point in his life have paid cash for a house…. You get a mortgage, and the total amount gets amortized out over 20, 25 years.

Interjections.

Madame Speaker: Members, come to order.

Hon. B. Bennett: One of the members on the other side said it’s confusing. I don’t know how to make it simpler than to compare a deferral account — a regulatory account, which is the proper name for these accounts — to a mortgage. They are amortizing costs.

When B.C. Hydro spends $2.4 billion a year on capital, largely because no money was spent by B.C. Hydro on infrastructure in the 1990s, they don’t pay cash for everything. These projects all have a life, and some of these projects have a life of decades — several decades. So they amortize the amount out, and that’s why you have these regulatory accounts. It’s not that complicated.

Madame Speaker: The member for Vancouver-Kingsway on a supplemental.

A. Dix: I asked the minister last week if any other utility had an account like the rate-smoothing account at B.C. Hydro. It’s called a revenue acceleration account. What it does is it creates revenue out of thin air so that the company can record a higher profit in the near term. That’s its purpose. It’s not borrowed against anything. It’s intended to make up for their incompetent management of B.C. Hydro. That’s what it’s intended to do.

Without that…. I know the minister didn’t like the previous Premier, and he took a cheap shot about the current Premier earlier. Let me say this. No other utility in Canada behaves this way. The Minister of Health and the Minister of Energy talk about B.C. Hydro as if it operated like all the other businesses.

[1410]

You know what the share of equity of deferral accounts is in Manitoba? It’s 10 percent. You know what it is in British Columbia? It’s 121 percent. That’s the difference between a corporation run in the interests of the people of the province and a corporation run in the interests of the governing party of the province.

How can the minister, who said that this practice of borrowing dividends is like the ratepayer loaning money to the taxpayer and then effectively pretending it’s profit, continue to justify this measure? Why should anyone believe he’s going to get rid of them in 2018, when what he said in 2015, he hasn’t kept up with in 2016?

Hon. B. Bennett: I hope the member doesn’t get a complex, but I’m going to have to say again, as I said last week in estimates: he’s just wrong again. Other Canadian utilities that do use regulatory accounts are Hydro-Québec, New Brunswick Power, Ontario Power, Hydro One, Nova Scotia Power. In fact, other utilities, public utilities in this country, do use regulatory accounts, the same as B.C. Hydro.

The other thing I would say to the member, respectfully, is that if he would go to the website and look at the ten-year rates plan — I hope he’s done that, but maybe he hasn’t — he would see that there is a commitment in that ten-year rates plan for 24 of the 26 regulatory accounts to be paid off. That’s 89 percent of the balance of regulatory accounts, and the majority — $4.1 billion — will be paid off over that time period.

The member consistently disparages the crown jewel of Crown corporations in this province. Regardless of who happens to be in government, regardless of what political parties are in government…

Interjections.

Madame Speaker: Members.
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Hon. B. Bennett: …we should be proud of the crown jewel of Crown corporations in this province.

Forbes magazine just stated that B.C. Hydro is Canada’s number one employer. Now, I wouldn’t expect anyone over there to read Forbes magazine, but that’s what Forbes magazine stated. B.C. Business said that B.C. Hydro has the most influential brand in all of British Columbia.

I don’t know why the members can’t accept the fact that B.C. Hydro actually does — not perfect — a pretty good job, and they’re getting better all the time.

INVESTIGATION AND OVERSIGHT OF
NEW COAST REALTY TRANSACTIONS

D. Eby: A secret recording of a training session has revealed that the owner of Metro Vancouver’s New Coast Realty, which is home to 445 real estate agents, is training those real estate agents in fraud and deception.

Now, in January, I wrote to the Real Estate Council of B.C. about this firm. They acknowledged my complaint and never wrote again. In February, I wrote to the independent real estate advisory group. I asked them to audit New Coast. They told me they don’t have the legal power to do so. Despite notorious unethical and illegal behaviour, the Real Estate Council says they won’t be auditing past New Coast home sales, just future sales.

Why is this government tolerating a system where there’s nobody who will audit past sales by a firm like New Coast Realty?

Hon. M. de Jong: I’ve said this before in the House and will repeat it again for the member and the House in its entirety. The government expects that members of the real estate profession will conduct themselves in accordance with both the law and the professional conduct guidelines by which they are pledged to abide.

I’m not going to comment on the specific case, which, the member knows, is very much under review by the council. But I will say this. British Columbians are entitled to expect that a self-regulated profession like the real estate community is regulated and that the public interest is being properly protected.

[1415]

They’re entitled to expect, for every transaction for which a British Columbian signs a listing agreement, that the realtor they retain conducts himself or herself in accordance with professional conduct guidelines and the law and, most importantly, acts in the best interests of that client, which is paying a substantial fee and commission for that service.

The Real Estate Council, as the member knows, is conducting a specific review. It is also in the midst of work that I am hoping to receive a report on — in fact, will receive a report on — later this week. We’ll receive an indication of the steps and the findings of the council to this point.

Madame Speaker: Recognizing Vancouver–Point Grey on a supplemental.

D. Eby: Well, the minister says that New Coast Realty is very much under review by the Real Estate Council. Let me give him an update on what’s happened. Despite repeated allegations and complaints of fraud over a period of months, including secret bonuses taken from but not disclosed to clients, not a single realtor at New Coast has had their licence suspended by the council.

Forget suspending licences in the public interest; the council is failing on the basics. They don’t even respond to complaints about New Coast Reality. Four months and I haven’t had a response to a complaint from the Real Estate Council. Well, they acknowledged receipt, so I guess that’s something.

Why is the Finance Minister so convinced that the Real Estate Council is doing a good job on New Coast Realty and on widespread allegations of fraud and illegal conduct by this firm?

Hon. M. de Jong: What I have said in the House and what I have said to this member is that in fulfilling its obligations under the relevant statutory provisions, I am aware that the council has taken steps against individual companies, individual realtors. It has imposed sanctions in the past — suspensions, cancellations of licences and the imposition of monetary fines.

One of the questions that the council has been charged, along with the superintendent, to provide specific advice on to the Real Estate Council and to government is whether those sanctions, as they have been imposed and as they exist in the relevant statutory instruments, are sufficient to deter that small percentage of the real estate profession who seem to have lost sight of what the primary obligation is.

I’ll await their report. The government has said, and I will say here again: “The government will take steps accordingly.”

M. Mark: New Coast’s owner is training his real estate agents to lie about the values of their homes. The owner told his agents: “The first offer will never be the best offer. I am sure about this. But you have to say the first offer is the best offer.” New Coast does this to try to resell the home again, for a second commission.

Does the minister agree that this is the kind of conduct that should lead to a full audit, and can he explain why that audit isn’t happening right now?

Hon. M. de Jong: There is no place in British Columbia — nor in the, dare I say, noble profession of real estate — for conduct that is intended to defraud or mislead members of the public or clients. The council exists within the ambit of the self-regulated real estate profession to ensure that the public interest is protected.
[ Page 12018 ]

To the extent that additional steps need to be taken to enhance their ability to protect the public interest, the government is willing to take those steps. I think it is appropriate, though, at this stage, to allow the superintendent and the council to complete the work they have been assigned, to examine that work and to ensure that the appropriate steps are taken that will guarantee the public interest is protected and that people can have confidence that the realtor they retain is acting in their best interests.

[1420]

Madame Speaker: Vancouver–Mount Pleasant on a supplemental.

M. Mark: New Coast also trains their agents to tell clients to offer $50,000 in bonuses to the buyer’s agent, which is what they then secretly pocket half of. The owner notes in his training that it’s best to sell only to other New Coast agents so that they can defraud their clients more easily. Again from the owner: “At this time, if you are dealing with other companies, be careful with issues that could violate the rules. If the other agent is from our team, it can be easily arranged, right? Bonus is so awesome.”

We need a fraud investigation by the police. Will the Attorney General demand that a police investigation take place immediately?

Hon. M. de Jong: The member and her colleagues have focused upon an important incident and an important transaction or series of transactions. It would, however, be incorrect to leave the impression that the Real Estate Council has not taken this matter seriously and is not employing its resources and its personnel to examine, investigate and take specific steps.

The council has imposed, I’m advised, significant conditions on this particular real estate company, conditions that are designed to protect the public. They have ensured or directed the appointment of a new managing director and attached conditions to the training that can take place. There is a quarterly audit, I am advised, that has been ordered — a series of steps that signals, to me at least, that the Real Estate Council takes seriously its oversight and the public interest role that it plays.

That having been said, the council and the superintendent are also undertaking this additional work that we are awaiting. I will say again that if the real estate sector is at a point where it can no longer discharge its duty as a self-regulating profession on behalf of the public, the government is prepared to step in and do it for them.

B.C. LOTTERY CORPORATION
MANAGEMENT OF CASINO TRANSACTIONS

C. James: In October 2014, the Minister of Finance audited the B.C. Lottery Corporation. In that audit, they found “a significant increase in unusual or suspicious financial transactions reported.” In 2015, the B.C. Lottery Corporation deployed a new anti-money-laundering computer system, claiming the results of this new system would “increase capacity, improve accuracy, reporting and identification of high-risk persons and patterns of activity using data analytics.”

But this new system failed to detect Mr. Mancini, the landscaper who claimed to have won over $2 million from slot machines in B.C. casinos and who is now being chased for that $70,000 from the Solicitor General, who says this man laundered money through B.C. casinos. Mr. Mancini was not caught by the new computer system. He was caught by a traffic police officer.

Could the minister tell us how much this system cost and why the system failed to detect Mr. Mancini’s activities?

Hon. M. de Jong: It won’t surprise the member to know that I’m not going to comment specifically on a case that is still the subject of investigation and before the courts. But I will say this. I don’t think anyone has been shy about acknowledging the temptation that exists for those who are engaged in criminal activity to utilize lawful gaming activities as a conduit to launder that money, which is why — it’s interesting that the member poses the question today — the Solicitor General and I were very pleased to announce the formation of the new Joint Illegal Gaming Investigations Team.

Interjections.

Madame Speaker: Members.

[1425]

Hon. M. de Jong: If members are interested in the important distinction and dimension to this that did not exist previously under the team, this is about more than investigating whether someone is conducting an illegal card game somewhere off premises.

This is a team that will work with 22 dedicated police officers and four gaming policy enforcement branch people and will root out organized criminal activity in our casinos and root out those who seek to launder money through our lawful gaming premises, the casinos of British Columbia, so that British Columbians who decide to take advantage and avail themselves of this legal, lawful form of entertainment can know that the people they’re sitting at the tables with are not criminals and are not laundering money through British Columbia casinos.

[End of question period.]

Points of Privilege
(Reservation of Right)

Hon. B. Bennett: I’d like to reserve my right to raise a point of privilege.
[ Page 12019 ]

Secondly, when I put my glasses on, I realized I gave an incorrect number in the very last answer. I think it was my fifth answer. I said $4.1 billion, and it should have been $1.3 billion.

A. Weaver: I, too, would like to rise and raise my right of privilege with respect to comments made by the Minister of Energy and Mines earlier in question period.

Madame Speaker: So noted.

Orders of the Day

Hon. M. de Jong: In Committee A, Committee of Supply, the ongoing estimates of the Ministry of Energy and Mines, and in this chamber, it is continued committee stage debate on Bill 17.

[1430]

Committee of the Whole House

BILL 17 — LOCAL ELECTIONS CAMPAIGN
FINANCING (ELECTION EXPENSES)
AMENDMENT ACT, 2016

The House in Committee of the Whole (Section B) on Bill 17; R. Chouhan in the chair.

The committee met at 2:31 p.m.

On section 36 (continued).

S. Robinson: It’s good to be back here and continuing committee stage on Bill 17.

Section 36 says: “Subject to subsection (2), for the purposes of this Act, the population of an election area is to be taken from the most recent population estimates issued annually by the director under the Statistics Act (British Columbia).…” If the minister can just describe where, specifically, the population estimates will come from, that would be helpful.

Hon. P. Fassbender: We did canvass this in the last session, but I will. Rather than using census data, which is only done every five years, B.C. Stats does a review on an annual basis. They publish the results of that. Those are posted on the website. They are updated every year, and those are the stats that are used to determine population.

S. Robinson: I have another question that has to do with subsection (2). “The minister responsible may determine the population of an election area (a) if the population of an election area has not been established by a Census of Canada, or (b) in other prescribed special circumstances.” If the minister can perhaps give an example of what a special circumstance might look like.

Hon. P. Fassbender: As I clarified previously on this, an example would be a community that has wards, like Lake Country, where there isn’t the same data available as we might have for other communities. It allows the minister to make sure that that information can be verified. The other thing is a new community, where stats don’t exist at the time. Again, the minister can determine what methodology would be used to verify the numbers that would be used for the population.

S. Robinson: Can the minister explain what system he would use to verify the number of residents in a municipality like Jumbo?

[1435]

Hon. P. Fassbender: I appreciate that the member wants to get the reference to a community in. The member knows clearly there are no residents there, and the minister’s well aware of that, so that process has been used to determine the population.

In those cases where there is a new community, whether it’s research or surveys that are done, the minister, through this, because it is enabling, will have the ability to ensure that we do as robust a job as possible to determine the numbers.

Section 36 approved.

On section 37.

S. Robinson: In section 37(a), it strikes out “jurisdiction area,” some of the language. If the minister can explain why we need to strike out just that term “jurisdiction area” — why it’s no longer of any value.

Hon. P. Fassbender: One of the keys in reviewing this legislation was to make sure that the language in the amendments that are being made is in keeping with the Community Charter, on one hand. The other thing is that, taking out “jurisdiction area” and putting in “election area” — there are communities where there are two jurisdictions that are part of an election area. This just further clarifies what is being referred to in terms of the limits, and it is the election area that may comprise two or more jurisdictions.

S. Robinson: I just want to make sure I understand. When the minister uses the word “jurisdiction,” how was it used previously? If you’re going to eliminate it, what word are we using instead of “jurisdiction area”? I’m just trying to make sure that there are no gaps here.

Hon. P. Fassbender: Again, perhaps for a little more clarity for the member, this is to ensure that the expense
[ Page 12020 ]
limits that are set align with the complexity that we may have between two areas.

I’ll use an example. The school district of Surrey encompasses both the city of Surrey and White Rock, so in order to make it fair across the election area, the reason for doing this is changing the language to “election area,” rather than “jurisdiction.”

S. Robinson: I appreciate the explanation. I come from a similar situation with a school board, school district 43 — three cities and two villages — so I appreciate the language change and have a better understanding of that.

Now, in section (b), it repeals paragraph (d) and substitutes…. Talking about the authority to make regulations around third-party advertising rules to non-election assent voting advertising, can the minister explain what’s being substituted here and how that’s going to affect the legislation?

[1440]

Hon. P. Fassbender: The change here provides the ability to make regulations for third-party advertising in relation to non-election assent voting. It does not include expense limits, because expense limits do not apply to non-election voting.

S. Robinson: Just so that I can be clear. When we have non-assent voting, the sky is the limit. So an interest group in a community might want something to happen, and then we can have another group that might not want something to happen, and it goes to assent voting. They don’t have to track in the same way that other groups might. I just want to make sure I understand as I explain it to my constituents.

Hon. P. Fassbender: The principle behind this in non-election or non-candidate elections is the fact that parties have the freedom of expression to get their message out there. It really becomes an issue of how strongly any organization may feel about a particular issue and a desire to make sure that the public hears that. Because it is not tied to a candidate and it is an assent-voting process, then they have the ability to spend whatever they feel is appropriate to get that message out.

S. Robinson: I’m just thinking about this principle of fairness and a level playing field. We’ve certainly heard a fair bit about that in the House. I’m trying to wrap my head around examples where this could be skewed. There could be this sense of not having fairness.

For example, there might be some large corporate agenda — I don’t want it to sound as sinister as that sounds — some corporate push to do something. Let’s say it’s cell towers, because that’s certainly been an issue in my community. I suspect it’s been an issue in the minister’s community. There might be a handful of neighbours that are very concerned about having a cell tower constructed near a school. This is exactly an issue.

If a community decides to take it to assent voting just to get a feel for what the community wants…. At this point, we know that corporate dollars can seem like perhaps not an endless pit…. But there are certainly some substantial corporate dollars that could be put into encouraging the community to vote one way, and this handful of people might have a much harder time getting word out.

If I understand correctly, then neither of these groups is required to follow any expense limit whatsoever. Is that what this piece of legislation says?

[1445]

Hon. P. Fassbender: The whole purpose of these expense limits is to, really, deal with elections of people who choose to want to represent communities and make the ultimate decisions, perhaps in zoning and all of the things that affect the community. When it comes to a particular issue, clearly we are not including that in this legislation. It does come down to, I think, the opportunity for people to gather together or for organizations to put their case out there, and we’re not suggesting limits. That does not mean that they do not have to report what they have invested in getting that message out.

We feel comfortable that the changes we’re proposing in this legislation deal with candidates and third-party organizations as it relates to those elections for people who choose to want to represent a community.

S. Robinson: It’s a little unfortunate, given the opportunity here to level the playing field. When the special committee for local elections financing was tasked with studying the issue, key principles that we were to develop included access and fairness. The principle of fairness was certainly the most common principle that guided the committee’s work and that the committee heard from everybody. I don’t think that there was any presenter that didn’t speak about the principle of fairness.

Here we have some change to the legislation, so there was an opportunity to actually create it here. Was there any particular reason why assent voting wasn’t included? I don’t imagine it would’ve been that difficult to use some of the formulas that we’re going to be talking about in section 38 — to include that in assent voting. The idea is that based on fairness and access, anyone can organize a campaign, not just for people but for ideas and for values and that that was the value of people using their voice.

Here we have a piece of legislation that doesn’t really make sure that fairness is included. I’m just wondering if the minister has any last thoughts about how fairness isn’t captured in this piece of legislation.

Hon. P. Fassbender: Being very familiar with the process that led to the changes that are before the House,
[ Page 12021 ]
it was absolutely…. The task force recommendations dealt with election of candidates. The special committee made no recommendations on assent voting. Our focus is clearly delivering fairness and equity when it comes to the election of candidates, and that is the only purpose of this legislation.

Section 37 approved.

On section 38.

S. Robinson: I understand that these are brand-new sections, so I would like to go through them fairly closely. Can the minister just describe this section 38, particularly the first part, 100.1? What, specifically, is happening here with this piece of legislation?

[1450]

Hon. P. Fassbender: The purpose of this section within the legislation is to, by regulation, set the third-party expense limits, as we have been talking about in a lot of the discussion so far.

S. Robinson: Can the minister explain why the decision was made to set it in regulation and not in legislation?

Hon. P. Fassbender: As we have canvassed earlier, the purpose of this is to give the flexibility that…. Indeed, if in future elections — the next one being in 2018 at the municipal level — there is learning that comes out of that and feedback that we might get from UBCM and other people from the next election cycle that would suggest that changes should be made as a result of experience, having it in regulation and having that flexibility allows us to do that.

S. Robinson: In 100.1(1)(b) it says: “…for the purposes of section 41.7” — which is the attribution of value of directed advertising — “respecting the basis on which third party advertising must be attributed, including prescribing factors or principles to be considered when attributing third party advertising.”

Can the minister tell us where these factors or principles will come from?

Hon. P. Fassbender: As the member knows, having been a part of the special committee that was struck on this, the principles behind this, as relates to third-party advertising, are to ensure that fairness, transparency, neutrality and accountability are at the foundation of this. It is important through this that all of those are attributed to meet the principles that I’ve just mentioned.

Those are the basic principles. The regulations and all of the other elements that come are based on the input that we’ve had from the stakeholders and from the committee.

S. Robinson: I’m pleased to hear that the minister will be using those principles that the committee worked so hard to identify and pull together into some coherent fashion. But I’m sure he can appreciate that it’s not listed here anywhere in this legislation. So it’s really important to understand, I think, that when you say principles, there’s some understanding about what principles, because it’s meaningless unless there’s some context for that. So I’m pleased to hear that those will be used.

Given that the decisions will be made by order-in-council, it’s really hard to know what sort of…. We don’t get to see what the process was like and if these principles were followed. I’ll be certain to watch and see how this plays out.

[1455]

The other question I have is for 100.2 — if the minister can describe what this section of this legislation does and changes in local elections legislation.

Hon. P. Fassbender: I believe the member was referring to 100.2 It is the same answer in terms of the answer I gave as we talked about expense limits for candidates. Those same criteria and the same process are being applied here in this section.

S. Robinson: Well, my understanding is that the earlier one was third-party advertising limits. And this one — the way I read it — is expense limits for candidates? Okay, thank you.

I have a question about (b) in this section. It says: “respecting the expense limit for a candidate referred to in section 4 (2) [candidate running in multiple elections].” Can the minister explain how this will work, what the expense limit for a candidate referred to in section 4(2)…? This is about a candidate running in multiple elections. What would the math look like?

Hon. P. Fassbender: I know that the member is aware…. We’ve seen it, not necessarily just in our jurisdictions but in other parts. What we recognize clearly is that there are instances where candidates may want to run for separate offices in two jurisdictions. There may be candidates who want to run for two offices within the same jurisdiction. The flexibility that this allows for the Lieutenant-Governor-in-Council to look at practices and to make regulations as a result of experience…. The key to that is the flexibility to deal with learning as we move along.

S. Robinson: I just want to make sure I understand this. This is about creating an opening for the Lieutenant-Governor-in-Council to make rules around how to manage the situation. We certainly did hear how it will further complicate with an expense limit. It sort of becomes more complicated when people are running in two different jurisdictions or for two different offices in the same jurisdiction.
[ Page 12022 ]

Right now, it looks like there’s no legislation that says that you can’t do that. So we’re leaving it open in legislation. At some future point down the road, there may be some rules that will come out. But we have no idea, at this point, what they’re going to look like.

[1500]

Hon. P. Fassbender: Clearly, this does not deal with the issue of whether people could or could not make the decision to run in multiple jurisdictions or for different offices. This strictly deals with the expense limits as a result of that decision. The flexibility that this provides is that once we have a learning out of that, we’ll be able to determine whether or not some of the regulations should be either brought into place or changed.

V. Huntington: With regard to section 38, 100.1, and the manner in which 100.2 discusses form and manner of obligations with regard to the electoral organization and candidate, in 100.1, where you’re establishing limits for third-party advertisers, where is there the understanding in this act about the way in which third-party advertisers are to report on their limits? There’s nothing here that indicates any obligation to report, and I wonder if the minister could discuss that.

Hon. P. Fassbender: I’m sure the member knows, but those provisions already exist in LECFA, which was passed in 2013. This simply makes it very clear that they must report under the provisions that are already in LECFA.

V. Huntington: I wonder if the minister could point me to where it assures they must report. Is he speaking to 100.1?

Hon. P. Fassbender: Staff has informed me it’s in part 3 of LECFA, in section 51.

S. Robinson: I’m reading 100.2(c). It says: “prescribing a form for a campaign financing arrangement for candidates and elector organizations.” When I read it, it’s like prescribing a form. Is that like a form as a written form or…? I’m just trying to make sure from a language perspective. I think I know what it’s trying to get at, but perhaps the minister can explain what that is. It doesn’t read quite the way that I thought it should, so I’m trying to figure out what that means.

Hon. P. Fassbender: When a candidate, should the act pass, decides to run under an electoral organization, there will be a specific form that will be developed, and that will ensure consistency throughout all of the local elections.

V. Huntington: Given that section 100.1 is referring so specifically to third-party advertisers, why is there no specific obligation, as there is in 100.2(c)? Why was there no specific obligation placed on the third-party advertisers prescribing a form for a campaign? Is there an obligation under the act the minister commented on?

[1505]

Hon. P. Fassbender: Third-party advertisers are not associated with an individual candidate, so that is why it is carried forward in the act in this way.

V. Huntington: Perhaps the minister, for my edification…. I suppose I should know this. Could he explain to me how third-party advertisers are regulated in terms of advising that they are going to be a third-party advertiser, whom they’re advertising on behalf of, what electoral organization they intend to support and how the percentage…?

Apparently, if I’m understanding this right, “establishing an amount based on a prescribed percentage of the expense limit for a prescribed class of candidates,” if you don’t know what your candidates are or what the expense limits are…. No, that’s the wrong way of putting it.

How do you organize the third-party advertisers? How do they become responsible to the process and to the system? Whether it’s an electoral organization or a candidate, who are they supporting, and how is it regulated?

Hon. P. Fassbender: Again, I would direct the member to part 3 of LECFA. This simply sets the expense limits, but the other issues that were raised are contained and clearly outlined in LECFA under part 3.

S. Robinson: I have a couple of questions on (e) and (f) of this section.

If the minister can just describe what these two pieces will do in terms of the election expense limits legislation.

Hon. P. Fassbender: The purpose of this is to respect the principle of neutrality, and it also will help to ensure that how the expense limits for a candidate are shared within the EO is respected in this as well.

S. Robinson: What caught my attention in these two pieces was this idea of termination of campaign finance arrangement and terminating an endorsed relationship.

Does that currently exist in the legislation — the terminating of the relationship?

[1510]

Hon. P. Fassbender: Campaign financing arrangements are new in this legislation. Therefore, this allows for those regulations to be set as a result of that.

I should say that this was done as a result of the input in terms of ensuring that the transparency is there as well.

S. Robinson: I’m just trying to sort out the requirements now of elector organizations. They’re going to be
[ Page 12023 ]
reading this legislation and trying to figure out what they need to do in anticipation of the regulations. If I understand correctly, there’s going to be some more paperwork for them to fill out. I’m assuming it’ll come through Elections B.C.

The way I’m reading it is that they’re going to have to include information about the length of the relationship when the formal relationship will end, at some point, because it says here: “…prescribing the form and manner of the termination of the campaign financing arrangement and the information that must be included in the termination, establishing the process for termination, including the notice requirements, and respecting the restrictions on or obligations of a candidate and an elector organization following the termination.”

So elector organizations can expect some paperwork that provides a parameter around the relationship — a beginning of a relationship and an end of a relationship — and they should be prepared to receive some information about that. As I try to imagine what that might look like…. Is that just for the campaign, so that, essentially, what you can expect is that the relationship will be terminated on election day? Or is it for the entire four years that they’re elected that they are in relationship with the elector organization?

You can continue to spend money into the next election — you have to report it — but not get captured under the expense limit. I’m thinking of Vision, for example, having a fundraiser three years before their election. They might be spending some money. They’re still in relationship with their party, with their elector organization. But they’re not formally in a campaign period.

I’m just trying to figure out what the minister sort of imagined this might look like.

[1515]

Hon. P. Fassbender: This does not define the length of a relationship. A relationship, as the member has said, can be ongoing. But there are instances, quite honestly…. We saw it in the recent federal election where candidates were declared, began campaigns, and then, for whatever reason, a decision was made to drop that candidate.

There is a reporting responsibility for the period of time that that candidate was a supported candidate, but the limits within this legislation clearly attach to the campaign period, not the relationship. Any expense limits that have to be reported are during that campaign period, which I know we have canvassed previously.

S. Robinson: So (e) specifically is about the campaign period and about the financial arrangements, but (f) is about the endorsement relationship ending. Those would happen, I would imagine, simultaneously. I’m just trying to make some sense of the distinction. One is clearly about the financial arrangements, and the other one is about an endorsement relationship ending. Perhaps the minister can explain why you had to have both of these in the legislation.

Hon. P. Fassbender: This does clearly indicate that if a relationship ends within a campaign period, yes, indeed, there will be a requirement to file certain papers that assure the transparency and the openness in reporting as a result of that termination. That is the intent of this.

S. Robinson: It looks like there are two sets that would need to be reported. One is an endorsement, and the other is a campaign finance arrangement. Essentially, there are two filings. Am I reading that correctly?

Hon. P. Fassbender: Indeed, this is clearly a requirement that Elections B.C. will have to determine the reasons for an endorsement or a candidate no longer being supported by an elector organization. There are many reasons why that might be. Some could be illness; some could be other reasons. Elections B.C. will clearly require forms to be filled out that give those reasons for either of those two circumstances.

S. Robinson: I can appreciate that you would want that, from a transparency perspective. But can the minister think of an example? I’m sitting here trying to think of what…. Why would you need both? I could picture that you would need….

If somebody is ill, the relationship, essentially, would be ended. They’re no longer eligible, or they can no longer run for office. So the elector organization is terminating the relationship and might pick up a different candidate or might not, and you’d want people to know. Or there may be a parting of ways. But here we have two different…. One is about a financial arrangement.

I’m trying to figure out: would you continue to have a financial arrangement but not have an endorsement? I think that is not likely. Would you continue to have an endorsement and a financial arrangement? I would think that that’s not likely. I’m just trying to understand why there are two separate clauses here rather than just one that says: “We’ve ended the relationship, and here’s the paperwork.”

[1520]

Hon. P. Fassbender: Perhaps I’ll start with the really simple answer that might help. One is about the relationship between a candidate and an elector organization. The other one is about the money. The reason you need both is that the reasons for the endorsement and the relationship with the EO and the candidate may be terminated for a variety of reasons. A candidate may choose, at some point, that any of the dollars raised would be given 100 percent, and the expense limits, to the EO. So each one of them may have unique elements to it.

All this allows is to make sure there is the openness and transparency on both the endorsement, and the reason it
[ Page 12024 ]
might end, and on the dollars and how they’re being applied or have been applied.

Section 38 approved.

On section 39.

S. Robinson: I do have a couple of questions about some of these definitions. I’d like to draw the minister’s attention to the “final campaign financing arrangement.” I don’t recall seeing this anywhere in the legislation. I’ve seen “campaign financing arrangement” but not “final campaign financing arrangement.” Perhaps the minister or his staff can direct us to where that comes up in the legislation.

Hon. P. Fassbender: Because we need to cross-reference this with the legislation, if I can suggest that as soon as I get the answer from legislative counsel, we come back to it.

S. Robinson: I’m happy to come back to it. I’ve just been going through the legislation. I can’t see anything that says “final campaign financing arrangement.” I want to make sure I understand the context.

[1525]

I do have one other comment on this section. That’s (l), “shared third party advertising.” It says here in the definition it “means third party advertising sponsored jointly by 2 or more third party sponsors, such that a portion of the total value of the third party advertising attributed to each third party advertising sponsor under section 33…is third party advertising of each of the third party sponsors participating in the third party advertising.”

Is there any way that the minister can provide some clarity about what this particular definition means?

Hon. P. Fassbender: Perhaps an example is the best way. If the Victoria cycling coalition and the Saanich cycling coalition decide to run an ad to say, “We urge you to support those candidates that support cycling in our communities,” they would have to share the cost of that ad under their expense limits.

S. Robinson: That’s helpful. There are certainly lots of “third party” comments in the legalese, so sometimes it’s hard to make sense of which third parties we’re talking about.

Under this definition, it doesn’t speak to the example that the minister used last week, which is…. If one party has larger font than the other, does the legislation ensure that it’s balanced so that the negotiation about how it’s shared is appropriately allocated? Does that also exist in the legislation? I do recall the minister describing that for elector organizations, they have to be apportioned appropriately. Is it the same for a third party as well?

Hon. P. Fassbender: The whole intent is that it is shared fairly and equitably between those advertisers, and it is exactly the same as we talked about with candidates.

In answer to the question that we had set aside, it is in 63.4(b) and 68.25(b).

Section 39 approved.

On section 40.

S. Robinson: In 40, it talks about transition. I just want to make sure I understand what this is about and that the example I have in mind is where this applies. If there’s a by-election between now and the 2018 general election, should this legislation pass, the old legislation will continue, but this won’t actually be enacted or the expectation for expense limits won’t actually be used until the 2018 local elections.

[1530]

Hon. P. Fassbender: That is, indeed, the case. As the member knows, our commitment is to ensure that those that are interested in local governments and UBCM clearly understand in the education that we need to do prior to the next general municipal election.

Sections 40 to 49 inclusive approved.

S. Robinson: Section 49 is about the Vancouver Charter. I actually have an amendment that is on the order paper. I am proposing the following:

[SECTION 49.1, by adding the underlined text as shown:

49.1 The following Division is added to Part 1:

Division 8.1 — Power to Make Contribution Limits

Campaign Finance

65.1 (1) Council is permitted to enact a bylaw or bylaws in order to

(a) establish maximum limits on campaign contributions to candidates or elector organizations;

(b) establish a limit or a ban on a contributor class; and

(c) establish fines or penalties, including disqualification, for violation of a bylaw enacted under this section.

(2) Enactments and amendments of bylaws under this section are prohibited within a campaign period.

(3) For the purpose of this section, definitions are as established in the Local Elections Campaign Financing Act.]

On the amendment.

S. Robinson: This comes from the fact that we can all agree in this House that spending in the Vancouver elections has become ridiculous. The member for Vancouver-Fraserview has certainly spoken out against it, as well, when she was on council. We’ve certainly heard from people throughout the city of Vancouver and from outside Vancouver who’ve expressed some serious concern about the kind of spending that goes on.

I’m proposing: at least, at a minimum, let’s give city of Vancouver the power to do what they feel that they need to do. They have elector organizations that are repre-
[ Page 12025 ]
sented. There is the Green Party. There are people from NPA, as well as Vision. All are very, very interested in having the authority to at least make their own campaign financing and election decisions.

What I’m proposing is that they be given the power to make contribution limits. While we have an expense limit here before us, people certainly recognize that contribution limits weren’t considered at all and that those ought to be considered for the city of Vancouver. When someone makes a $946,000 contribution to one party, we recognize that the principles that the minister and I have been talking about are not being adhered to in this case. It’s not equitable, it’s not fair, and it means that people don’t have the same kind of access in the principles of democracy that we both want to uphold.

In this case, with this amendment, we would provide to the city of Vancouver, under their own charter, the power to make contributions. In this case, council would be permitted to enact a bylaw or bylaws in order to establish maximum limits on campaign contributions to candidates or elector organizations. That means they can decide, as their own organization, as their own body, to say: “We’re only going to accept this kind of limit because we think it’s important that everyone have equal access.” And part of equal access is a contribution limit.

This would also establish a limit or ban on a contributor class. There has certainly been lots of conversation about the imbalance that comes to democracy when you have very powerful and wealthy corporations and unions that can contribute large amounts of money to election campaigns.

Certainly, we’ve seen it with local government, where people are very, very concerned, where developers have a vested interest in the outcome of who’s on council. It makes a significant difference in their ability to build their projects, and they have a vested interest in making sure there’s a particular outcome. If we were to ban those contributions, then we wouldn’t have some of the skewedness. We wouldn’t have some of these concerns. Democracy, I think, would be richer for it and better for it.

The other thing that this amendment would do is it would establish fines and penalties, including disqualifying those for violating this bylaw. I think it would just provide some fairness to a system where there’s a perceived lack of fairness. It would provide some access to a system where there’s a perceived lack of access.

[1535]

Some would even argue that if you’re just a regular person in Vancouver and you’re not connected to those elector organizations that have the ability to generate huge revenue, your voice gets drowned out. While we’re bringing in expense limits, others would argue that because the limits are so high, you don’t have the capacity to raise the funds. If we can find a way to limit who contributes and the amount that any individual can contribute, then that would make for better democracy.

It also happens, which we’ve certainly heard…. People keep saying it’s a Vancouver issue. While this is a proposal for Vancouver, because that’s at a minimum, I don’t think anyone should be deluded that it only happens in Vancouver. It happens everywhere.

There are certainly some concerns in other local governments, in other jurisdictions. They are very, very concerned about the lack of ability to make sure that there’s a level playing field. At the end of the day, that’s what everyone wants. They want a level playing field. They want everyone to have the opportunity to participate. When we have big money in local elections, it means that there isn’t a level playing field.

I have to say, having been in local government…. The first time, just trying to break in, it was very, very difficult. There were some folks who not only outspent me but outraised me — money — and it became very, very difficult to compete. Once I was elected, it became a little easier, because you know what? Developers were very, very eager to support those who were already on council. But those who they didn’t have a relationship with, they weren’t going to support them. How is that equal? How is that fair? How is that access?

I really do think that it’s good for democracy, particularly when we think about Vancouver and how outrageous it is and how outraged Vancouver residents are. I would encourage every member in this House who represents constituents in Vancouver…. I would hope that they would rise and speak to support this. There has been a very loud call from the residents of Vancouver to speak up against the influence of corporate and union donations in local government elections.

It’s a serious problem, and I really hope that the minister and members on the other side of the House will take this under very serious consideration.

I will take my seat because I know that there are others who would like to speak to this amendment.

V. Huntington: The member has said almost everything that I would say. I think the amendment is a very important one, if only because Vancouver operates distinctly. It operates under its own charter, and most importantly, Vancouver wants the ability to make these bylaws, to enact these bylaws.

Vancouver itself understands that there is a problem it is having in its elections, that there is a lack of balance for the different people running in the election. It wants to set limits so that people feel they have free and honourable access to the election process. At the moment, they do not. I see no reason why this government wouldn’t respect Vancouver city and its desire to have its charter amended, to give it the authority to democratize the electoral process in the city.

I strongly urge this government to consider the request from Vancouver and to consider the necessity to begin to set limits on contributions if we’re going to preserve a fair and equitable process.
[ Page 12026 ]

G. Heyman: I rise to support the amendment. It’s an important amendment. It’s no surprise that this government refuses to consider the request and the will of the city of Vancouver or, in fact, other municipalities across the province that wish to see some fairness and equity brought to local election campaigns in terms of limits on contributions, in terms of limits on contributions from particular contributor classes. But it should be no surprise.

[1540]

It was just last week, in fact, that this government said a resounding no to a motion brought forward by this side of the House to bring the same matters to bear in provincial elections. We moved that motion, and we have moved this amendment, through the member for Coquitlam-Maillardville, because we believe that things have simply gotten out of hand and are dangerously close to undercutting people’s faith in the democratic process.

We have seen in other jurisdictions and in the last municipal elections in Vancouver huge, huge amounts of money spent on a civic election and huge, single-person contributions to the election campaigns of individuals. When one side does that, the other side must match, or there is no hope to compete.

That’s not what citizens in Vancouver want. That is not what the council and government of Vancouver want. That’s not what UBCM thinks is appropriate. If, as is obviously the case, this government has no intention of addressing the issue with respect to provincial elections, despite the fact that there is growing support across the province…. One would understand why, with their massive fundraising efforts, they wouldn’t want to put any constraints on themselves.

But in the city of Vancouver, it’s been clear. Citizens want it. Government wants it. They’re supported by the Union of B.C. Municipalities. There should be limits on campaign contributions. There should be some reasonable limits on what gets spent in an election campaign. There should be the ability of the city of Vancouver to limit and eliminate contributions from unions and corporations, yet this government continues to say no. It’s not appropriate, and that’s why I support this amendment.

M. Elmore: I’m very pleased to rise and speak in favour of the amendment moved by the MLA for Coquitlam-Maillardville. This issue of the power to make contribution limits, particularly in the context of the Vancouver Charter…. Certainly, this is at the core of the need for reform in terms of managing political contributions, donations, and really restoring respect for democracy and ensuring that there is accountability and that citizens in Vancouver can be assured that the democratic practice and municipal elections are on a fair and level playing field.

During the last municipal elections, and certainly over the last two rounds that I’ve participated in and spoken to many candidates and citizens, this has been one of the very key features and big concerns that individuals have right across British Columbia, in particular in Vancouver, because it is characterized by really incredible amounts of donation amounts and really astounding amounts spent on the municipal campaign trail.

It’s highlighted by the nearly $1 million contribution of one individual in our last municipal election that is really in contrast and really a stark example of the need to bring in controls and to impose limits in terms of donation contributions for municipal campaigns.

We heard, also, from the Minister of Justice, when she was on city council, speaking in favour of bringing in limits for political contributions during municipal elections — so certainly during that time. With those recommendations coming forward from the Minister of Justice and MLA for Vancouver-Fraserview, certainly those are perspectives and opinions that the minister could also take into account and address the shortcomings of this bill in terms of ensuring that our electoral process, that our municipal elections, have the confidence of British Columbians.

[1545]

It is a stark example of what needs to happen and the direction we have to move to ensure that it is not just lip service around ensuring that there is accountability and that election spending and contribution limits are addressed but that we have to deliver on that principle. It sets us apart in terms of any other jurisdiction you look at. This amendment speaks to that fundamental concern and the importance of ensuring that we have the ability to really rein in this out-of-hand and incredible…. Really, there are no limits. The sky is the limit; $1 million is the limit in terms of a single contribution.

This is supported not only by citizens but also by the city government, the Vancouver council and mayor. It’s also supported by the Union of B.C. Municipalities. We really see that we have wide-ranging support. It’s the government who’s offside on this issue — offside not only with the Vancouver city council and the Union of B.C. Municipalities but offside with citizens and really on the wrong side of this issue.

I believe very strongly in this issue. It has been articulated again and again, repeatedly, from elected officials in Vancouver, political commentators, political scientists, individuals and citizens. It is a gaping hole, a gap and a shortfall in terms of this bill.

I’m speaking strongly in favour of this amendment, for it to pass to ensure that we restore a respect for democracy in our province in municipal elections and to allow for the reining in of these out-of-control contributions for political campaigns.

A. Weaver: I, too, want to rise to show unanimous support for this amendment on the opposition side of this House. I speak, as the member for Oak Bay–Gordon Head but also as the leader of a third political party in British Columbia, the B.C. Green Party, to say that we en-
[ Page 12027 ]
tirely back this amendment. This government has gone off the path of democracy. It is now supporting — and it already turned down an earlier amendment — essentially a free-for-all in terms of electoral spending, happening at the municipal level, as well as the provincial level.

Allowing Vancouver to actually set the bylaws is critical. That is the single biggest problem in terms of electoral expenses in the province of British Columbia — what happens in Vancouver. When you have a single individual that can essentially write a cheque and fund an entire campaign, how is that actually helping our democracy? Are we asking Mr. Trump to come up here and write a cheque and run a campaign? This is the kind of mentality that this is promoting: the Trump-style level of politics, where an individual with deep pockets can essentially dictate the will of the masses.

I cannot understand why this government continues to pretend that it’s representing the will of the people when it introduces legislation that is so egregious in terms of not representing the will of the people and then turns down or does not support attempts to try to bring this legislation towards the centre, to represent people instead of unions or corporations. Why is it that the government continues to resist this? I don’t understand it.

Again, I just want to emphasize that I wholly support this amendment. My colleagues in the B.C. Green Party, outside of this Legislature, support this amendment. We’ll work with the official opposition to ensure that this continues to be an issue that leads into the 2017 election campaign and to hold this government to account for their inability to represent people and for their corporate cronyism in representing their vested interests ahead of the interests of British Columbians.

[1550]

Hon. P. Fassbender: I appreciate the member bringing the amendment. It is another way to approach the same issue that’s been debated during committee stage on this bill and in other forums — question period, and so on.

The one thing that I know, coming from a local government background and having watched the task force that was put together…. I think that if there were any people who had a very in-depth look at this issue from a number of perspectives — and there are many — the task force is one of the groups that was able to do that.

I know that some people’s definition of democracy is that it can be thwarted by people who want to support candidates or elector organizations or the process through their commitment. Remember that democracy means that people need to know who’s supporting who, but I think it is inappropriate to suggest that democracy does not continue because of the financial support for candidates who are seeking office.

I think we have debated this. Clearly, we have not brought forward any limits in terms of contributions in this legislation, because we believe that the democracy goes both ways. People should have a right to support whomever they want to whatever extent they want.

What we have said is to ensure that during the campaign period — which is what this legislation speaks to for the most part — there are limits on what can be spent. What happens before that is democracy and is the right of people. Quite honestly, if someone wants to write a cheque to a particular candidate who they believe represents what they think is important for the community that they live in, that is important.

I also reflect that the task force was concerned that if they had different rules in the city of Vancouver and not the same rules in other communities — and I appreciate the members opposite would like to see contributions eliminated — it would create confusion.

We live in a very densified community. I suspect there are people who live in Burnaby that don’t know where the Burnaby-Vancouver border is. Quite honestly, I believe there are people, sometimes, who are not sure who they are voting for and what election they’re running in.

I think what’s really important here are the principles we’ve built into the election. That is transparency. It is accountability. It is ensuring there are limits during the campaign period that are appropriate for the communities, based on the criteria that we’ve clearly outlined.

I think it is very important to remember that democracy is something where even, as the member just said, in the United States, we might not like the process. We would like it less if people like Donald Trump weren’t allowed to run because someone didn’t like them or didn’t like the fact that they could finance their own campaign.

That would be a travesty to democracy. We may not like the individual or the candidate or their principles, but the principle of democracy has to apply across the board, and that includes those people who want to support candidates.

Through the expense limits in this legislation, we believe we respect that openness and transparency and accountability. Therefore, we do not support the amendment.

The Chair: It’s the amendment proposed by the member for Coquitlam-Maillardville.

Division has been called.

[1555-1600]

Amendment negatived on the following division:

[R. Lee in the chair.]

Sections 50 and 51 approved.

Title approved.

Hon. P. Fassbender: I move the committee rise and report the bill complete as amended.

Motion approved.

The committee rose at 4:05 p.m.

The House resumed; Madame Speaker in the chair.

Reporting of Bills

BILL 17 — LOCAL ELECTIONS CAMPAIGN
FINANCING (ELECTION EXPENSES)
AMENDMENT ACT, 2016

Bill 17, Local Elections Campaign Financing (Election Expenses) Amendment Act, 2016, reported complete with amendment.

Madame Speaker: When shall the bill be considered as reported?

Hon. M. Polak: With leave, now.

Leave granted.

Third Reading of Bills

BILL 17 — LOCAL ELECTIONS CAMPAIGN
FINANCING (ELECTION EXPENSES)
AMENDMENT ACT, 2016

Bill 17, Local Elections Campaign Financing (Election Expenses) Amendment Act, 2016, read a third time and passed.

Hon. T. Lake: I now call second reading of Bill 21, intituled the Environmental Management Amendment Act, 2016.

Second Reading of Bills

BILL 21 — ENVIRONMENTAL MANAGEMENT
AMENDMENT ACT, 2016

Hon. M. Polak: This bill repeals and replaces certain sections of the Environmental Management Act in order to introduce provisions that will enable a new spill preparedness, response and recovery regime in British Columbia. This new legislation is one step in ensuring that British Columbia has world-leading practices in place to deal with environmental emergencies.

[R. Lee in the chair.]

Preparedness helps to prevent spills. Planning for emergencies in advance saves time and costs, reduces the risk of poor decision-making due to uncertainty or lack of knowledge and can help to limit the impacts of a spill. New preparedness requirements will ensure that industries or businesses that may present a risk of a spill will have response strategies and procedures in place for their operations, including drills and exercises to test those strategies.

It is critical that in the event of a spill, the right people and equipment are in place to respond quickly and effectively. Currently, there is a patchwork of contingency planning requirements in place for different industries. The intent is to have a consistent standard for contingency plans across the province and across industry sectors.

The extent of the damage resulting from a spill depends on many factors, including the type of substance spilled and where it is spilled. The proposed amendments expand and build upon existing spill response provisions in the act that emphasize the polluter-pay principle. The new requirements are intended to ensure that the right actions are taken at the right time by a person who spills and that the person pays for those actions.

The actions include limiting the immediate damage caused by the spill, cleaning up the spill and monitoring and addressing the longer-term impacts through recovery actions. Currently, the act addresses remediation of con-
[ Page 12029 ]
tamination at a site. New recovery provisions ensure the legislation also addresses harm done to different species, their habitats and the overall ecology of the affected area.

While in the majority of cases, full environmental restoration at a site is possible, in some situations, complete environmental restoration at the site of a spill cannot be achieved, or the environmental benefits are small compared to the high cost to achieve them. For such situations, these amendments will allow mitigation and offsetting measures at other locations to ensure that the environmental damage caused is compensated for on a like-for-like basis with a beneficial conservation outcome.

[1610]

The new framework will retain the authority of the government to take direct action in response to a spill, if necessary, and to recover the costs of such actions. There are times when government may have to step in to respond, either at the spiller’s request or where the spiller is unknown or where additional actions are necessary to ensure an effective response to the spill.

However, a new feature of these amendments is that the government will have authority to recover costs, not only from a spiller but also from the owner of the spilled substance, if the owner is a different party than the person who had possession or control of the substance at the time it was spilled. These new provisions will help to reduce the chances of British Columbians having to pay for the costs of responding to spills.

A major element of this legislation is that it sets out a two-stage certification process to recognize qualified preparedness and response organizations that have the capability to respond to spills anywhere in British Columbia. Response organizations have a specific role to play in responding to spills. They can bring technical experts together who know how to respond to challenges posed by particular substances or circumstances.

A certified preparedness and response organization will have specialized equipment and staff on standby. Government will know the capability of the organization and will have certainty as to the availability, resources and competency in the event of a spill.

Potentially, a certified preparedness and response organization could offer many services. A certified organization could also play a significant role in preparedness before a spill ever happens — for example, as a source of expertise providing training and facilitating knowledge-sharing across business sectors so that the various sectors have access to information and the collective opportunity to learn from incidents. This could help different businesses to work towards improving their own preparedness measures.

The proposed amendments also provide for the possibility for future regulations that would require businesses presenting a risk of a spill to have an arrangement with a certified preparedness and response organization as part of their preparedness efforts.

Finally, these amendments provide greater transparency, accountability and participation. There will be greater access to information regarding spill preparedness response and recovery and increased opportunities for active collaboration and communication with local governments and First Nations so that local communities can provide input into preparedness and planning processes.

The amendments also provide for the opportunity to review the framework on a regular basis, to see how well the spill preparedness response and recovery regime is working and to identify improvements. The implementation of this comprehensive spill preparedness response and recovery regime will require a collective effort from industry partners, different levels of government, First Nations, regulators and others. This collective effort, together with the initiatives enabled by these new amendments, will help ensure that world-leading practices are in place for British Columbia.

I’m pleased to present this bill, and I look forward to the comments of my colleagues in second reading.

G. Heyman: I will note that I’m the designated speaker on this bill.

We know that nothing concerns British Columbians more, in many instances, in communities than the risk posed by spills of hazardous materials, whether it’s on land or at sea or whether it’s on land with a potential to contaminate waterways, affect fish, affect drinking water or, ultimately, to move into the oceans.

It’s clearly important that the government address these concerns by bringing in new measures, and this is clearly what the government is doing with Bill 21, the Environmental Management Amendment Act. The government, I believe, and the minister also are proposing this bill to address what they said was their insistence on a world-class and world-leading spill response regime in preparation for any transport of hazardous goods — in particular oil, whether in the form of bitumen or other forms, from Alberta.

While we may question what it actually takes to determine the difference between world-leading and absolutely essential actions, we will be supporting this bill, because it is a very significant move forward, and it’s important.

[1615]

It’s important to set up new mechanisms and new requirements for industry to address potential spills — to prepare for the spills, to ensure the polluter-pay principle is enshrined and to give British Columbians a sense that we’re moving ahead and moving forward on the measures that this bill is introduced to address.

We will, of course, differ on some aspects of the bill, whether it could be stronger in places, whether there should be less reliance in some areas on industry itself or more input from the public, stakeholders and governments on the preparedness and response; organizations’
[ Page 12030 ]
governance — whether, in fact, there should be more on-the-ground capacity of the government itself to enforce the provisions of the current act and the amended act. We will reserve the right to discuss those in committee and make suggestions, possibly move amendments to the bill. But in general, this is a bill that we will support, and I’m happy to speak to it.

As the minister noted, key new measures include provisions for detailed planning and spill response requirements. These will be, in large part, subject to regulations, which is appropriate in many instances. But as I move through my remarks in second reading, I will, in a couple of instances, raise concern that perhaps too much is being left to regulation and a bit more could be included in the act and in enabling provisions that would add to the transparency and add to the assurances that British Columbians would seek.

The requirement for companies to pay for maintaining an adequate state of preparedness at all times, not simply the costs after a spill happens, through newly created preparedness and response organizations is an important step towards the polluter-pay principle and ensuring that there actually is some state of preparedness and readiness. We welcome that, although there are, perhaps, instances where we think it could go further.

As I’ve said earlier, government says that the legislation enables the achievement of their third condition on the five conditions for heavy oil pipelines in B.C. They’ve said that once fully implemented, these proposed amendments will ensure a world-leading spill preparedness and response regime, satisfying one of the province’s five conditions for moving heavy oil.

As I’ve said, world-leading is in some ways a subjective assessment when you actually look at the requirements for the most appropriate and effective response regimes, particularly in the case of diluted bitumen. It behaves much differently than other forms of oil with which we’re familiar and which may well require some very, very specific spill response requirements for which there are not a lot of examples around the world. It may be possible to lead the world and still not be effective.

I accept…. Well, I understand the government’s use of what has become a catch phrase, world-class or world-leading. Whether I think it’s the most appropriate one to use in this regard or not is perhaps irrelevant to the government’s framing of their own bill and how it meets their own conditions. But I will say that not only do we believe that B.C.’s oil spill response should be world leading; we believe that whatever level it’s at, it needs to be effective. It needs to be adequate. It needs to be tailored for the form of the material that is being spilled or has been spilled.

Bitumen may require a very different…. Assuming, in fact, that there are any pipelines whatsoever that move through British Columbia as a result of the various environmental assessments as well as the revised environmental assessments that the federal government may put on, we believe that we need to assure British Columbians that everything that can be done will be done.

[1620]

We also need to assure British Columbians that, in the case of bitumen, everything that can be done is actually adequate.

The legislation enshrines the polluter-pay principle through the category of regulated persons. Individuals, or corporations, who are responsible for a spill will be required to clean it up. It’s worth noting that parties who present a spill risk above a certain threshold, to be defined in regulations, will be required to meet new spill preparedness requirements.

I understand that perhaps the most effective way to set these thresholds is through regulation. Certainly, that’s true if the thresholds need to be changed. We will pursue some more clarity on this threshold level in committee stage, because I think British Columbians want a bit more information than simply a statement that we will create the thresholds in regulation. I think it’s important for people to be able to see transparently at least what the government is thinking about in a number of instances, how they’re approaching the setting of threshold levels and what we can expect.

The legislation creates spill response and restoration requirements, including environmental restoration, as the minister has noted. It says that in the event that government itself must provide this work, the province will be able to pursue costs against the responsible person and the owner of the substance spilled. I think it’s probably incumbent on the government to provide a bit more clarity to this House and to British Columbians about what mechanisms will be able to be used to pursue costs and how, in fact, we can be assured that the responsible parties will actually have the capacity to cover the costs.

We have seen around the world at different times some very, very, very expensive cleanup operations for which money was not set aside in any form whatsoever to cover the costs of that. I think British Columbians would expect that we not be on the hook for cleanup costs. Clearly, the legislation doesn’t think so either, but it’s still important for us to be able to discuss what the mechanisms are, whether there will be deposits or bonds or any other mechanism that would allow government to have some level of certainty that in the case of extreme costs, those costs can be covered.

The minister has referred to preparedness and response organizations, or PROs. The PROs will be there to maintain a spill response capability throughout B.C. As I’ve said, we will have a number of questions about at what level it is appropriate for the response to be industry-led, as opposed to industry-governed. There is a difference.

Having industry be responsible for funding, for leading response, for creating plans that align with emergency preparedness and response is appropriate. But it may not
[ Page 12031 ]
be appropriate — in fact, I would argue it is not appropriate — to simply allow these organizations to be governed in some way that excludes oversight of the province of British Columbia, direct input from the province of British Columbia, from First Nations, from stakeholders, from municipalities. That is a significant difference.

Governance is going to be key in the faith that the people of B.C. have in these organizations, and I look forward to asking the minister some more questions specifically in that area.

New offences and penalties will be created. They will range, I believe, from $300,000 to $400,000 in fines depending on the offence and, potentially, could include a jail term for up to six months, although it is expected that the majority of penalties under the regime will be administrative in nature.

[1625]

I will look forward to asking questions of the minister to provide some more narrative around how decisions might be made or how the parameters of the discussion around application of penalties, whether they be incarceration or financial, were determined and also how this particular range of administrative penalty quantum was determined, whether it’s in fact likely to be adequate in all cases, notwithstanding the fact this is separate and apart from the costs of cleanup that will be borne by responsible persons.

These are the kinds of questions British Columbians will want to know because, in fact, we don’t just want to know that the costs of cleanup will be attributed to the responsible persons. Obviously, people would prefer there are no spills whatsoever. I’m sure the minister and the government would share that view. Being prepared is different from ensuring that people have great disincentives to cutting corners or engaging in risky behaviour in transportation of hazardous materials that could potentially be spilled.

In the realm of transparency, participation and accountability, ministerial authority will be given to create advisory committees to help the minister obtain advice from experts, local government representatives and First Nations. That’s a good step.

Having some more detail around the nature of these advisory committees would be exceptionally useful, as would…. The bill requires that the minister submit reports on the effectiveness of the spill response regime to the Legislature. Some more details around that, as well as the kind of frequency the minister is considering in this bill, as opposed to the statement that it’ll be defined in regulation, would, in fact, be useful.

The provision to ensure development of area response plans, or ARPs, and geographic response plans, or GRAs, is good. We will have more questions around exactly how that is going to be implemented or at least what the options being considered by the government and the minister are.

Let me speak to some issues that I think are some vulnerabilities in this bill, which, of course, we will pursue further in committee stage. Hopefully, the minister can provide answers. Perhaps the minister may consider some improvements to this bill, based on not just what we say on this side of the House but on commentary that has been made by interested parties who have been reviewing this bill for some period of time.

Let me start with the issue of professional reliance. The key question here is: whose interest is being protected? Is it the industry’s interest, or is it the public interest? I say that because we will see the creation of the PROs, or preparedness and response organizations. Industry must develop detailed spill response plans, but it is actually the PROs that will be responsible for spill response on the ground.

Now, I understand that that is a way of ensuring that polluters or potential polluters pay. It’s another way of saying that this is the cost of doing business when you’re transporting, producing or handling hazardous substances, so we want to ensure that you fund the response organizations. But this legislation actually means that the PROs will be industry-led, which means that both spill preparedness and spill response appear to be placed entirely under the watch and control of industry.

The legislation does not require that the governing body of the PRO will include any representation from local governments, First Nations, citizen groups or other expert stakeholders, and it does not require that decision-making structures will be established so the industry entities do not hold a controlling position on the governance bodies.

[1630]

That is, in my view, a fundamental flaw in the legislation. It’s not a significant one to move us to opposition, but it will be significant enough to see me and my colleagues make suggestions to the minister to consider amendments that would actually tighten up this aspect. There is, I think, considerable room for involvement of interested parties, knowledgable individuals, government itself and local governments in controlling and governing positions on the boards of the PROs.

One environmental organization has communicated and said that placing so much control of both planning and response in the hands of industry — and, specifically, the industry-funded PRO billed as a provincewide version of WCMRC — could foil efforts to build public trust from the outset.

While they agree that it’s true industry should fund both planning and response as part of implementing the polluter-pay principle and while it may make sense for industry to deliver the operational aspects of a spill response: “We have serious reservations about the PRO having lead responsibility for planning and ensuring readiness. Government oversight and certification may not be sufficient to ensure that the public interest comes
[ Page 12032 ]
first, particularly if the PRO ends up being led and operated by industry.”

Now, we are in this position because the capacity of the Ministry of Environment on the ground has been significantly reduced and compromised over the last decade and a half. I understand that, and this bill does nothing to change that. That is not necessarily the best way to protect the public interest in this instance.

If we look at neighboring jurisdictions in the U.S., funding is provided by industry, but states themselves take on the spill prevention and preparedness work. For example, they’ll conduct geographic response planning exercises and drills. In fact, the ministry itself, in its first intentions paper, published in 2012, similarly envisioned more of a leading role for the province than we see in this bill.

It would be useful information for the minister to provide a rationale as to what changed between 2012 and today so we can assess if the change is warranted, if it’s a productive change or if, in fact, it’s a change to simply reflect the unwillingness of the government to put more resources into its own ability to lead planning and response exercises, as opposed to allowing industry to both fund and provide the response capacity as well as be responsible for determining exactly what that should be — which, considering the fact that they’re going to be paying for it, has at least the appearance of a conflict, if not the reality of the conflict.

There are a number of ways to address this. One of those is for government, local governments, First Nations and others to have a governance role; ensure that they either engage directly in the planning of the various response mechanisms as well as the criteria; or to be in a position to review, with technical expertise, plans developed by industry and then say “yes,” “no” or “amend.”

It’s clear that that’s not in this bill, even though the intentions paper in 2012 included providing training for local government, first responders, more of a leading role for the province, collecting baseline information and even maintaining some provincial spill response equipment.

The other area that I believe is a significant vulnerability in this bill is that there are a number of important details that simply are unknown. They won’t be known until they come into effect through regulation.

[1635]

It’s a bit of a leap of faith to assume that important details that need to be known, both for public assurance and for us as legislators to fully understand what we’re voting for…. I’ll reiterate, in this case, that we will vote for this unless some of the response in committee stage leads us to believe that we’ve totally misunderstood what is in this bill. It is important for us to not have to take as a leap of faith that important factors will be addressed adequately at a later date.

This act says that many important features will not be developed until 2017. The minister has said government will consult with industry and other groups before developing the regulations for early 2017, but these features are paramount. They’re important for us to know and, frankly, if they were enshrined in legislation, as we believe they should be, they would ensure effectiveness.

A world-class spill response plan should not be created through simply a stroke of a pen, but it should be enshrined in law. When you create by regulation, you can also amend by regulation. We believe that they should be enshrined in law.

I don’t disagree with the minister that consultation is important, but consultation could have taken place before the introduction of the bill. The government first started talking about the bill four years ago, as I’ve said.

Let me just talk about some of the features that are being left to regulation that we believe are significant and that we should have more information about as we debate this bill.

The qualifications that a preparedness and response organization must have. The requirements that a PRO must satisfy its terms and conditions. Whether the company or PRO spill response plan must be made public or whether they must address a worst-case spill. What types and volumes of substances to be transported this law will apply to. Who decides when a spill is “cleaned up” or how much is “too much” compensation for spillers to pay.

Risk assessment requirements and methodologies. Training, drill and exercise standards and frequency. Notification timelines and response times. Response and cleanup techniques. Monitoring and long-term mitigation and recovery plans. Geographic response plans. Areas where the plans are required. What the plan has to cover and who will have input into developing the plan.

Finally, area response plans. What are the requirements for response strategies, equipment and resources, and who will have input into developing those?

To reiterate, we understand on this side of the House that you can’t define everything in legislation, and regulation has a role. But there is, with this bill, as with many government bills that have been brought forward, what we perceive to be an overreliance on passing a basic framework. And developing the important detail….

In this case, the important detail is what will reassure British Columbians that this bill actually has the teeth and potential effectiveness in addressing spills that we believe it has to have. It’s important that more detail than we currently see be before us. Unfortunately, it’s not in the bill.

The third vulnerability in this bill, I believe, is the lack of capacity of the ministry for monitoring and enforcement. There’s a lack of staff. There’s a lack of data. There’s a lack of capacity and ability to respond effectively.

This is now systemic within the ministry. It’s the result of years and years of staff cuts and capacity cuts. We’re left now in this situation where, in order to achieve goals of addressing and effectively both preventing and cleaning up spills, we’re relying entirely on industry.

[1640]

I understand, and we understand, that this is an industry responsibility, that polluters must pay. But in order to assure British Columbians that this important principle of polluter-pay has meaning, it’s important that we, as government acting on behalf of the public interest in both resources and the environment and health and safety, actually have the capacity to determine if industry is doing enough, if the PRO is effectively being governed, if the plans are adequate, if they’re responding to change and if, in fact, they’re adequate to a variety of substances that could form the basis for the spill. So legislation is important, clearly.

As I said, I’m pleased to see this legislation, but without boots on the ground and the ability to properly monitor, enforce and respond, we question whether the bill can actually, truly be effective. We’re not the only ones who question that. Interested stakeholders have questioned it. Municipalities have questioned it. The public will question it.

I will offer an example. We uncovered some correspondence within the ministry in a 2014 freedom-of-information request that showed the province is currently unprepared to deal with a major environmental disaster. Now, I understand that part of the purpose of this bill is to address this in some measure and offer assurance to British Columbians. But let me just simply say that the emails that we looked at clearly showed discomfort, on the part of the director of B.C.’s environmental emergency program and director of the environmental emergencies and land remediation branch, in the province’s ability to monitor and respond to events such as oil spills, mine tailings breach and, in fact, its very ability and power to hold polluters responsible.

Let me offer a quote from Graham Knox, the director of B.C.’s environmental emergency program. “We could point to hundreds of spills on an annual basis where gaps occurred or improvements are needed.” This was in response to Jim Hofweber, the executive director of environmental emergencies and land remediation, who was requesting additional information on spill response.

The email went on to say: “Compiling such a report, however, would involve significant staff resources that we currently do not have.” So to give this bill life and to ensure that it’s effective, I think the government needs to address the fact that in its haste to reduce the size of the public service in order to support its reduction in taxes — most recently for people who didn’t even ask for a reduction in taxes, in the wealthiest 2 percent of British Columbians — they have cut the ability to respond. They have cut the ability to monitor and protect our environment, and they have cut, ultimately, the ability to give this act life and meaning.

The director of B.C.’s environmental emergency program went on to outline what he called a sampling of examples of existing gaps or deficiencies. The most troubling examples highlight the government’s apparent lack of enforcement power for a polluter-pay model. For instance, he cited an incident where CN Rail advised the ministry of “a small spill at a railyard in the Lower Mainland. Ministry staff subsequently discovered that there was actually a collision between locomotives, and substantially more fuel was released than reported and that the spilled materials were moving off site.”

In this instance, staff eventually uncovered the gap in information, but there are lots and lots of spills. There are, as the director said, hundreds of spills on an annual basis, and there simply are not the boots on the ground, the capacity of this government, to actually monitor and ensure effective enforcement.

One more example was the April 2011 Goldstream River disaster, where a Columbia Fuels tanker truck crashed off the Malahat highway on Vancouver Island and spilled its contents into the river. Mr. Knox said that that spill “exemplified the current lack of process or requirements of restoration of the environment after a spill.”

[1645]

He went on to say: “The ministry continues to work with Columbia Fuels and numerous stakeholders on a restoration plan. But without clear rules and guidelines, the process has continued on, and the responsible party could ultimately walk away if it so chose.”

This highlights two issues. It highlights the importance to have adequate resources in the ministry to monitor and assess spills, to determine that they’re accurately reported, to assist with actually ensuring that plans to respond are appropriate and that penalties, where appropriate, are administered. But it also highlights the importance to have more clarity before this House about the nature of what the requirements will be to hold responsible parties responsible and to ensure that restoration plans and cleanup plans are adequate — that they’re enough, not simply that they’re the best in the world. That’s a good thing to say, but if the current best in the world is inadequate, it’s still not good enough.

This is critically important for diluted bitumen, as I’ve already mentioned. We need to have a bit more detail about what this will look like and how the requirements will be put into place, because it’s clear that spills are on the rise in British Columbia. There were 3,786 reported dangerous goods spills in British Columbia in 2014. The total number of spills has risen since 2010, when there were only 2,615 confirmed spills.

In almost half of the incidents reported, a spill impacted water — the ocean, lakes or rivers. In a small number of cases, groundwater was impacted. Of course, that’s of critical concern to British Columbians. The majority of spills impacted land. In 438 cases, the environment was at risk. The environmental risk was either unknown or not listed.

Let me move towards the close of my remarks by talking a little bit more about what is missing in this legislation. We know what’s in the legislation. We’ve got the
[ Page 12034 ]
polluter-pay principle. We’ve got the establishment of preparedness and response organizations. We’ve got industry responsibility. But it’s worth some conversation about what could have been in here and what’s missing.

In Alaska, citizens advisory councils are enshrined in the U.S. Oil Pollution Act. They’re industry-funded, and they formally involve the public and stakeholders in the development, implementation and oversight of spill prevention and response measures.

This model has been proposed by many for B.C., with the aim of enabling citizens with local knowledge, armed with full disclosure concerning the industry’s activities, to strengthen the regime overall, both in substance, by tailoring measures to protect specific local resources, as well as public perception. In other words, lift the veil of secrecy which may exist over both plans and organizations that industry has, at this point, sole responsibility to both fund and lead.

That has to do with transparency. It has to do with governance. It has to do with the ability of the public to be assured that the public interest is represented by other than simply the industry that has a financial interest in the transportation of hazardous goods and materials and may be responsible for spills, whether they’re the producers, the people who contract to the handlers or the people themselves who are involved in the handling.

It’s not like this has never been done anywhere. It’s not even like the ministry didn’t consider that four years ago in its initial intention statement. There is room here, and I will question the minister more in committee stage about whether there is still room, to ensure that governance of the preparedness and response organizations will involve stakeholders and government itself.

[1650]

Government’s job is to protect the public interest. That’s why people elect us to come to this place. That’s why one party or the other is elected to be government. That’s why we have ministries — to ensure that as we develop resources or create industries in British Columbia, we simply don’t allow them to create risk to public health or the environment or ecosystems in order to make more profit.

That’s what the public expects from us, and if we don’t have some proper oversight of these organizations and the plans they create, it won’t, in many peoples’ minds, be good enough.

Training and coordination for local emergency response is important. It’s clear that local authorities and resources will be relied upon for emergency response in the event of a spill and that communities, particularly in rural areas, do not currently have the capacity to do so.

Local governments need training, equipment, as well as practice drills to develop their own internal plans — and they need support for that as well — in order to be prepared for the role that this legislation envisions they will play in spill response. Some more information on that will be useful, and we’ll ask some questions about that in committee stage.

With respect to restoration and remediation, in the United States, there’s a natural resources damage assessment model, which establishes a process for assessing and recovering oil spill damages, with people and plans in place for implementation prior to an oil spill so that all parties know what to expect.

That’s a good model. This model was initially proposed by the Ministry of Environment in the early stages of development, but it doesn’t appear in the proposed amendments. There’s no reason, in my view, that it shouldn’t. Perhaps it’s the intention of the minister to introduce it some other way, and we’ll ask questions about that, but it was proposed initially. It’s successfully implemented in the United States.

It’s not in the proposed amendments contained in this bill, but it is highlighted in the recent Nuka report as a world-leading example of a spill recovery initiative. If this is, in fact, going to be world-leading, then we would like to see a different model for assessing and recovering oil spill damages than we see in the amendments to date.

We also don’t have a dedicated provincial spill fund. In many cases, the province will need to lead spill prevention and planning. It will need to provide immediate funding for response activities. If there is a very significant spill, there’s not a lot of time to spend arguing about who’s going to respond.

I understand a big part of this bill is in place to have preparedness and response organizations in place that can do this, but there will be instances where the government itself will be called upon to lead — will need to lead.

In fact, a dedicated provincial spill fund to fund province-led spill prevention initiatives was suggested by the ministry in its 2012 intentions paper. It was highlighted by Nuka, and it was requested by numerous stakeholders who were consulted, but we don’t see it.

Finally, let me say that this diluted bitumen — which in many ways is the threat that led the government to set out five conditions, one of which was a world-leading spill response regime, which this bill purports to address — poses a very significant and untested threat.

We know it behaves differently than conventional oil and that, therefore, it requires different strategies, expertise and response capabilities. The National Academy of Sciences report that was commissioned by the U.S. Congress recommended that all levels of oil spill plans in the U.S. should be updated to address the unique challenges of diluted bitumen spills.

[1655]

Yet there is no mention of particular response strategies or updating of all response strategies contained in this bill with respect to diluted bitumen or other particular types of hazardous substances that, supposedly, this bill will entail.

The effectiveness and credibility of this bill, according to the Georgia Strait Alliance, “will depend on how
[ Page 12035 ]
it is implemented through specific regulations,” which, of course, we don’t see because they will be created at a later date. We have no guidance about what the government is considering in this regard. “The new framework doesn’t change the fact that there is no known effective technique for recovering spilled diluted bitumen.” That is, again, a comment from the Georgia Strait Alliance.

The Georgia Strait Alliance concludes this comment from their media statement by saying they strongly encourage the province “to facilitate full public consultation” on the proposed regulations, and notes that failure to do so “will undermine the ultimate credibility of the new rules and will mean the province isn’t meeting its commitment to a fair and transparent process.” Again, we will be questioning the minister about her ideas and views on the consultation process for regulation development when we get to committee stage.

This bill should require, and hopefully, the regulations will require — but we can’t tell, because we can’t see them — transparency. All levels of plans, whether it’s an area response plan, a geographic response plan or a contingency plan, should be publicly disclosed. That is the only way that the public of British Columbia can know whether, in fact, we are world-leading and, more importantly, whether we are effective, where independent experts can assess what’s disclosed. This may be the intention of the ministry, but it is not a requirement of this act.

The frequency with which the minister must report to the Legislature should be set out in the act — and, I would suggest, annually or more often would be appropriate. I’ve said already that the board of the preparedness and response organization must not simply be people representing and chosen by industry. They should include the provincial government, local governments and First Nations governments.

The third intentions paper put out by the ministry said that regulations will “not weigh into the…structure of a PRO”, and this is a big concern. We could be looking at a private company, owned by industry, leading spill planning and response in B.C. This makes it all the more important that the governance of these organizations be opened up beyond private interests to include levels of government, First Nations and stakeholders.

It’s important that we know or at least have some idea what the training and equipment standards will be for the PROs, that clear criteria and regulations for training and equipment standards be developed. We would hope that commitment will be made by the government.

We continue to be concerned on this side of the House, and stakeholders and commentators are also concerned, about the current lack of enforcement capacity of this government, which this bill will do nothing to change. I hope the minister can offer some response to members, as well as to interested organizations such as BCHAZMAT Management, who believe that we just don’t have the capacity on the ground to enforce or assess.

They use as an example Lemon Creek and a spill in the Victoria Gorge, where there were no penalties for polluters. They contrasted that with an Alberta example, where a dry cleaner was actually jailed for dumping toxins, but in B.C., currently, people spill with no penalty. The number of enforcement officers…. Even if this bill passes and penalties provided for in the bill become substantial, we simply don’t have enforcement officer capacity to give this life.

[1700]

Let me close by saying that we need to define effective spill response. We need to tailor effective spill response for the materials or substances being spilled. The genesis of this bill, unless I misunderstand, is the government’s insistence that it was protecting the public interest with five conditions before it would allow pipelines transporting diluted bitumen.

There are many people who believe there is no effective way to control a spill of diluted bitumen. For that reason, we will be asking some very direct and pointed questions of the minister in committee stage. World-leading is not the same as effective. What British Columbians want to know is not just that, or even whether, we’re the best in the world, just: do we have legislation, procedures and organizations in place that will effectively clean up spills? Not better than our neighbour, if our neighbour isn’t doing it well at all, but effectively to clean up a spill. And if a particular material can’t be effectively cleaned up, then we need to address that in other ways.

There’s an opportunity in this bill to raise the bar for the protection of B.C.’s environment and communities. The act currently states that a regulated person, a spiller, must demonstrate the capability to effectively respond to a spill, but without further definition or required timelines, this has less meaning than British Columbians would desire it to have.

Does it mean that the spiller is responding to their own plans and required timelines or that those plans and required timelines actually meet a different set of tests over which different levels of governments, First Nations and interested parties have some say, input and ability to review? That’s why we will seek to flesh out the government’s definitions and claims to effectiveness, at committee stage.

To sum up, we welcome this bill. It is an improvement; it’s not perfect. We look forward to further debate at committee stage. We look forward to suggesting amendments that can make this bill, once it becomes an act, even more effective. We look forward to perhaps getting some clarity from the minister around the process of giving this bill life through what appears, at least on first blush, to be an overreliance on regulation. But at least, hopefully, the minister can give us a clearer insight into the consultation process and what she considers the different bars and parameters for those regulations that will mean whether or not this bill will actually be effective.
[ Page 12036 ]

With that, hon. Speaker, I thank you and the members for the time I’ve taken, and I take my seat.

J. Thornthwaite: I am happy to stand and rise, along with our friends from the opposition — and in particular, the member for Vancouver-Fairview — in their support and my support for Bill 21, the Environmental Management Amendment Act, 2016.

Government has always maintained that we want economic growth in British Columbia while balancing environmental protection. A world-leading provincial spills regime is the perfect example of this commitment. Once fully implemented, these proposed amendments will ensure a world-leading spill preparedness and response regime satisfying one of the province’s five conditions for moving heavy oil — condition 3.

The proposed spill regime will ensure that effective preparedness response and recovery measures are in place for hazardous substance spills from any source and reflects over three years of engagement with industry, First Nations, local government and environmental groups. Through this legislation, and the detailed regulations to come, we’re working hard to ensure that British Columbia sets the bar in protecting human health and the environment.

[1705]

With regards to the current approach to spill preparedness responses and restoration, spill response is evolving in British Columbia. Our existing spill response program was considered leading edge when it was introduced in the late 1980s, but now it is simply out of date. It’s time to adopt new requirements to make B.C. world-leading and help keep us there for years to come.

The Ministry of Environment’s current requirements focus on reporting spills. The experience from smaller spills and near misses show that the province does not have, right now, the plans, capacity or funding to address a major spill. We are addressing this through these proposed amendments.

This act addresses remediation of contamination at a site. New recovery provisions ensure the legislation also addresses harm done to different species, their habitats and the overall ecology of the affected area. Government’s goal is to continue to support our environmental emergency response officers and other responders and regulators as changes are made to improve the system.

The reviews done by the ministry over the last few years, including a recent one by Nuka Research which is now posted on line, have helped identify areas where the B.C. spill preparedness and response regime could be strengthened and world-leading practices that have been successfully implemented in other jurisdictions, including some of our immediate neighbours to the south.

The proposed amendments expand and build upon existing spill response provisions in the act that emphasize the polluter-pay principle. This legislation will establish new requirements for spill preparedness, response and recovery; create new offences and penalties; enable the certification of a preparedness and response organization; and increase transparency, participation and accountability. Full implementation of these proposed amendments will establish British Columbia as a world-leading regime.

The legislation will come into effect via regulations, with the ability to bring different parts into effect at different times. Some aspects of a world-leading system may be implemented sooner, and we will be incrementally improving our spill response regime. For example, government could bring in some of the new authorities for the environmental emergency response officers in advance of certain regulations.

The west coast states have been identified as leading jurisdictions. Therefore, the British Columbia government looked at how these jurisdictions have responded and have taken the best elements of those to tailor to B.C. Leading practices include strong rules, coordinated planning, public input, and preparedness and response organizations. Not only is government catching up to other jurisdictions; we’re also adapting and improving upon what is already in place for the federal marine area.

We recognize that different jurisdictions lead in various aspects of spill preparedness and response. We intend to continue to learn from our partnerships, such as the Pacific states–B.C. Oil Spill Task Force, and apply established best practices here in British Columbia. While some elements of the provincial spill regime outlined in the proposed legislation will equally apply to spills into or affecting the marine environment, it is still primarily the federal government’s responsibility to ensure a world-leading marine regime is in place.

B.C. has been extremely proactive on condition 2, the world-leading marine spill preparedness and response, commissioning Nuka Research in 2013 to assess current marine spill preparedness and response capabilities for B.C.’s coast. Government also publicly released follow-up reports from Nuka identifying specific world-leading practices. These reports are foundational pieces for discussion between the province and the federal government and can help set the path towards meeting world-leading in marine spill preparedness and response. Being world-leading will be something we are continuously improving upon and always striving towards.

Each heavy-oil pipeline project must meet government’s five conditions. If a proponent fully implements the new requirements, they will satisfy three — i.e., world-leading land-based spill preparedness and responses. However, proponents will still have to demonstrate they can meet the other four requirements.

[1710]

The requirements for spill responses are based on engagements government has had with industry, First Nations, local governments and other stakeholders over
[ Page 12037 ]
the past two years. Two policy intention papers form much of the basis for discussion, along with spills symposiums for all stakeholders and an industry round table. Any spill that meets the reporting threshold will be subject to the spill response and recovery requirements, just as they are today.

Some new preparedness requirements, like a spill plan, will only apply to companies that use, store and transport larger quantities of hazardous materials than the current reporting threshold. The specific details regarding the substances and volume will be discussed with industry, First Nations and local government as part of the regulatory design phase planned for 2016-2017.

While the marine environment is primarily federal jurisdiction, like ships or spills, most marine spills, such as that in English Bay, have a very high probability of impacting areas of provincial interests, such as shorelines. Many of the proposed amendments would apply equally to spills into or affecting the marine environment. Examples include spill reporting, restoration and notification.

Government envisions setting standards with this legislation that will help close some gaps with respect to spill response in the marine environment. For example, if we propose standards for spill response times that are more stringent than Transport Canada’s, we may be able to require the spiller to take immediate action and activate the preparedness and response organization immediately in instances where spills enter the marine environment.

This legislation sets out a two-stage certification process to recognize qualified preparedness and response organizations that have the capability to respond to spills anywhere in British Columbia. The Minister of Environment has also had discussions with Western Canada Marine Response Corporation regarding the establishment of the PROs in place. Some level of integration between the PROs and Western Canada Marine Response Corporation could enable sharing of resources and reduce duplication and cost.

Mr. Speaker, this bill refers to land-based spills, but as we know, that can become a marine-based spill. On that note, yourself and myself went on a tour of the Western Canada Marine Response Corporation. I was very pleased to have you join us.

What this legislation will do is to set up a mechanism to bring a PRO into place, to place requirements on it and to require regulated persons to be a part of it.

Recall way back on February 3 of this year, Mr. Speaker. We went for a tour of the Western Canada Marine Response Corporation, which is a Transport Canada–certified organization that protects the coastal waters of British Columbia from oil spills. To date, they are the only certified spill response organization on Canada’s west coast.

I found that very interesting when we went on the tour. We discussed many things, toured their entire facility and found out how they work with international partners as well as other jurisdictions, like the province. What I found was very interesting, actually, to my constituents and also your constituents — i.e., North Vancouver and Burnaby — was their comments about the proposed pipeline projects that are in the media right now.

If either — and this is if — of the proposed northern gateway or Trans Mountain pipeline projects moves ahead, WCMRC’s capacity will increase substantially. Both projects have adopted a risk-based approach to response planning and have proposed significant improvements to spill response, capacity, planning and response times on the west coast.

The Trans Mountain expansion project would likely increase the total number of bases for Vancouver Island and the south coast from two to six, including two 24-hour bases. Northern gateway’s response equipment plan involves the creation of a multiple new floating response station in Douglas Channel. Regardless of whether the pipeline projects proceed — again, this is a requirement for British Columbia that they must meet all five conditions — the WCMRC will continue to grow as marine traffic expands along our coast, with or without the expansion projects going ahead.

[1715]

In summary, with regards to this bill, the regulations will provide consistent oversight and ensure there is always a robust response no matter what is spilled, where or by whom, providing both the government and the public with confidence in public safety and protection of the environment. For that reason, I will be supporting Bill 21, the Environmental Management Amendment Act.

G. Holman: I’m pleased to speak on Bill 21. As our Environment spokesperson indicated, we’re inclined to support the bill. We do think there are some important steps forward outlined in the legislation.

We still have some serious questions, in part because much of the intent of the bill will not be known — what’s actually happening on the ground — until we see the regulations. There’s always a balance to be struck between legislation and regulation, but there are a lot of unanswered questions that this legislation raises. We will get to some of those during committee stage, and depending on the outcome of the discussions during that stage, we may be proposing amendments to the legislation. At this point, we do feel that it’s a step forward.

Just to quickly summarize the intent of the bill. There will be provisions for detailed planning and spill response requirements, subject to regulations. As I’ve said before, that’s where the devil is in the details. There are a number of very key questions that will be addressed by regulation, and we can’t tell at this point whether this legislation — or, ultimately, those regulations — is going to address some of those issues.

Secondly, the legislation strengthens already existing polluter-pay provisions in legislation, strengthening, essentially, provisions that require companies to pay for
[ Page 12038 ]
maintaining an adequate state of preparedness at all times and also to pay for the consequences of those spills. A key question raised by the legislation…. It’s a good thing. The polluter-pay principle is a good thing. It’s a good thing that industry will be required to fund not only the cleanup of spills but the environmental impacts resulting from those spills, although not necessarily the economic impacts flowing from those spills. I’ll get to that later.

Industry funding is good. The question we have is whether industry-led is adequate. There is a real concern that to make this legislation work, government needs to have the capacity to oversee the provisions of the legislation, to oversee the regulations. If there’s a spill in the forest and nobody is there to actually monitor what’s going on and enforce what’s going on, then all of the polluter-pay legislation and fines and all of that are for naught. There’s a key question here about government’s capacity to oversee this legislation, to oversee the regulations.

There is much talk. Government is talking about this legislation fulfilling one of its key requirements for oil pipelines, particularly bitumen pipelines. For those projects to be approved, one of the five conditions government has said it will make these projects live up to is world-leading practices for land oil spill prevention and response and recovery systems to manage and mitigate the risks and costs of heavy oil pipelines. That remains to be seen — whether the regulations are effective at all.

[1720]

Essentially, what we’re doing here is, in many respects, privatizing the responsibility for oil spill recovery response and mitigation. We’re, essentially, privatizing it with this legislation. It’s not at all clear that that’s a world-leading practice. That’s our, I guess, qualification or concern about this legislation actually fulfilling one of the government’s five conditions — for supporting, for example, Kinder Morgan. It’s not at all clear that this is world-leading in any sense of that term.

It is a good thing….There are a number of provisions in the legislation that do seem to be a positive step forward. A consistent set of requirements among sectors to really make sure of and strengthen already existing provisions for polluter-pay — these are good things. Certification of entities that are to be responsible for spill response — these are all, we think, steps forward.

There certainly is a clear need for legislation and for stronger regulations. Since 2010, apparently, the number of spills in British Columbia of dangerous goods, oil, other hazardous materials has increased, from about 2,600, in 2010, to almost 3,800 incidents, in 2014. That’s a 45 percent increase in a matter of about six years, so there clearly is a need for this.

We’ve also seen some very disconcerting examples of serious spills in British Columbia, including, as our spokesperson for the environment mentioned, the very serious Columbia Fuels spill near Goldstream River, where much of that hazardous material flowed into the river and, in fact, impacted significantly, as I understand it, salmon runs.

There are a number of examples of serious spills occurring in British Columbia, and there is concern, not just by this side of the House but by the public, about how we’re actually addressing those. Are we actually getting at the root of the problem?

The remarks by the member opposite about the WCMRC, the entity that’s responsible for marine spills in British Columbia, and the statements that there are plans to improve that system, which is not under provincial jurisdiction, at least directly….

One year after that relatively minor oil spill in English Bay, it’s our understanding that local government is still expressing concern that, as far as they can see, there has been no strengthening of the system. There are no apparent improvements in the spill response a year after that occurred in English Bay. So the optimism that members opposite have about improvements in marine spill response, also, we look at with some skepticism.

In a nutshell, there are, I guess, three main concerns that we have about this legislation. First of all, we’re essentially privatizing responsibility here. There is continued concern on our side of the House about the so-called professional reliance model. There’s a real concern about whose interests really are being protected when you privatize responsibility for such an important function as this.

[1725]

There is a concern about the capacity of government even to monitor what’s going on, even to understand when a serious spill has happened. And there are concerns, when you privatize a function, about potential conflicts of interest. That’s one issue.

Another one is, of course, as I’ve mentioned before, and our Environment spokesperson before me, that many of the details around how this legislation is to function will come through regulation. Of course, we have no idea what those regulations involve. The lack of clarity about that poses a lot of questions about whether or not this is going to be an effective regime. Finally, again, the government’s capacity to oversee this system is absolutely crucial.

Those are the three main concerns we have. Just to kind of go back over them…. This is a model that is similar to the existing model exemplified by Western Canada Marine Response Corporation, which is a privately held corporation — in fact, held by the very companies that will be responsible for spills. So it’s very similar in that respect.

There are concerns there about the inability of government to oversee this privatized system. There is the potential for a patchwork of coverage throughout British Columbia. The legislation enables government to create more than one PRO, which is the acronym for these spill response entities. More than one can be created. That creates the possibility of a patchwork throughout British
[ Page 12039 ]
Columbia. It creates the possibility of, say, the loss of economies of scale.

If you’ve got a number of private entities, each of whom are purchasing equipment and that kind of thing, doing the training, if it was under the aegis of one agency, either government or private — although I think certainly my preference would be to have this function more controlled directly by government — there are economies of scale that could be achieved here. If we’re certifying more than one PRO, then you’ve got the possibility of overlaps or a patchwork, even of gaps in the system and the loss, potentially, of economies of scale in terms of purchase of equipment, training or other such capital investments that will be required.

We are aware that, for example, in the United States, in at least some U.S. jurisdictions, funding is certainly provided by industry. This is a good thing. This is as it should be. This is consistent with the polluter-pay principle, which we agree with government is absolutely an important principle to be applying in this case. In a number of U.S. jurisdictions, while funding is provided by industry, the states take on spill prevention and preparedness work themselves. They’re much more directly involved in planning.

As our spokesperson for the environment indicated, there doesn’t seem to be any requirement for local governments or governments of any level to be involved — First Nations, for example — to be board members on the boards of the PRO organizations. We do have here the possibility of a completely privately run entity, and that could create issues in terms of the effectiveness of this legislation.

We are aware that in its first intentions paper in 2012, the Ministry of Environment did appear to envision a more leading role for the province, for local governments in the system of spill response.

[1730]

An obvious question — and it’s our understanding that the consultation supported that kind of government involvement — is: what changed here? Why are we moving to an almost completely privatized system when the consultation and government’s own proposal seem to suggest a more prominent role for governments in the system?

The concern around regulations and the fact that the legislation is not at all clear about some very important issues…. The spokesperson went through them in a fair amount of detail. I don’t want to repeat too much, but essentially the effectiveness and the credibility of this legislation will rest on those regulations.

[R. Chouhan in the chair.]

There is a concern about whether the public will be involved, whether local governments will be involved, First Nations, in the consultation around those regulations. There are certainly some key questions that are raised by the fact that the legislation is rather vague on a whole number of points.

For example, the regulations will set out the qualifications that a preparedness and response organization, a PRO organization, must have. The regulations will set out the requirements a PRO must satisfy, its terms and conditions. Of course, we’ll be asking questions about what the intent is there.

We come back to a fundamental concern and point. You can have as many regulations and rules as you want, but if government lacks the capacity to actually monitor and enforce, then these rules really don’t mean a lot, nor do associated penalties. There are provisions in the legislation for substantially increased financial penalties, but again, those penalties really don’t have a lot of meaning if government does not have the capacity to oversee, to monitor. You need boots on the ground in order to make penalties work. Otherwise, it looks good in legislation, but they really aren’t very effective at all.

There are other things that have to be covered in the regulations: the geographic areas where the plans are required, what the plan has to cover, who has input into developing. These are obviously pretty crucial questions. I go back to my previous comments about the concern that what we could have here is a patchwork of coverage within the province, maybe even some key gaps where areas are completely left out in British Columbia. It could be confusing, when a situation arises, about who’s responsible, about whether or not there is anyone responsible.

All of these issues — there are a whole number of others that our spokesperson for the environment went through — are going to be addressed by regulation. We have no idea at all whether they’re going to be effectively addressed. We can’t really tell from the legislation. We might have a better idea as a result of questioning during committee stage.

For example, one of the issues covered by regulation is whether a company or a PRO’s spill response plan must be made public. This is obviously a very key concern. Again, the concern around privatization…. I don’t want to accuse the private sector, necessarily, of lacking in integrity. But they are profit-maximizing entities. Economic theory tells us that that’s the main raison d’être of the corporation.

There are incentives for polluters to hide spills or hide their severity. Our spokesperson did talk about a few examples. There are some very disconcerting examples revealed as a result of an FOI that the NDP caucus did in 2014 that showed that the province currently is quite unprepared to deal with any major environmental disaster in British Columbia. I’m sure, in part, that’s part of the rationale for this legislation: to make sure that industry is responsible.

[1735]

Again, without government capacity to oversee, simply pointing your finger at private industry is not going
[ Page 12040 ]
to be adequate. There could be major events in British Columbia where this system falls down.

This lack of capacity, of course, is a direct result of government cutbacks since 2001. Across all functions within government, there have been cutbacks, and certainly within the Ministry of Environment.

There was one example that our spokesperson raised where — and this is from the FOI request — CN Rail advised the Ministry of Environment of a small spill at a rail yard in the Lower Mainland. It turns out, in fact, it was actually a collision between locomotives, and there was a lot more fuel released to the environment than reported, certainly initially, as a result. Again, it demonstrates that there’s a real concern that if you completely privatize the spill response system and you don’t have the capacity in government to oversee, then you can have major events being either not reported or under-reported in terms of their severity.

Those are three of the key issues. I also would like to point out, too, in terms of where there might be another gap in this legislation. It’s a good thing that it’s polluter-pay and that polluters will be required to not only pay for spill response. But in fact, the responsible person, which could be either the spiller or the owner of the hazardous goods…. Again, this is another good feature of this legislation. The legislation will require the person responsible to prepare and carry out a recovery plan to resolve or mitigate the impacts of a spill, including environmental restoration.

This is a good thing and one of the reasons why, at least at first blush, this legislation seems to be a step forward. What’s missing here, though, is the economic impacts of a spill on private sector business, on homeowners, on First Nations, even local governments — the economic consequences of that spill, for example, if it resulted in loss of use.

Say there was a spill that affected a First Nation’s shellfish beach that resulted in loss of use. It’s not at all clear that this legislation would require the polluters to make up for that loss of use during that point of time that the beach is polluted. It may require the restoration of the beach, although that’s not entirely clear, but the economic impacts of the spill don’t appear to be covered by this legislation. I think that’s a major gap.

I know there are others who want to speak to the legislation. I will be looking forward to the committee stage. As our spokesperson for the environment indicated, it’s not just us that has concerns. Certainly, there are non-government organizations that have concerns — even companies that are now involved as spill responders.

For example, BCHAZMAT Management Ltd. — the Environment spokesperson and myself met with them. In fact, they’re located in the West Sidney industrial park. They’re a constituent. Their business has been growing quite rapidly, and they do respond, as private responders, to spills.

This company has some very serious concerns about the legislation. They’ve even heard rumours that there might be U.S. entities that become PROs in British Columbia. They’re concerned about overlaps and gaps in coverage within British Columbia. They’re concerned about actually increasing cost. They feel that, in fact, there are existing regulations that do cover spill response.

[1740]

So even industries, even businesses now involved in spill response have expressed concerns to us. I look forward to comments from other members of the Legislature and to working with the Environment spokesperson through the committee stage.

A. Weaver: I rise to speak to Bill 21, the Environmental Management Amendment Act, 2016. Now, this bill is designed to provide the legal foundation for a spill preparedness and response regime in British Columbia. The legislation, as we just heard from the member for Saanich North and the Islands, puts in new requirements for spill preparedness, response and recovery, and it creates new offences and penalties. However, the problem with this bill is not so much what’s in it but what’s not in it. This bill puts much, if not most, of the items of interest into regulations.

I’d like to give just a couple of examples of this. I think it highlights what we’re debating. We’re debating an enabling legislation. It is clearly an enabling legislation, essentially enabling government to put in place regulations that will govern a spill response and regime.

Before I can even get to a couple of examples of what is in regulations, I have to start with a definition. It’s a definition of what is called a “responsible person.” In this legislation, this amendment, a responsible person means “a person who has possession, charge or control of a substance or thing when a spill of the substance or thing occurs or is at imminent risk of occurring.” That’s what a responsible person is — rather broad.

I would like to give some examples, because I think it ultimately highlights how much we are essentially debating on here that has to be put in regulations. Section 91.11 would be added to the Environmental Management Act. Listen carefully. “A regulated person must ensure that (a) on or before the prescribed date, the regulated person has a spill contingency plan that complies with the regulations.”

What does that say? There’s a prescribed date; we leave it to government to prescribe it. The regulated person, whoever that might be, has a spill contingency plan that complies with regulations — not very specific.

“(b) the spill contingency plan is reviewed, updated and tested in the prescribed manner and at the prescribed frequency.” Okay. That doesn’t give us an awful lot of comfort as to what that means.

“(c) the spill contingency plan is made available to employees of the regulated person in accordance with the regulations.” Essentially, it’s saying: “Trust us.”
[ Page 12041 ]

“(d) the spill contingency plan demonstrates that the regulated person has the capability to effectively respond to a spill, and (e) if required by the regulations, the spill contingency plan is published in accordance with the regulations.”

You can’t make this stuff up: “if required by the regulations, the spill contingency plan is published in accordance with the regulations.” Does this mean we wouldn’t actually publish the spill contingency plan if it’s not required? Does it mean that if in accordance with regulations at the end, we can just publish whatever contingency plan we want? I mean, it’s bizarre.

Further down: “(3) A regulated person must ensure that, in accordance with the regulations, (a) records respecting investigations, tests and surveys referred to in subsection (2) are prepared and kept for the prescribed period.” Again, what does that mean?

“(b) prescribed reports are prepared and submitted to a director.” What prescribed reports?

“(c) employees of the regulated person receive prescribed training to prescribed standards” — I’m honestly not making this up — “employees of the regulated person receive prescribed training to prescribed standards.” “Trust us,” says the government.

“(d) employees of the regulated person engage in spill response training exercises and drills in the prescribed manner and at the prescribed frequency.”

We are being asked to certainly trust that government will have the best interests of British Columbians at heart as they develop — in their words, not in our words — a world-leading spill preparedness.

That brings me to another point. You know, in the field of science, when we hear universities describe themselves as world-class, we know right away that they’re not, because the people who describe themselves as world-class clearly are not world-class.

[1745]

World-class scientists are described by others as world-class. World-class institutions are described by others as world-class. When this government stands up and says it’s building a world-class spill response, I can assure you that it will be anything but world-class, because we would be expecting others to look at it and tell us if it were indeed world-class.

Given what we’ve seen around us under the professional reliance model that this government is so proud to put forward…. We only have to look at Mount Polley. Was that a world-class response? I don’t think so. What about what’s going on in Shawnigan Lake? Is this a world-class process for a world-class land use agreement for a world-class containment facility? I don’t think so. Is our LNG “we’re going to world-class standards, cleanest in the world” rhetoric…? I don’t think so.

This government is full of rhetoric. It’s full of rhetoric that’s substanceless, and frankly, I’m tired of it. I’m tired of hearing them call themselves world-class. British Columbians are tired of hearing them call it world-class. They’re not world-class. They’re parochial and inward-looking and missing the bigger picture of what’s going on in the world around us.

With that said, I did participate as an intervener in the Trans Mountain hearings over the last couple of years. Let me tell you, that was a lot of work — hundreds of hours, hundreds and hundreds of hours by the team, poring through papers, many unresponded-to questions.

What I learned from that is that British Columbia — in fact, Canada — has simply not the capacity to respond to any spill of any magnitude — in particular, when it comes to diluted bitumen. We have no idea, at the basic level of science, as to what would happen if diluted bitumen were to spill in, say, the Fraser River. We know there’s a lot of suspended sediment there. We know that a lot of it would sink, but we really don’t have any idea.

Frankly, it is reckless. It is reckless for this government to be talking about even entertaining the Trans Mountain proposal and putting in place these regulations now, while still allowing one tanker a week, laden with diluted bitumen, to leave the Burnaby ports through our coastal waters when we don’t even have a response capability today.

Where is this government actually standing up and being truthful to British Columbians that we need an immediate moratorium on the transportation of diluted bitumen in our coastal waters because, as admitted in this Environmental Management Amendment Act, we don’t have any standards here in B.C.? If there were a spill, my riding of Oak Bay–Gordon Head and the riding of my friend here in Saanich North and the Islands would be devastated, yet we have no management plan in place.

The government is trying to put a management plan in place, largely for land-based spills, but we have none now. It is reckless and irresponsible for us to continue to put diluted bitumen in pipes and to have that product shipped in our coastal waters. A relatively new Trans Mountain pipeline proposal that was recently built in the U.S. is already leaking. It’s already leaking. Right now, there’s cleanup and concerns happening there.

The basis of this bill obviously comes from the pressure of the major oil pipeline proposals. I recognize it’s coming in response to the government’s willingness and desire, or condition No. 3, to have in place what they call, through the usual hyperbolic rhetoric, “world-leading spill response.”

This is their attempt, but really, it’s an attempt that we don’t know anything about, because it just enables the government — as is becoming more and more typical — in negotiation with industry, to put in place regulations as they see fit and then surround it and wrap this in rhetoric about “world-leading” and “consultation” and “listening to First Nations,” etc.

[1750]

One of the things that I do appreciate in this — because it’s a fundamental principle within the Green Party
[ Page 12042 ]
of British Columbia — is that it’s based on a polluter-pay model. The person who makes the mistake pays for the mistake, not the taxpayer. So in that regard, I support this aspect.

The other principles, not the only one of which is polluter pays, that this is based on, are risk-based requirements, avoiding unnecessary duplication, a fair and transparent process, opportunities for First Nations and communities in preparedness response and recovery, and strong government oversight and continuous improvement.

Now, again, the strong government oversight is something that I would love to trust. I would love to trust that we would indeed have strong government oversight. But the evidence is that we cannot trust this government to provide that strong oversight. Again, I come back to Mount Polley. Again, I come back to Shawnigan Lake, and there are other examples out there.

Let me give you probably what I perceive to be the most worrying aspect of this bill. It may not seem like much. It’s on page 15 of the legislation. We turn to page 15, and we look at (d), where it says: “by adding the following paragraph….” I’m going to read this slowly. I can’t make this stuff up: “(d) exempting a person, an organization or a thing or a class of persons, organizations or things from any provisions of Division 2.1 or the regulations under this Division, in circumstances and on conditions that the Lieutenant Governor in Council prescribes.”

Essentially, this says: “Anything we have in here we can exempt, if we want, as cabinet.” “Trust us”? I don’t think so, hon. Speaker. That clause is deeply, deeply troubling.

While I will recognize that this bill is a step in the right direction, it’s not clear to me that I can support it at this juncture. It’s not clear to me that I can support it in light of the fact that I have no idea where the regulations are going.

I look forward to exploring that further at committee stage to see what the government has in mind so that we might, as a matter of record for future occasions down the road, get a sense of what the government’s intentions are with respect to each and every one of these sections, of which there are many, where everything is prescribed by regulations.

K. Corrigan: I rise to speak on this bill as well, Bill 21, the Environmental Management Amendment Act, 2016. I’m going to keep my comments fairly brief, but I did want to get on the record in second reading some concerns about this legislation.

Certainly, we’re going to support this legislation, but I’m looking at it through the very parochial lens of my concern about Burnaby. I think Burnaby is probably representative of other communities that also would have some concerns about exactly what this framework is going to look like when it’s implemented.

As the Speaker well knows, because he lives in the same community as I do, the city of Burnaby is presently one of the communities that the Kinder Morgan pipeline travels through. It is also where the terminus is to the Kinder Morgan pipeline and where the tankers, under the proposed expansion of Kinder Morgan, would be coming to. So of course, Burnaby has for many years now been keenly interested and concerned — concerned about what spill protection would look like, what kind of response there would be.

[1755]

I can say from a local perspective that I know the city of Burnaby, the community of Burnaby, has been very, very concerned about the nebulousness of the plan. Having a plan is a good idea, but where the concerns are, are to do with what exactly the plans are going to look like, what exactly the response would be in the case of a major spill.

Of course, in the city of Burnaby, that means that we could have not only a major spill, but there could be fires associated with those spills. So there is a real concern, an acute concern, about what kind of response there would be.

[Madame Speaker in the chair.]

I do have some concerns about the fact that this essentially is self-regulation, that this is going to be industry self-regulation. I think it’s instructive to think of a couple of things. First of all, I know the real difficulty that the city of Burnaby has in terms of having any kind of concrete response and commitment from, in our case, Kinder Morgan, saying, “We will be responsible for fire protection. We will be responsible for cleanup,” and so on.

In fact, just the opposite. Kinder Morgan has repeatedly asked the city of Burnaby to take on responsibility for the fires: if there was a fire up at the tank farm, for example; if there was a spill that resulted in a fire. We’re talking what could be, in some cases, in a serious spill, hundreds of millions of dollars, because we know from the earlier, smaller spill that it was very, very expensive.

There is a concern there, because it has not been a happy experience for my community thus far. They are not feeling comforted by the progress, to date, in terms of making sure that my community is protected.

My concern about self-regulation is also compounded by the fact that it has been found in repeated Auditor General reports that emergency management B.C. is simply not prepared to manage large catastrophes.

I turn to the 2014 report, Catastrophic Earthquake Preparedness. The Auditor General said: “Catastrophic earthquake planning has not been made a priority by government or emergency management B.C.” It goes on and says: “EMBC is lacking critical positions, such as a logistic planner, which constrains the organization’s ability to deliver on its catastrophic earthquake mandate.”

It talks about: “We also found that EMBC’s catastrophic earthquake training, exercise and public education programs are inadequate” and “We found that EMBC
[ Page 12043 ]
is not adequately monitoring stakeholder readiness and capacity and is not adequately ensuring that all the various stakeholder plans are integrated into a coordinated provincial response.”

Now, I know, in that case, the report was about earthquake preparedness, but it showed a general lack of capacity of this government to oversee catastrophic emergency events. I think to simply say that we are going to now assume that the companies that are responsible for managing spills are also going to be responsible for oversight — or that there will be oversight — is problematic.

Those are some of the areas that I would like to explore further when we get to the committee stage of this bill. With that, having raised a couple of issues, I will end my remarks.

Madame Speaker: Seeing no further speakers, the minister closes debate.

Hon. M. Polak: I thank the members for offering their perspectives on this bill. I’m looking forward to committee stage.

With that, I move the bill be read a second time now.

[1800-1805]

Second reading of Bill 21 approved unanimously on a division. [See Votes and Proceedings.]

Hon. M. Polak: I move that the bill be referred to Committee of the Whole House for consideration at the next sitting after today.

Bill 21, Environmental Management Amendment Act, 2016, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. M. de Jong: Committee stage on Bill 14.

Committee of the Whole House

BILL 14 — FINANCE STATUTES
AMENDMENT ACT, 2016

The House in Committee of the Whole (Section B) on Bill 14; R. Lee in the chair.

The committee met at 6:08 p.m.

Sections 1 to 6 inclusive approved.

On section 7.

C. James: This section, section 7, talks about a refund not payable under this section with respect to coloured fuel if the person “has not complied.”

I just wanted to ask the minister: was there non-compliance? Is that the reason that this section has come forward? Was there an issue around non-compliance, and is that the effect of the changes?

[1810]

Hon. M. de Jong: I’m advised that was not the motivation. It was, from a drafting point of view, to mirror in the Carbon Tax Act the provisions of the Motor Fuel Tax Act that were previously made. It was a question of drafting consistency as opposed to addressing an identifiable issue.

Sections 7 and 8 approved.

On section 9.

C. James: Section 9, again, is still related to the Carbon Tax Act. Section 9 speaks to “permissive rather than mandatory.” It changes a “must” to a “may” when it comes to whether taxes have been paid as required under this act. It now says: “the director may (a) calculate, in the manner and…procedure….”

I wouldn’t imagine that the Finance Minister would be bringing something forward that would let people out of paying taxes that they owe. I just wondered if the minister could talk about why that change is being made, what the change is to be more permissive and whether it relates to people paying taxes or not.

Hon. M. de Jong: The general intent here is to ensure that, through unintentional drafting construct, the director is not obliged to collect twice for the same transaction — twice from different people at times for the same transaction. I can advise the committee that there is a desire to establish consistency with the other consumption tax statutes.

There are some circumstances, some examples, here where the amended section is designed to ensure that the director is not required to, for example, assess the buyer for failing to pay tax and the seller for failing to collect tax in relation to the same transaction — two ends of the same transaction. The Crown, arguably, would receive more than it should be entitled to in that single transaction.

Sections 9 to 16 inclusive approved.

On section 17.

C. James: Section 17 speaks to the Income Tax Act and the foreign tax credit. It talks about paying taxes to another country on foreign non-business income. I just wonder if the minister could talk about what kind of non-business income tax would there be. What might a British Columbian be paying to a foreign government that would be classed as non-business income tax?

[1815]

Hon. M. de Jong: I’m advised that an example of what would be applicable would be investment income in the U.S., for example, where there are deductions and withholdings applied in the host jurisdiction, if I can use that term.

C. James: I wonder if the minister could also speak to why this has been made retroactive to 2004 and the necessity for that.

Hon. M. de Jong: It is to ensure that the provision as it exists in the provincial legislation is consistent with when the change was made in the federal act.

C. James: Just one further question on this section. I think, you know, we could look at lots of what-ifs. I’m sure the Ministry of Finance did all of that work.

If someone in B.C., for example, makes a loan of money to a resident of another country, which is kind of what this section talks about, who then uses the money to buy property in British Columbia, would this amendment mean that they could get a tax credit? Would this amendment provide them with a tax credit if that occurred — if they were withholding taxes, for example, on their interest income in other countries?

Hon. M. de Jong: I may not have understood the question entirely. I think the answer is no, because the intention here is to avoid double taxation. So where there has been an investment for an individual British Columbian and they have been assessed and remitted tax in another jurisdiction, they’re still reporting that income domestically in British Columbia and in Canada. The point behind the provisions is to ensure that they’re not double-taxed if they have remitted taxation in the other jurisdiction.

Sections 17 to 22 inclusive approved.

On section 23.

C. James: This section speaks to the scientific research and experimental development tax credit, which is SR&ED, as most people know it. It talks about provisions for recapturing when a portion of the credit needs to be repaid because the property that was claimed is shared or a portion of the property isn’t being used for research.

I just wondered if the minister could talk, as I asked in another section, about the reason for this change. Again, were there problems? Is that why this change is coming forward? What were examples of that that might have occurred?

Hon. M. de Jong: The term “recapture,” which is a significant term within the parlance of taxation law, applies, in this case, when the taxpayer converts property acquired for SR&ED purposes to commercial use within ten years of the acquisition of the property or sells the property within ten years without converting it to commercial use. That’s part and parcel of that construct of SR&ED.

The reason for this change, as is the case with many of the provisions in this bill, is simply to harmonize with amendments that took place with the federal legislation. No specific identifiable problem. An exercise in harmonization.

Sections 23 to 27 inclusive approved.

On section 28.

C. James: Section 28 talks about the Insurance Premium Tax Act, which exempts a member of the Law Society with taxation in respect to the insurance fee set out.

[1820]

I just wanted to confirm my understanding. My understanding is that this is already current practice and that this is an exemption on a self-insured fund. So it’s not letting lawyers out of paying taxes but in fact is an existing practice. I just wanted to confirm that my understanding is correct on that.

Hon. M. de Jong: That is correct.

Sections 28 to 66 inclusive approved.

On section 67.

C. James: This amendment…. This is a little bit of an interesting discussion because I think this is something that certainly, having sat on the Finance Committee for the last couple of years, has come up often at the Finance Committee, which is related to people who sell products in British Columbia and may not be paying the PST.

It’s certainly something that we saw lobbied for over the time period — to clarify for businesses, fair businesses in British Columbia, who are concerned that they’re seeing people delivering goods in British Columbia. They’re outside British Columbia, and they’re getting away with not paying PST, basically, and not providing a level playing field.

I wondered if the minister, in putting this amendment together, took a look at what the numbers were that we’re looking at. How big a problem was this? As I said, we certainly heard the issues coming forward. I wondered if there was any kind of analysis done around how large a problem this really was, tax-wise, for our province.

Hon. M. de Jong: The member may have heard me put this proposition…. I’m not aware of a quantification or an attempt to quantify the order of magnitude. It’s thought to be minor, and I think it’s fair for me to say to the com-
[ Page 12045 ]
mittee that the amendment proposed here has more to do with trying to establish equity and fairness than capturing vast sums of uncollected revenues.

C. James: I appreciate that. Thanks to the minister. Certainly, from the committee’s perspective, making sure that the field was level for businesses I think was important. Most of the concerns seemed to come from border communities. I think that’s no surprise.

My last question is just around the effective date. This may be, again, matching it up with taxation. This amendment comes into effect on July 1. I just wondered why. Does that provide any kinds of worries about businesses who may quickly be looking at buying materials and not paying PST? Doesn’t that provide a problem, when it comes to fairness, again?

Hon. M. de Jong: In this case, not an exercise in federal harmonization. It’s really thought to be a reasonable time to effect notification where the revenue branch is perhaps aware or to publicize the new requirement and to provide opportunity to comply and register.

I guess it’s appropriate for me to say, as well, that the absence of this provision doesn’t excuse or exempt the obligation to pay tax. It still exists. The manner in which it is collected or remitted by the Crown, though, is influenced insofar as it is…. The obligation pursuant to this shifts from one party to the other.

The timing, I think I can advise the member and the committee, is more about ensuring that those covered by the provision have time to become aware of that and then take the necessary steps to register.

Sections 67 to 79 inclusive approved.

Title approved.

Hon. M. de Jong: With thanks to the member and the committee, I move the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 6:25 p.m.

The House resumed; Madame Speaker in the chair.

Report and
Third Reading of Bills

BILL 14 — FINANCE STATUTES
AMENDMENT ACT, 2016

Bill 14, Finance Statutes Amendment Act, 2016, reported complete without amendment, read a third time and passed.

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

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

Motion approved.

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

The House adjourned at 6:26 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
ENERGY AND MINES

The House in Committee of Supply (Section A); P. Pimm in the chair.

The committee met at 2:31 p.m.

On Vote 20: ministry operations, $25,912,000 (continued).

The Chair: Before I recognize the minister, I’d like to address an issue from last Thursday. An issue arose during the proceedings in Committee of Supply on the afternoon of Thursday, April 7. As members may know, the lights at the Clerks’ table in the Committee of Supply turn red to signal when a member’s speaking time has expired. This happened on Thursday afternoon while the member for Vancouver-Kingsway had the floor. The Chair indicated to the member that his speaking time had expired.

I’d like to advise all members that upon investigation, a computer error caused the timing clock to double the speaking time and signal that the speaking time for the member for Vancouver-Kingsway had expired when, in fact, less than half his time of the allotted 15 minutes had passed.

I apologize to the member for the error and thank Hansard for correcting this technical program.

Hon. B. Bennett: I had no part in this, so I guess there’s no need for me to apologize. I just express surprise that that really wasn’t 15 minutes.

[J. Yap in the chair.]

There are two outstanding questions that the member for Vancouver-Kingsway had for me last week that I have answers for. I’m just going to read them into the record.
[ Page 12046 ]

The first one was in relation to operating costs. The member had pointed out, correctly, that the information that has gone in under the revenue requirements application showed fiscal 2016 operating costs at about $827 million. The next year, those same operating costs — $69 million higher. He was asking for the explanation why $69 million higher, roughly 8 percent higher.

The answer is as follows — I won’t read it; I’ll just summarize it: $42 million of that can be explained with two items. The first item is the operating cost relating to the smart-metering and infrastructure program, which were deferred in fiscal 2015 and fiscal 2016 while the project was still in progress. Those costs are now being included in operating costs starting in fiscal 2017. That accounts for $22 million of the increase.

The member, I’m sure, is familiar with the fact that when capital projects are being built, the amounts go into an account and are considered to be just what they are, which is capital construction projects. Once they’re operational, then they get treated differently from an accounting perspective. So $22 million of that $42 million that I just spoke of was from the smart-metering and infrastructure program.

[1435]

The second item, which totaled approximately $20 million, is something referred to as capitalized overhead. To comply with the international financial reporting standards accounting rules — that is, the international financial reporting standards is a term of art — B.C. Hydro is required to gradually transition some amounts previously capitalized as indirect overhead into operating costs, and this happens over a ten-year period.

You being an accountant, hon. Chair, you’d understand how that works. Each year approximately 20 million more of ineligible capital overhead is being absorbed into B.C. Hydro’s operating costs.

Between those two items, you get to 42 million — and, of course, we’re starting with the total of 69. The remaining 27 breaks down as follows. First of all, Hydro is facing a number of unavoidable cost increases. I made some reference to these last Thursday, I think.

The first unavoidable cost increase is the external regulator. Western Electricity Coordinating Council, Peak Reliability and the North America Electric Reliability Corporation — they’re all increasing their fees by $3.7 million in 2017. That $3.7 million includes the exchange rate impact. That’s the first thing.

The second item I bring to the member’s attention is that B.C. Hydro is investing, on average, $2.4 billion — well, he knows about this — in capital over a ten-year period of time. As Hydro makes this huge capital investment, obviously it’s going to have some impact on operating costs. Hydro needs to spend a lot more time to plan these projects up front in advance to make sure they come in on time and on budget. That represents almost $10 million in increased costs.

The third item to bring to the member’s attention. Hydro has been making more investments than ever to improve the safety of its workers and also its customer service. Hydro noticed that the safety record was lagging behind other Canadian utilities and invested an additional $5 million starting in fiscal 2017 — also investing $1½ million starting in 2017 to make it easier for customers to do business with the corporation. That was the third item.

The fourth and final item that has driven up operating costs could be characterized as cost pressures associated with storm costs. Now, there are a number of things that Hydro has also done to offset those increased operating costs. For example, they have found $10 million in transmission, distribution and customer service — a business group in that particular part of the corporation. There’s $7 million related to a partial decommissioning of Burrard Thermal. There’s $4.3 million in company-wide savings that are currently being identified through additional budget reviews. And there’s $7.6 million in savings in various other areas, which I won’t go into.

That’s the explanation of why operating costs have gone up, with a little bit of editorial on what Hydro is doing to offset those increases.

The second question the member had related to the transmission line. I think he called it, or referred to it, as the son of DCAT — it’s a Dawson Creek transmission line project. I think the question was…. The part of the question that I couldn’t answer categorically, at the time, was whether, at the BCUC hearings, the BCUC asked, or B.C. Hydro committed, in any sort of formal way, to come back to the commission with respect to subsequent projects — and that goes to my comment about the son of DCAT.

Hydro did a thorough search on the weekend to determine whether there were commitments made. What I can say to the member is that during the DCAT hearing process, there were a number of issues raised that B.C. Hydro contested as being out of scope, and in fact, the BCUC agreed with Hydro and ruled that those issues were out of scope.

[1440]

In the BCUC decision on DCAT that was issued October 10, 2012, the BCUC directed that when Hydro brought forward the second phase — which is sometimes known as the PRES project — some of the issues identified as being out of scope in the DCAT proceedings should be considered in the PRES proceeding. So what I said last week still applies to this situation.

I can’t quote — I don’t have it in front of me — but I believe what I would have said would have been, first of all, that we would prefer any of these large transmission projects like the PRES project to go to the BCUC for a certificate of public convenience. That would be what we would anticipate happening.

However, if we find ourselves in a situation where some LNG companies have made a final investment
[ Page 12047 ]
decision and suddenly there is mad rush, if you will, to get more wells drilled and more infrastructure in the ground in the northeast to supply those LNG operators, and those extraction operators tell Hydro that they are prepared to use electricity to drive their infrastructure, as opposed to natural gas, and the only way we could get them signed on the dotted line in time for them to start their construction and build their infrastructure was to direct that one or both of these transmission lines be constructed, we might do that.

I can’t say that we would do that, but we might do that but only under those circumstances. Otherwise, we would expect Hydro to go to the BCUC for that certificate of public convenience. Those are the answers to those two questions.

A. Dix: I’ll help the minister out, then, on the second question. He asked when the commitment was made. It was made, as I understand, July 24, 2012. B.C. Hydro final submission, page 13, where B.C. Hydro, which had been resisting the effort to have a discussion of phase 2 of the project, said “that phase 2” — which is sometimes called PRES, sometimes called son of DCAT, sometimes even called GDAT — would be “the subject of its own regulatory processes, at the appropriate time as necessary.”

That was their commitment at the time. They made that commitment. Now the minister is saying that that commitment does not have any meaning and that, in fact, he’ll consider…. He did consider. In August, he went forward and gave a ten-page document out to attempt to circumvent a BCUC review. He’s saying that he believes, for all the reasons he just said, that in spite of the BCUC review, in spite of the B.C. Hydro review, the review of rates paid by industrial customers which argued to the contrary, he’s still prepared to exempt this project.

Unfortunately, I guess that the government, from their point of view, expected success, and LNG hasn’t occurred. So the minister isn’t proceeding at the moment. But when the minister is asking specifically when they made that commitment, they made that commitment in their final submissions to the BCUC at that time. They made them for what they thought were good reasons, I think, which was to say: “We don’t want you litigating phase 2 during phase 1. Let’s litigate phase 1 during phase 1, and we’re going to come back to you and discuss phase 2.”

Now, as in the way of all bait-and-switch, I suppose, phase 2 will be coming along, and they’re thinking of exempting it from BCUC review. Thus is the nature of these things, I suppose, but that’s what has occurred with respect to the PRES project.

I wanted to ask the minister specifically about what’s sometimes called the rate stabilization account. I asked him this question last Thursday, and he responded that other utilities used deferral accounts. Well, I don’t think the rate-smoothing account, as it’s sometimes called, is used in other jurisdictions.

Can the minister tell this House what other jurisdiction uses something like a rate-smoothing deferral account, a device that, essentially, creates revenue out of thin air to allow you to record higher profits in the near term? What other regulated energy utilities have a revenue acceleration account that operates like this rate-smoothing account?

[1445]

Hon. B. Bennett: I can provide the member with examples of where utilities, both electricity and gas utilities, have smoothing accounts to smooth out a variety of circumstances. I can’t provide the member with an example of a rate-smoothing account, quite simply, because I’m not aware, and B.C. Hydro is not aware, of any other jurisdiction that has put a ten-year rates plan in place like B.C. has done.

We’ve committed to it. We’re on it. We’re going to stay on it so that people at least know what to expect — individuals and small businesses and industry. Certainly what we’ve been told, especially by the major users of electricity, the large industrial users, is that they…. No one likes a rate increase, but at least they’d like to know what the plan is, going out over ten years, so we did that. We think that was the right thing to do.

The other piece of this, of course, that goes more to the character of a rate-smoothing account, is that because you have a ten-year plan, you have the opportunity to smooth out the rate increases. There’s nothing really unusual, I don’t think, about the idea.

It is a lot like amortization, very similar to amortization. We simply avoid the rate shock of huge rate increases in one year or two years and spread them out over a few years of the ten-year rates plan, which I think is the responsible thing to do. Certainly, I think, if you put it to the public and the business community, they would support the idea.

A. Dix: What this account does is allow the Liberal government to pretend that it has more revenue than it actually does. What it is, is it creates…. It allows B.C. Hydro to claim that, in terms of its net profit over any given year. That’s what it’s a manipulation of. The minister knows — surely, he knows — that such an account would never have been approved by the B.C. Utilities Commission.

Can the minister explain why the creation of such an account, which is…? Unlike a house, this is a political account to try and get a government, which has mismanaged the funds of the corporation and was facing massive rate increases as a result, to try and push them beyond election cycles. That’s the purpose of that account. No one else has used it in this way. I mean, low water years, all kinds of other reasons have been used.

This government is addicted to deferral accounts like no other government in history and like no other utility
[ Page 12048 ]
— not Hydro Québec, not Manitoba Hydro — in Canada. This is a fact. The level, in comparison to equity, of deferral accounts of B.C. Hydro is something like 12 times more than in Manitoba. That is a fact.

Can the minister explain, if they were confident that this rate-smoothing account wasn’t just a form of deception for the ratepayer, a means of creating revenue where none existed in the present, creating revenue based on unapproved future revenue — which is what it was, so it’s a revenue acceleration account —whether he believes such an account would ever have been approved by the B.C. Utilities Commission?

[1450]

Hon. B. Bennett: A couple of things. First of all, I think the member has it backwards. I don’t think a rate-smoothing account actually adds revenue. It actually defers revenue. That’s the idea of a rate-smoothing account, so I don’t understand how the member thinks that, somehow or other, Hydro and government get more money from that.

The second thing is that I was advised that there is an example, actually — at least one —that we’ve been able to come up with on short notice, where the BCUC did approve a five-year rate-smoothing account related to the Waneta dam in the West Kootenay. So there is at least one example of where they did.

A. Dix: That’s against an asset. They have approved deferral accounts with respect to that. This is just the creation of revenue where none existed. That’s what it is. I asked specifically…. Fair enough for the Waneta dam. I’m not surprised that they would have approved it. Does the minister believe…?

This deferral account, so that we understand it, was created in the cabinet room. It wasn’t created by B.C. Hydro. It was created in the cabinet room for the interests of the people in the cabinet room. That’s why it was created. That’s a fact. It was created in March 2014, and we’re dealing with it right now here in this estimates. And it’s going to go up to $1 billion up to 2020. A nice little slush fund.

So my question is: did B.C. Hydro, and did the Liberal government, put that rate-smoothing account into effect because they did not believe the BCUC would approve it?

Hon. B. Bennett: I’m sure that this answer won’t be satisfactory to the member. It’s factual, but I’m quite sure he won’t like it.

When we decided to do the ten-year rates plan, contemporaneously with that we also decided, through the core review process, that we were going to have the BCUC reviewed by an independent panel of experts — which we did.

Through the ten-year rates plan, we set what the rates were the first two years and then set caps for years 3, 4 and 5. Then we stated that in year 6, the BCUC would…. Well, actually, in year 3 the BCUC is brought into the process even with the capped rates. So years 3, 4 and 5, the BCUC is involved. Hydro is filing its revenue requirements application. The member is aware of that.

[1455]

But in year 6, BCUC will be fully in charge again for signing off on rates and revenue requirements proposed by B.C. Hydro. The idea at the time was to give Hydro, mainly, the time and space to know what the plan is for the business community — and for individuals in the province to know what the plan was and how much rates had to go up because of the investment in capital by B.C. Hydro — and then move back to the BCUC over a relatively short period of time.

A. Dix: Just to put in context what we are talking about. We’re talking about an account designed to create revenue where none exists — different than almost all the other deferral accounts, I might add. It was designed to, frankly, hide the fact that mismanagement at B.C. Hydro had created a circumstance of unacceptable rate increases — the decision, for example, to over-buy private power.

It was the minister’s own presentation in August 2013 that noted this — that in the coming years, almost all the increase in cost in energy came from those decisions. They were forced to abandon their private power policy for low-water years. They were forced to abandon it. In short, they had fundamentally mismanaged B.C. Hydro. That was the circumstance.

So they all gathered together in B.C. Hydro offices and in the cabinet room, and they said: “What are we going to do? We’ve got to rid of — get out of — whatever IPP commitments we can get out of.” They tried to do that. That was part of it, because they had to somehow unravel some of their own incompetence in that regard. They decided to create this account.

What did they say to themselves about the BCUC? They knew that this account would not meet the test of the BCUC. How do I know they knew it? Well, they wrote it down — contrary to what the minister says, who suggests that this was some sort of accident and that they were thinking of reviewing the BCUC, having spent six years exempting projects from the BCUC.

They went through this. They looked at the rate-stabilization account, and what did they say? I’m referring to page 58: “Privileged and Confidential Rate Forecast and Revenue Requirements, August 23, 2013.” BCUC is “likely to disallow certain costs.”

What are those costs? “Rate stabilization regulatory account” — the rate-smoothing account. This is them. They knew that it didn’t meet the test. They knew they were, in this way, deferring and pushing off to 2021 and 2022 and 2023 — election cycles into the future — the consequences of the incompetence that had been shown by the Liberal government.
[ Page 12049 ]

They knew this, so they said: “We can’t send this through the BCUC. We have to direct this from the cabinet room.” They directed it from the cabinet room. Isn’t that the case?

Hon. B. Bennett: Once again we’re getting boogeymen out of thin air. I’ll try this. The provisions in the Utilities Commission Act that authorize the Lieutenant-Governor to direct the BCUC to do certain things or to not do certain things have been there for some considerable period of time.

Our government has availed itself of the provisions. We have issued directions. I know I have gone to cabinet and asked for permission to issue directions on certain things.

When the member was advising the Premier of the province here in his days before he was elected, that government also availed themselves of the same statutory authority. If the member wants, I can go back and find examples — I know we’ve got them — of where the government of the day directed the BCUC to do certain things or not do certain things.

[1500]

In terms of the member suggesting that our direction of the BCUC to do something or not do something is unusual or nefarious just doesn’t hold water, no pun intended.

[D. Plecas in the chair.]

The second part of this is to point out to the member what we were directing the BCUC to do or not to do. We were directing the BCUC to allow B.C. Hydro to shield ratepayers from what I have referred to on numerous occasions as rate shock. In the first year — it probably would have been the first two years of the ten-year rates plan — the rates would have had to have gone up far more than they did.

We raised rates. Hydro raised rates by 9 percent in the first year, 6 percent in the second year. Given all of the money that Hydro was, is and will be investing in capital in this province — $2.4 billion for a year for at least the next ten years and probably more — that puts pressure on rates. So he’s correct: cabinet decided. Cabinet didn’t want to see the ratepayers experience this kind of rate shock, so we did a direction to the BCUC to smooth the rate increases out over a period of years.

I understand that the member thinks that this was the wrong decision, that he would have preferred that ratepayers be exposed to this rate shock. I’m sure that would have served his political purposes more, had that been allowed. But it would have been unfair to the ratepayers.

We had a choice. Government has a choice in that circumstance, and we didn’t need to expose ratepayers to that level of rate shock. We created this rate-smoothing account. We directed BCUC to allow it. That was the right thing to do, despite what my critic thinks.

The Chair: The member for Vancouver-Kingsway. Good afternoon.

A. Dix: Good afternoon, hon. Chair. It’s great to see you.

What was being protected, of course, has nothing to do with the ratepayer. What was being protected was the Liberal cabinet. What was being protected was the Minister of Finance. They could have given up on that and protected the ratepayer, but no, they didn’t. They borrowed money into the future. What this is, is a net income protection account for the Minister of Finance and for the government, which was pretending that net income exists that didn’t exist in that year.

They were taking income from way in the future and putting it in that year in order to protect the government of British Columbia. That’s what they were doing. They were, in fact, soaking ratepayers, who, in this context where the increase in deferral accounts was about the same as net income…. That’s precisely what they were doing.

They had an option. They could have protected ratepayers, and they chose not to. This was designed to — dare I say it? — fudge the accounts, and it succeeded in doing so.

I wanted to ask the minister, because that’s pretty clearly the case, and they knew the BCUC wouldn’t go for it. So it was directed from the cabinet room. This was a regulatory risk, according to the people who got together and planned this account, and they didn’t want to go buy that risk. They didn’t want to justify this. They didn’t want to justify it, so what they did instead was they ordered it from the cabinet room.

That’s what happened. The cabinet was acting in its own interest, not protecting ratepayers, who, after all, had been paying 28 percent rate increases. And still they need a rate-smoothing account of $1 billion. That’s how much they’ve mismanaged the situation. That’s who they protected. They protected themselves.

I’ve got a specific question with respect to the total of net deferrals. The minister says: “Well, all of the jurisdictions do these accounts.” In 2014-15, the net deferral balance was $5.5 billion. That’s 132 percent of the equity. That information is from the 2015 annual report. In 2009, that had been 64 percent. So we’ve gone from 64 percent to 132 percent in five years.

The minister wasn’t minister throughout that time. That’s pretty much the situation now. The ratio of net deferrals at Fortis, 35 percent. At Manitoba Hydro in 2014, 11 percent. Those are the realities.

[1505]

Does the minister believe that carrying so much deferred expenditure means they’re actually operating like a commercial corporation? If that’s the case, why did all the other utilities in similar circumstances not do the same thing? Why is it only the Liberal-run B.C. Hydro
[ Page 12050 ]
that uses deferral accounts like a bank account for the government?

The Chair: Minister, good afternoon.

Hon. B. Bennett: Good afternoon, hon. Chair. It’s hard to keep track of you Chairs. You come through pretty seamlessly.

A. Dix: Like Ministers of Agriculture.

Hon. B. Bennett: I’m not going to touch that one. I think our Minister of Agriculture has been around for quite a while.

Interjection.

Hon. B. Bennett: Once again, we have the critic for B.C. Hydro just inviting me to make comparisons. Eleven or 12 Health Ministers, I think, during the 1990s.

Anyway, to the point. First of all, because of the member’s statement prior to his question, I have to say that the member’s idea of “protection” of the ratepayer, apparently, is to freeze rates and get a slap on the back from voters presumably, from ratepayers — “We’ve frozen rates; we’re your friend, and we want your vote” — and, therefore, not have the wherewithal to invest in infrastructure.

Again, over the ten years that the member was involved with the previous government prior to 2001, it is demonstrably true. We can show the member a graph that shows how little was invested in B.C. Hydro.

Interjection.

Hon. B. Bennett: The member says I’m making it up. I would be overjoyed to show the member the graph that actually shows the amount of investment that went into infrastructure at B.C. Hydro when the NDP was in government. It was pitiful.

In 2001, when this government got elected, they recognized this pent-up demand, this need to invest in infrastructure. It started to ramp up almost immediately, about three years in. As I said earlier, right now B.C. Hydro is spending $2.4 billion a year on infrastructure.

That’s what the vast majority of these regulatory accounts are used for. The member refers to them as deferral accounts. The proper terminology is regulatory accounts, but we all know what he’s referring to. If you don’t have these regulatory accounts set up…. In other words, if B.C. Hydro is required to pay cash for all of its infrastructure investment, then it simply wouldn’t be able to make those infrastructure investments.

The vast majority of these regulatory accounts are very similar to mortgages. The amounts go into the accounts, they are amortized over a period of time, and they are paid down. Over the life of the ten-year rates plan…. Well, I’ll tell the member. He probably wants to know this, if he doesn’t already. The balance of the regulatory accounts at June 30, 2015, was $5.4 billion. That will be paid down, it’s estimated, to $4.1 billion by the end of the ten-year plan. So that’s $1.3 billion being paid down. They are constantly being paid down. Once an asset is in service, they start being paid down.

[1510]

What the member is actually suggesting is that Hydro should not invest in infrastructure if it can’t pay cash, and that’s a preposterous suggestion.

A. Dix: That is not the purpose of the rate-smoothing account which we’ve been talking about. What’s preposterous is that in 2005, such accounts had approximately $150 million. So think of all of the governments before that — $150 million. It’s now $5.4 billion.

The minister says: “Well, you know, other governments have used such accounts.” Yeah, that’s 4 percent. Liberals are 96 percent. They say: “Other utilities use such accounts.” Yes, they do, but at about 1/12 the level that B.C. Hydro does. That’s the fact. That’s what they’ve been doing.

Those were the questions. I asked the minister a couple of times whether the BCUC would ever have approved the rate-smoothing regulatory account, a deferral account. He didn’t answer. His own folks….

Interjection.

A. Dix: No. He said: “We didn’t do it, because they were reviewing the BCUC at the time. That’s why we didn’t do it.” I asked him that question, and his own people said that they believed it wouldn’t have. That’s what happened.

That’s the situation we’re faced with, with the government. It’s a government that behaves differently than all the other hydroelectric utilities in Canada in this respect, which is to create an account that has no equal in Canada, which is intended to protect the political interests of the government and which their own selves understood would never have been approved by the BCUC if they’d gone that route. That’s why they ordered it.

Hon. Speaker, I know, because you are particularly enjoying these estimates, that you would hope that they would go on forever. Alas, there’s actually an end to this. There’s a time limit to this, and that time limit is 4:45. I say that just to let the minister know that’s when we’re going to start to do the Columbia Power estimates with the member for Kootenay West. He will speak and debate a great NDP achievement for an hour and a half, one that I’m sure he will be acknowledging repeatedly during that time.

That means, for us here now, given that we have about an hour and a half left, even I am going to have to speed up. So we’ve entered kind of the lightning round of these estimates.
[ Page 12051 ]

I’m going to ask the minister a variety of questions, mostly related to customer service and administration of B.C. Hydro — questions on a number of subjects.

Firstly, I want to ask him a question about Powerex. We spoke earlier about the number of employees at B.C. Hydro earning over $150,000 a year. He will know that Powerex, in general, over the last ten years, has seen its net income drop in half. Over that time, the number of employees, and the cost of employees, earning over $150,000 a year has more than doubled at Powerex. It was $9 million in 2006. It’s $20.3 million now. None of those, I presume, are members of the IBEW. It’s more than doubled. We’ve gone from 40 individuals at Powerex earning over $150,000 to 72 in that time.

I wanted to ask the minister: as Powerex performance has declined in that period, partly for things beyond the control of those folks, why incomes at Powerex — the salary cost of high-income employees at Powerex — continue to go forward massively, even doubling in a relatively short period.

[1515]

Hon. B. Bennett: Well, once again, you take numbers and treat them without any context, and you can create any argument that you want. The member is pretty darn good at it.

But there are facts that will help the member fully understand what actually is going on here. I am advised that the number of trades made by Powerex over this last few years is roughly the same as what they made traditionally when there was more income coming in.

I should, just for the member’s benefit and for the benefit of anyone who might be listening…. It’s not like Powerex is failing to make a contribution to the province. Powerex still contributes around $100 million a year from its trade. Powerex is very good at what it does. It’s a trading organization. It’s like a business. It tries to buy and sell electricity in a way that benefits B.C. Hydro ratepayers.

The number of trades remains the same, but the size of those trades is down, because the price of electricity around North America is very much down from what it was a few years back when Powerex was bringing in more money. I don’t know this but I would expect that if the member took the time to check out the returns that other similar trading agencies are getting, he would find the same thing as Powerex. It’s very competitive out there right now with low electricity prices.

The other thing that I would say…. I think the member might be aware of this, but just in case he isn’t, he should be. With respect to the traders who work at Powerex, if you go back to 2009, when Morgan Stanley opened an office in Vancouver, they immediately recruited 20 percent of Powerex’s traders, including the head trader. These folks…. I don’t know if the member has been inside the Powerex headquarters; I’m sure he has. It’s the epitome of high tech. It’s a very sophisticated organization.

So when Morgan Stanley moves in, they recruit 20 percent of Powerex’s traders, including the head trader. TransAlta happens to be paying their top traders $2 million a year, based on their performance. If we want Powerex to be able to continue to pay us as much money as they can possibly make over the course of a year, they need to have competitively trained people. Fortunately, we do have competitively trained people there.

I don’t think the member should read anything nefarious into the fact that there has been less income from Powerex. It’s just a matter of low electricity prices and the fact that right now it’s hyper-competitive.

A. Dix: So the minister’s defence is that we’re making about the same amount of trades as we made when we were making between $200 million and $250 million a year. The trades are for less. But the fact is, from 2006 to the present: 93 employees in 2006, 146 in 2015. The number making over $150,000 a year: 40 in 2006, 72…. That’s an 80 percent increase in that time, while net income is dropping.

The percentage of employees making over $150,000 a year is half the employees at Powerex — half of them. The total remuneration just of that group of people…. Remember, $150,000 is the threshold the government put for the surtax. The amount of remuneration they get at this time — when income is dropping and, according to the minister, there’s a flat number of trades — has gone from $9 million to $20 million.

[1520]

Now, the total remuneration for those earning under $75,000 has dropped. I guess somebody has to pay the price somewhere. But the reality is that total remuneration has gone up 80 percent, disproportionately to the wealthiest people at Powerex, and the minister just said that performance is the same in terms of the number of trades.

I’ll just make this point that people, including low-income people, are paying 28 percent rate increases. There was in this past year — we’ve talked about this — basically a flat for employees at B.C. Hydro, or a 1 percent increase.

This is what it’s like at the top. It reflects the general pattern of the corporation. So my question is: why has Powerex seen significantly more than a doubling of its total remuneration of people earning over $150K a year, and why has it seen an 80 percent increase in their numbers over the last ten years?

Hon. B. Bennett: Hon. Chair, this will put the member’s mind at rest so that he can move on to another scintillating conspiracy that he might have in mind.

I’m advised that the reason there is a larger number of traders today than there was at the time that the member referenced is because Powerex had to put consultants on as employees or lose them to competitors like Morgan
[ Page 12052 ]
Stanley. So there actually are not double the number of people doing trading at Powerex, according to my advice. My advice is that there are roughly the same number of people. Half of them are not consultants. They are all now employees.

A. Dix: The Financial Information Act is the source of the information. What it shows is what it shows, which is that at B.C. Hydro, in that same period, the number of people earning over $150,000 has tripled, and that at Powerex the number has gone up 80 percent. The question, I guess, was fairly straightforward on that, and the minister, I guess, is saying that the job is hard.

I wanted to move on briefly, because this is a subject I’ve been engaged with B.C. Hydro on in another forum, which is the issue of information technology.

B.C. Hydro made a new intervention in a process around their SAP program just last Friday. It stated pretty clearly that the amount of money B.C. Hydro was spending on those projects was significantly more than what B.C. Hydro said the first time they were asked in January. It was $142 million in a letter from the president of B.C. Hydro in January. It’s now $194.6 million in this document, so that’s a substantial difference. I’ll be responding in detail at the commission to the latest submissions from B.C. Hydro with respect to their decision to mislead the Utilities Commission and their decisions and the problems with that program.

I just wanted to ask the minister where we are in this fiscal year and the specific changes. Last year I asked him about the SAP program, and he stated that three of the six components had been completed at that time, as of April 2015. In a follow-up letter from Mr. Reimer, the vice-president responsible for the IT program, he stated that four of seven components had been done at that time. Can the minister tell us where we are in terms of the remaining three components of the SAP program at B.C. Hydro?

[1525]

Hon. B. Bennett: I want to, first of all, just state my understanding of the process that is in place today between the member and the BCUC. The member made a complaint, as is his right, to the BCUC. Hydro has a certain amount of time to respond to that. Hydro responded. Subsequent to that, the BCUC made an information request, and it was considerable information that was requested. Hydro filed their response to that information request, I think, this past Friday.

There is a formal process in place between the member and the B.C. Utilities Commission, so I’m not sure where the member wants to go with the discussion. I’m certainly happy to talk about IT specifically, generally, but I’m going to really try to stay away from the process that’s in place right now and that will run its course, as the member said.

Let me point out, first of all, in terms of answering the member’s question, that the member actually has alleged that the SAP projects combined were at a total of $492 million, and that doesn’t seem to be correct. He’s now using the $142 million that was filed by B.C. Hydro in response to the complaint, in comparison to the $192 million that Hydro provided the BCUC on Friday. The member characterizes the difference between those two numbers as false. It’s not on the record, but that’s what he just said.

All these processes are processes that are highly technical, far more sophisticated and technical, certainly, than what I would pretend to fully understand. There are legitimate interpretations of what belongs in the so-called SAP category and what doesn’t belong in the SAP category.

Hydro took a very thorough second or third or fourth look at everything, all the IT programming that they felt was “SAP related” over eight years, and came up with the new number. They took a few IT programs out because they didn’t believe they were related to SAP, and they brought some other programs in.

[1530]

Even if they weren’t fundamentally connected to SAP, they were connected to SAP to the extent that Hydro felt it was appropriate to add them in. So they did that, and that’s how they came up with the $192 million. I don’t think I want to go any further on that part of the answer.

The member asked, specifically, about the three outstanding SAP projects that I referenced a year ago. There were three: the supply chain, asset management and work management. The member asked for status of those three. I’m advised that asset management and work management currently has no schedule associated with those two IT projects. The third one, supply chain, Hydro is contemplating moving forward. Certainly, we’ll answer whatever other questions the member might have on those three projects.

A. Dix: Well, what the minister just said is false. Of course, the people around him know it’s false. He said and asserted that I said SAP cost $492 million.

[M. Hunt in the chair.]

What I was asserting was the five-year IT and T capital plan — which last year, apparently, was a mystery to the minister and B.C. Hydro — had cost $492 million. The plan was budgeted at $412 million, and SAP was one of the component parts of that plan.

So when he says I said it cost $492 million, he knows that to be false. Everyone at B.C. Hydro knows it to be false, because my first 14-page letter and my next 19-page letter were both copied to the president of B.C. Hydro, so she’s well aware of what the facts are. I know the minister wants to play that game — it’s an interesting game.
[ Page 12053 ]
The fact of the matter is that plan was a move to a “one Hydro” model of SAP, and it hasn’t been completed. How do I know it hasn’t been completed? Because the minister just said it hadn’t been completed.

What we have is a plan that was set off in 2008. The B.C. Utilities Commission was misled. They go forward on a five-year plan, of which SAP is a component, and they’re both years behind. We’re in year, I think, eight or nine of that plan, and it hasn’t been completed. B.C. Hydro says: “Well, if you do a plan worth $400 million and you only spend $400 million in those five years, it’s not over budget.” Well, if you haven’t completed what you said you were going to do, yes it is over budget, because you haven’t finished the plan. Those are the facts.

In the first response, the minister is correct. I made a complaint in December. The president of B.C. Hydro responded in the first week in January and acknowledged some things. I subsequently responded in February now, and then the commission, subsequent to that, has asked questions of B.C. Hydro, to which they’ve responded. Their answers have evolved, as I discussed.

I have a specific question, then. It is: when will the components of SAP, which were all supposed to be done within the five-year plan…? When does the minister envision that B.C. Hydro’s SAP platform will finally be completed?

[1535]

Hon. B. Bennett: I know the member is trying to get through as much of this as he can. I do apologize for taking extra time. I remember last year, when we were discussing the SAP platform, it was similar. I have two sons who are both very fluent. Father has a cellphone and a laptop. I need to be sure that what I’m saying is accurate.

I think the best way for me to respond to the member is to point out to the member that the way he’s characterized Hydro’s investment in the SAP platform is more like a hard piece of infrastructure, like a dam or a power plant, and less like an IT project, particularly an IT project that is enterprise-wide.

The member laughs.

I have the person in charge of IT at B.C. Hydro sitting behind me, and I’m following his advice in answering this question. What I am told — and it certainly makes sense to me — is that there are a number of components to an enterprise-wide IT platform. That’s what SAP is. You don’t necessarily build all the components at the same time. You don’t necessarily build them and then never change them. They are constantly changing, like all IT constantly changes.

SAP, as an enterprise platform, will never be finished in the way that the member has asked his question. There’s not going to be a day where everybody in the IT department at Hydro goes out for a beer after work and says: “Well, we finished the enterprise-wide platform. It’s done, and we shouldn’t have to do anything for another ten years.” That isn’t the way that IT works.

Something that hopefully will give the member some sunshine on this particular topic is that when B.C. Hydro files their revenue requirements application in late July, all of the foreseeable expenditures around SAP and everything else having to do with IT at Hydro will be detailed there for his viewing pleasure. He will get all of the details that are available at that time.

[1540]

A. Dix: I actually know that to be the case. It was B.C. Hydro that decided to make SAP its default provider in 2008. That was done at the executive level. Then they misled the B.C. Utilities Commission about it. They did.

The minister will recall — because this occurred in time and space last May — that he apologized for how the matter had been handled. He apologized for the fact that it was disastrously behind time and over budget. The main benefit proposed, the reason we were going to this, is exactly the kind of unity that the minister just described they weren’t seeking.

I’m merely asking it because the purpose of this was to put SAP across B.C. Hydro’s platform. We’re now eight years into the process, and they finish four of seven components or three of six components — depending on whether it’s the minister or others answering the question at B.C. Hydro. This is what they say.

That seems to me to be not an impressive performance. The minister agrees with me, to the extent that he has apologized for the poor management of this file.

I wanted to ask the minister a very straightforward question, because it seems like a reasonable question. We debated it last year. He says even though they have all the information about IT and T spending — because they’ve developed their budgets including in past years, they know what they’re spending — we can’t see it until July, even though this is when the budget process is here.

In the 2015-16 RRA, they provided IT and T spending in planned and actual amounts in schedule 5.2. But the interim RRA did not give totals for IT and T in schedule 5, and the submission last Friday only gave it up to 2014. So I’m asking if the minister can provide the total IT and T spend for fiscal 2015 and 2016.

Hon. B. Bennett: I am advised that we can provide those two numbers shortly, if the member would like to carry on with another question.

A. Dix: I’ll move on to the E-Plus program, just to ask the minister about this program. He’ll know that people in the Kootenays — less so his part of the Kootenays — are participants in this program, a large number. Indeed, on Vancouver Island, approximately 8,177 E-Plus accounts continue at a residential level and 232 commercial and industrial accounts.

The minister will know that this has been, through a number of rate review hearings, a contentious issue be-
[ Page 12054 ]
tween the E-Plus ratepayer group and B.C. Hydro and that B.C. Hydro has come forward with a new position on this question in its rate design application. Or at least it’s proposed to amend the E-Plus program, if you will, to make it a practical interruptible option.

I’m wondering…. Given the small number of customers and the fact that we’ve been engaged across regulatory hearings, I sort of wanted to ask the minister — because we’ve just created a deferral for mining companies — why B.C. Hydro feels it’s necessary to continue to pursue this group of customers and why it just doesn’t make sense, in this case, to leave the status quo.

Why this change in option, which presumably is a slightly better option than eliminating E-Plus but is still a change — and one that the group is unhappy with? Why would B.C. Hydro continue to pursue changes in this option and changes in the program in this way?

[1545]

Hon. B. Bennett: I have had some personal experience as an MLA with this one. The program started in 1987. The program was built at a time when there were seasonal shortages of electricity, and Hydro wanted to be in a position where they could call upon customers to stop using electricity for heating. They call this the E-Plus program. Customers who agreed, by contract, to enter into the program agreed that when called upon, they would turn off their electricity to their heating unit — whether it was a furnace or baseboard heaters or whatever it was — and thereby allow Hydro to use that electricity to meet other demands in times of a shortage of electricity.

As I say, that program was created in 1987. People who have stayed in the same houses since 1987 have paid roughly half the cost of electricity that every other residential ratepayer in the province has been paying. I can totally understand how, particularly, a senior or a senior couple would get used to the fact that they’re paying half the electricity rates that their neighbours are paying, essentially. The E-Plus program is not well known. Most ratepayers would never have a clue that it even existed.

In 1987, these folks on the E-Plus program are going along and paying 50 percent of the electricity costs that their neighbours are paying. But hanging over them is this possibility that Hydro would ask them to turn their heating electricity off. The interesting thing about the program is that Hydro has never availed itself of this program ever in the history of the program since 1987, so you have a category of customers who have paid half of what everyone else, residentially, is paying for electricity.

Hydro determined that that probably isn’t fair to the other ratepayers in the province who are, in effect, subsidizing the E-Plus customers. Hydro could have applied to the BCUC to just get rid of the program. They didn’t do that. They didn’t do it for the reasons, I think, suggested by the member, that there are people who have grown very much accustomed to paying less for electricity.

I can see by the quizzical look on the Chair’s face that he’s never heard of the E-Plus program. It isn’t a well-known program out there.

In any case, Hydro has asked the BCUC to consider allowing them to change the notice period. I think the current notice period is 30 days. When you really think about the intention of this program, which is for Hydro to be able to access extra electricity on short notice to meet sudden demand — a heavy-duty, sub-zero freeze or something or perhaps a heat wave and more electricity needed for air conditioners — whatever the case might be, 30 days isn’t very practical.

[1550]

Hydro recognizes that. They have asked the BCUC to consider changing, shrinking down, the length of the notice period — not to get rid of the program, but just to shrink down the length of the notice period so that the program would actually function the way it was originally intended to function. That’s the explanation of where the E-Plus program came from.

That’s the explanation of the changes that B.C. Hydro is proposing to make. I guess the only other thing I would say is that Hydro has made, I think, a significant attempt to communicate with all of the E-Plus customers to make sure that they understand that the program isn’t being terminated and to understand what changes B.C. Hydro is actually asking for.

I think, in my experience, because many of these ratepayers are seniors, there is some anxiety that comes with change. It’s harder, as we get older, to deal with that, with the prospect of change, so it is important that those E-Plus customers who are seniors understand that the program is still there. The notice period would change if BCUC agrees with B.C. Hydro.

A. Dix: Of course, the minister will know that B.C. Hydro did try and get rid of the program in 2007. The BCUC protected ratepayers at that time.

A short question to the minister about the smart meter program. The smart meter program and the meter choices part of the smart meter program, on which the minister gets some correspondence, I suspect — how many people currently still have an analog meter, and how many people currently have a radio-off smart meter?

Hon. B. Bennett: I think he may have changed his opinion recently, but the current leader, the member’s own leader, stated…. Well, it was way back in April of 2007, but still, it was this century. He said: “Certainly, I’m really excited about smart metering.” He saw the value of smart metering at the time.

I hope the member will ask me more questions about the benefits from smart meters in terms of theft and how they helped B.C. Hydro perform during some of these terrible windstorms that have happened over the last few
[ Page 12055 ]
years. They’ve made a very significant difference in the performance of B.C. Hydro.

There are, to answer the member’s specific question, 1.93 million smart meters installed across the province, 12,761 customers have legacy meters, and 661 customers have radio-off meters. Those numbers are as of February 4, 2016.

A. Dix: Of course, the minister knows how B.C. Hydro advertised, when they were starting the smart meter program, that with smart meters, you wouldn’t even have to call B.C. Hydro if your power went out. They’d be on the case. Of course, that didn’t turn out to be the case.

I have a specific question about smart meters and what’s going on now to the relatively small number of people in the meter choices program. The minister said about 12,600 with analog meters and, obviously, 660 with radio-off smart meters.

[The bells were rung.]

The question is…. We’re going to do a vote, so the minister’s staff will have an opportunity to respond to it.

Why is it that now B.C. Hydro is notifying customers that they can’t have an analog meter anymore? They’ve been paying $360 a year — a lot of money, more than any other jurisdiction in Canada — and that is precisely what they’ve been told. They can’t have an analog meter any longer, even though they’ve paid this massive price, more than anywhere else in the country. I was just asking the minister about that.

With that, we’ll go vote.

The Chair: The Committee of Supply will stand at recess for a few moments.

The committee recessed from 3:55 p.m. to 4:08 p.m.

[M. Hunt in the chair.]

Hon. B. Bennett: I want to provide the member with some information that I took on notice a few minutes ago relating to the information technology budgets for fiscal ’15, I think, and fiscal ’16. For fiscal ’15, the budget on the capital side was $88.4 million. The actual expenditure for information technology for fiscal ’15 was $69.8 million. So underspent that.

I don’t know if the member wants operating expenditures as well. In 2015, the operating budget was $110.6 million. The actual was $111.1 million. In 2016, F ’16, the capital budget was $93.3 million. The actual expenditure on capital was $77.3 million. Operating, in the F ’16 budget was $109.3 million; actual, $107.2 million.

[1610]

All of these numbers, I’m advised, are preliminary numbers. There is some chance that they could change, but that’s the best that we have right here today on the spot.

With respect to the member’s questions around smart meters and, specifically, legacy smart meters, Hydro, essentially, has run out of legacy meters. They don’t have any more legacy meters to hand out. They did have a warehouse with a bunch of them when we first launched the smart-meter program. And I made it very clear at the time, by the way, when we announced this and when I talked about it in the news releases and backgrounders and so forth, that legacy meters would be available to those who wanted them until such time as there weren’t any available.

Of course, what happens is that all of these meters are tested eventually. I should say that another way. All of these meters have seals on them, put on there by an organization that I first learned about a couple of years ago, called Measurement Canada. I remember talking about this last year. It really exists. Somewhere in Ottawa there’s a sign over a building that says “Measurement Canada.”

Measurement Canada puts seals on these meters. Once the date on the seal occurs, then these meters have to be tested. As these meters run out of time, essentially, they have to be replaced. Hydro has been doing that with their inventory of legacy meters until recently, when their legacy meters, essentially, ran out. That’s why it’s been difficult — well, impossible — for Hydro to provide any more analog meters.

The second part of the smart-meter question dealt with: why do smart-meter customers have to phone B.C. Hydro when the power is out? They actually don’t. B.C. Hydro knows that the power is out, from the use of the smart meter. There still are some people who are phoning, but I’m told that it’s a very small number. Sorry, let me back up. Hydro already knows that their power is out, so they don’t have to phone.

There are some folks who are not network-connected — about 2 percent of customers, by the sounds of it — who would have to phone. Otherwise Hydro wouldn’t know about the outage. In the business case that Hydro has for the smart-meter program, they thought that there would be roughly 5 percent of customers at this stage that did not have the network connection so that the smart meters would work. So 2 percent is good. Hydro has obviously surpassed their estimates in their own business case.

Hydro advises that there is still some value in encouraging customers to call because there is useful information that customers do provide from time to time. You can tell with the use of a smart meter that the power is out, but you can’t tell that there are trees down on the road and that sort of thing. So there is value in customers phoning, and some customers still do phone.

Hydro is working on future enhancements, like being able to text a customer to let them know that their power is back on. I won’t go any further, because I don’t want to use up the member’s time. But if the member wants to talk about the benefits of smart meters in terms
[ Page 12056 ]
of the windstorms that have happened here in the Lower Mainland, they’re quite considerable.

A. Dix: I’m not sure that windstorms were the case that the minister wants to make for IT at B.C. Hydro. In any event, during the windstorm he’ll know that B.C. Hydro was encouraging customers to call in, notwithstanding what he just said about smart meters.

To follow up on the issue of analog meters, as the minister will know, many people pay over $1,000 now to B.C. Hydro to essentially lease, as extra cost, an analog meter. They want an analog meter, and B.C. Hydro is making a rate of return on that. They are. And it’s a cost that’s many times more than other jurisdictions, in terms of the meter choices program. So they spend $1,000 for it for three years, and B.C. Hydro is essentially refusing to recertify or get more analog meters. I guess the question to the minister is: why not? You’ve got 12,000 customers here. They’ve expressed their determination.

[1615]

They were told by Liberal MLAs, just to quote one of them, that B.C. Hydro “will not install a new meter without the homeowner’s consent.” They were told that they could keep the analog meter, although the price was very high. I think the minister would agree that $360 a year is a lot for a different kind of meter.

Why can’t B.C. Hydro satisfy the small group of customers who are being very significantly charged for this service? Why is B.C. Hydro making them now, after three years, after paying $1,000, take a smart meter?

Hon. B. Bennett: I wonder what the NDP would say if we weren’t talking about electricity — if we were talking about a gas utility, if the customers wanted to use different hardware in the system, if the NDP would support that too.

I don’t know how else to put this. B.C. Hydro bent over backwards to try to accommodate those who didn’t want a so-called smart meter. Obviously, as minister, I encouraged them to bend over backwards to do that. They then went to the BCUC, and they said: “This is how much we think it’s going to cost us.”

It’s not just a question of choosing to have an analog meter. It’s a question of: what does that do to the B.C. Hydro system? What does it do to checking meters? What does it do to the quality of information that Hydro has to utilize moving to a smart grid? Their numbers were shared with BCUC for the unit cost that they thought would be associated with keeping these legacy meters. BCUC said: “We think that your cost estimates are reasonable. Go ahead.”

When Fortis went to the BCUC, the BCUC actually didn’t allow Fortis to allow their customers to keep the old analog meters. So Hydro…. I had some role in this. I had a significant role in the decision to allow people to keep these analog meters. We’re running out of them. We’d have to chase all over North America to try to find analog meters to bring up here to B.C. so that we could put them onto somebody’s house who doesn’t want a smart meter.

The member has been around long enough to know that public utilities had legislation passed years and years and years ago enabling them to run their systems in a way that allows them to keep people safe and to operate their systems as effectively as possible so as to keep rates down. This public utility, with millions of customers, determined, like so many other utilities across the world, that putting smart meters into the system was a smart thing to do. They decided to do that. They built the project. They actually did it for $100 million less than budgeted. Good for them.

[1620]

At the end of the day, some customers just didn’t want a smart meter. So government and Hydro said: “You can have legacy meters for as long as we have them. After that, you’re going to have to take a smart meter.” That is an eminently reasonable way to manage through this situation, in my opinion.

A. Dix: Well, there’s nothing reasonable about it. First of all, the meter choices program was created by the government. So $1,000 for 12,000 customers, $1,000 they’ve paid in that period. So $360 a year, three years…. Let’s call it $1,000 for 12,000 customers — right? The minister will know that that’s…. It’s late in the estimates. That might be $12 million. I was thinking for a moment it was $1.2 million, but it might be $12 million.

That’s what they’ve paid to have an analog meter. They paid the full cost. They paid for the extra security that B.C. Hydro says is $12 a month, and they purchased with that money check meters. The minister knows this.

Now, after just a few years, after they’ve spent 12 million bucks as a group, the minister is saying that they’ve got to go anyway: “Our initial commitment that you can stay with your analog meter…. We’re not capable as a corporation of addressing this.” So they’re going to go in — with all of the problems for those customers, for B.C. Hydro employees and everyone else — and force those customers to take the very smart meters that they didn’t want to take and they spent $1,000 not taking in 2013.

From the point of view of the customer, I think, B.C. Hydro, which is not losing money on this proposition…. You know, just to have a metre is $32 a month. That’s less than the current rate for basic cable — to have that kind of meter. B.C. Hydro is charging them three times as much as other utilities in Canada for a smart meter, more than Fortis is charging them for the radio-off smart meters. Their radio-off fee is significantly higher than Fortis.

Why can’t B.C. Hydro organize itself? Why is it creating one more confrontation with this group of customers? That’s the question, and that’s my point. The minister apparently doesn’t agree, but that’s my plea to him: to respond positively, because there are lots of people….
[ Page 12057 ]

My friend from Alberni is here. John Mansell, who is one of his constituents, and others feel very strongly about this question. As the minister knows, as B.C. Hydro knows, people feel extremely strongly, and you know that they put their money where their mouth is. If you spend $1,000 to keep an analog meter, you feel strongly about it.

I think part of the reason, presumably, that B.C. Hydro created meter choices was that they were respectful of those very legitimate concerns, and now they are not. Now it’s too difficult for B.C. Hydro. They’re not capable of it. I don’t believe that they’re not capable of addressing this problem, and I would ask the minister to, as he sometimes does, ask questions of the people at B.C. Hydro.

I don’t want to suggest that this might happen from time to time when he meets with B.C. Hydro — but to ask questions of them and see if they couldn’t make some progress so that needless confrontation doesn’t take place and so that people who feel that, having paid this $1,000, having a continuing obligation to spend $360 more a year or whatever the number is — I think it’s a little more than that; I think it’s about $376 — don’t have to do it.

I will ask the minister briefly about low-income programs. He’ll know that in other jurisdictions, low-income programs exist, in different states and different provinces in Canada. They are significant. I ask this question because the minister will know that Hydro rates have gone up more than double the rates. They have increases in the minimum wage and significantly higher than the average person living below the LICO right now, which is part of the measure that Hydro uses to define low-income customers. They define it as about 180,000 customers, I understand.

[1625]

Given the problems that low-income customers are having during what have been problematic and difficult economic times, why is it appropriate? I think it made sense for the government to reach out to the mining industry. Why isn’t it equally appropriate for B.C. Hydro to do what other jurisdictions are doing and reach out to low-income customers?

Hon. B. Bennett: I go from the general to the specific in this answer. Generally speaking, it’s the belief of this government that it is wiser to help people use less electricity than it is to provide some sort of subsidy to low-income families and see them continue to use the same amount of electricity. It actually encourages people to use more electricity if their costs are subsidized.

Recognizing that it is a real issue and recognizing that we do have an ethical obligation to help those who do need our help, we would rather put our resources into helping those folks use less electricity. Hydro has programs that can help low-income families find energy savings and reduce their electricity and gas bills. I’m advised that over the next year, Hydro will spend $7.8 million — that’s over $2½ million a year — on low-income conservation programs. There are a number of those programs.

I said I’d go into the specific. I think I’ll sit down and see whether the member wants me to do that. But that is the difference between, obviously, what the NDP believe, with their private member’s bill, and what we believe. It is better to find ways for people to use less electricity than it is to use those same resources to simply subsidize the regular use of electricity that’s already ongoing.

A. Dix: Well, as the minister will know, for example, the ECAP program and other programs that the government has put forward don’t apply, in that case, to those who live in apartments, who are, disproportionately, low-income people in British Columbia. I guess the point is that while other jurisdictions…. The minister makes it a B.C. Liberal–NDP thing, but, of course, it’s a Liberal government in Ontario. Republican governors in the United States have done it, as have Democratic governors, as have Conservative governments in Canada, as have NDP governments in Canada.

What we know is that, disproportionately, low-income people are paying the price — a very significantly higher percentage of their income. That’s what makes it not equal. It’s not equal for them, when we see massive rate increases at B.C. Hydro and they have to deal with it on what are significantly fixed incomes. Yet those same customers — because this was a special direction from the cabinet — have taken their share of the obligation, for example, for the mining industry deferral package, which the government ensured didn’t just come from industrial customers but came from industrial, commercial and residential customers.

[J. Martin in the chair.]

The low-income customer, who gets a worse deal in B.C. than in other jurisdictions, has a responsibility to pay for that package. It’s unfair, because the economic issues are different. We want people to be working in mining. If the difference between a mine working and not is the short-term impact of Hydro rates, there are a lot of other potential benefits. This is true, as well, for low-income customers.

[1630]

I wanted to ask the minister specifically about one issue that’s actually quite a small issue that has come up in the rate design hearings and elsewhere. It’s that B.C. Hydro won’t consider waiving a reconnection fee for eligible low-income customers because — here it is, hon. Speaker; wait for it — it would under-recover $90,000 that would have to be recovered from other ratepayers.

Can the minister explain, in light of the mining program, with a $300 million potential cost, why he wouldn’t consider changing this program, which disproportionately affects low-income people, with a cost of $90,000?
[ Page 12058 ]

Hon. B. Bennett: Multiple parts to the answer. First of all, Hydro’s energy conservation assistance program does offer free energy assessments and energy-saving products to customers on low incomes.

Because that program is for the building envelope, it does, in fact, cover off apartment buildings. The energy conservation assistance program would, in fact — at least, potentially — help those living in an apartment. Energy-saving kits are also available for apartments. What the member stated, to the effect that people living in apartments can’t avail themselves of Hydro’s energy-saving programs, is not correct.

I would also point out to the member…. He may not know this, based on what he said about reconnection costs. The reconnection costs for low-income ratepayers was changed from $125 to $30. It certainly is a lot better than it was.

Finally, I think it is wrong to compare the electricity cost deferral program for mines with a straight subsidy. The electricity cost deferral program for mines is exactly what it says it is: it’s a deferral. They not only pay the cost of their electricity; they pay the cost of their electricity with a commercial rate of interest. That is a lot different than simply saying: “You no longer have to pay a reconnection charge.” I think it’s reasonable that the reconnection charge has gone from $125 to $30.

In fairness, to the member’s question, I think this is a place where both sides of the House intersect with respect to making sure that we’re doing everything we can to help those who need our help. Electricity costs are one of the most basic human needs in a province like British Columbia, with the weather we have and the daylight hours we have at certain times of the year. The equal payment plan, I think, is helpful to those who struggle with finances. It’s another thing that we’ve done.

We’re continually on the hunt for other conservation measures that we could introduce that are not necessarily costly that would help low-income British Columbians. But there’s a lot already available, as I just indicated.

[1635]

A. Dix: We’re talking about, in this case, $90,000. I want to quote B.C. Hydro’s website because the minister just corrected me. Here’s what B.C. Hydro’s ECAP website says under the “How to apply” section. “Renters and homeowners that live in a detached home, townhome, duplex or mobile home and meet the income qualifications are eligible and can apply.” That means not apartments. So when the minister corrects me and says people in apartments can apply, I don’t think he’s correct.

I make this point because, of course, low-income ratepayers, as the minister will understand, are much less likely to live in a detached home than middle- and higher-income ratepayers. In fact, low-income ratepayers are 42 percent of the apartment population and only 26 percent of the overall.

I would be interested if the ECAP program was being extended to people in apartments. That may be a change since I read this on the website. I’m optimistic about that. But at least at some point recently, it was the case that people in apartments could not apply.

Hon. B. Bennett: This would be a glorious place, point in time in estimates for the member to turn it over to his colleague on the Columbia Power Corporation, given that — I’m not happy to say this — the member is correct. I made a mistake just a second ago. The ECAP program is for building envelopes but not apartment buildings. Now, the energy saving kits are available for apartments.

He’s absolutely correct. I hope he gives me an opportunity to answer at least one more question so that we don’t end on that kind of a note.

A. Dix: I think my quote from the minister is simply: “The member is correct.”

My point is that that’s a very significant group of low-income ratepayers who don’t get to benefit from an important program that B.C. Hydro does offer and who are facing these issues of reconnection fees. So my appeal to the minister is simply to ask him whether he and B.C. Hydro would consider the $90,000 cost.

He’s right. It’s not the same thing — the mining program — as this program. But what’s also true is this. Most companies…. Teck Cominco has no need for a loan from the province of British Columbia. They’re not going to be involved in that program. The only mining companies that have been involved in that program are those that couldn’t get better credit than the province is offering. In that sense, they’re a credit risk. The minister acknowledged that in the debate with the member for Columbia River–Revelstoke just a few days ago.

I think that it is reasonable to ask the government or B.C. Hydro whether they wouldn’t consider making that change given that it is a very small change but makes a very large difference and noting that the individuals involved, when they’re getting reconnected, are paying their owed bill in full. They’re extremely low income. They’re below the LICO, so it has a significant effect on them. I think that is a perfectly reasonable step, which B.C. Hydro has, to date, rejected. But we’d like to hear from them in the future.

I’m going to give the minister a chance to answer a couple of more questions so that he doesn’t end on what, for him, might be a sour note. I’m always concerned about his good feeling. I spend a lot of time, relative to the general level of interest, concerned about that. I want to leave him in a positive frame of mind for his discussions with the member for Kootenay West — and I’ve mentioned this — where the minister will spend an hour celebrating an NDP triumph, which is the Columbia Basin Trust and the Columbia Power Corporation.

He’ll spend an hour going on and on, recognizing, as we do, the success and what that’s meant for the
[ Page 12059 ]
Kootenays. It only came because of the intervention of great MLAs such as Corky Evans, Ed Conroy, Anne Edwards and others.

A Voice: What about Jim Doyle?

A. Dix: You know, it’s a long list. It’s hard to remember them all. I’m sure there were more than one. The minister can celebrate other NDP MLAs that he likes, as well, from the Kootenays. I know that’s a long list.

[1640]

I wanted to ask the minister about the issue of demand-side management. The fact is that, as he acknowledged in last year’s estimates, B.C. Hydro had failed to meet its conservation targets repeatedly. Then they changed the nature of the targets, which previously measured cumulative energy savings against the target of 7,800 gigawatt hours a year, by 2020, in successive service plans.

I wanted to ask the minister: based on the old target, cumulative energy savings, where is B.C. Hydro at, in this year?

Hon. B. Bennett: We might have to get back to the member in terms of a specific number, given that the year has not been closed out yet.

What I can provide the member, however, is the fact that the Clean Energy Act requires that 66 percent of all incremental demand for electricity is met by conservation. Unfortunately, the NDP voted against that when that measure was introduced into the Legislature. Heaven knows why, but they did. We have met that 66 percent goal of all incremental demand for electricity every year since the act was passed in 2010.

The member is asking, of course, about specific annual goals. It is true that there was one DSM program dealing with commercial electricity users where it just, simply, didn’t work. You never know for sure, when you offer incentives, the extent to which the ratepayer or the ratepayer group is going to take you up on the offer. In that case, the commercial users — probably, for the most part, small to medium-sized businesses — didn’t avail themselves of the opportunity so that part of the program didn’t work.

There was never any question about meeting the 66 percent target. They were always well beyond that. My understanding of where this year is at is that we’re well above the 66 percent, but we can get the member a specific number in due course.

Just for the member’s benefit, since 2003, B.C. Hydro has invested $1.3 billion in conservation. It’s an average of about $100 million a year. Over the next three years, it’s expected that B.C. Hydro will invest $375 million in conservation per year, so they’re certainly not letting up in terms of spending the money that’s required to get the results.

It is interesting — you know, I like to do this; the member knows I like to do this — to contrast the way our government has managed things and Hydro manages things while we’re government compared to when he was advising the NDP government. When they were in power, they cut spending on conservation from $65 million, in 1993, to only $1 million. It’s barely believable they would do such a thing. Certainly, they don’t indicate that they think that’s a good idea today, with their new, exciting energy plan that they have around the importance of conservation, but that’s what they did when they were in government.

[1645]

A. Dix: That’s right. The minister is correct. He has — as he knows, as we reviewed last year — massively missed their targets. The minister, having missed the target, has done what I suppose all Liberal ministers do: lowered the target. It’s not raising performance up to the target. It’s lowering the target, and that’s what’s happened here. The minister’s new target is the lowest possible under the law. That’s his new target.

Unfortunately, the plan presented as a significant part of the IRP that was presented, what they did was…. They didn’t just change the target. They changed the basis on it, and they changed the statistics themselves — the benchmarks themselves — so you wouldn’t compare what they promised and what they delivered.

Yes, the minister is quite right. We in the official opposition have a different view: that you can create jobs by conserving energy; that you can invest in retrofits of public buildings; that you don’t have to cut those programs, which this government has done. We have a different approach to those issues.

But the fact of the matter is that the minimum required under the law is not what B.C. Hydro promised. They, unfortunately, dramatically failed to meet their targets, having cut significant conservation programs. So that, I think, is the point I’m making to the minister — that B.C. Hydro unfortunately has missed its targets. I’m curious to know, given that another year has passed, whether this past year, the one just finished, B.C. Hydro has missed its target — its promised target, its committed target — again.

We would, of course, be able to see these in an IRP and in a rate review hearing. But unfortunately, B.C. Hydro missed its target to present that this spring. They’ve delayed that for six more months because they are currently 2,400 gigawatt hours of demand lower than they said they’d be. This has nothing to do with demand-side management and everything to do with what’s going on in the B.C. economy. The minister confirmed that yesterday.

In short, we are interested, and I know that officials at B.C. Hydro will provide and forward this information.

It’s approximately 4:46, and we’re going to keep our promises here, both to staff and to B.C. Hydro. Noting the minister’s commitment to get that information on demand-side management, and noting the importance
[ Page 12060 ]
of Columbia Power Corporation, perhaps I could finish by thanking staff at B.C. Hydro and staff of the Ministry of Energy and Mines for being here today.

The minister will know and so on that at the end of today, we’re not ending debate but merely reporting progress. There are issues around mining that will happen on a subsequent date. I just want to express my appreciation for staff for coming over. B.C. Hydro staff will now be free to return to Vancouver and their busy lives there.

I want to thank them and thank the minister for participating in the estimates and hand things over to my colleague from Kootenay West.

Hon. B. Bennett: There are a couple of loose ends that I should respond to.

I wanted to get on the record that in addition to the programming that I made reference to that’s in place for low-income British Columbians, I am also advised that we’ve actually doubled the number of people, low-income folks, who are eligible for these programs. So it’s another piece in this story of what our government has done to recognize that there are some people in our communities who need some extra help.

I also, I guess, and I’ll end with this, thank the member for always being so well-prepared, because he always is. We will never agree. We will have to, I guess, agree to disagree on most things. But to suggest that since 2001, the government of British Columbia or the public utility is not doing enough on conservation is a ludicrous claim for anyone who has an NDP card to make, given the record of the NDP on energy conservation in the 1990s.

We might want to take just one minute to have staff….

K. Conroy: But, Minister, some of my questions will go to B.C. Hydro. I’ve got a few questions that will go to B.C. Hydro first, in relation to CPC, if that’s okay.

[1650]

The Chair: Please proceed.

K. Conroy: First of all, I want to acknowledge and thank the staff of the Columbia Power Corporation and the Columbia Basin Trust for their continued dedication to both of these great organizations, and my colleague from Vancouver-Kingsway. He mentioned the heritage that these organizations enjoy. I think everybody in the Kootenays is very proud of them, and they continue to do great things for the people of the region.

Just to clarify with the minister, I’ll be meeting with Neil Muth, the CEO, and Rick Jensen, the new chair, in the very near future. We actually do connect very regularly. We’ve agreed that due to the short period of time that’s allowed for these estimates, it didn’t make sense to bring them down to Victoria when I know that staff, as well as the minister, are perfectly capable of answering any questions that I haven’t had answered by the staff up there.

I also want to thank Bree Seabrook, the manager of communications at Columbia Power Corp, who took the time to come and meet with me and pass on the information that I requested so that I don’t need to be asking those questions here in estimates today.

So the questions that I have on B.C. Hydro…. Some relate to CPC. But the first one is actually a local issue. It relates to the Hugh Keenleyside dam, and it’s about the intention of permanently closing the Hugh Keenleyside roadway to traffic — closing the public access over the Hugh Keenleyside dam.

When this dam was first constructed, way back during the ’60s, it was advertised as a main artery linking both sides of the highway systems, and it was used exclusively by people living in Robson that worked in the pulp mill and the sawmill, as well as people going to Castlegar to shop. There also used to be tourist facilities that were maintained in the summer by students. People from all over the world came to see Hydro’s only navigation lock, the only one in western Canada. It was profiled as Hydro’s engineering marvel.

Once a bridge was constructed downstream and the ferry disappeared, some people still chose to use the dam but others didn’t. The number of people actually using the dam went down, and tourists continued to come. However, the tourist facilities were downsized. I want to point out that I have been to some of the facilities in the States. They have some incredible programs where they tour people through their dam sites, and they don’t seem to have an issue with touring people through the dams.

There seems to be an issue from B.C. Hydro or the ministry. I’m not sure where it’s coming from. But it’s an incredible opportunity for people to go and tour dams. It’s well utilized in the States and brings many, many tourists down, so it’s unfortunate that it doesn’t happen. There are not even drinking water or washroom facilities out there anymore.

Then B.C. Hydro put in gates at both ends of the dam and restricted the hours. Now they’ve done a risk assessment, where they say that the only viable solution is to close the roadway. There is some concern that this wasn’t an entirely independent study. It was done by a former employee. What’s even more concerning is that Hydro hasn’t released the information from this study, so nobody knows what the mitigating factors are in this study that have said: “Oh, we definitely have to close this roadway.”

For 42 years, this roadway has been open. No one has ever been hurt. There have never been any serious accidents on the dam. People are at a bit of a loss why it wouldn’t stay open. It’s interesting that the public access over Hydro’s Terzaghi dam remains open, and it actually has worse sightlines than Keenleyside. People in the area are really upset about this.

It is utilized not just by people driving but hikers and people biking. The interesting thing is that local B.C.
[ Page 12061 ]
Hydro staff have worked really hard to re-establish a good name for B.C. Hydro in our region. I mean, we all know what happened in the ’60s and how horrific the relationship was between the community and B.C. Hydro at the time. B.C. Hydro was burning people’s houses and throwing people out in order to build the Keenleyside dam.

[1655]

The staff in the area have done a really good job of trying to work with the communities and working well with the trust and the power corp to do some good work in the region. Now this seems to have put a big schism into all of this good work.

There are a couple of questions that go with this. Will B.C. Hydro release the study that was done to justify this decision? Or will B.C. Hydro actually do an independent study? There are numerous employees, former employees, that feel that this is an unjustified viable decision and are requesting that the B.C. Hydro reconsider it.

Hon. B. Bennett: Well, look. I recognize that this is a constituency issue, and the member who asked the question, as is her custom, is going to bat for her constituents on this. I understand, as an MLA who represents a rural region, that when people get accustomed to routes of access and then suddenly find that something is going to be closed, they’re not very happy about it. I get that and appreciate that, and I can understand it.

On the other hand, B.C. Hydro is subject to a lot of rules around how they manage and maintain their dams. They are very sensitive — and need to be very sensitive — to the Canadian association of dam safety and what their expectations are for the management of large water dams like this.

The member didn’t suggest this, but in order to make sure that I’ve gotten on the record about this…. It isn’t a simple matter of people who’ve been using this since the 1960s and nothing has ever gone wrong. There have been, as I understand it, a number of incidents caused by people who are crossing the dam deck. There have been instances of vehicles crossing at excessive speeds, forcing workers to jump clear.

There are some folks with travel trailers that find their way there. They ignore the length restrictions, and they’ve attempt to traverse the switchback around the navigation tower. They’ve obviously crashed into the roadway barriers, which has resulted in damage to their trailers, damage to the roadway barriers and, in some cases, a release of raw sewage into the environment.

There have been vehicles travelling at excessive speeds, impacting barriers around that navigation tower. There’s a 90-degree turn there. There have been vehicles have jumping the lights at either end of the dam deck. That creates, of course, potential for head-on collisions. There are large trucks and tractor-trailers which have attempted to negotiate these tight corners on the dam deck. Maintenance work, actually, in some circumstances, has had to shut down as a result of vehicles refusing to heed directions from flagging crews and so forth.

[1700]

So it isn’t like this has been a flawless, riskless scenario. There have been issues, and as the Canadian Dam Association’s safety guidelines evolve over time — and they do evolve over time — there is more focus on issues of security, terrorism and so forth.

Hydro has an obligation to do what it believes is in the interests of everyone, its workers and also the general public, from a safety perspective. They have this study, which we will get released right away, as soon as possible. The member can have a look at the study as soon as we can get it to her.

It certainly looks like the advice is…. There is no…. I mean, if the member has evidence that somehow or other there’s something wrong with the study, she can certainly provide it to me. I’d be interested to see what she has by way of evidence, but it looks like…. I’m certainly advised that it was a credible study that was done. She can have a look at it and see what she thinks.

It isn’t just a simple matter of the large public corporation making a decision that impacts local people, and the corporation doesn’t care. They are doing this for safety reasons.

K. Conroy: When people went to the consultation meetings — people that have been working on the dam for 30 or 40 years, that have been there since day one — they talked about the safety issues and the mitigating factors that could be put into place.

Yes, some of those things have happened, but they are minuscule and few and far between — the incidents that have happened. So the minister is saying a few incidents that have happened are going to shut the whole roadway down for everyone, because of a few small incidents.

People actually presented situations that could ensure that those things didn’t happen. But the decision was already made that it was being closed without…. Then B.C. Hydro came to the community for consultation.

I’m just putting it out there that it seems to be a backward way of doing consultation, by saying: “Okay. We’re coming to consult with you. But we’ve already made up our mind, and it really doesn’t matter what you say.” That was even though people had some really good points they wanted to bring forward — things that could be done to ensure that we don’t have the situations that the minister referred to, which are actually few and far between.

I question the whole issue around terrorism. I mean, the U.S. have a really public program, and I would think they’d have more concerns around terrorism than Canada does. But maybe not. I didn’t think our dams were on the terrorist list. Who knows? They could be.

I won’t take that lightly, but I think the United States has much more of an issue. Not only do they have access on a lot of their dams; they also have tourist sites. You
[ Page 12062 ]
can tour the dams. They have wardens that work there with the United States parks association. It’s something to think about. Why can’t we have a similar operation here in B.C.?

I appreciate that the minister will be releasing the report. I’m sure it’ll be viewed with great interest in the community. All I’m asking is that the decision that’s been made be put on hold until people can see what the report…. I mean, if the report, in fact, says, “Yes this is the best situation to do,” then I’m sure people will agree with it.

[1705]

Hon. B. Bennett: There is some additional information that I can provide to the member that will provide some more context around what’s happening there, at this site.

I’m advised that there are equipment upgrades going to the spillway reliability. The member is well aware that there’s been a spillway project there, going on for upwards of three years. Some of the equipment that has been upgraded there has actually restricted the roadway and Hydro’s ability to pass public traffic.

That is a change from the past. Given that the road has been closed for the duration of the spillway project — which is, as I understand it, if not three years, close to it — the public, probably, is not aware of the restrictions from this new equipment that exists there.

The second thing I wanted to say is that — in response to the member’s criticism that a risk assessment shouldn’t be done before public input is sought — it is, in fact, the risk assessment that you go out to the public to talk to them about. It is quite standard for the risk assessment to be done and then to seek public input on that risk assessment.

A third thing I wanted to say is that Hydro did risk assessments on eight dams that have public access and where the public is allowed to cross, and Keenleyside was, far and away, the highest risk of the eight dams. Again, this isn’t a large public corporation trying to poke local people in the eye with a stick. It is a safety issue. They have, in their professional judgment, given a lot of scrutiny and due diligence, decided that it’s not safe to allow the public to cross the dam any longer.

That’s unfortunate for people who want to cross the dam and who have relied on that in the past — I get it — but Hydro still has an obligation to manage risk appropriately. If they took any other approach to Keenleyside or to any other situation where they have identified public risk and didn’t do what their experts told them they should be doing, they would be in a very bad way if somebody got hurt. To me, it’s understandable that they’ve had to make this difficult decision the way they have.

K. Conroy: I understand where the minister is coming from, but he did say that they do risk analysis and reports to go out and to consult with the community. They did the risk analysis and then went and consulted with the community but didn’t share the report, which is what has got the community concerned. The risk analysis was done, the report was done, but the community doesn’t know what it said. The minister is saying that that’s why you do it — so you can go and consult and share the results. Well, that didn’t happen.

All the community is asking for is: can they please see a copy of the report? The minister is now saying that can happen, and then we can move on from there.

I’m getting a shake of a head. Good. Okay, thank you for that.

These are questions for B.C. Hydro as well as in conjunction with CPC. The power corp. is in the process of completing the last of its three projects that were originally planned out in the ’90s, as the member from Vancouver-Kingsway had referred to. With the completion of the Waneta dam project, it will be the end of the three projects that were planned at that time.

I just, at this time, want to once again say to the people that all worked on the Waneta dam project: congratulations to them for a project that was done on time, on budget. Everybody involved was really proud of the work that was done and what the results are today.

[1710]

One of the concerns expressed is…. We have this amazing team of dedicated professionals who are there, willing, ready and able to go out and do other projects in the region, if not in other parts of the province. I understand that Elko is close to a decision, that it’s been narrowed down to six options that will actually be taken out to the communities for consultation, the communities that are affected, and that B.C. Hydro are the people actually involved in the consultation with First Nations on the project.

I wondered which First Nations B.C. Hydro is consulting with. Is it the Ktunaxa as well as the Shuswap, or are there other First Nations that are being consulted with?

Hon. B. Bennett: My advice on this topic is that the Ktunaxa have been consulted, and the Shuswap, having made it known that they lay claim to that corner of the province as well as the Ktunaxa, also have been consulted on the project.

K. Conroy: One of the issues is the amount of time it takes to get projects up and running. There’s a lag time between when projects are finished and when projects can get started up again. I’m wondering. Are there other projects on the docket that B.C. Hydro is actively looking at to work in cooperation with the CPC?

They obviously have the expertise to go in and retrofit small dams, and there are enough older, smaller dams in the province that could be retrofitted or just need rehabilitation. I’m wondering if Hydro is actually working to ensure that these projects can be shovel-ready in a sooner-than-later process.
[ Page 12063 ]

Hon. B. Bennett: The member asked whether Hydro is working to get projects sort of shovel-ready for CPC, Columbia Power Corporation. Let me preface my answer by saying to the member that I, too, am impressed with the work that Columbia Power Corporation has done. I’ve said that before on Hansard, and I’m happy to say it again. Good board, good management. Did a great job on Waneta.

[1715]

Given the local jobs associated with CPC and the fact that they seem to be good at what they do, obviously I, as the provincial Energy Minister, would like to see them continue to do good things in the future. That’s the context for my answer.

My answer is that B.C. Hydro and Columbia Power Corporation are totally separate corporations with completely separate mandates and sets of people that they’re accountable to. The one thing, I guess, they have in common is that the shareholder is the B.C. government for Hydro and 50 percent of the shareholder for CPC, the other 50 percent being CBT. So they have that in common. But their mandates, their responsibilities, their accountabilities are quite different.

Hydro has an obligation to act in the best interest of its ratepayers, B.C. Hydro ratepayers, which means that they have to take whatever time is necessary on any proposed project. And there have been multiple projects. I think we’ve had this discussion, either in estimates or elsewhere. There was originally a list of three or four projects that CPC looked at with Hydro, and the one that seemed to rise to the top of the list was Elko.

It’s not like Hydro hasn’t been trying to discharge its obligation to the Crown, to the shareholder, to work with CPC — which I directed them to do a couple of years ago, I think — and find projects. They have. They’ve been trying really hard to come up with projects that make sense for CPC but also a project that makes sense for the B.C. Hydro ratepayer. It has to make sense for the parties that Hydro is accountable to — i.e., the ratepayer.

No. You know, the approach taken here is not to get as many shovel-ready projects in the pipeline as possible for CPC. The approach is to try to find out whether there are projects that Hydro and CPC could work together on such that the B.C. Hydro ratepayer is respected and rewarded and such that CPC is able to utilize its people and its skills.

To date, the Elko project has been the one project that there has been enough potential for that it justified continuing work and due diligence. I know the project is still in the definitions stage.

I think that’s the best sort of update or summary that I can give to the member in terms of Hydro’s relationship with CPC. There is no legal or any other sort of requirement that Hydro feed projects to CPC. Government asked Hydro to work with CPC on identifying projects that CPC might be able to build and potentially even operate but in the context of what is the responsible thing to do for the B.C. Hydro ratepayer.

K. Conroy: I’m by no means inferring that B.C. Hydro should be doing anything other than taking care of the best interest of ratepayers. I think it would be in the best interest of ratepayers to be working, as they have been, with Columbia Power Corp to retrofit or take care of the dams that need the work that they need done to them. I think not only does it make sense for CPC, but I think it makes sense for B.C. Hydro, and that’s why I’m having this discussion.

It’s no way saying B.C. Hydro is at fault here. I think they do work well with Columbia Power. All I’m asking is if there’s not a way that both Crown corporations — they’re both Crown corporations — could be looking more to the future.

I understand — I can never say it — Spillimacheen is a potential. Duncan dam — that keeps coming up as an option again and again. I just wonder, is it like we can only do one project at a time? Or are engineers looking at the potential of…? You know, these are dams that need some work done on them or could possibly be, you know, retrofitted. Duncan dam, a drone — could it start creating power?

That’s all that I’m asking. Is there anywhere, some engineer in B.C. Hydro that is actually saying: “These are projects that we could work in cooperation with Columbia Power Corp because they’ve got the expertise? They’ve been doing this. They know what they’re doing. B.C. Hydro has bigger fish to fry, and they can allow Columbia Power Corp to carry on and do the job”? That’s what I’m asking. Is there anything being planned?

[1720]

Hon. B. Bennett: I think the member, quite understandably, is looking for some comfort and encouragement that Hydro takes seriously the direction that government gave them a few years ago to work with CPC on identifying opportunities that CPC can be involved in.

I’m repeating myself a little bit, but I want to assure the member that her concern and her interest in this has been a priority of mine, for obvious reasons, given the opportunity I’ve had over the last three years to serve as Energy Minister. I’ve had the opportunity to make sure that we are looking at all of these opportunities, but again, it’s in the context of what B.C. Hydro’s central mandate is, which is to deliver electricity at affordable rates in a reliable way to its ratepayers. Will the Elko project move forward ultimately? Will we find other projects that CPC can do? All I can tell the member is that I hope so.

I’m not qualified to say that CPC is a perfect little operation to be doing work for B.C. Hydro. It’s a good idea. I like the idea. I’ve asked Hydro, in their mandate letter, to work with CPC to determine if it’s practical and cost-effective to do that, but we’re going to have to leave this
[ Page 12064 ]
to Hydro and CPC to work through. There’s no lack of political will. There’s no lack of will at B.C. Hydro, but Hydro does have its mandate, which was given to it by the shareholder, by the government of B.C., and we are all over them about any pressure that would be put on rates, so they’ve got that to deal with first.

But Hydro has expended a considerable amount of resources dealing with CPC over the past couple of years and will continue to do that. It’s not like they never talk. It’s not like they haven’t had many, many meetings and shared information and worked on documents together. They have, and they’ll continue to do that.

So it’s just, I guess, steady as she goes, and we’ll do what we can. I will do what I can as minister to see that CPC gets additional opportunities, but I can’t announce anything here today, and I can’t guarantee anything either.

K. Conroy: I think if the minister didn’t think that CPC was qualified, he wouldn’t have put it in the mandate letter. I appreciate the work that both organizations do together. It has resulted in some, hopefully, potential good work, which is going to be of benefit to the ratepayers of the province, so I think in the long term it’s going to be of benefit.

When it comes to the Elko project, is B.C. Hydro utilizing the allied Hydro agreement?

Hon. B. Bennett: I think it’s way too early to talk about who’s going to build it. We’re still in the definitions phase. We still have to figure out what needs to be done. We still have to figure out what the impact on B.C. Hydro ratepayers is — from whatever one of the options that could potentially be chosen.

[1725]

It is just too early for me to start speculating about who’s going to build a project where a decision hasn’t yet been made to actually go ahead and build it or even…. A decision hasn’t yet been made, not only whether to build it or not but none of the options…. The member said there were six options. I can’t remember how many options there are for Elko, but however many there are, none of those options have yet been chosen either.

So it’s just too early to talk about what labour model might be used on such a project.

K. Conroy: For the record, all three projects that were done through the Columbia Basin Trust and Columbia Power Corp. utilized the Allied Hydro agreement. All were done on time, on budget. All were done without labour shortages.

I just think that there’s an established…. Any of the projects that have been done in this province using that model…. I can’t see why a minister wouldn’t say it’s one of the best models to use. It works. I know I would be if I was the minister. I think that we would be looking forward and looking at the positive results of something that happened in the past. But I’ll move on.

There are a number of dams that B.C. Hydro is responsible for in the province that were….

I have till quarter after six, if the minister is wondering.

Hon. B. Bennett: I thought we were about to stop.

K. Conroy: Sorry. It’s just taking far longer than you thought. No, the clock didn’t stop.

There are a number of older dams in the province. I know John Hart is getting upgraded right now. There are a number of them. I just wondered what other dams are being looked at by B.C. Hydro for either retrofitting or just rehabilitation because of their age?

Hon. B. Bennett: The member asked what dams and generation facilities Hydro is working on these days. I sound like a broken record. The way to start the conversation, the way to start my answer, is to remind the member that B.C. Hydro is spending $2.4 billion a year for the next ten years, at least, on infrastructure. Yes, there’s a tremendous amount of work that’s being done out there.

I think the member is interested in how that connects to, or the extent to which it connects to, Columbia Power Corporation in terms of opportunities for that company. What I would say to the member is that CPC itself has identified its expertise to Hydro. It has indicated what it can do and what it feels it does well. Hydro has worked with CPC to identify projects that fall into the particular expertise and experience that CPC has.

I can tell the member that, for example, right now there’s $400 million being spent around the province on spillway gates programs. There’s $19 million to complete the Elsie dam safety upgrade. There’s $65 million going into the Coquitlam dam. Sorry. That’s already happened. That was 2008. There was $20 million in 2009-10 into the Strathcona dam intake tower project.

The member mentioned the John Hart dam project. John Hart is an expensive project. It’s around $1 billion. The dam part of it is actually not as big a part of that project as you might think.

Ruskin. I was up to see Ruskin about a year ago. It’s a dam safety and powerhouse upgrade. That will be done in 2017 — $748 million.

[1730]

I guess I got myself confused a bit. The John Hart north earthfill dam upgrade project was the smaller part of that project. It was only $4 million. Then you’ve got, separate from that, the $1 billion upgrade of the John Hart generating station.

It would be, I think, wrong to assume that CPC can start doing things that it hasn’t done in the past. For example, it doesn’t build dams. It typically has been involved with new generation. So the extent to which there are opportunities for CPC in collaboration with Hydro will really be limited by what their experience has been, which is one of the reasons why Elko was chosen as a project of interest.
[ Page 12065 ]

Again, though, I can say to the member that everyone is well aware that government would like to see CPC find as much to do as possible. Again, that’s going to be limited by B.C. Hydro’s obligation to its ratepayers, and it’s going to be limited by the expertise that CPC actually has.

[G. Kyllo in the chair.]

K. Conroy: I’m well aware of the expertise in the region. In fact, there are actually a lot of workers in the region — and the minister’s part of the Kootenays as well — that have actually built dams, so I know that that expertise is there. A number of them are working on the John Hart and have gone to work in other spots in the province.

One of the questions I had about Elko was…. It’s my understanding that one of the options, of the six options, is not to do anything. Is that a viable option?

The Chair: Minister.

Hon. B. Bennett: Thank you, hon. Chair. Welcome to the chair.

I don’t have the document, in terms of the list of options, at my fingertips, but I have seen it. I think the do-nothing option refers to a large project at Elko. So “do nothing” would be: “Don’t do a large project right now.”

What drives this, of course, is public safety. That’s what has driven the discussion on Elko from the very beginning. What will continue to drive the decision about what to do at Elko by B.C. Hydro will be public safety.

Is the do-nothing option a feasible option? My advice is that, potentially, a large project at Elko could be deferred until such time as public safety just would not allow any additional deferral. It is a form, I guess, of “do nothing,” but it isn’t really “do nothing.” It would be a temporary deferral of a larger project until such time as engineers said: “You must choose one of these options and do it.”

So the answer is yes. You could choose that option but probably not for very long.

K. Conroy: Would the same assessment be done at Spillimacheen too?

[1735]

Hon. B. Bennett: I just wanted to be sure before I answered the question. I think the member is asking, specifically, about whether the Spillimacheen dam would have the same assessment as the dam at Elko. The answer is yes. Hydro maintains, quite safely, and also operates 79 dams at 41 locations across the province. They are constantly assessed to determine their safety. The knowledge that Hydro has and the ongoing work they do to assess the structural integrity of the dam at Elko would apply to all of their 79 dams across the province, including the one that apparently is at Spillimacheen.

K. Conroy: It’s very much at Spillimacheen.

Has there been any study done to determine the capacity to retrofit Duncan dam so it’s no longer a drone dam and is actually producing energy for the province?

Hon. B. Bennett: There was apparently a study completed on the Duncan dam. There have been many studies over the years. The member is probably aware of that. There was the most recent study that was completed in 2014, done by B.C. Hydro and CPC. The large multinational SNC was involved in that study.

They determined that, in fact, it did not make sense to add generation to Duncan, as valuable as Duncan is to the system, and it is valuable for storing water. It is a valuable asset. The study determined that it just didn’t make sense to add generation to it. CPC was part of that study and accepted the results.

K. Conroy: Moving on to more CPC-related questions. I want to talk about local projects, and I don’t think Hydro has anything to do with the local projects. Thank you to the staff for your input.

I just want to ask the minister about some of the local projects that have been looked at and to understand the assessment that has been done on them and where CPC is at. There are a number of people that come with local projects. I know there has been assessment done. I just wondered if there is potential for some of those projects to go ahead sooner than later.

[1740]

Hon. B. Bennett: If the member will give us the names of specific projects that she is wondering about, we’ll do our best to either provide an answer right here, immediately, or to provide an answer later.

I can only say that, with the effort putting into Waneta, CPC, as I understand it, has no other projects that they’re committed to and working on, other than Elko is a potential project for them. So I’m not really sure what projects the member’s asking about. I do know there was a consultation by CPC back a while ago where members of the basin were asked for ideas on what CPC could be up to. That consultation record, I’m sure, is available if the member wants it. We can try to find that for her.

But again, it’s my advice that CPC hasn’t focused on any particular project post-Waneta.

K. Conroy: There are projects proposed in different communities. There’s one in Golden, in Valemount, Slocan. There are different projects that different people have come over the years. I’ll get the written list and give it to the minister.

I think it’s interesting that this is also something that was proposed to…. CPC went out to the community and asked people for input as to projects. I just wonder where the projects are going. As a concept for CPC, is the man-
[ Page 12066 ]
date from the ministry that they only focus on finishing up with Waneta, the operations of the three existing power projects that they are part owners of and the focus on what’s happening at Elko? Or is it part of the mandate to also be looking at community projects that could have a significant impact on the smaller communities as well as on the region?

Most of them would be power generators, which is always a great thing — to have small, environmentally friendly, sustainable power projects in our region, which is what Columbia Power Corp.’s all about. I think it would be a good idea, so I’m wondering if that’s part of the minister’s mandate to the corporation.

Hon. B. Bennett: I don’t have a copy of the mandate letter to CPC from last year. It is on our ministry website if the member wants to have a look. She may already have a copy. That will give the member the legal definition of what CPC is supposed to do in accordance with the shareholder’s wishes.

What I can tell the member though, without referring to that letter, is that we have not restricted CPC from looking at opportunities that they’re interested in looking at. There’s a very open and friendly relationship between the ministry and CPC as there is with CBT. It’s just a question of CPC bringing ideas to us, if the project is significant enough to warrant that, and talking to us about that. They haven’t done that, but they’re certainly welcome to do that.

[1745]

Their main mandate, as the member referenced when she asked the first question, is essentially complete. They’ve built the projects that they were mandated to build by government.

I’m going over ground that we’ve covered, but it’s part of the answer to the question. Now we need to figure out whether there’s more that CPC can do. As an MLA from the Kootenays answering a question from another MLA from the Kootenays, obviously, I would like to see CPC have things to do, things that would keep their capable staff working and keep the company functioning. I am only aware of Elko. In terms of projects that CPC has spent time on and is serious about doing, I’m only aware of Elko. There is no prohibition against CPC coming forward with other project ideas. In fact, I encourage them to do so.

K. Conroy: I’m glad the minister is in agreement with that. When you look at the mandate letter, it is just Waneta and the joint development committee working towards getting Elko up and going to the definition phase and then operating its facilities reliably and safely. There’s not anything about any other options or opportunities. I’m glad that the minister feels that is very much a part of what CPC should be doing. As both MLAs from the Kootenays, we’re well aware of the importance of the organization and want to ensure that it carries on.

One of the questions I had is about the board members that have been appointed. At this time, there are no board members from the West Kootenay. There usually always has been, and I just wondered why that was the situation.

Hon. B. Bennett: I’m not sure that it’s a formal requirement, but there’s an understanding between CPC and CBT that CBT has two directors on the CPC board. I’m sure the member is aware of that. Historically, I think that’s been the case — that Columbia Basin Trust has had two directors on the CPC board. I believe today they do. One is the chair of CBT, and I think the other one is the past chair of Columbia Basin Trust, Mr. Deck. Mr. Deck and Mr. Jensen sit on CPC. That’s not unusual. That’s been the practice from the beginning.

Kim Deane, I think, retired not long ago, and that would be why — I wasn’t aware of this, actually — the member is stating that there isn’t anyone on the board from the West Kootenay. I think there’s reason for me as minister, regardless of where I come from, to be interested in seeing that there is some local perspective on the board, so I’ll do my best to address that.

I would just say, finally, that CPC, Columbia Power Corporation, is a commercial Crown. It is not the same as Columbia Basin Trust. CPC requires people with the technical expertise and at least some considerable financial experience, or legal or accounting. It’s best that they have some utility experience, frankly, other than the two CBT members.

I think that the member is making a good point. We should look for a local member to sit on CPC’s board. Having said that, there are two Kootenay members already sitting on the CPC board in the form of the two CBT directors.

K. Conroy: I should publicly acknowledge Kim Deane and the work that he’s done. His expertise was excellent and utilized for a number of years, so I was sorry to see him go.

[1750]

It’s my understanding Greg Deck has done his time, so to speak — that there was a time limit and that he would not be sitting on the board for much longer. So I’m wondering if that is, in fact, the case and if, then, there would be the opportunity to appoint a West Kootenay person in his stead.

Hon. B. Bennett: What I can say to the member is that I will work with CPC heading into June, when, typically, we do a consent resolution appointing members to the board. We don’t know, on this side, where things stand in terms of what CBT wants for members to CPC. They are, after all, CBT people; they’re not government people.

One way or the other, I take the member’s point about Kim Deane having retired. He must have served his six or seven years, I guess. I know he was a very, very good
[ Page 12067 ]
board member, but I also understand that he was ready to retire. So we’ll need to see what we can do to find somebody else from the West Kootenay, and we’ll have to see what CBT wants to do with respect to who they have on the CPC board at the present time.

K. Conroy: Just the last question on that. Can the minister remind me if there are time limits on the board members for the CPC?

Hon. B. Bennett: There is no legal requirement that board members serve a minimum or are allowed to serve a maximum term. The board resourcing office has a practice that has been in place for a few years — several years, actually — that members who have served six years ought to start thinking about retirement and moving on to something else.

In the case of CPC, we made a decision a couple years ago, at least — maybe three years ago — that because of Waneta there was a need for stability at the board. We asked people if they would stay. The chair of the board had indicated that he was concerned about stability and having people who knew the project and could help with the project. Now that the project is over, of course, that reason for stability is gone.

We still want stability, obviously. I haven’t really thought too much yet about the CPC board, but the member now has me thinking about it. Maybe she and I need to talk more about the CPC board and see whether we can work together to find somebody that could go on the board that has the qualifications.

K. Conroy: I’d be only too happy to do that, because I’m sure there are some very qualified people in the West Kootenays that would like to be on that board. I look forward to that discussion in the near future.

I’m just conscious of the time.

Some Columbia River treaty questions, which I’m sure Mr. MacLaren would be well-versed in.

[1755]

It’s interesting that there’s been some discussion around who is actually going to be negotiating. I want to give full kudos to Kathy Eichenberger, who has done a terrific job and has been incredible in the work that she’s been doing not only in her work with people across the line but also in the region. She’s come out and met the local community advisory group that she’s working with. She’s just done an excellent job in the region.

But it was interesting. With the visit of our Prime Minister to Washington, D.C., there was suddenly discussion that Canada needed to appoint a negotiator. It’s my understanding that we’re actually waiting for the State Department to approve a report that’s gone in to the State Department.

I am cautious in my question, but at the same time, I have some concern. It’s always been the understanding that B.C. was the entity that would be doing the negotiation. I just wondered if that might have changed with the new government in Ottawa, or if we will continue to be the entity that will carry on doing the negotiations.

I understand that it’s government to government when it comes to the final decision, but I think it’s really important to have on the record that it’s B.C. that is the first negotiator of the whole process.

Hon. B. Bennett: No, I think the member understands completely the setup for the Columbia River treaty and who is involved in the negotiations, with the one exception. This may be more of a formality than anything, but it’s still important, because it is an exception to what she described. That is the fact that the Columbia River treaty is an international treaty. It’s between countries. It’s between the U.S.A. and Canada.

Therefore, the official negotiating party on our side of the border is Canada, and it always has been. But as the member knows, that wily old W.A.C. Bennett, before he retired, negotiated with the government of Canada to put B.C. in a position where they have considerable influence over what is in the treaty and, more to the point, I think, considerable influence about whether the treaty is terminated.

I don’t want to be disrespectful to the federal government, because we’ve worked really, really well. Kathy Eichenberger and Mr. McLaren have been back to Ottawa a few times, and they’re doing a great job on behalf of all British Columbians with this file.

Canada is definitely our partner in this. They do have formal negotiating authority, because it is an international treaty. But the member is correct to suggest that B.C. is very much in the driver’s seat in terms of this particular international treaty.

It is a highly unusual circumstance. I’m not sure there is another international treaty that Canada is a party to where a subnational jurisdiction has the kind of influence over what happens that we have with the Columbia River treaty. So most of what the member said is correct, with the one exception that the government of Canada is the formal negotiator on our side.

K. Conroy: So is the ministry or the negotiating team still waiting for the report from the State Department in the United States to go through that process and be approved and come back?

Hon. B. Bennett: Sorry. I neglected to answer that part of the question.

The member is also correct about that piece. I’m certainly not aware of the U.S. State Department having issued any sort of an opinion on where they want to take the treaty — whether they want to terminate it or not.

[The bells were rung.]
[ Page 12068 ]

There was recently a U.S. legislator; I think she was a state legislator. She might have been a national representative from a state. I’m not sure. But she confronted the Prime Minister and asked questions about the treaty. That’s where this conversation came in the media about the U.S. appointing a negotiator, and so forth.

There really is nothing new on this front. The member has it right. We’re still waiting for the U.S. State Department to declare a position. We have declared a position. They have not.

The Chair: Committee members, you’ve all heard the bell. We’re thinking that there may not be time to reconvene, but I’m looking for some direction.

[1800]

K. Conroy: I have one more question.

Hon. B. Bennett: Do you want to get it on the record, or can I just….

K. Conroy: Can I get it on the record and then if we….

Okay, it’s one more question. I’ll ask it quick. It’s about the fish.

I’ve been at a number of conferences with the minister. I’ve seen media from him. He’s always said that the fish are not part of the Columbia River treaty. Yet just a few weeks ago in the media, he said that we needed to talk about the fish. I wondered if the minister has changed his position.

I’ll provide a copy of the press release, if you’d like that. But I wonder if the minister has changed his position on how to deal with fish, especially in light of what the minister is proposing for the fish in the proposed project up north.

The fish is a critical issue. It is the issue for the majority of people that are dealing with the Columbia River treaty in the Interior as well as across the line.

The Chair: We’re going to have to go.

Hon. B. Bennett: I will have to answer that question off line. I’m sorry.

K. Conroy: I appreciate the minister giving me the opportunity to ask that one.

Hon. B. Bennett: I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:01 p.m.

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