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, May 2, 2016

Afternoon Sitting

Volume 38, Number 5

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

MONDAY, MAY 2, 2016

The House met at 1:34 p.m.

[Madame Speaker in the chair.]

Routine Business

Introductions by Members

Hon. C. Oakes: I’m truly delighted to have some very special guests in the audience today from Quesnel.

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They are youth ambassadors in our community who have collectively put in over 2,500 hours of community service since February of 2015. Today joining us we have a 2015 Quesnel princess, Maneesha Johal, who plans on going into criminology and wants to take my job, which I’ll support her in doing. It’s great to see young women wanting to get involved. Also, a 2015 Miss Quesnel princess, Courtney Moore, who is going into teaching, and 2015 Miss Quesnel Telise Gauthier, who is going to do a bachelor of arts. As well, joining them is the program director, Ashley Schmidt, who has recently been nominated for citizen of the year in our community.

I asked the young ladies what they think is the most powerful opportunity for them as youth leaders. I talked about the opportunity of creating confidence, public speaking, the fact that they get to meet people in the community, have better connections, be able to provide good role models for the community. It’s a very diverse program.

This year there’s a young lady with Down syndrome. Last year there was a young lady with autism. They’ve had candidates that have come from First Nations communities. It’s a really fantastic program that our community is proud of. They have 53 more days till graduation, and I know that they’re going to do a spectacular job in whatever they choose to do. Would the House please help make them welcome.

N. Macdonald: I’d just like to introduce my wife, Karen. She’s here visiting, and with her is my daughter, Danielle, who has not been here — if ever — for a long, long time. She’s from the people’s democratic republic of Alberta. Whatever you hear about it, I just want you to know that last time I filled up there, gas was 80 cents a litre, so it’s not quite as dire as you would think there. There are still lots of advantages.

Please join me in making them welcome. And thanks to the Speaker as well for your….

Hon. T. Lake: It’s my pleasure to introduce and welcome to the House today some visitors that are here to mark the proclamation of the month as May as Ehlers-Danlos syndrome — or EDS — Awareness Month. EDS is a genetic disorder involving mutation in connective tissue. About one in 5,000 people worldwide are affected.

It’s characterized by instability and dislocations of the joints; skin that bruises, scars and tears easily; and arterial and organ rupture, causing internal bleeding, shock, stroke and premature death. You can understand how serious an ailment this is. It’s one of these rare diseases that we certainly need to research and look for answers.

EDS Canada is a non-profit organization that provides knowledge, advocacy and support to adult individuals and their families living with EDS in Canada. We have 27 members of EDS Canada here with us today. I won’t introduce them all individually, but I would hope the House would please join me in welcoming them here today.

N. Simons: I am very pleased to have in the House one of Canada’s really, really good musicians. He happens to be my brother. Mark’s visiting from Montreal. He’s adjudicating the provincials in all the provinces for the Canadian Music Competition, which I think is in its 58th year. My brother, Mark, is a brilliant clarinetist. He’s also, I think, Canada’s sole expert in the chalumeau. Now, if you look that up, you’ll find “blowtorch.” He’s not an expert in the blowtorch. The chalumeau is an ancient cousin of the clarinet. He didn’t bring it here today. He’d get kicked out of the gallery if he tried to play it anyway.

It’s my pleasure to introduce him. Sitting with him is, of course, my partner, country musician Slim Milkie. Would the House please welcome my guests.

Hon. S. Anton: I’d like to welcome to the House and have the House make welcome the Trial Lawyers Association of British Columbia. Bentley Doyle, who’s the director of communications; Carla Terzariol, staff executive director; Wes Shields, table officer and chair of the government relations committee; Aseem Dosanjh, president — a well-known name in this House — and Keri Grenier, first vice-president.

The Trial Lawyers Association, of course, does a terrific job for persons in British Columbia who need representation. They are excellent partners of ours in moving forward to improve access to justice and, indeed, justice for all British Columbians.

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Also visiting us today is the Lord Justice Briggs, who started his career as a lawyer and is now a Lord Justice of Appeal, to which position he was appointed in April 2013 in the U.K. On the first of January, 2016, he was appointed deputy head of civil justice.

Like us, in the U.K., they are very interested in justice reform. He is here in British Columbia to learn about the civil resolution tribunal, which they are very interested in, in the U.K.

I will say that he’s no stranger to British Columbia. He’s been here a number of times, including taking some quite interesting adventures through our more wild areas, and
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he’s a great yachter so appreciates the waters of British Columbia as well.

Would the House please make welcome the Trial Lawyers Association of B.C. and Lord Justice Briggs.

L. Krog: I, too, want to extend my welcome to the trial lawyers group here this afternoon. Of course, I’d be remiss if I didn’t point out that the distinguished current president is a former colleague of mine in this chamber and the former Premier of the province of British Columbia. It only goes to prove that sometimes your kids do really well in spite of your political career. Welcome to the trial lawyers.

Hon. P. Fassbender: I’m delighted to introduce a group of students from Kwantlen Park Secondary School in the great city of Surrey. They’re here today to see what happens here in Victoria. And I need to tell you that as I had lunch with them, I’m absolutely thrilled to see the involvement and the perspective they have.

They’ve been brought over by the Rotary Club of Surrey to participate today. I know that the Rotarians do this because they believe in democracy and want to expose these students to that.

The students that are with us today are Grace Mattson, Achini Udaratayalage, Kimberlyn Gacusan, Faisia Ahmadi, and the Rotarian is Lakhjit Sarang. The teachers that are with them are Stephen Mackie and student teacher Thomas Tesan.

Would the House please make them all feel welcome.

M. Mark: I’d like to introduce my Auntie Doreen Sinclair, who’s here from Winnipeg. She is one of the few family members on my dad’s side, my Cree, Ojibwa, French and Scottish side. She’s an elder-in-residence at the Stony Mountain federal penitentiary.

Will the House please join me in making her feel most welcome.

G. Kyllo: I’m very proud to share with the House today that a pattern appears to be emerging in my family in the Shuswap. You see, being blessed with four daughters and four granddaughters, Georgina and I are very proud to announce the birth of yet another granddaughter.

Miss Hannah Lorraine Plock arrived just after 5 p.m. at six pounds, ten ounces and 21 inches long. Parents Angie and Aaron couldn’t be happier, and her big sister Kylie, who just last week told me that she’s going to call her “kid,” couldn’t be more excited.

Would the House please join me in welcoming my newest constituent, Miss Hannah Lorraine Plock.

J. Shin: While I’m happy to introduce my guests from the Turkish-Canadian community visiting us in the capital city, I regret to inform the House that they didn’t make their 11 o’clock ferry and will be missing question period. The good news is that there are two members of the delegation who are from Vancouver Island, so they are here in the gallery joining us.

This group is here not just to meet their MLAs but also to share with us their work in our communities through the Intercultural Dialogue Institute. IDI is a non-profit organization founded by Turkish Canadians in 2010. They already have 11 chapters and regional offices across Canada, including British Columbia. It aims to serve Canadians with open dialogue across culture for democracy, human rights and equality.

Would the House please join me in making the executive director, Ahmet Karaaslan, and the members of the Intercultural Dialogue Institute, both in the gallery and many of them on the ferry watching us live on Hansard as they cross the Georgia Strait, feel very welcome.

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D. McRae: I have a cornucopia of guests to announce today, if I may — maybe a veritable plethora. I’ve got to practise my words.

Today I have the Nasralla family joining from the Comox Valley. I’m joined by dad, Phil; mom, Jolie; daughter, Cassia, who’s in grade 11; and son, Spencer, who’s in grade 8. We had an opportunity to tour the Legislature. We had a chance to sample the fries in the dining room. Would the Legislature please make the Nasralla family most welcome.

And another part of my cornucopia, if I may. I’d like to introduce some individuals from the B.C. Salmon Farmers who are here joining us. I have Jeremy Dunn from the B.C. Salmon Farmers Association, joined by Vincent Erenst from the Marine Harvest company. Stewart Hawthorn from Grieg Seafood is joined by his lovely wife, Carrie; Fernando Villarroel from Cermaq Canada; and Tim Rundle from Creative Salmon.

They are joined by their First Nation partners. We have Bruce Frank, who is from the Tla-o-qui-aht First Nation. He is also joined by his ten-year-old daughter, Hannah, who is here joining us today. We have Chief John Smith from the Tlowitsis First Nation, who are partners with Grieg Seafood. We have James Walkus from the Gwa’sala-Nakwaxda’xw First Nation. We also have Keith Atleo and Trevor Jones from the Ahousaht First Nation, who are partners with Cermaq. We also have Richard Harry from the Aboriginal Aquaculture Association.

Would the House make all my cornucopia of guests most very welcome to this Legislature.

J. Horgan: Following on the introduction from the member for Burnaby-Lougheed, I think the minister responsible for ferries is going to want to make sure that we’ve got Hansard television rolling on every available TV on B.C. Ferries from this point on.

Joining us in the gallery are two Vancouver Islanders from my constituency of Juan de Fuca. Jemgerbuz Unar
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and Nazeem Akar are up here, are part of the Turkish-Canadian delegation visiting the Legislature to get an understanding of what government is all about and how the two sides of the Legislature go back and forth in a positive and, I would hope, cordial way today.

Would the House please make them very, very welcome.

C. Trevena: I’d like to join the member for Comox Valley to welcome the salmon farmers who are in the House today. They’ve made their headquarters in Campbell River and have added to the economy of Campbell River and the north Island.

I’ll be meeting with Jeremy Dunn myself tomorrow, from the Salmon Farmers Association. We’d like to extend a warm welcome to Vince Erenst from Marine Harvest; Stewart Hawthorn from Grieg, whose operations are over on the west side of the Island. Marine Harvest are up in the Broughton area. To Fernando Villarroel from Cermaq and their First Nations partners as well.

The Walkus family have a very active engagement with Marine Harvest. They have a boat that works closely with the factory. The Tlowitsis, John Smith, also has a very close connection with Grieg. Obviously, Richard Harry has a long history in aboriginal aquaculture.

I hope the House will make them all welcome and recognize the importance of their industry for my community.

Introduction and
First Reading of Bills

BILL 25 — MISCELLANEOUS STATUTES
(GENERAL) AMENDMENT ACT, 2016

Hon. S. Anton presented a message from His Honour the Administrator: a bill intituled Miscellaneous Statutes (General) Amendment Act, 2016.

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

Motion approved.

Hon. S. Anton: I’m pleased to introduce Bill 25, the Miscellaneous Statutes (General) Amendment Act, 2016. This bill amends the following statutes: the Agricultural Land Commission Act; the Assessment Act; the Local Government Act; the Environmental Management Act; the Protected Areas of British Columbia Act; the Income Tax Act; the Insurance Act; the Mutual Fire Insurance Companies Act; the Ministry of Lands, Parks and Housing Act; and the Liquor Control and Licensing Act.

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

Bill 25, Miscellaneous Statutes (General) Amendment Act, 2016, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. M. de Jong: To, as I customarily do, advise the House that the tabling of Bill 25 represents the completion of the government’s intended legislative package for the spring session, in the days ahead, the hon. Opposition House Leader and I will endeavour to settle on a schedule that will ensure timely consideration of the measures that sit on the order paper.

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Statements
(Standing Order 25B)

SCHOOL COUNSELLORS

Moira Stilwell: It’s with great pleasure that I rise today to recognize British Columbia’s school counsellors and the exemplary work they do to help students manage crucial turning points in their lives, cope with a variety of social concerns and plan for a life after high school.

High school can be very challenging. There are a number of issues that often can challenge a student’s self-esteem and academic achievement. Things like family troubles, social pressure and discrimination are just a few of the challenges that present barriers to learning and success. Counsellors mitigate these barriers, providing much-needed guidance in an array of personal and career matters.

They are often the first point of contact for students dealing with issues such as anxiety, depression and bullying. In situations like this, they provide front-line support by resolving threats and offering tools to help students strengthen their resiliency and build confidence.

Recently I heard from parents whose child was suffering from bullying and homophobia, and the harassment had led to self-harm. These parents are crediting their school counsellor with saving their child’s life. I’ve also heard from other parents who are thanking their school counsellor for helping to steer their child away from the gang lifestyle and onto a safer, happier and more productive path.

Counsellors do more than assist with schedules and post-secondary applications. They help students and parents handle a multitude of problems that fall outside regular academic issues. They enhance the school experience, help build inclusive learning environments and ultimately societies and provide guidance for emotional development.

I ask the House to join me in thanking them for everything they do to empower youth to strive for their best and take control of their futures.
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BURNABY FESTIVAL OF LEARNING

K. Corrigan: The Burnaby Festival of Learning is a week-long celebration from May 1 to May 7, co-presented by Simon Fraser University and the city of Burnaby, with participation from school district 41 and support from Vancity and Burnaby Now. More than 50 free events will inform, engage and spark creative conversations between diverse audiences.

Capping SFU’s 50th anniversary celebrations, the festival will showcase performances, lectures, discussions, debates and book launches, joining the university’s strong history of research and dialogue with the city’s diversity and community programming. Events will engage many audiences, including children, families, young adults and seniors. Activities will happen across many civic spaces and institutions, including libraries, museums, galleries, parks and community centres in Burnaby and SFU.

Activities will include Burnaby high school students attending classes at SFU; a discussion of the elders digital storytelling project; and a talk by Ray Villard, who was public relations director of the Hubble telescope for 25 years. There are walking tours about the development of the city; talks about the archaeology of the Franklin expedition; an environmental scavenger hunt; a talk by SFU president Dr. Andrew Petter, entitled “Why Universities Matter”; and “Bugs and Bodies: An Introduction to Forensic Entomology.”

The festival is an exciting mix of facts and fun, activities and reflection, and there are still many days left for those who want to attend.

Congratulations to the city, Simon Fraser University, the Burnaby school district, the sponsors and all the presenters for this wonderful celebration of learning.

ABBOTSFORD CHRISTIAN SCHOOL

S. Gibson: It’s a great pleasure for me to rise on behalf of my constituents in Abbotsford-Mission to recognize an outstanding educational institution within my community. Since 1953, Abbotsford Christian School has been a centre of learning and development for Abbotsford’s youth.

Its entrepreneurial forefathers sought to establish an institution dedicated to educating their children and first opened their doors as an elementary school in 1953. In the decades since, Abbotsford Christian School has grown into a wonderful community of students from preschool right through to grade 12, with a simple but clear mission: “Engaging minds, nurturing hearts and shaping the world.”

The school fosters an environment where students are encouraged to become naturally curious and engaged with their teaching through project-based learning, group work and community service, which is well-known throughout the area.

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Beyond intellectual development, the school also focuses on developing the emotional intelligence of students. It instils with them the traits of responsibility, empathy, integrity, courage and respect, so that one day they will become leaders who shape our world. It is more than simply a place of learning. It’s a community built upon partnerships between students and educators that nurtures the spirit and grows the mind.

I wish all the best to Abbotsford Christian School in the decades to come. I’m very proud to acknowledge that today and continue the excellent work of preparing its graduates to seize life’s challenges and inspiring them to be the next generation of Christian leaders.

CYSTIC FIBROSIS AWARENESS
AND FUNDRAISING WALK

S. Simpson: Along with the start of great weather that May brings, this is also the month to highlight awareness around cystic fibrosis. I’ve spoken over the past few years about this issue a number of times in the House. It is a personal matter for me, as my nephew Liam has CF. More importantly, for Liam and the other 4,000 young Canadians who face the reality of CF, it is a compelling life challenge.

Cystic fibrosis causes mucus buildup that damages the lining of the lungs as well as blocking an enzyme required for the intestinal digestive system. There is no cure for CF, and too often the disease is fatal, cutting short too many young lives. While there is no cure for cystic fibrosis, the progress being made on the research and science is significant. There are new treatment regimens and strategies that are showing real promise in battling CF.

Since 1960, Cystic Fibrosis Canada has invested over $140 million in research, care and support for those suffering with CF and their families. This is critical support in so many ways for these families.

The major fundraising event for cystic fibrosis is coming up on May 29. Across Canada, people will be participating in the Great Strides walks. In British Columbia, walks will take place in ten locations around the province. I will be participating in the Vancouver event at VanDusen Botanical Garden. I want to encourage all members of this House to support walkers in your community or to participate yourselves.

For those who may be watching today, commit to walk or pledge to give our young people the best chance we can in life. Go to cysticfibrosis.ca for more information.

Reiterating what I said last year, I am more confident than ever that we are making real progress on this disease. We can find a cure or turn this into a manageable chronic condition rather than a life-threatening disease with all too often fatal results. Together we can beat cystic fibrosis. Support the Great Strides walks, and let’s make that happen.
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OLD HASTINGS MILL STORE MUSEUM
EVENT ON CHINOOK WAWA LANGUAGE

S. Sullivan: On June 24 and 25 at the Old Hastings Mill Store Museum, a group of people will gather for the weekend to learn from Jay Powell, a retired UBC professor who has dedicated his life to documenting and reviving traditional First Nations languages. He’s the only remaining speaker in British Columbia of Chinook Wawa, or Chinook Jargon.

This is a trade language or pidgin language, part aboriginal, part non-aboriginal. It is a language that has many Nuu-chah-nulth Nootka words, Chinook, Chehalis, Salishan, French, English and many other languages. It was spoken throughout B.C. just 100 years ago by aboriginal and non-aboriginal people.

It is fitting the gathering will take place at the Hastings Mill museum. The Hastings Mill was the largest employer in early Vancouver, and it operated in Chinook Wawa. This means that Chinook Wawa was at one time the working language of Vancouver. It was spoken in logging camps, mills and canneries along the coast. It was also the first language used by Japanese and Chinese people when they came. We know that because their eyewitness testimony was written in Chinook by the judges.

Many of us still speak Chinook Wawa when we use words like skookum or salt chuck, meaning the ocean, mucky-muck, bigwigs, potlatch, cultus. I’m sorry to the member in front that cultus means a “not very nice” lake. The surest way that I know to tell if someone is really from British Columbia is how many Chinook Wawa words they know.

People from many different cultures contributed to the development of Chinook Wawa. It is an example of how people work together. It is an inspiration for our future. The language is so intimately connected with our history that some people call it speaking British Columbian.

Would you like to learn to speak British Columbian? Come join us at the Hastings Mill store museum.

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B.C. CENTRE FOR
AQUATIC HEALTH SCIENCES

C. Trevena: I rise today to speak about a unique operation located in Campbell River, the B.C. Centre for Aquatic Health Sciences. Eight years old and going from strength to strength, this high-tech laboratory is providing new opportunities for the community. It’s the only aquatic research facility of its kind in the province and adds a new dimension to Campbell River. Long known as the salmon capital of the world, it’s also still a hub for fishing and, of course, for aquaculture. Having a research centre dedicated to aquatic health is truly value-added.

The not-for-profit, fee-for-service lab works with many organizations, from the Tula Foundation, which runs the Hakai institute on Calvert Island, to shellfish farmers; from the federal department of fisheries to fish farmers. Its mission statement, perhaps, says it all. The centre “exists to improve the health of aquatic animals and ecosystems by developing applied scientific knowledge.”

The work it does includes fish health and welfare, looking at wild and farmed animal interactions, epidemiology, stress physiology and environmental monitoring. From checking for lice on tiny, tiny fish — which was what was happening when I last visited — to monitoring plankton in Discovery passage, from virology to molecular tests, the ten-strong team is engaged and enthusiastic about their work.

Jim Powell, the executive director, was a founding board member. A number of the staff have been on the board since its inception, and the diversity of the backgrounds in the board are emblematic of the diversity of the work done by the laboratory.

Education and training are core to the operation, both for its own staff and those who work in the industry. But the organization also wants to increase the value of marine-based industries. The investment in the centre is huge, as would be expected, with state-of-the-art equipment for tests. But its location is discreet, although a new, vivid mural on one of its walls might give the game away. It’s in a building that houses a dentist, a restaurant and a union office. It has already outgrown its initial space in the Maritime Heritage Centre and now is bursting at the seams at this, its second home.

What is clear for those who have come to rely on it, as well as for Campbell River itself, is if the B.C. Centre for Aquatic Health Sciences didn’t exist, it would need to be invented.

Oral Questions

ROADSIDE PROHIBITION PROGRAM
ADJUDICATION SYSTEM AND
ROLE OF LEGAL SERVICES BRANCH

J. Horgan: Over the past five years, the government has had serious challenges to its roadside prohibition program. While keeping impaired drivers off the road was unanimously supported by this Legislature, we still also must, of course, keep in mind the legal rights of British Columbians. In 2012, the government was forced to amend the legislation, and now we have serious allegations of direct interference in the adjudication process.

My question is to the Attorney General. Can she tell this House if her staff has interfered in the independence of the adjudicators?

Hon. S. Anton: It is indeed the goal of the immediate roadside prohibition program to take people who have been drinking and driving off the road and to make our roads safe. There’s an adjudication system, and
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RoadSafetyBC and the adjudicators enjoy advice from our legal services branch lawyers. This is common for tribunals. This is common throughout the justice system — that those making decisions can receive advice.

Our legal services branch lawyers are there to ensure that the system operates fairly and with integrity, and when they give advice to tribunal members, when they give advice to different branches of government, that is exactly what we are doing — what those lawyers are doing. And everyone in this House — indeed, everyone in the province — should have confidence in the work that they do and in the advice that they give.

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

J. Horgan: Paul Doroshenko, a Vancouver lawyer, received a freedom-of-information package from the B.C. Liberal government that painted quite a different picture from that which was just described by the Attorney General. In fact, according to those documents, emails suggest that the superintendent of motor vehicles, as well as ministry staff in the Attorney General’s ministry, directly tried to influence the outcome of an adjudication.

Again, I appreciate the minister’s talking points, but when I think of the reasons for judgment…. Chief Justice Hinkson said the following: “While a part of this exchange was certainly legal advice to the responsible adjudicator, another part of the exchange went beyond the lawyer’s role as legal adviser by purporting to influence the reasonable adjudicator’s decision-making or adjudicating role.” And that’s the end of the reason for judgment.

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So to the Attorney General, can she determine for us in this House: which is it — legal advice or interference?

Hon. S. Anton: As I mentioned a moment ago, it is the job of the legal services branch lawyers to provide advice to government ministries and to government programs and to assist in tribunals, and of course, there are tribunals throughout government.

That kind of advice is common throughout the judicial system. It’s common in courts, and it’s common in tribunals. That’s exactly what our lawyers do. The advice is provided to ensure that the system operates fairly and with integrity. At the end of the day, it is the adjudicator who makes the decision, but they can get advice, they do get advice, and as I said, that happens across the justice system.

Once again, I will say that the province and this House should have confidence in the advice given by legal services branch lawyers. They act with integrity, and they serve us well every single day.

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

J. Horgan: I appreciate the Attorney’s sentiment, but it’s difficult to have the confidence that she suggests that British Columbians have — in fact, that suggests at the confidence this House should have — when no one less than the chief justice, in reasons for judgment, calls into question that very independence. In fact, it says that the legal action went beyond advice towards interference.

So I am hopeful, hon. Speaker, through you to the Attorney General, that perhaps the….

Interjections.

Madame Speaker: Members.

J. Horgan: Perhaps the Attorney General can put our minds at ease by releasing, through freedom of information, the emails that are now being sealed until such time as the government determines whether or not they are going to appeal. I think we could clear the air. Support the intention of the Attorney General to give confidence to this independent adjudication process by allowing us to see the emails, and we’ll judge for ourselves.

Hon. S. Anton: As I said a moment ago, the legal services branch lawyers provide advice, in this case to RoadSafetyBC and to the adjudicators in that system.

This is common throughout the justice system. They do it with integrity, they do it fairly, they do it properly, and they do it so that our province, our justice system and, in this case, the immediate roadside prohibition system are operating properly and operating with integrity. So all of us in British Columbia should have confidence in the work that they do.

M. Farnworth: I know that the Attorney General wants to take a nothing-to-see-here approach in her answers. Given the government’s record on so many other issues, please don’t be surprised if we’re skeptical on her answers to date.

I’d like to draw the Attorney’s attention to the quote of the chief justice, of Justice Hinkson, and what he said. He said: “Another part of the exchange went beyond the lawyer’s role as legal advisor by purporting to influence the responsible adjudicator’s decision-making or adjudicating role.”

That’s completely different than the answer the Attorney General has given us. Mr. Doroshenko alleges that the Ministry of Attorney General released documents under FOI that prove “the government is committing an offence and breaking the law.”

We’ve had a statement from the justice. We have the comments from the lawyer. So if the Attorney General is so confident that there is nothing to see here, will she release those documents and table them in the House today? What’s she afraid of?
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Hon. S. Anton: As I have said a couple of times already, it is the job of legal services branch lawyers to assist with advice, both to government ministries and, indeed, to government tribunals. The immediate roadside prohibition program — the reviewers being part of that overall system of justice in the province of British Columbia…. They provide that advice properly. They provide it fairly. We are well-served in British Columbia by the advice that they provide.

Madame Speaker: The member for Port Coquitlam on a supplemental.

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M. Farnworth: It is the Attorney General’s job to ensure that justice is delivered fairly in the province of British Columbia. It’s the Attorney General’s job to ensure that administrative tribunals are not interfered with. And what we’re hearing are serious allegations and questions that that is in fact exactly what has been taking place — that these tribunals are being interfered with.

The Attorney General has one way today to resolve this issue, and that is to table those documents so that the public can judge for themselves that justice is being delivered fairly. Will she do that?

Hon. S. Anton: Indeed, the member opposite asks that justice be delivered fairly, and it is. Advice is given properly and fairly and with integrity. The advice is given by legal services branch lawyers, in this case, and the adjudicator makes their decisions. The adjudicator…. It is their job to maintain their independence and make their decisions independently.

It is a bit rich, coming from members opposite, who like to advise political interference often. They want political interference on the health firings. They want political interference…. They want political interference on the issues around indemnity. They want political interference in the issues around judging on real estate transactions.

Interjections.

Madame Speaker: Members.

Hon. S. Anton: They love to have political interference, but I can assure you, I do not, and nor do our lawyers. Our lawyers operate fairly and properly to ensure that justice is properly and fairly delivered in the province of British Columbia.

OVERSIGHT OF BANKS ISLAND
GOLD MINE OPERATIONS

J. Rice: I received a copy of a letter, sent by the Gitxaala First Nation to government, raising serious concerns about the now closed Banks Island gold mine.

In March and June of 2015, Banks Island Gold did not report that it had two separate tailings spills and numerous serious health and safety infractions. Alarmingly, the minister’s staff never set foot on Banks Island until after it had been in operation for 15 months and only after the ministry received a tip from the opposition that there had been a spill and safety infractions.

What is the end result of the minister’s negligence? Ninety people are out of work, and the Gitxaala traditional and seafood harvesting territories are a mess. To the minister: why were there no inspections for 15 months — while, at the exact same time, the minister was promising increased rigour for mine oversight?

Hon. B. Bennett: The member is partly correct — which is a change. The mine on Banks Island was determined to be not following best practices in terms of protecting the environment. Immediately upon the ministry getting a tip — not from the member for Columbia River–Revelstoke, actually, but from somebody in the north — they went up, they looked at what needed to be looked at, and the mine was closed.

Interjections.

Madame Speaker: Members.

Hon. B. Bennett: The opposition likes to say that the Ministry of Energy and Mines never takes action in the mining industry. Well, that mine was closed. It was closed, it’s still closed, and it will never reopen, unless they can show that they will operate in a way that protects the natural environment.

Madame Speaker: The member for North Coast on a supplemental.

J. Rice: Hon. Speaker….

Interjection.

Madame Speaker: Member, the Chair will hear the answer and the question.

Please continue.

J. Rice: In the 15 months from the time the mine was permitted until the visit by compliance officers on July 9, not one inspection took place. When the minister finally sent staff to Banks Island, they discovered no fewer than ten violations of the mines permit.

[1415]

So the ministry told the company to shut down. Banks Island Gold ignored that order. The ministry also ordered Banks Island Gold to submit an action plan to clean up their operations by August 31, 2015. Again to the minister: why did the ministry not enforce the order?
[ Page 12570 ]

Hon. B. Bennett: The member has the chronology wrong; she has the facts wrong. When the Ministry of Energy and Mines found out that the mine was not in compliance, the mine was closed. It is still closed.

The right action was taken by the Ministry of Energy and Mines. It is unfortunate that people lost their jobs in the member’s constituency, but the choice for the regulator is not whether there ought to be jobs in the mining industry or whether there ought to be proper compliance and enforcement. There has to be proper compliance and enforcement. The ministry has to shut a mine down that is not behaving in a responsible way, and that’s what we did.

N. Macdonald: The mine opens. It’s not inspected from when it opens, for 15 months, until there is a complaint. The ministry orders it closed. They refuse to close. They simply don’t, and the ministry becomes aware of that in a media story.

That is compliance and enforcement here in British Columbia, and it’s pretty appalling. There was an action plan. Action was supposed to be taken August 31. In fact, the company only got around to submitting their action plan on October 9. Even then, the Gitxaala described that plan as haphazard, and no action followed.

The minister promised British Columbia after the Mount Polley spill that he was going to ensure that mines were operating safely, that he was on the case. Can the minister tell the House what steps he took between July 2015 and December 2015 to force Banks Island Gold to fix the damage that they had caused?

Hon. B. Bennett: We received a tip — we don’t know who from for sure but probably somebody working at the minesite — that there were practices at the minesite that were not meeting standards. It’s true. We don’t have inspectors on the site every single day.

Immediately upon having received that tip, the staff from MEM and, I believe, the Ministry of Environment as well…. I will take some advice on that later. I believe the two ministries both went up and determined that the mine had to be closed.

The member for Columbia River–Revelstoke also got a tip, apparently, from somebody up north that this mine was doing something that they shouldn’t be doing. The member, quite rightly…. I think I would commend the member for letting my office know that he, too, had heard that there was a problem at this minesite. We had already had the tip.

In any case, our ministry looked into it and very quickly decided that the only right thing to do here was to close the mine down. The mine was closed. Corrective action has been and continues to be taken. We do have a bond in place. Frankly, I think what we have done is exactly what the people of British Columbia would expect us to do.

N. Macdonald: It’s what does happen, but it’s not what should happen. The Gitxaala are there. They’ve had people on the ground. They have been clear in the letter that was sent to this minister that if government had listened to their concerns, had caught violations and required Banks Island Gold to fix problems earlier, the spills would not have happened and 90 miners would still be working.

It’s what this minister chooses…. It’s because he chooses not to understand the reality that most British Columbians understand clearly — that if you regulate the industry properly, you will not have people losing their jobs and the environment will not be damaged. That is the reality that we understand, that the minister seems to not understand repeatedly.

[1420]

The fact is that with no inspections, this minister chose to let Banks Island Gold operate with impunity until a worker became fed up, put his job on the line, sent the ministry and me a tip and pictures and documented what was going on there. The ministry didn’t have the people on the ground to do that.

Even after Banks Island Gold was ordered to shut down and clean up its operations, this ministry did little to enforce that order. The company ignored this ministry because they knew they could.

The question I have for the minister is: what will it take to have this minister, this government, take seriously the onus of responsibility for compliance and enforcement on B.C.’s public lands?

Hon. B. Bennett: I think what I just heard the member say was that if you have the right regulatory and compliance and enforcement regime in place, you’ll never, ever have a bad actor. You’ll never, ever have to close a mine down. I think that’s what he just said. But actually….

Interjections.

Madame Speaker: Members.

Hon. B. Bennett: He’s wrong. Unfortunately, he’s wrong. I think we all know that, human nature being what it is, occasionally you do encounter situations where they will not do the right thing. And that is, in fact, what happened in the case of the mine on Banks Island. Unfortunately, it has happened in at least one other case since I was sworn in, in 2013, where we had to close the mine down because the operator simply would not do the right thing.

I think the public of the province supports government in that. I think they want us to take that kind of rather direct and severe action in cases where you do have an actor, an operator, who fails to deliver on the standards that we have set out.

I’ll say, in conclusion, that my ministry and, I think, government in general are always looking for ways that we can do things better. There are always improvements
[ Page 12571 ]
that can be made. We will continue to strive to deliver the most effective permitting and compliance and enforcement that exist in this country today.

WEST FRASER AND CANFOR ACTIVITIES
AND DONATIONS TO B.C. LIBERAL PARTY

H. Bains: In 2014, the forestry companies West Fraser and Canfor were found to have illegally overharvested healthy trees in northwest B.C. Under B.C. laws, they could have been fined well over $6 million. But they weren’t fined $6 million. In fact, they weren’t fined at all. The fines were waived by the Premier and her minister. West Fraser and Canfor are two of the biggest political donors to the B.C. Liberal Party. They have donated over $1.6 million since 2005.

To the Minister of Forests: was this decision to excuse them from any fine related to the massive donations that they have made to the B.C. Liberal Party?

Hon. S. Thomson: Firstly, if there’s any assertion by the member opposite that any of my decisions in operating this ministry at any time are influenced by support for this government in any way, I take great offence to that assertion. I have managed this ministry with integrity, with informed decision-making, and I make the decisions in the best public interest that I can.

With respect to the situation referenced by the member opposite, we reviewed the situation and looked at whether to put hard partitions in place with respect to the harvesting. We did not do that because what we did was we put the companies under watch and have them file plans around their harvesting plans.

Interjections.

Madame Speaker: Members.

[1425]

Hon. S. Thomson: The ministry continues to monitor the harvest activities of companies to ensure that they comply with the partition directions that are set by the chief forester and set by the apportionment decisions that are in place.

D. Eby: This minister is offended, but it’s British Columbians who are offended that this government will not take the big money out of politics.

Now, let’s go through the chronology. In the year before the last election, West Fraser and Canfor donated more than a quarter-million dollars to the B.C. Liberal Party. That same year the Premier and her minister made the decision not to fine them a penny for illegally cutting almost a million cubic metres of wood in our public forests. The Premier’s decision, the minister’s decision, cabinet’s decision was a $6 million gift to these two companies.

To the minister: was this decision made at a dinner party?

Madame Speaker: Member, do you recall the caution I provided you this morning?

D. Eby: Thank you, hon. Speaker.

Madame Speaker: Next question. Esquimalt–Royal Roads.

CHILDREN AND FAMILY DEVELOPMENT
MINISTRY RESPONSE TO PLECAS REPORT

M. Karagianis: Last summer the Ministry of Children and Families hired Bob Plecas to distract from the failure to protect children from harm, a failure that was exposed by the Judge Walker decision in the J.P. case. When Mr. Plecas was hired, the public was originally told that he would be reviewing “matters arising from Judge Walker’s recent B.C. Supreme Court ruling.”

Months later Mr. Plecas delivered a report that had nothing to do with the J.P. case, a report that the independent Representative for Children and Youth has called a train wreck.

My question is to the Minister of Children and Families. Mr. Plecas has failed to deliver on the work that he was paid to do. Why is he still on the payroll?

Hon. S. Cadieux: Mr. Plecas indeed embarked on some work that I asked him to do — to look at some issues within the Ministry of Children and Families and to advise on how we could do our work better. Mr. Plecas provided that report in December. We have accepted in principle many of the recommendations and have, indeed, started to work on an implementation plan.

I think it’s important that the ministry and I hear from people with vast experience, like Mr. Plecas, on what they think the ministry could do differently and better. We take the advice and recommendations made from time to time by the Representatives for Children and Youth as she carries out her duties of oversight of the ministry. We are taking the advice of Grand Chief Ed John as he helps us to chart a new path in relation to the work that we do specifically with aboriginal and First Nations people. We take the advice of others.

We take all of that. We combine it. We look at how best we can serve the children of this province. All of that will be considered as we move forward to develop a three-year plan for changes to the ministry.

Madame Speaker: Esquimalt–Royal Roads on a supplemental.

M. Karagianis: Again, the minister has failed to address the fact that J.P. and her family have not been served
[ Page 12572 ]
well by this government. Mr. Plecas was to have looked into that case. But Mr. Plecas didn’t see fit to consult with First Nations peoples before recommending changes to the ministry, despite the fact that we know that aboriginal children are over-represented in that ministry.

Responding to this failure, First Nations leaders have said: “It harkens to another era when our children were forcibly removed from their homes and put into the residential school system and where our land was taken and our culture was outlawed.”

Given this kind of condemnation, does the minister think it’s appropriate to charge ahead with this train wreck of a report, a report that will disproportionately impact aboriginal people, without any consultation whatsoever with them?

[1430]

Hon. S. Cadieux: Firstly, I think we see the opposition again leaping to conclusions that have not been made. The conclusion that has been made to date is that we will work on developing an implementation plan for changes to improve the ministry, to improve the oversight of the ministry, to improve the policy and practice within the ministry.

As I have stated publicly, that work will include the consultation with all of our necessary partners, including First Nations people. The first will be through the report I will receive from Grand Chief Ed John, but not exclusively, as the oversight of the development of an implementation plan. The development of what will be involved and changes made to over the coming years will involve an independent advisory on which there will be representation from First Nations and the Representative for Children and Youth.

N. Simons: Several inaccuracies in the report were pointed out to the minister prior to the report being made public. So not only is the report actually off-topic, not only does it fail to include any voice of those who are overrepresented in the system — 60 percent of children in care are from First Nations communities — but now we realize it’s also riddled with errors.

Now, the minister might want to quote some folks who she is asking to work with who’ve actually said that the review is “utterly unfair,” “represents a wasted opportunity to effect positive change,” is a “biased survey of child welfare and politics,” and is “deeply offensive and inappropriate.” Oh, and that’s from the special adviser, Grand Chief Ed John.

If the minister is so sure that she wants to follow through with the recommendations of this report, I would ask her to take a second look. And would she, at this point, allow the representative, who has asked on repeated occasions, to at least provide her with the information used by Mr. Plecas to come up with his so-called recommendations?

Hon. S. Cadieux: While the members opposite may see that there is only one individual in the province for whom they would prescribe to take recommendations, I take recommendations from many sources, not the least of which is Grand Chief Ed John. However, I will also be taking the advice of other First Nations leaders. We have a Children and Family gathering coming up shortly, at the end of May, where we have two days of discussions lined up.

I will also take advice from experts with vast experience in the field and in bureaucracy like Mr. Plecas. And we have, over many, many years, taken the advice and recommendations of the Representative for Children and Youth. I will take all of that into consideration.

But in this circumstance, the Representative for Children and Youth had the opportunity to speak with Mr. Plecas. She chose not to take him up on that opportunity. And she has asked to be provided with information that falls outside of her scope.

[End of question period.]

Tabling Documents

Madame Speaker: Hon. Members, I have the honour to present a report of the Ombudsperson, special report 37, Strategic Plan, 2016-2021.

Hon. R. Coleman: I have the honour to present the revised Oil and Gas Commission service plan for the fiscal year ending 2016-2017. This updates cash and letters of credit held by the organization against potential liabilities from permit holders, as discussed on page 13 of the report.

[1435]

Orders of the Day

Hon. M. de Jong: In both Section A and Section B, Committee of Supply — for the information of members, in Committee A, the estimates of the Ministry of Transportation and, in this chamber, the estimates of the Ministry of Health.

Committee of Supply

ESTIMATES: MINISTRY OF HEALTH

The House in Committee of Supply (Section B); R. Lee in the chair.

The committee met at 2:39 p.m.

On Vote 29: ministry operations, $17,820,706,000.

Hon. T. Lake: I am proud to stand in the House today to present the estimates of the Ministry of Health.

[1440]

We have some of my ministry officials here assisting me in the House. We have a cast of thousands in the Cedar Room here in the building, as well, to support us, as well as many people around the province that are watching on television and helping us answer questions from members on the operations of the Ministry of Health. I want to, first of all, thank all the members of the ministry and health authorities and related organizations for supporting us and for the work that they do each and every day. It is remarkable.

Today in the House I have my Deputy Minister of Health, Mr. Stephen Brown, on my right. I have our associate deputy minister of corporate services, Sabine Feulgen, to my left. Behind me is our assistant deputy minister, finance and corporate, Manjit Sidhu.

J. Darcy: Thank you to the minister and his staff, including all the staff who are watching — the army of thousands, as the minister said. I know that we’re going to have a very intense five days asking questions about every conceivable aspect of the health care budget and driven very much by the issues that British Columbians raise with me.

I wish I could say that I had a cast of thousands assisting me on this, but I certainly do want to thank the staff in caucus services who have been assisting and will continue to assist through this estimate process — Tim Renneberg, in particular, and our legislative intern Michael McDonald.

If I could just begin by confirming the figure, the total operating expenses for the Health Ministry for the 2016-2017 budget year.

[1445]

Hon. T. Lake: I apologize for the length of time. As one can imagine, the ministry is a very large and complex one.

The voted appropriation, as I mentioned here, is $17,820,706,000. When it shows up in our blue book, in terms of operating expenses, it’s actually $17,967,956,000 because we have a health special account, which is a statutory appropriation which is on top of the voted appropriation that is in vote 29. That is money that flows, actually, from gaming revenue into the ministry.

J. Darcy: I didn’t think I had asked a difficult question off the top. Perhaps what I’ll do is ask a few together so that we can move things along and get to the heart of the matter.

Just to confirm, that is an increase, I understand, of $522 million from the restated estimates of last year, and that represents an annual increase of approximately 2.9 percent year over year. Is that correct?

Hon. T. Lake: The increase is approaching 3 percent at $522.494 million.

J. Darcy: Going forward, the three-year plan sets out budgets of $18,504,795,000, then $19.064 billion the next two years, respectively. Those represent increases of roughly 3 percent annually. Is that correct?

Hon. T. Lake: That is correct.

J. Darcy: In terms of percentages, how do those compare to the past ten years? Does the minister have that figure available, or can he provide it to us?

[1450]

Hon. T. Lake: I don’t know if we have it going back ten years. I can tell you that in the three years I’ve been minister, that’s been the norm — anywhere from 2.7 percent to 3.1 percent. In the previous years, there certainly was a higher increase annually. Going back to about 2007, we were seeing probably on the order of 6 to 7 percent into about 2011. I will confirm all this, and if we don’t have it here today, we can certainly provide that to the member.

I think the member’s point is that the annual rate of increase in health budgets has decreased over the last three years, which is very in line with what is occurring across the country. In fact, you will see that budgets for health care organizations across North America have decreased in the rate of increase.

There are some provinces that are operating on a zero percent increase at the moment, but across the country, it is not unusual anymore — instead of 5, 6 or 7 percent increases in annual budget lifts for the Ministry of Health — to be anywhere in the zero- to 3-percent range.

J. Darcy: So the minister will provide those figures for the last ten years?

Hon. T. Lake: Now that I’ve ragged the puck long enough, forget the numbers. They’re right here.

They bear up with the essential part of the answer I gave earlier. If you look at going back to ’07-08, in that year there was a 6.4 percent increase in the budget. In ’08-09 — that was a bit of an anomaly — it was only a 3 percent increase. The member may remember that all government revenues were down, and there was considerable effort at restraint across the board after the recession.

In ’09-10 it was a 5.7 percent increase; in ’10-11, a 4.9 percent increase; in ’11-12, a 6.3 percent increase; in ’12-13, a 2.8 percent increase. In ’13-14, it was 2.3 percent; in ’14-15, 2.3 percent; in ’15-16, 3 percent; in ’16-17, 3 percent. Projected in ’17-18 and ’18-19 are also 3 percent increases.

J. Darcy: So health spending is anticipated to rise by about 3 percent a year for the next three years. How does that compare to the rate of inflation?

Hon. T. Lake: The current rate of inflation is approximately 1 percent per annum. So it is three times the rate
[ Page 12574 ]
of inflation. Having said that, the typical CPI is based on a basket of goods that a typical household family would use. It probably doesn’t apply directly to the inflation we see in health care. When you look at the pressure on pharmaceuticals, for instance, as one example, certainly they tend to increase — particularly the newer pharmaceuticals — at a much higher rate than the rate of inflation.

Having said that, we’ve been managing, in terms of our largest expenditure, which is human resources, to manage that similarly to the rate of inflation. It’s our largest cost driver, actually. Thanks to our partnership with health professionals, in terms of physicians and nurses — although we are awaiting anxiously the outcome of a tentative agreement with our 42,000 nurses — which is about 70 percent of costs in health care, we’ve been able to hold those increases at close to the rate of inflation.

J. Darcy: What is the anticipated increase in population in B.C., as a percentage year over year?

[1455]

Hon. T. Lake: When we’re looking at budgeting, particularly as we look at the population needs–based funding formula we use for health authorities, we generally look at inflation. Even though it’s running at about 1 percent, we sort of have a conservative estimate that could be up to 2 percent in the health care field. And population…. We estimate that the pressure due to population growth is 1.2 percent. The other pressure, related to aging, is 0.7 percent.

We do try to take those factors into account — not just the growth of the population but the demographics of the population. As we have talked about many times with our federal counterparts, British Columbia has an older population. As that baby boomer generation moves through the system, it does put added pressure on the system.

J. Darcy: I wonder if the minister could clarify. He referred to the change in demographics, as far as the aging population, as 0.7 percent. But surely the cost, the impact on the health budget, is more significant than that. I wonder if the minister could talk about the budgeted increase in health spending and how much of it, as a percentage, is expected to be taken up by the demographic changes — in particular, in the aging population.

Hon. T. Lake: Apologies if it wasn’t clear. That is the pressure that we expect. The aging population is 0.7. If you take population growth, if you take inflation and then add 0.7 for the effect of the changing demographics, that’s how we arrive at that figure.

J. Darcy: The minister touched on the federal government. I know that there was recently a meeting of Health ministers. I’m sure that there’s ongoing dialogue. Can the minister please share with us what assurances he has received from the federal government, if any, about increases in federal transfers?

Hon. T. Lake: At the meeting of provincial and territorial ministers in January of this year in Vancouver, the provincial and territorial ministers were quite clear in terms of the expectation that federal investments in health care would increase. Currently for British Columbia, it’s about 21 to 22 percent of health care costs that are borne by the federal government through the Canada health transfer. Now, it’s a complicated formula, and there are tax points that are given up. So there are other factors to consider. But if you look back in time, there was an era where the federal government paid for about 50 percent of health care costs. Again, the tax points make up some of that. But the point we made as ministers was that we expected the federal government to increase their investment in the costs of health care to the level of 25 percent.

We did not have agreement among the provincial and territorial ministers about how that allocation would take place — in other words, on a pure per-capita basis as it is now, as it became under the former federal government and is currently utilized by the current federal government, or to have a demographic lens on the transfers so that provinces with a higher age group in the population, an older population, would receive more funding. Obviously, it takes a higher level of health care and health care costs to deliver services to an older population than it does a younger population.

[1500]

It’s no secret that provinces like Alberta, with a younger population, did not want us to look at a change in the formula, whereas provinces like Quebec, the Maritimes and British Columbia were very much in favour of that.

There has not been a new agreement on the Canada health transfers or health accord. The federal government has expressed a desire to work towards that, and it’s a combination of Health ministers and Finance ministers and first ministers working together, but we have had no assurances from the federal government that, in fact, what type of changes would come. We’ve been given signals that there may be changes, but we have not had any solid assurance of what those changes would be.

J. Darcy: The service plan envisions an additional cost of about $72 million to the provincial PharmaCare program in the first year of a three-year plan, and then the expected budget flatlines for the next two years.

Can the minister expand on that commitment and, in particular, the flatlining, after this year, for the next two years? How does he expect to spend the same amount of money for the next two years?

Hon. T. Lake: PharmaCare is a budget that we have concerns about, there’s no question. As I mentioned ear-
[ Page 12575 ]
lier, when you have new pharmaceuticals coming on the market, some of these are coming on at a much higher cost than the armamentarium that we have been used to. Now, on the other hand, some of these pharmaceuticals are life-savers. The drugs that treat hepatitis C, for example, have the ability in 95 percent of cases to cure the most common type of hepatitis C, but they come at a steep cost.

Our goal is to look for savings elsewhere in the PharmaCare budget, and we do this a number of different ways. We work together with our provincial, territorial and, now, our federal counterparts in the Pan-Canadian Pharmaceutical Alliance, so that we can extract a lower cost from pharmaceutical companies on 18 — soon to be 24 — different drugs, commonly used generic drugs, across Canada at 18 percent of the cost of the name-brand drug. That has the potential to save, for each province, tens of millions of dollars.

We also have things like the low-cost alternative program and the reference drug-pricing program, where we will only pay for certain types of drugs in a particular category and if the outcomes are considered clinically the same as a higher price drug. This is a program that has been advocated by PharmaCare advocacy groups as well as those in research in terms of looking at lowering the cost of pharmaceuticals.

We look for those opportunities knowing that there will be pressures, and there always are pressures, to cover more and more different kinds of pharmaceuticals that come on the market.

I will add this. The addition to the budget was because we knew that these hep C drugs were going to be approved, and there was a latent demand among patients for these drugs to come on the market and be covered. People that were diagnosed with hep C were waiting for these drugs to be covered. That’s why we had an increase of 6.5 percent in ’16-17 so that we could accommodate that latent demand among patients. It has actually occurred. We’ve seen, I think, $100 million that has been spent on hep C drugs.

Now, the good news is that we expect to see that demand taper off and decrease as we’re able to treat more and more people with hepatitis, because this is a drug that, under the right circumstances, will provide a cure.

G. Heyman: I seek leave to make an introduction.

Leave granted.

[1505]

Introductions by Members

G. Heyman: Joining us in the gallery is the president of the B.C. Teachers Federation, Jim Iker, and one of the vice-presidents, Teri Mooring. I ask members to make them both very, very welcome.

Debate Continued

J. Darcy: I have a number of questions now about a recent announcement that the government has made in the area of health as to where those appear in the budget. The first has to do with MRIs.

This fall, in this House, on a number of occasions I raised, as did other members of the official opposition, the exceedingly long wait times for MRIs in the province of B.C. Some people are waiting as long as a couple of years for MRIs. People are being told to come back for their MRIs, told to check the year of the appointment because they think they would show up at literally the wrong year. People, even for the most urgent MRIs, are having to wait twice as long, sometimes three times as long, as was the standard set by the society of radiologists, the national standards in this regard.

The minister announced an increase to the number of MRIs — 65,000 new MRI scans — over the next four years. He announced that, I believe, the day after the last session completed. It’s certainly welcome news for those folks out there who have been waiting exceedingly long times, some of the longest times in the country.

We’ll return to the issue of MRIs later, but I would ask if the minister could give us the estimated annual cost of that commitment and where it can be found in the budget.

Hon. T. Lake: The regional health authorities receive their budgets. The larger health authorities, like Fraser Health, would receive about $2 billion a year. The estimated cost of increasing MRI volumes as planned is about $20 million per year by 2018-19. So if you were to take a health authority like Fraser Health, that would probably be in the order of about $4 million a year on a $2 billion budget.

J. Darcy: My question is more specific. This was a commitment made by the minister. I understand it’s delivered through the health authorities. Has there been additional funding, therefore, given to the health authorities in order to pay for those additional scans? Or are they required to take that out of existing budgets?

Hon. T. Lake: Yes, they are expected to take that out of existing budgets, which is why I made the point about $4 million on a $2 billion budget. This is always the challenge within a health authority or any ministry: looking at the priorities from a patient-centred approach and being able to find efficiencies within the system to be able to provide those patient-oriented services — in this case, ensuring that we’re completing more MRIs within a certain period of time.

[1510]

J. Darcy: I think I know the answer to my next question, which also relates to MRIs, but I’ll try it in any case.
[ Page 12576 ]
With respect to those MRI scans, are there currently enough radiologists and MRI technologists in B.C. in order to keep the commitment that the minister has made? Is there enough MRI equipment? Is there anything in the budget that sets aside funds for the health care professionals and the equipment that will be required in order to meet the commitment of 65,000 new MRIs over four years?

Hon. T. Lake: A couple of things. The question is: how are we going to accommodate the additional scans? We’ve canvassed the health authorities to determine if they have the capacity to do that.

Now, first of all, there are publicly owned MRI scanners. There are 16 MRI scanners at HA facilities. They’re not being utilized at maximum, so there is time available on the public facilities. We’ve canvassed the health authorities to see if they have an adequate supply of radiology technicians to assist with this. I should say we’ve had no indication from the specialist groups that the radiologists are not able to manage that extra capacity.

[1515]

Of course, the other avenue is private MRI clinics. There are 17 accredited private MRI clinics across British Columbia. Where a health authority does not have the capacity in the public system, they would look for opportunities to contract with the private sector to provide those MRIs — of course, in a publicly paid and publicly administered way.

Now, the other limiting factor always is: do you have enough machines? We are developing a longer-term MRI strategy in terms of looking at the number of machines that we will require. In process already is an additional mobile MRI for the north, and we have also set aside, in a restricted capital account, an amount of money with Interior Health for the needs of the Interior.

As is always the tradition in health care in Canada and, in fact, around the world, the philanthropic community often will step up. We saw, I think, $3.5 million in Penticton recently by a private individual towards the purchase of an MRI machine for the new hospital being developed in Penticton.

We think we have the capacity in terms of equipment, in terms of the people who will operate and the people who will interpret the MRIs at this additional capacity.

J. Darcy: On another issue, B.C. Hydro rate increases are an issue that has been canvassed considerably in this House as far as the impact on affordability of daily life for families and households in British Columbia. It also, clearly, has an impact on businesses and on public bodies like health authorities, school districts and so on. The increase in B.C. Hydro rates for 2015-2016 is 6 percent. For 2016-17, it’s 4 percent.

Can the minister please tell us how much these increases will cost health authorities? I assume, from the trend in the previous questions, that the additional costs to health authorities would need to be absorbed within health authority budgets. If the minister could confirm, yes or no, whether that’s the case.

Hon. T. Lake: Yes, the health authorities are expected to manage those increases. As I said, they get an increase of, on average, 3 percent each year. That’s to cover all manner of costs associated with providing health services. Some of it is to do with inflation. Obviously, energy use would be one part of their costs that is subject to inflation.

However, I would say that our aggressive capital plan helps health authorities in many ways, because the newer buildings are more energy-efficient. For an example, the North Island project, which is building hospitals in Comox and in Campbell River, has won multiple international awards for energy efficiency. They will be using far less energy than the legacy buildings that they replace. We can go and point to Surrey Memorial Hospital. We can point to the Interior Heart and Surgical Centre in Kelowna.

[1520]

The addition at Royal Inland Hospital, the redevelopment at Penticton, the redevelopment occurring at Children’s and Women’s, the redevelopment at Royal Columbian, the new hospital that is nearing completion in Haida Gwaii, and the new hospital we opened about 18 months ago in the Lakes District, in Burns Lake — all of these facilities are far, far, far more energy-efficient than the legacy buildings that they replace.

While there will be cost pressures as a result of inflationary pressures for some components, with the considerable investment that we’re making in capital, there will be savings on those energy uses — which will accrue to health authorities — that can be used for front-line health care.

J. Darcy: Yes, I’d like to turn to some other recent commitments by this government and the impact on the budget.

The minister will be aware, and we will certainly return in some more detail later in the week, of issues related to the Ambulance Service. After hearing considerable feedback and concerns from firefighters, ambulance paramedics, municipal governments and the official opposition, the government made a commitment to eight new ambulances and hiring of 34 new ambulance paramedics. Again, we’ll return to this issue of whether that addresses the need.

If the minister could please indicate: what is the estimated annual cost of that commitment? Can the minister point to where that commitment is costed in the budget?

[1525]

Hon. T. Lake: A two-part answer. First of all, in terms of B.C. emergency health services — which, of course,
[ Page 12577 ]
includes the Ambulance Service — there is currently a business case being developed, based on the ORH study that was done over the demand in the Lower Mainland and the response times that we currently see.

This study pointed to the need to make investments. In the short term, the immediate action was to place the additional resources on the road. That would come from the existing B.C. emergency health services budget. The B.C. emergency health services in the last year received $401.226 million. Again, in a budget exceeding $400 million, they were able to take action immediately to fill the immediate needs of the Lower Mainland, based on the results of that ORH study.

That is leading into a business case to look at how, over the long term, some of the issues identified in the ORH study can be addressed. There will be a business case developed that will outline new funding requirements, should that be the case, based on actions taken.

Some of the actions contemplated may be additional resources in terms of ambulances but other methods, as well, that may not in fact require more dollars to support — for instance, the idea of treat and release. An ambulance team will show up to a call and, supported by a physician, make a decision that the person for whom they were called does not in fact need to go to the hospital. That will free up resources.

Also, the transfer of patients at the hospital, we know, in some cases is taking far too long. So strategies to reduce the handover of the patient to the hospital staff will also free up resources. The use of what are called PRUs, response units…. Instead of sending a full ambulance, you send a primary care paramedic in, alone, to assess and essentially determine whether or not the patient needs additional resources. Again, that frees up a number of people to respond to other calls.

[1530]

There are different strategies that are all being developed within this business case. The business case will include the potential new funding requirements, in addition to the $401 million that they received in the past year.

J. Darcy: On another area of funding commitment, I think we’re all aware that the health care system has suffered over the last number of years from a shortage of nurses. In the previous round of public sector bargaining, there was a commitment made to hire an additional 2,125 nurses. The minister made a commitment earlier this year, January 19, that after years of delay, it would appear that the last of that commitment, an additional 643 regular nursing positions, would be created by March 31, 2016. What is the estimated annual cost of that commitment? Can the minister point to where that commitment is costed in the budget?

Hon. T. Lake: I believe that the member said 643. It was 1,643. I know that was just a….

Interjection.

Hon. T. Lake: Yeah, 1,643.

If I might just report out on that, that obviously was a very aggressive target. The B.C. Nurses Union has been extremely collaborative in our efforts to recruit nurses into the system, along with Health Match B.C. and the health authorities. I just would like to today report out on the results of that. We are still in process, but as of a couple of weeks ago, we were at 1,563, very close to meeting our goal there.

Now, the member’s question is: where does that appear in a line item? Well, it would appear, again, under the regional health authorities. We are of the belief that the hiring of additional nurses will, essentially, pay for itself, because we were in a situation where we were using a very expensive form of filling the gaps using overtime.

What was happening was clear, after we worked with the BCNU and the health authorities, that we were seeing very high overtime bills in some health authorities. We were finding, also, a high level of burnout on the part of nurses. We were seeing nurses that were on leave due to either physical injury or from burnout because of the number of hours that they were working to fill this gap. And, of course, you’ve got a churn that happens in the system, a very inefficient way of managing human resources.

[1535]

Working with health authorities, we are confident that having these additional nurses in place will reduce the cost of overtime, reduce the cost of sick leave and reduce the churn in the system that, essentially, will pay for those positions. As mentioned, all the health authorities are getting increases that are to pay for increased human resources and other cost pressures that they face.

We are, again, very thankful for the working relationship with the union and the health authorities to make this commitment. By and large, we are almost there in completing our goal.

J. Darcy: I certainly appreciate that overtime costs and burnout and sick leave will be reduced. But could the minister please still answer the question about what the actual cost is for 1,643 nursing positions.

[1540]

Hon. T. Lake: First of all, I just want to give you an idea, hon. Member, about the number of nursing hours that are overtime. I don’t have a number that I can attach to the costs of overtime. I’m endeavouring to find that out and certainly can provide the member that number at a later date, as to how much each health authority was spending on nurse overtime hours.

I think the point the member is making is: where are you going to get the money to pay for these 1,643 nurses? My contention is that this will come from the regional
[ Page 12578 ]
health authorities’ base budgets. It doesn’t appear as a new item in the budget. It’s part of the increases they get.

It will, through the conversion of casual nurses to full-time nurses…. That would be considered one position. New nurses coming into the system and, often, new graduates would be at a lower level of cost than someone that’s got more experience. Agency nurses — in other words, contracted services — now would become hired nurses within the system. The combination of that versus the decrease in overtime and the decrease in sick time due to burnout will, essentially, equal the amount of money that is needed to fund these additional positions.

We can provide more details in terms of the costs of overtime currently, but as I mentioned, the regional health authorities…. This is one of their human resource pressures that they face. We have about 42,000 nurses around the province. Looking at the order of magnitude, 42,000. Not all of them will work for health authorities but 42,000 versus 1,600 new positions. Many of those will be converting a part-time nurse, a casual nurse, into a full-time position. It is a relatively small number, given the number of nurses that work within the system.

By modifying the way nurses are hired and the number of hours that they are working, we feel that health authorities will be able to manage this within the budget, under regional health services, that is in the budget of the Ministry of Health.

J. Darcy: Well, I would certainly appreciate the minister being able to get back about how the savings would be realized in other areas. But I would still like the minister to answer the question about what the cost of 1,643 new nurses is. I know that the ministry staff has that kind of information at its fingertips. It has been provided many times in the past.

Can the minister please share: what is the cost of creating 1,600 nursing positions?

[1545]

Hon. T. Lake: No, it’s not something that is at our fingertips. It depends on all of the factors that I mentioned. If you’re taking a casual nurse and turning that casual position into a full-time position, obviously, it’s not…. On average, let’s say an experienced nurse with benefits is probably in the order of $100,000 a year. It’s not a full $100,000 to take a casual nurse and that casual nurse becomes a full-time-equivalent. Then, if you subtract the overtime, if you subtract the costs in terms of injuries and burnout…. It depends what that mix is, and it will vary depending on the health authority.

Some health authorities experience shortages in specialty nurses, so there will be…. Obviously, training is ongoing to increase the number of specialty nurses, and our tentative agreement with the nurses union has set aside money for specialty training. Again, if their needs are more in the specialty nursing area, that would be a higher figure than it would be on the general wards.

I don’t have that exact figure. If you were to take a simple calculation and multiply 1,600 nurses by an average of $100,000, that’s $160 million. But that is a vast oversimplification of what we’re talking about here. It is our contention that if the health authorities manage this well, there should be no net cost. It should come at…. The benefit will be that we have full-time nurses, we have fewer overtime hours, and we have fewer hours of short-term or long-term disability.

J. Darcy: If I just can summarize the minister’s answers to some of the questions that I’ve asked so far. We’re talking about health care. The minister has confirmed that the increase in the Health budget is 2.9 percent, 3 percent — roughly, a $522 million increase — and that health care inflation the minister estimated to be approximately 2 percent. He said — and, of course, he’s right — that inflation in health care is not the same as a basket of goods, as calculated under the CPI.

The minister has indicated that the aging population accounts for 0.7 percent. CIHI actually says 0.9 percent. But even if we take the minister’s figure of 0.7 percent, the aging population…. Sorry, the population increase, the minister referred to as 1.2 percent. That means, even without getting into…. The minister says $160 million for the new nursing positions, from which you would have to deduct various things — I understand — but deducting figures that are not yet known and not yet proven.

We also have an additional $72 million budgeted for PharmaCare. Even without getting into the increased ambulance service and MRIs, it seems to me that the commitments that have been made and the expected increases — because of aging population, because of population increase, because of health inflation — already have eaten up more than the entire budget increase that the minister has projected.

It is very difficult to understand — with those announcements, with those additions and with those costs that the minister has agreed with — how the minister could not be planning to make some significant cuts in various health care programs in order to pay for those expected increases and those new programs. What is the minister planning to cut in order to meet the budget?

Hon. T. Lake: Well, again, the member, I think, is oversimplifying the situation. The member’s contention is that nothing will change, that we’ll just continue doing what we are doing, just at a higher level in terms of the percentage increases. The reality is: we understand that to have a sustainable health care system, you do have to change things.

[1550]

When Fraser Health, for instance, says, “We’ve got too many people sitting in what we call alternative level of
[ Page 12579 ]
care beds in our health authority; we are going to create 400 new beds in community for complex care patients in residential care, but we’re going to close 78 or 80 beds in the acute care system, those alternative level of care beds,” that will result in (a) better care, because they’re in the appropriate environment, and (b) savings, because each of those acute beds — the alternative level of care beds in an acute facility — will cost, on average, four times more than a bed in a residential care facility.

The member’s contention is that we just keep doing the same thing rather than changing. I know the member has read all of our strategic priorities for the health care system. This team worked extremely hard for over a year when we came into the ministry in June of 2013 to develop the strategic priorities.

Those priorities address the need in an aging population to do things differently, to look after people in their homes longer, to provide help in community — that would be assisted living in residential care — so that we’re not as reliant on the high-priced acute care facilities that were really built for a younger population and a style of medicine that was more suited to the 1970s than it is to 2016.

I would contend that by having a 2.95 percent increase in our budget and making the changes in the direction outlined in the strategic priorities for the health care system in British Columbia, we actually will be able to improve care within the budget that we have been allocated.

J. Darcy: Thank you to the minister. I want to turn to commitments that the minister has made in the past and that were set out in mandate letters for the minister in the past and compare some of those past mandate letters with present mandate letters. I think that will….

In addition to the issues that I’ve raised already today — about programs and funding that the minister has committed to but that it’s not clear to me that money exists in the budget to fund — there are a number of other commitments that I would like to understand the status of. This is based on looking at the 2015-2016 mandate letter and going back and examining the mandate letters for the last couple of years preceding it.

For hospice spaces, in 2013, there was a commitment to double the hospice spaces in British Columbia by 2020. In 2014, the commitment changed to “work with Treasury Board and Finance to develop a plan and begin the process of doubling hospice spaces by 2020.” Then by 2015, it was simply “provide an update to cabinet” on the plan to double by 2020.

Can the minister please explain what the status is of doubling hospice spaces by 2020, which was the commitment in 2013?

[1555]

Hon. T. Lake: I just want to make the point that the commitment hasn’t changed. The mandate letter changes in terms of: “Okay, this is what we said we wanted you to do. Now how are you doing? Report back. Go to Treasury Board to make sure you’ve got the resources necessary.”

The commitment is the same — to double the number of hospice spaces by 2020. These are a combination of health authority beds that would be either in hospitals or in other forms of tertiary care and then community hospice beds. The number of beds, as a baseline, is 375. We need to get to 750 to meet the commitment by 2020.

Planning is ongoing. At this point, we have 104 beds planned in phase 2. That would be in 2015-16, ’16-17 and ’17-18. Those have been planned. Another 52 beds in phase 3, and that would take us to ’19-20. That’s not the end of 2020, obviously. So there are 219 beds that still need to be filled in that process, and those beds are still being planned.

We’ve got three phases of the plan in place. They’ve been identified — where those will go in terms of which health authority will receive additional beds. But there are still 219 in the planning process to get us to the 750 number that is in the commitment.

J. Darcy: If the minister can please indicate…. The commitment was in 2013 — double the number of hospice beds by 2013. How many of those beds have already been created?

Hon. T. Lake: New beds completed to date total 29. As I mentioned, in phase 2, there are 104. In phase 3, 52. That would bring us up to the 531 mark. So there are 219 beds that are still being planned.

[1600]

J. Darcy: Looking at addiction spaces, in 2013, there was a commitment to significantly increase the number of addiction spaces by 2017. It was reiterated in 2014: deliver by 2017 and, in 2015, provide an update on the status by December 31, 2015.

Can the minister please clarify what was the starting point from which he’s measuring progress? In his update on December 31, 2015, how many addiction spaces had been created? How many will be created in the coming year? Because 2017 is next year.

[R. Chouhan in the chair.]

Hon. T. Lake: The baseline of substance-use beds in the province that the commitment is measured against is 1,104 beds. With the additional 500 beds, then the expected number by the end of 2017 would be 1,604.

To date…. Well, first of all, I should explain that the plan was broken down into three phases, and it was informed by a planning process conducted by the Centre for Addictions Research of B.C. and community consultations. It provided health authorities with estimates of
[ Page 12580 ]
demand for various types of substance-use services and a description of need by geographic area among subpopulations.

So a three-phased approach, and to date, in planning and implementation, we have 220 beds open in phases 1 and 2. There is still a gap there of 280 beds that need to be planned and implemented by the end of 2017.

[1605]

There’s been considerable discussion with the health authorities about what constitutes a bed. Again, the goal was to increase the resources available for substance-use recovery and treatment, and there are different schools of thought on how best to provide that. There has been discussion about mobile withdrawal management spaces and home-based withdrawal management spaces, because not everyone would need an institution-based kind of program.

That is an ongoing discussion with health authorities, and there may be some discussion around the best approach to meet those 280 bed equivalents, if you like, as we approach the phase 3 part of this target.

Again, because I know the member will ask, this is part of the commitment that we have made, that we expect health authorities to be able to manage within their budget. The estimated operating cost for the 500 beds is expected to be in the range of $20 million to $40 million.

So again, in the context of budgets to regional health authorities, which — I don’t have the line in front of me — is about $12 billion, we’re looking at a relatively small incremental cost for this particular service to patients that would result from savings that accrue to this shift, outlined by the strategic priorities, to have less of a reliance on the higher-cost acute care system.

J. Darcy: So I just want to be clear. The commitment was for 500 new addiction spaces to be delivered by 2017, which is a year away.

The 220 that the minister referred to in planning or implementation — how many of those already exist? How many have actually been created? Not planned for, not implemented — created.

Hon. T. Lake: To date, 144.

J. Darcy: That means that by the end of next fiscal year, the remainder, to take us up to…. That’s 356, if I’m doing a quick math — in the next year.

The minister gave a range of cost — $20 million to $40 million. Did I hear that correctly? That’s a big range, $20 million to $40 million, especially if we’re talking about an additional 356 addiction spaces in order to meet the commitment.

How does the minister expect health authorities to absorb that big of a number in the remaining year of that commitment?

Hon. T. Lake: I stand corrected, hon. Member. There were 76 opened in phase 1; 144 in phase 2; so there’s a total of 220 that have been opened. The gap is 280 between now and the end of 2017.

Is it a challenge? Yes. In terms of the cost, I mentioned that the annual operating cost for the extra 500 — so, again, 220 are in place already — is in the range of $20 million to $40 million, on a total budget for health authorities of about $12 billion.

J. Darcy: I neglected, when I asked about hospice spaces…. Can the minister please give the cost of doubling the number of hospice spaces that we talked about previously?

[1610-1615]

Hon. T. Lake: The cost of a hospice bed will vary on a number of things — number one, the type of hospice bed. A stand-alone hospice, for instance, is more expensive than a hospice space that is part of an acute care hospital or part of a residential care hospital. On average, it’s estimated that the cost of a hospice space, on a year-to-year basis, is about $300 to $400 per day.

Not all of those beds would be operated every single day of the year, because they wouldn’t all be full all year. But within that estimate, the 375 spaces, order of magnitude of costs, our estimated costs…. Again, without the plans in place and seeing what kinds of beds are needed in what community, it’s hard to be exact. Again, the estimate would be $20 million to $25 million a year.

J. Darcy: I hesitate to ask some of my remaining questions, because these were the easy ones. Perhaps what I’ll do is…. For the times when I’m asking for numbers and it would appear that it will take some considerable time for the answer, the minister could indicate that he would be happy to get back to me and provide the information tomorrow, just so that we can move things along. Would that be acceptable?

[1620]

Interjection.

J. Darcy: Perhaps.

The Chair: Member, continue.

J. Darcy: Well, you know, it would make better viewing for those hundreds of thousands of people who are tuned in to Health estimates and are following this, with rapt attention, from one corner of British Columbia to the other.

How about I put some questions on the record, and the minister could perhaps undertake to provide the information for tomorrow? These are some issues we would like to pursue further. The mental health plan….
[ Page 12581 ]

Hon. T. Lake: To the member: I’m not going to commit to a certain style of answering questions. If you ask the question, I will do my best to answer. If I don’t think I can get you the answers within a reasonable period of time, we will provide them to you. But I won’t be held to a standard of questions that I don’t feel is appropriate. We’re here to debate the estimates of the Ministry of Health, and I’m prepared to do that.

J. Darcy: With respect to the minister, we’re also here to canvass as many possible issues as we can. If we can expedite this by getting answers and the minister getting back to me, as he often has in the past…. But I guess that’s the minister’s decision.

Again, in the mandate letters, 2013 refers to “full implementation of the provincial mental health plan”; 2014 refers to the same, “full implementation of the mental health plan Healthy Minds, Healthy People”; and 2015 says: “Ensure renewal of the balance of the provincial mental health plan.”

Can the minister please provide the figures, either at this time or for tomorrow, about the cost of fully implementing the mental health plan? What of that cost has already been expended, and what is expected over the next budget year?

Hon. T. Lake: The mental health plan — Healthy Minds, Healthy People — is a ten-year plan, and the commitment is to renew the last half of that mental health plan. There also is work ongoing with the cabinet working group on mental health. There is no specific dollar attached to the mental health plan. It is embedded in the increases that we see on a year-to-year basis. We currently spend, I believe, $1.42 billion on mental health and substance use per year in the ministry.

Again to the member: this isn’t about doing the same things that we’ve always done. It’s about doing things in a different way to achieve better outcomes. A good example of that is the child and youth collaborative, which was to work with health authorities, with primary care physicians. It was a good partnership between the government and the Doctors of B.C. to increase the connectivity of services in child and youth mental health. That is doing something different that doesn’t require, necessarily, additional operating dollars on a year-to-year basis.

To the member’s contention that each commitment needs to have a line item, my contention is that that would be true if we were doing the same things, but we’re not. We’re doing things differently. We are making sure that the priorities of the B.C. health care system, as identified in the strategic papers that we have presented, are being met, both by the ministry and by regional health authorities. It’s a matter of doing things differently to get different outcomes within the 3 percent budget increases that are in the three-year budget for the Ministry of Health.

J. Darcy: The minister has spoken on many occasions…. The discussion papers of the ministry certainly speak to the importance of taking pressure off our acute care hospitals so that patients are cared for appropriately in the appropriate place, whether that’s residential care, assisted living or in their own homes.

[1625]

Can the minister please set out what the government’s commitment is to creating new residential care spaces, new assisted-living spaces and expanded home support, and what are the dollars? How many spaces — residential care — and how many assisted-living? What’s the increase in home support that the minister envisions? What’s the cost of that over the next year and over the next three years?

Interjection.

J. Darcy: That would be fine. If he has the answer now, that would be great too.

Hon. T. Lake: Just a little bit of context, if I may. The spending on community and residential care currently is $2.92 billion, which, compared to 2001, is a 79 percent increase. That’s a reflection of needing to catch up, which we did in the early 2000s, and 6,500 beds have been added in that time.

Now, I don’t have in front of me the plans of every health authority in terms of number of beds. We did mention earlier that Fraser Health is looking at 400 additional beds.

Some of that planning will be developed in the consultation process that will take place over the next year with the passage of the Community Care and Assisted Living Act. As the member well knows, this act has been changed so that there’s more flexibility to keep people in assisted living rather than having to move on to residential care. That will shift the demand for assisted living and the subsequent demand for residential care.

During that consultation period over the next year, we’ll have a better sense of how many new beds in residential care will be required versus assisted living. Currently, health authorities plan using demographics. So if I may…. The majority of people in residential care, for instance, would be older British Columbians. So if we look at the 85-plus age group, that is 2 percent of our population now and will grow to 3 percent of our population by 2025.

We’re going from 110,890 British Columbians over 85 to 162,000 in 2025. That’s the figure that health authorities use to decide the demand moving forward, but it will now change because of the changes that we’ve made to the Community Care and Assisted Living Act.

Hon. Chair, with that, if I might request a health break for a few minutes.
[ Page 12582 ]

The Chair: The committee will be in recess for ten minutes.

The committee recessed from 4:30 p.m. to 4:42 p.m.

[R. Chouhan in the chair.]

J. Darcy: I just want to revisit the last question that I asked before the break. I certainly appreciate that the changes to the Community Care and Assisted Living Act will mean that there are a certain number of frail seniors who will be cared for in assisted living, but we’re talking about a change from two services to more than two services. We’re still not talking about the majority of the frail elderly population in residential care.

I think what the minister essentially said when…. I asked the question about what the plans of the ministry are as far as new residential care beds, new assisted-living beds and increased funding for home support. His answer was that, essentially, it depends. It seems to me that only part of it depends. That part is: what’s the potential shift of a certain number of seniors — not the majority, I would estimate — being able to be cared for in assisted living, rather than residential care?

Can the minister please answer the question, which is: what projections does the ministry make about increased numbers of residential care beds, assisted-living beds and increased support for home support?

Hon. T. Lake: Well, I thought I explained extensively how health authorities plan. They base their planning on growth of the population, on the aging of the population. That varies within each health authority. The consultation over the Community Care and Assisted Living Act changes will help to inform and refine those plans. Health authorities know what’s coming at them in terms of the aging of the population. They make their plans based on those changes.

Now, however, with the changes that we’ve made…. They were identified by the seniors advocate in a report that showed that up to 15 percent of people in British Columbia in long-term residential care could still reasonably live in assisted living. That prompted changes to the Community Care and Assisted Living Act to allow that to happen. So that will change the balance.

[1645]

Over the next year, health authorities will be engaged, along with the care providers in that space, to determine what the new demand will be in assisted living versus residential care. It may affect the number of residential care spaces.

I guess I need to make the point that with a regional health authority, we don’t have micromanagement from the ministry. We have oversight by the ministry.

The ministry created priority papers, which I mentioned, in February of 2014. There were five major areas: access to primary care; primary and community care, particularly with frail seniors; primary and community care with mental health and substance use; rural health; and access to surgical treatments and procedures. Each health authority has a different way of meeting those major areas of priority that have been identified by the ministry.

The ministry didn’t do this in isolation. We did this with extensive consultation with health authorities, with experts in health policy, and using extensive informatics of the B.C. population today and into the future.

Each of those health authorities develop their own plans. We have a leadership council that is comprised of senior ministry officials and the CEOs of each of the regional health authorities. They do an update to the ministry on how those plans are coming. I also meet with the CEOs and chairs of the health authorities on a regular basis.

We did extensive bilateral sessions, one-on-one with the ministry and the chair and the CEO of each health authority, in October of 2015. We set aside the better part of a day to go through, with each health authority, how they were going to meet — and do a check-in on the development of their plans — those five priority areas.

If the member had the opportunity to question the CEO of each regional health authority and the Provincial Health Services Authority in this forum, she would receive more detailed answers in terms of what each of those health authorities are doing to meet those five priority areas.

They have an understanding of what the priorities are. They know what their budget is. It is up to the health authorities, which answer to a board — a publicly appointed board of directors — how they’re meeting those priorities. They also need to develop detailed plans and check in with the ministry. We are going through that process with them.

In terms of the individual plans for each health authority, that will vary depending on the health authority. They each have different needs, different challenges. Northern Health is a lot different than Fraser Health in terms of demographics, distances and the types of services that they need to provide.

K. Corrigan: I seek leave to make an introduction.

Leave granted.

Introductions by Members

K. Corrigan: It gives me a great deal of pleasure to introduce a group, by name, who were introduced as a group earlier today by the member for Burnaby-Lougheed. I’d like to introduce some members of the Intercultural Dialogue Institute, B.C. chapter, which is a group of Turkish residents.
[ Page 12583 ]

Up in the gallery today, we have Gurdal Telli, Muzaffer Ahmet Karaaslan, Enes Satir, Hayri Ardal, Emrah Tutumlu, Sultan Murat Atay, Erkan Kara and Madi Satayev. I hope the House will make all of our guests very welcome.

Debate Continued

J. Darcy: Just one last question before we move on to capital projects. The minister’s mandate letter — the last item, No. 14 — says: “Work with the parliamentary secretary and the seniors advocate to provide an update to cabinet on seniors care improvements in the province by December 31, 2015.” Could the minister please share a copy of that report?

[1650]

Hon. T. Lake: The member knows that cabinet reports are under confidentiality. So no, I cannot.

J. Darcy: Well, let me ask the question a different way. Could the minister please share the substance of the report that he produced for cabinet on improvements in seniors care based on the seniors advocate’s recommendations?

Hon. T. Lake: I do not see the distinction in the question. Reports to cabinet are covered by an oath of confidentiality. I can tell the member that we are working with the seniors advocate. Our parliamentary secretary is working hard on improvements to services to seniors, in the field of health care particularly. We’ve seen the results of some of that in legislation presented here in the House, with the changes to the Community Care and Assisted Living Act.

We currently have the parliamentary secretary working with the seniors advocate and with the ministry over the issue of dedicated hours per resident in residential care facilities. That work is ongoing. Again, we’ve seen some of the results of that work in legislation passed this session.

J. Darcy: If we could turn to capital projects. Just to be clear.... Does the minister need a shift change?

Interjection.

J. Darcy: Yes, capital questions. Just to be clear, the expected expenditure of capital in 2016-17 is $505.855 million. Is that correct?

Hon. T. Lake: The capital is broken into two different areas: restricted capital grants and P3 debt, which is, in many cases, a part of capital projects. In ’15-16, that total was $560.9 million, and in ’16-17, it is $678.8 million.

J. Darcy: Could the minister please set out those two groups? The minister said restricted funds and P3 debt. Can the minister give the amount for each?

Hon. T. Lake: The restricted capital grants for ’15-16 were $378.9 million, and for ’15-16 they’re $505.9 million. P3 debt in 2015-16 was $182.1 million and is $173 million in 2016-17.

J. Darcy: The service plan lists eight major projects: Queen Charlotte–Haida Gwaii hospital; Royal Inland; North Island hospitals; Interior Heart and Surgical Centre; Vancouver General Hospital, the Joseph and Rosalie Segal family health centre; Children’s and Women’s Hospital redevelopment; Penticton Regional Hospital patient care tower; and Royal Columbian Hospital.

Could the minister please provide a brief update on the status of each? I know from reading the service plan what the total cost is that’s anticipated for each. Can the minister please indicate how much of the $505 million is being allocated to each project in this fiscal year?

[1655]

Hon. T. Lake: I can go through and I will provide a breakdown in writing in terms of the restricted capital grant versus P3 debt for the various projects. But I’ll quickly go through the projects and let the member know where we are in terms of project cost to date, as of December 31, 2015.

Queen Charlotte–Haida Gwaii hospital. The target date is completion later this year. Anticipated total cost is $50 million. The cost to the end of 2015 was $28 million.

Royal Inland Hospital clinical services building, again, will be open by August of this year. The anticipated cost is around $80 million. The project cost till the end of 2015 was $25 million.

North Island hospitals, again, will be opened in the spring of 2017, and the anticipated cost of these two hospitals at Comox and Campbell River is $606 million. The cost to December 13, 2015, is $288 million.

Interior Heart and Surgical Centre. The targeted completion date is 2017, and approved cost was $381 million. The cost to December 31, 2015, was $254 million.

Joseph and Rosalie Segal family health centre at Vancouver General Hospital: 2017 completion date; anticipated cost, $82 million; project cost to the end of 2015, $25 million.

Children and Women’s redevelopment anticipated date is…. Well, the full development is in phases. Full development is 2019; the total cost, $678 million; the cost to date, at the end of 2015, $228 million.

Penticton care tower. The anticipated cost is $325 million. That’s in the early stages — only $3 million by the end of 2015.

Royal Columbian Hospital, again, very early stages, but that total, at phase 1, is $259 million.

J. Darcy: I believe the member for Burnaby–Deer Lake has some questions.
[ Page 12584 ]

K. Corrigan: Prior to the 2013 election, a document was leaked, which was a little plan, signed by Pamela Gardner, Brian Bonney and Mark Robinson, with the title, “A New Burnaby Hospital: the issue we can win Burnaby Deer Lake on, re-win Burnaby North and Lougheed — will also help in Fairview and Fraserview.”

The plan in that document was that they could announce a hospital and wouldn’t have to commit any dollars to it — it’s all in the document; I’m sure I’ve mentioned it before — but then could do some polling later to see whether it was a winning issue.

[1700]

Since that time, you would understand that those of us that live in Burnaby are always concerned when there’s talk about Burnaby Hospital. We do need a new hospital, and we’ve needed a new hospital for a long time. In fact, there was a capital plan in 2001, a master plan, that said that there needed to be a new hospital and that the hospital is very seismically fragile. We also know that in 2011-12, there were a number of C. difficile deaths, I think 84 deaths, that the doctors in the hospital said were related to the aging infrastructure.

In the 2013 Liberal election platform, Burnaby Hospital was listed as underway or in progress and then separately as “underway or in planning.” But last year when I asked the minister — same minister, the present minister — about the plans for Burnaby Hospital, the comment I got was: “I just wanted to say, though, I have no record of any promise being made about building a new hospital in Burnaby. The master site plan was developed, and that is absolutely correct. But as far as I can tell, there was no commitment made by this government to build a new Burnaby hospital.”

My question to the minister is from the people of Burnaby. No promise is being made, despite the election platform, despite the fact that we’ve had about 15 years that there’s been a plan that says we need a new hospital. What are the commitments to the people of Burnaby to build a new hospital?

Hon. T. Lake: Well, I would just want to reiterate that the government has not made commitments in the past in terms of a new Burnaby hospital. The member is quoting from a document. I haven’t seen the document. Presumably, it was like a lot of process, whereby political parties think about what could form part of a platform. But to my knowledge, there has never been a commitment to rebuild Burnaby Hospital, to date.

[1705]

Now, the member does know…. She was in a meeting with me and with the other Burnaby MLAs, I believe in about June of last year. We sat down and discussed extensively Burnaby Hospital. At that time, we acknowledged that there had been a master site plan that had been developed and that we were committed to discussing with Fraser Health the needs of Burnaby Hospital in context with the redevelopment of Royal Columbian Hospital and St. Paul’s Hospital, as part of looking at the acute care facilities and the future needs of the Lower Mainland. To plan in isolation would not, obviously, be the best way to address the needs in the Lower Mainland.

That work is ongoing. Fraser Health is looking at the acute care needs in the Lower Mainland and how the redevelopment of Royal Columbian Hospital and the building of new St. Paul’s will impact the needs at Burnaby Hospital.

I can tell the member that there has been some work done on Burnaby Hospital over the years. I’ve been to Burnaby Hospital, and I can tell you that the changes that have been implemented there — for instance, over containing C. difficile, which is an infection that can occur in hospitals — the remarkable difference that they’ve made, is actually leading across Canada.

The care provided at Burnaby Hospital is first class. We understand that the facility needs to be looked at, in terms of a renovation, replacement. That work is ongoing, but it can’t be done in isolation of what else is going on in the Lower Mainland, particularly as it relates to St. Paul’s and to Royal Columbian.

K. Corrigan: I think it’s interesting that the minister talks about information that was in the 2013 Liberal platform, essentially saying: “Well, that’s what political parties do.”

Interjection.

K. Corrigan: Well, I’ll pull the documents out — that it was mentioned in the platform. That’s my understanding, so I will confirm that. Nevertheless, reference to that as being something that has to do with elections and somehow intimating that that’s not relevant to what government actually plans to do…. But I’ll certainly pull it out and provide it to the minister.

It does concern me, because Burnaby Hospital is very old. I appreciate that the hospital and the hospital staff, who are fantastic…. I’ve gone there, had my children there, both my parents died in the hospital with great care, and it’s served us very well. But to have to put resources — focus hundreds of thousands, perhaps millions, of dollars of resources — to try to prop up a hospital that needs to be rebuilt….

When you talk about the infection control — yes, that was done. But my understanding from talking to people who have worked at the hospital is it took a huge amount of resources that were then taken away from somewhere else.

It’s a concern. It is the third-largest city in this province, and we have a hospital that is essentially falling apart, despite the great work of the people that actually work in that hospital — the doctors, the nurses, the support staff and other professionals, and the volunteers.
[ Page 12585 ]

I want to ask a specific question about bed closures. Earlier this year, there were several stories in the news about Fraser Valley’s plan to close 80 — well, one story says 80; I think another said 95 — beds in Fraser Health Authority.

The report that we had, that the member for New Westminster raised in this House, said over 100 acute care hospital beds were going to be closed. The number that was attributed to Burnaby was 11 — that 11 beds were going to close.

[1710]

The response from the minister on that date, in question period, was essentially that these beds were going to be replaced and then some with community beds. That would include, I’m assuming, long-term-care-facility beds and so on.

My questions are twofold to the minister. Have there been 11 acute care beds closed in Burnaby, or is there a plan to close 11 beds? If it’s not 11 beds, how many is it? What beds are being replaced in the city of Burnaby with these other types of resources, like long-term-care-facility beds and so on? What’s being added to Burnaby very specifically to address the closure of the 11 beds, if that’s the correct number?

Hon. T. Lake: The number is not 95; it’s 80. But the member is right in terms of Burnaby General looking at the closure of 11 of what we call alternative level of care beds. These are people that should be in complex care and residential care rather than in an acute care situation.

There will be 403 new residential care beds in Fraser Health by the end of 2016-17. I don’t have the number precisely for Burnaby. I will endeavour to get that number for her and provide it tomorrow.

J. Darcy: I know that the member for Vancouver–West End has some questions about the St. Paul’s redevelopment, but he’s not here just now. He will be returning shortly.

I would like to move on to the clinical and systems transformation project. Do we need a shift change?

Hon. T. Lake: We will endeavour to…. This is a very large project. Obviously, had we known that this topic was coming up today, we would have had other people here that are not present today, so I’m not sure we can answer all the member’s questions on that project.

J. Darcy: We did indicate that we were dealing with capital projects and CST. When we’ve discussed it in estimates the last couple of years, it has certainly been part of capital projects.

As the minister knows, we have been talking about the clinical and systems transformation project for a few years. Two years ago the minister said the project was 29 percent complete and was on time and on budget. In last year’s estimates, the minister admitted that the project was no longer on time and was projecting it to be eight to 12 months behind.

Can the minister expand on where we are with this project now? Is there a percentage completion number the minister can give today?

[1715]

Hon. T. Lake: This is one of the largest capital projects we have, and it’s not a typical capital project. We think of capital projects as buildings — bricks and mortar. This is…. Some people would call it an IT project, but it really is much more than that and better described as a quality improvement project.

The clinical and systems transformation will knit together three health authorities — Vancouver Coastal, Provincial Health Services Authority and Providence Health — and establish common clinical and process standards, including work flows; order sets, which are the computerized provider order entries; clinical guidelines; integrated care plans; and a common clinical information system, which will replace a myriad of legacy systems that are in place now.

One of the attributes of this type of system is patient safety, which is why I like to describe it as a quality improvement project rather than an IT project. It allows for consistency in terms of the way the care plan is provided for patients, based on these computerized provider order entries. It will prevent medication errors. I can give examples from Island Health. I think there are over 300 medication errors that have been averted due to their institution of a similar but smaller-scale project in Island Health.

In terms of where we are with the clinical and systems transformation project, the total budget is $842 million. As of January…. Well, I need to go back and get the up-to-date figure. In January of last year, we were at $175.5 million, which is about 21 percent. I will endeavour to get an updated figure momentarily for the project.

The member knows that there were some changes, in that we were working with IBM Canada and that in early 2015 the decision was made by the project board and IBM to part ways. Cerner was retained as a new project partner in July of 2015.

We have been working with Cerner and with a consultant in terms of the governance of the clinical and systems transformation project. We have changed the governance to make sure that the work is meeting certain targets and timelines and outputs. I think that we have a much stronger governance system.

Also, we have learned from other large IT projects. We had a review of the Panorama public health system by the Auditor General. One of the pieces of advice by the Auditor General was to involve their office at an earlier stage, so we have done that. We have met with the Auditor General this past fall to discuss the changes to the
[ Page 12586 ]
project and the strengthening of the governance. We’ll be meeting again with the Auditor General this month to provide an update and get feedback on our approach.

One of the key things, I think, that we learned was that when you take on projects like this, there are sort of two ways of going about it. You can bring in outside parties and have them provide advice and leadership when the project is being built, but then they, essentially, are not there long term.

The other approach is what we are doing, which is to encourage ownership of the project by the people who will be using this system over the next ten to 15 years. There is, I would say, a greater degree of ownership on the part of clinical leads and others that are involved in helping to design the system.

[1720]

In terms of where we’re going, implementation of the system will start at Vancouver Coastal sites on the North Shore — so, Lions Gate Hospital and Sea to Sky. We’re calling that group 1. That implementation will occur in spring of 2017. Then it will be followed by the B.C. Cancer Agency in group 2.

What we’re doing is taking an approach that is iterative, in that we will learn from each of these phases or groups what we can do better for the next phase or group. This is, I think, one of the major changes that occurred with this project: to take that iterative approach, rather than to try to build it all and switch it all on at once. I can later refer to the IHealth project in Island Health — the success they’ve had in a similar but smaller-scale project and the results that have occurred there — which we are using to help guide us in the CST project as well.

J. Darcy: Just to reiterate part of my question, two years ago the minister said the project was 29 percent complete. Is there a percentage completion date that the minister can give today? The minister referred to how much money had been spent. But he did not answer the question, I believe, as to what is the percentage completion number for the project itself.

[1725]

Hon. T. Lake: As I mentioned, 21 percent, I think, of the funds have been expended. That, I’ve confirmed, is total spending, up to the launch of the design phase, of $177 million. That’s about 21 percent of the $842 million budget. In terms of how much of it is complete…. Well, that’s a financial estimate of where we are — 21 percent of the spending.

There are six groups. When you look at all of the facilities that will come on board, they’re grouped into six. The first group will be coming on board in the spring of 2017, and that is Lions Gate Hospital and Sea to Sky, followed by B.C. Cancer Agency. It will then go through all of the other groups. The time in between those groups will shorten.

It’s not unusual when you have a project like this. Each time you go to the next level or the next group that comes on line, you’ve learned all of…. Up-to-date learning will be applied to the next group. The period in between one group and the second group initially will be long to make sure that the design is working, that it’s tested, that any concerns have been addressed. The next one will follow in a shorter period of time. With each implementation of each group, the time in between implementation will shorten and shorten.

It’s difficult for me to stand up and say: “Today we’ve spent 21 percent of the money, but we’re only X amount through the project.” It is an iterative process, and the space between each of the groups coming on stream will shorten as we go through that. There is not a reliable way of predicting exactly how long that will take.

J. Darcy: The minister referred to some things that he sounded as if had just been recently learned or recently understood — problems with this project. But we know, and the minister knows, that this project has been rife with problems from the get-go.

The project was the subject of a risk assessment, as the minister well knows, in March of 2013, one that indicated that 12 of 13 risk indicators were very high. Those included finance, governance, culture, technical complexity, shared vision, resourcing, clinical standardization, achievable expectations and timelines, clinical engagement and accountability, leadership, end-user adoption and vendor relationship.

Now, the minister insisted, when I asked him about this two years ago and again last year, that the risks “fall away as the project moves down the track.” Not only did those risks not fall away; they have certainly come to fruition.

Can the minister please explain how the project has been altered as a result of the problems with delivery to date?

[1730]

Hon. T. Lake: Well, the member identified some of the identified risks. This, of course, is (a) a large project and (b) a very complex project involving literally thousands of people in a health care setting, which is a complex setting.

Some of the risks that were identified…. I mean, the reason you identify risks is to help you in terms of mitigating those risks. In any project like this, you will have a risk schedule, a risk register. The governance should be monitoring those risks and how they’re being mitigated as the projects move forward.

I think it’s safe to say that after a period of time, it was recognized that with the provider we were working with at the time, we were concerned about some of those risks. One of those risks was governance.

What we did was work with PwC. PricewaterhouseCoopers Inc. worked with us from July till September of
[ Page 12587 ]
last year. We made changes to the governance and planning to ensure a program that improves the quality and consistency of what we were doing.

As part of their work over the last year, the project team realized that…. This is what I was talking about in terms of the ownership, was to engage front-line clinicians to add clinical elements that will better suit the system needs of the health care providers. One thing you learn quickly on these projects is that if you’re not talking to the people who actually have to use it a lot, you’re going to run into problems.

To give an example, in the Island Health project, the IHealth project on Vancouver Island, the initial plan was to have data entry by the clinician on a keyboard. When they talked to the clinicians, the clinicians said: “That’s going to slow us down far too much. We need voice recognition software.”

When I visited Nanaimo Regional Hospital in the fall…. I believe it was the fall. I can’t keep track of time these days. No, it wasn’t the fall. It was earlier this spring. When I was there and I talked to the emergency clinicians using — in real time — the system, it became evident to me that this voice recognition system that they had was far better than trying to input it by keyboard.

That was taken from that project and scoped into this project to ensure that we had voice recognition software that would be available to clinicians. That’s the kind of iterative process that has been adapted to this project. We also have, in our governance structure, put a non-voting member who is a member of Island Health team that is taking the lessons learned from IHealth on Vancouver Island and bringing it over to the CST project.

It is a new model. It’s got improved governance, improved project management, a better plan for change management and incorporating clinical needs. The implementation in phases with the groups, as identified…. I think we feel much more confident about this quality improvement project.

J. Darcy: This is the third year that I have raised questions about this issue. These issues have been raised in the House in question period. Some of these same issues that the minister talks about now were raised in a report entitled the Mackenzie report and also in the North York General report.

When we discussed those in previous sets of estimates, the minister was actually quite dismissive of some of the findings of that report. I think the North York General report was dismissed as: “Well, this is a huge project, and they’re just — what? — a medium-sized hospital in Ontario. What was the relevance of it?”

[R. Lee in the chair.]

Precisely, one of the issues that the minister has just spoken about, which is engagement of the folks involved in front-line delivery in the process, and actually listening to them — not just engaging them, but listening to them — is one of the things that they raised in that report.

[1735]

They were very critical of the project and of the ministry for not sufficiently listening and listening to people who actually had to use these products in the end.

Now, we are aware that the original contractor, IBM, is no longer attached to the project. The minister doesn’t seem very comfortable any longer using figures about percentage completion rate, although he did two years ago refer to a 29 percent completion rate of the project. How much of the work that IBM did that got us up to the 29 percent mark is usable by the new contractor?

Hon. T. Lake: The member may characterize my answers in a certain way from previous estimates. That’s fine.

The reality is that these projects are complex. No two of them are the same. You can’t just take what happened at North York General, for instance, or what happened at Nanaimo General and just superimpose it on a very complex organization or group of organizations that we’re dealing with here.

We’ve got Providence Health Care, which runs one of the largest hospitals in the province, St. Paul’s. We’ve got Vancouver Coastal, which runs another one of our largest hospitals, Vancouver General Hospital. You’ve got the Provincial Health Services Authority, which runs Children’s and Women’s, runs the B.C. Cancer Agency. You’ve got a complex series of institutions and facilities. It’s unlike taking what happened at North York or what happened at Nanaimo and simply plugging it into the system.

A lot of the work that IBM did in the early stages of this project was what is called strategy and validation. They would look at this complex group of facilities and health providers and determine what was required for that environment, particularly as it relates to the clinical order sets, the type of information that would be consistent across the system — from a clinician’s point of view, how things are grouped together for patient care.

It is not simple. Obviously, there is a vast array of specialists, of health care providers in that environment. A great majority — I won’t say all, but a great deal — of that work that was done by IBM with the project team is still relevant and still being used under the clinical systems transformation under the new governance model that we have today.

J. Darcy: As I recall from our previous discussions, every single one of the playbooks developed by IBM as part of this project were rejected as being not quality products. That’s pretty serious. That surely has significant cost implications.

[1740]

It seems to me that in the interests…. We’re talking about a project on the books for $846 million. Surely, the
[ Page 12588 ]
minister has a responsibility to be accountable, not just to the opposition or in this House but to taxpayers of British Columbia. These are valuable dollars that are being spent — $846 million has been allocated.

Can the minister indicate… ? He hasn’t answered the question about what percentage of the work produced by IBM is still usable. Can the minister tell us whether the scope of the project has been modified as a result of the failures to date? I know that he said we’re going to go live in the North Shore in 2017, and the project will go live at the B.C. Cancer Agency after that. But has the overall scope of the project been modified as a result of the failures to date?

Hon. T. Lake: Well, I mentioned a couple of things that have been brought into the project. One is the voice recognition, which was, through the Island Health project, recognized as something that would be needed.

The other feature that was added as well was the bedside medical devices integration. This is being able to have input into the system right from the bedside — by the instrumentation that is used by medical devices — rather than having that input by nurses or other health professionals.

The style of direction, if you like, from where we’re going now is a bit of a contrast, I guess. Before it was: “Here’s our system. We’re going to build it, and then we’re going to turn it all on.” Working with IBM, we realized that there was some resistance to that. The resistance was at the clinician level — a lot of the resistance — although there were members of the board that had concerns about that too.

[1745]

Now, as I mentioned, we’ve become more clinician-led. An example is what’s called Agile methodology. Input is taken from clinicians, and then they meet every two weeks to see if those changes are…. They get some feedback on those changes — so very iterative in the process where this is being developed.

In terms of the scope, we anticipate that, as I mentioned, the first group is going to take a while to bring on board — a year from today, in that approximate time, the spring of 2017. Then the second group will be B.C. Cancer Agency. As we go through those groups, the time between each of those will shorten.

One of the biggest drivers of cost is that time to implementation of the next group. You will see that the costs at the front end are high. At the back end, they’ll be relatively lower. So we are optimistic at this point that we can achieve all we hope to achieve within the project budget.

J. Darcy: In question period a couple of months ago, I raised the issue of possible cost overruns, budget overruns on the clinical and systems transformation project and reported that sources from Coastal Health were saying the project could now be over budget by as much as $250 million and go well over the $1 billion mark.

The minister’s response at the time was to say that he was “speechless.” But he never actually confirmed.

It’s true, Minister. It’s what the record will show. You said you were speechless. There actually was some considerable response from this side of the House. I’ve checked the Hansard on it.

The minister never actually confirmed or denied whether or not the project was going to be over budget and, if so, by how much. Can the minister please indicate what cost increases he foresees in the CST project as a result of the failures and the delays to date?

Hon. T. Lake: I love how the member characterizes everything in a negative way.

This is, again, a large and complex project. The budget for the project is $842 million. The budget for the project today is $842 million. The challenge for this project team will be to continue to develop the project and find ways and means of ensuring that the project meets its objectives within that $842 million budget.

J. Darcy: To be clear, the minister is saying that this project will not go over budget. It was budgeted for $842 million, and it will be $842 million. Is that the case?

Hon. T. Lake: What I’m saying is that there has been no change to the budget. I am not in a position to tell the member whether this budget will come in under budget or over budget. We are one year away from the first group implementation. Each of the groups will come on stream faster than the one before, and we are still confident that we can achieve what we need to achieve within the budget.

But this is a multi-year, complex project, so I don’t think there is anyone who could tell you with 100 percent certainty that the project will come out exactly as envisioned when it was first put together. This is something that is, as I mentioned, one that we have a team that’s working extremely hard on that requires an Agile methodology, as I mentioned, making sure that we learn from each step and learn from other projects, as we have with the IHealth project on Vancouver Island.

J. Darcy: So the capital project budget for this year is $505 million. We discussed that earlier. How much of that is for the clinical and systems transformation project this year?

[1750]

Hon. T. Lake: The CST project in ’16-17 is expected to…. Well, it’s budgeted for $116.193 million.

J. Darcy: This minister prides himself, as the government prides itself, on saying that it delivers projects on time and on budget. The minister is not in a position, he says, to say whether or not this project will go over budget.
[ Page 12589 ]

We certainly know that it is not on time. The first parts of the project were supposed to go live first in early 2015 and then in late 2015. We now know that the first part of the project will not be rolled out or not go live until a year from now — 2017 for the North Shore and then the Cancer Agency after that. Can the minister explain when he expects the other parts of the project to go live?

Hon. T. Lake: The plan, as mentioned, is spring of 2017 for Lions Gate Hospital, Sea to Sky corridor. BCCA, the B.C. Cancer Agency, Vancouver and regional sites, is November of 2017. B.C. Children’s and Women’s, including Sunny Hill and Sechelt Hospital, would be June of 2018.

Following that, Vancouver General is expected January of 2019, then followed by UBC Hospital, G.F. Strong and Richmond Hospital in August 2019. St. Paul’s Hospital would be in the last group, and the date of that implementation is still subject to the planning process around the new St. Paul’s. So that is a little less certain as to when that will come on.

Now, as I mentioned, we hope that we can improve the time in between each of these implementations. As we learn from the first group and the second group, we hope that the third group will come on faster and that the time in between each of these implementations will shorten as we go.

J. Darcy: How many staff were working on this project before IBM left the project? How many are working on it now? How many are health authority employees? How many are external contractors and consultants?

[1755]

Hon. T. Lake: The number of people working on the project will vary, depending on what phase of the project is being implemented.

The current stage that we are in is called the design-configure-validate phase. Currently, there are about 300 employees that are from our CST team and about 50 Cerner associates that are working on the project at the moment. Now, they’re not going to be there the whole time, but this is a very intense phase of the project. There are about 355 to 360 people in total that are working on the project at the moment.

Even before IBM departed, that number would have gone up and down, depending on the phase of the project. I can provide the member — hopefully, tomorrow — with a bit of a timeline, in terms of the ups and downs of the number of people working on the project at any sort of stage. At the moment, we’ve got about 350 people working on the project.

J. Darcy: Have there been internal ministry documents or internal health authority documents or consultants’ reports produced that provide an assessment of why this project has been plagued by problems from the start? Can the minister summarize the findings of these reports, or better yet, provide them to us?

[1800]

Hon. T. Lake: I just wanted to correct the record. The member said that I was speechless. My staff found the Hansard. The question that was posed by the member to me was: “Can the Health Minister tell us if he intends to cut care for seniors even further to pay for his government’s latest computer technology failure?” Of course, it was a question laced with the usual flavour of question period. I said: “You know, I’m almost speechless at the member’s accusations in terms of….” And of course, then, I got drowned out by the interjections.

I just wanted to correct the record. I wasn’t speechless; I was almost speechless, Member. I think it’s important to get that on the record.

I’m not going to supply internal ministry documents. The member knows well why. That’s information that is often used for advice to cabinet.

I mentioned PricewaterhouseCoopers. They helped identify project management and governance issues as part of the experience that we had up to that date. I went through the changes that we’ve made to government and planning. I mentioned earlier that we had met with the Auditor General last fall and that we will be meeting with the Auditor General, I believe next week, to provide an update and get feedback on our approach.

Yes, I think the member and others identified concerns. The project was analyzed, within government and using a consultant. Changes were made, which is what you would expect to do when you see that you’ve reached some challenges on a project of this size.

We are, I think, on a better path, as I mentioned, and taking all that we have learned to improve this project and to make sure that implementation stages occur, starting in spring of 2017.

J. Darcy: When we were dealing with capital projects earlier, I mentioned that my colleague the member for Vancouver–West End had some questions that he wanted to ask, because one of the things that’s missing from the capital plan is St. Paul’s Hospital. The new hospital was announced with some fanfare last year. It was included in the capital plan in last year’s service plan, but it’s not in this plan. I would like to ask the member for Vancouver–West End to carry on this line of discussion.

S. Chandra Herbert: Thank you to my colleague, and thank you to the minister and his staff in advance.

I guess the question that comes from my constituents in Vancouver–West End, Coal Harbour, really is about…. There have been consultations looking at the “new St. Paul’s,” as they reverentially call it. My constituents want to know what will happen with the old St. Paul’s and, in
[ Page 12590 ]
particular, what sort of care facilities will exist for them in downtown Vancouver.

There have been a number of consultations where we’ve managed to fit into the conversation our demands and our desires for our community, but they’ve never really been officially part of the conversation, as in: “What do you want to see in the West End specifically?” We’ve managed to graft that onto the process. I know the minister will have to make a decision around what happens, what the new St. Paul’s looks like, very soon.

[1805]

The question I have is: when he makes that decision, will he also be making a decision about what will remain in downtown Vancouver, whether that be, as my constituents have called for, an urgent care facility with a strong primary health care focus so that if they don’t have doctors, they have access to a place to go where they can get that care — kind of like a Three Bridges clinic, but more expanded?

They talked about the need for care for seniors, elderly folks, geriatric kinds of programs. There are a number of day programs currently that they’ve had benefit of.

Then, of course, the HIV/AIDS community has asked that their cluster of health care services remain around that existing site — to name just a few of the programs that constituents have asked for, for the existing site.

Again, the question would be…. They don’t want to see an approval for a new hospital elsewhere if we don’t have any clue about what’s going to be retained on site for their health care needs, because their needs are just as important as the rest of the province. I would ask the minister if he can fill me in on if we are going to learn this fall what the government is proposing to leave on site with the proposed new hospital.

Hon. T. Lake: The new St. Paul’s is, again, a large project — from a high level, probably over $1 billion, when complete. There is a commitment on the part of government, in our capital plan, of $500 million towards St. Paul’s, and the board of Providence Health is very aware of that. Obviously, the redevelopment of the existing site will provide opportunities for financing not just the new St. Paul’s but also other services that will be available in the West End.

[1810]

As the member that represents that area, his concern is what that will mean for his constituents. There has been extensive consultation that has taken place. I know that the member is very well aware. I could list all of the groups and organizations that have been consulted and the number of meetings that have taken place. Many of those include the very people that he is concerned about, including the West End Seniors Network — there was a community forum held in the West End — the West End Seniors Planning Table, Dr. Peter Centre and a number of other organizations and stakeholders in that community.

In terms of where the decision-making is in relation to what will be left or will exist in a new St. Paul’s for the constituents in the West End, no decisions have been made at this point. We have heard that there will be primary care needs, which, I’ve said to the member and committed to the member, will not be ignored. The West End community will have the availability of an integrated primary care facility. What that looks like and the extent of that have not been decided yet.

In terms of other services that are currently at the St. Paul’s site, the Centre for Excellence for HIV/AIDS, for instance, Dr. Montaner has assured me that his organization, the fantastic work they do, is not contingent on being located at their current location. That can be incorporated into a site elsewhere, not necessarily where it is now. The people that are involved in the Dr. Peter Centre, again, have expressed no concern with moving the hospital to the Station Street site.

In terms of the Station Street site, the clinical plan is being completed. That will flow into a services plan and an indicative design which will lead to what we call a class C estimate of what the new St. Paul’s will look like on that site. We are hopeful to have that process by, probably, late fall of this year, of 2016.

S. Chandra Herbert: It might not surprise the minister, but I was pretty much aware that that would be exactly the answer he gave and, certainly, knew all that information already.

The question that I asked was very specific, which was…. When the ministry goes to make a decision about the new hospital in terms of what the site plan carries — what it will do, who it will serve and so forth — my concern is that we also need to be making a decision then about what remains in the West End, very clearly.

If I could just ask: does the $500 million budget estimate, I guess at this point, the province is putting forward include what will be kept in the West End? That’s part of that $1.2 billion budget? Is that correct? Or is that a separate fund somewhere else that will be decided separately? I guess what I want to know is: are we going to know what the government is committed to put in place for the West End when they make their decision around the other site for St. Paul’s Hospital?

[1815]

Hon. T. Lake: The estimated budget is around $1.2 billion, as the member mentioned. But it’s important to understand that once the new St. Paul’s starts construction, the existing St. Paul’s will still be there with all the services. We’re looking at four years, probably, that those services will be there.

In that time period, there will be discussions about the redevelopment of that site. Part of those discussions will be: what remains on site, based on the consultations that are being done at the moment and based on an analysis
[ Page 12591 ]
of what is needed to meet the patient care needs of that population?

As I mentioned, I am assuring the member that primary care will be part of that. The question that comes up is whether or not there will be a 24-hour urgent care centre. That decision hasn’t been made. But all of that is expected to be within the envelope of the project design, and no decisions have been made as to the type of service above integrated primary care to date.

As we move forward, obviously, we will be listening. Providence, Vancouver Coastal and the ministry will be listening and looking at what the needs are for the residents of the West End to ensure that their needs are being met and we’re not creating a vacuum with this project. This is a great news story — to have a state-of-the art campus of care that, really, is leading the nation in the way we design care for, particularly, vulnerable populations. We want to make sure that we’re not, in that process, creating a vacuum and leaving other people vulnerable.

S. Chandra Herbert: Thanks for that answer. I’m not sure if the suggestion was: “Well, maybe we’ll talk about deciding around an urgent care facility in 2021, 2022 — somewhere out there.” Ideally we can get to that understanding much, much sooner. Certainly, I know there’ll be many people wanting to know within the next couple of months, really, to get a sense, or the next year — perhaps within that window.

The first question is: do we expect an answer on that? I know that there have been surveys, consultations and so forth. Do we expect an answer on that question within, let’s say, the next six months? Maybe I’ll say eight months, just to give the minister a bit of time.

Interjection.

S. Chandra Herbert: Eight months and two hours — okay, there we go.

The other question is: is an ambulance station downtown part of that conversation as well? The minister will be well aware, of course, that I’ve been raising this issue for some time — about the need for an ambulance station downtown, not on the outskirts of town, as is currently the case.

Hon. T. Lake: I can’t tell the member when a decision will be made on the need for an urgent care centre.

[1820]

As I mentioned, all of these discussions are taking place. As discussions over the redevelopment of the site occur, these will be the kinds of decision points that will come with that process. Once Providence Health Care looks at the needs of the population, in concert with Vancouver Coastal and the ministry, then decisions will be made and will inform the subsequent decisions that occur over redevelopment.

In terms of an ambulance station, when we’ve discussed this in the past…. Having been on ambulance rides with the paramedics downtown, most of the ambulance calls, particularly in the downtown core, don’t find the ambulance at the station. They’re on the road. What is important is that the ambulances have an opportunity for the crews to restock, replenish and refresh. That is part of B.C. emergency health services planning.

They have completed a study in the Lower Mainland. They are developing a business case to address the issues of demand and response in the Lower Mainland. I don’t have an exact answer on whether they will find the need for an ambulance station in the West End. They know they need to meet the needs of the population of the West End, and that will be part of the business plan that they bring forward after the ORH study is completed.

C. Trevena: To the minister. I have a question which I don’t think he’s going to be surprised about. We’ve got our new hospital being built. I had a tour of it not long ago, and it’s coming along very well. I think everybody is very pleased with the progress there and very excited about having a whole new hospital opening there.

I have written to the minister and to the health authority a few times, and he has also received correspondence from elected officials up-Island — the mayor of Port Hardy, the mayor of Port Alice, the mayor of Port McNeill, the mayor of Alert Bay as well as the regional districts — about the issue that there’s going to be paid parking. As has been made very clear in these letters — my correspondence to the minister as well as the other elected officials — we don’t have paid parking anywhere in Campbell River. There are, maybe, two sites. One is out at the airport, so it’s not downtown, and one is one piece of land way downtown and a long way from the hospital.

It’s not within the culture of Campbell River. Further, you have people who are travelling a very long way to get to the hospital who have already got the stress of the hospital. They’ve got the cost of getting to the hospital. They’ve the gas cost and, obviously, wear and tear on their car. If you’re coming from the island, you’ve got the ferry cost as well as the gas cost. There is a real belief that having paid parking is going to add to people’s stress. It’s going to add to people’s concern.

It is really…. The explanations people have been getting about why we’re having paid parking are not sufficient. What we understand is we’re going to have to be paying for the parking to pay for having the parking — that the moneys raised will actually go to maintain the parking. We have a parking lot at Campbell River Hospital at the moment. There is an overflow lot as the new hospital is being built. They are free. So that justification of having to pay for parking because we have a lot doesn’t fit well with people — as I say, particularly when you’re looking at long distances to get to the hospital and the concerns.
[ Page 12592 ]

I wonder if the minister can explain, one, why we’re going to have the paid parking at that hospital. Secondly, it is a public-private partnership. It is a project agreement that the hospital builds. So I would assume that, in that agreement, part of the agreement was building the parking lot and that the way the parking was going to be paid for would be built into the agreement and, therefore, would be adopted by the management of this new facility and that they would be absorbing it.

I might be wrong on that, but we do need an explanation. We have 35,000 people who are very unhappy that while we’re getting a new hospital, they’re going to have to pay for parking.

Hon. T. Lake: I’ve provided the explanation in letters to the member. Nothing has changed. There is no such thing as free parking. The member knows that. It costs money to maintain a facility. There are two ways you can do that. You can charge for parking, or you can take it from the budget that is used to provide health care.

[1825]

The member mentioned the airport has paid parking. There’s a reason for that. It’s a destination where people go because it is something they need. If you don’t have controlled parking, there may not be availability of parking. It gets abused, and it doesn’t serve the purpose.

Now, there’s a difference between a smaller community like Campbell River than there is in downtown Vancouver. The parking fees will reflect that. They will be fees that are not considered unlike other areas of that community. In this case, it would be, probably, similar to what the airport charges but quite different to what it would be in downtown Vancouver.

We’ve also explained that if someone has a hardship, an inability to pay, health authorities are always willing to take that into account. If someone has to be at the hospital on a frequent basis, arrangements can be made to reduce the cost of parking for someone that needs to be there on a regular basis or for a long period of time, should the need arise and they find that the affordability is a challenge. I think health authorities have always demonstrated the willingness to engage people that way.

I would remind the member that the initial concept of a north Island hospital was one hospital. The people of Campbell River made the case that it should be two separate hospitals — one in Comox and one in Campbell River. The folks of Campbell River, I think, are very pleased to know that they’re getting a new hospital. This is the government that made that decision to better meet the needs, in terms of distance and convenience, of north Island residents around Campbell River and north.

While no one likes to pay for parking, I’m sure that the vast majority of the member’s constituents would be pleased that they have a hospital closer to them than the original concept outlined.

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

Motion approved.

The committee rose at 6:27 p.m.

The House resumed; Madame Speaker in the chair.

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

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

Hon. T. Lake moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:28 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
TRANSPORTATION AND INFRASTRUCTURE

(continued)

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

The committee met at 2:44 p.m.

On Vote 43: ministry operations, $843,349,000 (continued).

The Chair: Good afternoon. Welcome to…. We’ll call this Section A, Douglas Fir Room.

[1445]

Before we begin, though, I’d just like to remind both the members and the minister…. We are in a bit of a heatwave in Victoria. It is 25 degrees outside. While the building has been here for 118 years and it has experienced other heatwaves as well, it is warm. I do ask all members to consider that if they feel the heat is getting to them — the doors are not able to be opened — to ask for a five-minute recess. The Chair will be very lenient to that degree.

A. Dix: Just to begin, for people who, as Jim Robson used to say, are shut in and can’t get out to estimates de-
[ Page 12593 ]
bates, can the minister perhaps introduce his team from ICBC who are with him for the debate?

Interjection.

Hon. T. Stone: It’s awfully hot in here. Perhaps we need a recess. [Laughter.] It’s getting pretty controversial.

The Chair: And it’s very jovial in here, I might add.

Hon. T. Stone: I appreciate the member’s suggestion to introduce the ICBC folks who are here. In particular, we have the president and CEO, Mark Blucher, as well as Steve Crombie, who’s vice-president, corporate and stakeholder governance. Then we also have, that we can tap, Steve Yendall, who’s the vice-president of insurance and driver licensing, and Phil Leong, who’s the corporate comptroller.

A. Dix: We’ll start with the whys. I just had a question for the minister about the charges related to drivers’ licences. The minister will know that people are double-taxed for drivers’ licences in British Columbia. They pay for it through their basic automobile insurance rates, and they also pay a fee, which brings back to government, according to the budget documents, about $48 million.

In 1998, the Supreme Court made an important ruling around taxation. They essentially said that a fee was a tax when it went into general revenue and wasn’t directly related to the service being paid for by the fee.

The minister was asked this question in the 2014 estimates, and his answer was, I suppose, brief and impressive in its simplicity. He said that that was government policy. Does the minister still believe that should be government policy, and does he think it appropriate, given the 1998 court decision which guided government in these areas, that people will be double-taxed for drivers’ licences?

[1450]

Hon. T. Stone: The member is correct insofar as the costs to actually cover the operating cost relating to the driver licensing program are recouped largely from within the basic rates that are paid by motorists. He’s absolutely correct about that. The fee that is charged for a new licence or a renewal of an existing licence is revenue that is remitted to government. He’s correct about that as well.

I think the important point here is to understand that the revenue that’s collected actually goes towards covering a whole bunch of other programs and other related driving programs. I wanted to get a list of some of those items for the member’s benefit.

[1455]

For example, the fees support the superintendent of motor vehicles in deterring and handling public reports related to street racing. As well, the fees are used to cover adjudication services, violation management, driver school administration and senior driver assessments. So the basic rates collected cover the cost of actually operating the driver’s licence program. The fee collected from the driver’s licence is used to cover a myriad of these other services.

A. Dix: So essentially, the driver pays twice. They pay through their basic insurance, and then they pay a fee. That money is collected and then sent to Victoria and then allocated by the government to these purposes the minister has just said. In other words, is it allocated to a special fund, or is it allocated just to the government, and they decide notionally to spend it on these things?

Hon. T. Stone: Yes, the revenue is remitted by ICBC to government, and the government makes the policy decisions on how the revenue will be spent. But as I said, it’s spent entirely on driver-related programs, as per the list that I just provided you.

A. Dix: It’s remitted to government, and then government makes other spending decisions. I mean it’s a tax, is what it is. It’s supposed to be a fee, and it’s a tax, and drivers who are paying for driver’s licences pay twice.

I think that would be true of other taxes, the government would say, which they allocate to good and positive public purposes. But in this case, the fee is clearly a tax, and it has issues. People pay twice for it. You would think that if they paid twice for it, if government and ICBC were effectively harvesting $48 million in profits from this process in addition to what they harvest from the ratepayer on basic insurance, the service would be excellent.

I checked Victoria today. To get a driver’s test, the first available date is June 23. Does the minister think that’s excellent service?

Hon. T. Stone: Road tests, yes. That is a great question. Obviously, ICBC is always concerned if there are frustrations experienced by its customers as to the amount of time it takes to get a road test. But I will say this. ICBC informs me that they receive very few complaints about the amount of time that it takes for road tests to be provided — very, very few.

Secondly, the customer satisfaction survey from those who actually do the road tests is very, very high and has been for quite some time. The most recent survey that I’ve seen from those who have done the road test is 90 percent satisfaction, keeping in mind that a pretty large percentage of those who do the road tests actually don’t pass. Still, of the total that do the road test, 90 percent have a positive experience, so that’s good.

I do want to say, though, to the member’s question of is there more to do to try and reduce the amount of time it takes in different parts of the province — for sure. We do see longer delays in the Lower Mainland where there’s
[ Page 12594 ]
a larger volume than other parts of the province. In the most recent numbers I have, the wait time for the Fraser Valley was 43 days; greater Vancouver, 36 days; northern Interior, 17 days; southern Interior, 19 days; Vancouver Island, 19 days. So the wait time varies in different parts of the province.

ICBC is looking at additional things they can do to reduce those wait times. The member, I’m sure, is well aware of the on-line system that’s now in place and that has actually been very well received by the customers.

There’s also a strategy within ICBC to hire more driver examiners. ICBC has been actively filling a number of driver examiner vacancies. There are 11 that have been recently trained and began road testing on April 25. There are another nine who will soon complete their training and be road testing as early as May 24. That brings to a total of 20 additional full-time driver examiners in various parts of the province that will be helping with the volumes.

[1500]

ICBC also informs me that they’ve increased the number of hours that their part-time driver examiners are going to dedicate towards this challenge as well. That will help. They have also achieved some additional hours for the front-line provision of road tests by limiting the amount of employee vacation time that’s taken during the busiest months. They’re trying to manage their workloads that way.

The last thing I’ll say is that from what I understand, there’s also the ability for drivers to show up at a driver licence office, where these road tests are done, and to actually put themselves on what is called the daily standby list. If an individual can’t wait 19 days or 43 days or whatever the current delay is, they can show up at one of ICBC’s offices and put themselves on the daily wait-list. I am told that the vast majority of folks who do that actually do receive their road test that specific day due to cancellations and people who don’t show up.

Is there more to do? Yes. ICBC is working very hard. But there is a lot of effort underway to further reduce the amount of time it takes for British Columbians to receive that road test.

A. Dix: On January 24, ICBC made changes to its road test booking system. Can the minister confirm that the reason for those changes was that there are people in British Columbia…? I’ll just repeat to the minister what I told him. He says the average on Vancouver Island is 19 days. Today the first possible test was June 23, so that’s 49 days. Presumably, the average, when the first test was 49 days, was higher than 49 days. And you can’t drop in, in Victoria.

I wanted to ask the minister, specifically, if it was the case that ICBC changed its system because people in British Columbia, businesses in British Columbia were charging a scalping fee — in other words, charging people to get an appointment with ICBC for road tests.

[1505]

Hon. T. Stone: Again, a couple of other statistics that I think will help inform this debate. At the present time, there are about 38 percent of ICBC’s customers, those requesting road tests, who are provided that road test within ten days. There are 53 percent who are provided the road test within 30 days.

The member conveniently leaves out the fact that the amount of time that it takes from when someone books to when they actually get their road test often has more to do with the individual than it has to do with ICBC — meaning I might be in the midst of driver training with a professional driving training school and I know that I’ve got another six weeks left of training. I decide at that point to actually book my road test six or seven or eight weeks from now. That’s not an ICBC-driven delay; that’s the decision of a customer to book their road test when they were finished.

Let’s just make sure that we’re looking at this from a complete picture. As I said earlier, ICBC is aggressively trying to reduce those wait times in every part of the province. That’s why they’re hiring more driver examiners, increasing the hours of the part-time examiners and so forth.

With respect to the member’s questions about the decision by ICBC in January to roll the on-line booking system out provincewide, there is no correlation between that decision and the incidents in 2014 that I believe the member referenced as well. He quite rightfully pointed out that there were a number of driving schools — in fact, three — that were actually block booking road test times in the on-line system in advance and then were charging a fee to their driving students for that guaranteed booking.

That was wrong. It was totally inappropriate. ICBC, at the earliest possible moment upon learning that this activity was taking place, revoked the access to the on-line booking system of those three companies.

A. Dix: And who are the companies?

[1510]

Hon. T. Stone: I just want to correct something I said a moment ago. The access that was revoked was not revoked for the entire company — those three companies. It was actually the unique identifying log-in or access codes for a number of individuals in each of those three companies that were actually revoked.

It would be inappropriate to name the three companies in this venue. I would also point out that I’ve been happy to generally answer some of these questions here today, but the member knows full well that the driver licence component of ICBC is actually the responsibility of the Ministry of Public Safety and Solicitor General. These responsibilities actually don’t fall within the purview of the Ministry of Transportation and Infrastructure.
[ Page 12595 ]

Interjection.

Hon. T. Stone: It will be scintillating, I’m sure.

A. Dix: Just to be specific, what I was asking for in January…. ICBC wasn’t going provincewide. It was a security component. They had added a security feature. We won’t dwell on this too much.

The minister has bragged that 50 percent of customers get an appointment within 30 days, having paid twice for it — paid once through their basic insurance and then once through a fee. But 50 percent get it within 30 days.

We have businesses in B.C. that are…. The wait times are so significant that they saw a means to make money by booking fees, by essentially scalping places in the lineup. We have people travelling from Surrey to Victoria, even Surrey to Prince George, to get driving test dates. I think what that reflects is the use of ICBC, really, as a cash cow and not providing the level of service that you would expect, especially expect from people who are paying, after all, twice for the service.

I wanted to ask the minister about positions at ICBC and FTEs. In the rate review application that ICBC is in the process of going through, there was a final submission, one that was not challenged, on point of fact, by ICBC. From MoveUP, the ICBC union…. From the BCUC website, it states that “the union is aware that the corporation has received government approval to fill 265 new positions, the majority of which are in the claims department.”

You will recall, hon. Chair, as a keen observer of this, that ICBC had laid off a significant number of people in its claims department and that the number of unpaid claims at the end of each year has been going up precipitously.

To resume, they said: “Presumably, the addition of these new positions involved in direct customer service will positively affect the service quality metrics and customer experience before the next revenue requirement filing.”

My question, to begin with, about this is more technical. When MoveUP is told by ICBC management that the hiring of claims staff has been approved by the government, is it the case that in spite of the very expansive and interesting senior management at ICBC, they require government approval to hire claims staff?

[1515]

Hon. T. Stone: I’m not sure where the member is getting his information on this particular question, because it’s factually inaccurate. ICBC has not in the past sought approval of government to hire claims employees and does not need approval now or moving forward. ICBC makes those decisions. Those are operational decisions within ICBC.

I will say, though, that we’re certainly very supportive of ICBC’s decision in recent months to move forward with hiring a net new 40 claims positions. That, in complement to the new claims-management system that was rolled out not that long ago, has and will continue to provide even better service to British Columbians.

A. Dix: To be clear, when ICBC contacted MoveUP in the course of this rate review hearing and said that it had received government approval, they were speaking in the broadest sense of approval — maybe the benevolence of the minister and such as that might be.

When they said it was 265 new positions, the majority of which are in the claims department, what the minister is saying is that 265 — they were told — was, in fact, 40.

What I’m reading from is evidence provided and submissions provided to the B.C. Utilities Commission, evidence that was unchallenged by ICBC, so evidence that was accepted by the commission and, presumably, accepted by ICBC. So 265 means 40, and government approval means just that the minister likes it.

Hon. T. Stone: With respect to the one part of the member’s question — again, the government approval in the MoveUP document — I can’t speak to the MoveUP document. Perhaps he could direct that question to them.

I said a moment ago, and I’ll say again, that government approval is not required. It wasn’t sought, and it’s not required with respect to hiring decisions made within ICBC in the claims department or elsewhere, for that matter.

Just to provide some clarity on the numbers here. Again, there is not a net increase of 260 positions in the corporation. There’s a net increase of 40 positions in the claims department. That is fact.

[1520]

What creating the additional 40 positions on the claims side…. The positions are offered within the corporation initially, and that creates vacancies in other parts of the corporation. There’s a cascading effect from one department to the next as individuals are moving from one department to another.

There is a net increase of 40 in the claims department, not 265. The 265 is the total number of positions that are actually affected as a result of the decision to hire 40 net new positions in the claims department.

A. Dix: Wow. I can see the challenges of senior management at ICBC. Hiring 40 new people in the claims department requires that 265 people move. That’s the suggestion being made.

I don’t think that was the suggestion or the message directly heard from ICBC that MoveUP got immediately prior to their final intervention in the hearing.

I wanted to ask the minister, since we’re on the subject of salaries and benefits and hiring…. He’ll know that the number of employees making over $150,000 at ICBC has increased significantly in recent times. He’ll know this because he’s as avid a reader of the Financial Information
[ Page 12596 ]
Act’s filings of ICBC as I am. He’ll know that number was 41 in 2006. He’ll know it was 62 in 2008. He’ll know it was 120 in 2012 and 145 two years after the government’s review of ICBC and ICBC’s response — 145 in 2014.

That latter period coincided with very significant layoffs in the claims department. We hired a lot of people over $150,000, and we cut services to the public. This is from ICBC’s submission to the Utilities Commission. That’s 48 in 2010, 25 in 2011, 114 in 2012, 129 in 2013. That’s on the claims side. That’s going down in front-line staff, but the number of people earning over $150,000 went up significantly — even precipitously, indeed — in this period on the claims side. That included the vice-president and others who received significant salary bumps.

I guess I’m asking the minister if he thinks that that model — an increasingly hierarchical model where there are more people overseeing the work and fewer people doing the work directly with the public — has any connection with the dramatic increase in unpaid claims in that period and the increasingly poor financial performance of ICBC.

In other words, when the number of the increase in unpaid claims goes from $109 million in 2010 to $523 million in 2014 and $575 million in fiscal 2015 — that’s the forecast, in that latter case. Do you think that that dramatically negative performance, which has implication for future rates, for the financial status of the corporation and, of course, for all of those people who’ve paid their insurance and whose claims are delayed…?

Does he think that strategy of hiring more high-paid staff — dramatically more high-paid staff — and laying off the people who provide front-line services, in light of the dramatic increase in unpaid claims and the declining financial status of the corporation, is working?

Hon. T. Stone: I look forward, for the balance of today, to do some myth-busting here with the member opposite. I mean, there is cherry-picking of data, and there is really cherry-picking data. The member is engaging in the latter.

I will point out, for the member’s benefit, that while he got the numbers he rattled off just about right, he was off by one or two individuals here and there. But it is true that the number of those earning $150,000 per year in…. Pick a year. In 2011, it was 138. It was 121 in 2012. It was 92 in 2013. Yes, it went up to 145 in 2014.

He conveniently neglects that in 2015, the number went down to 74. That’s a 95.9 percent reduction in the number of folks that are earning $150K or more. Perhaps the member could provide a little more context as to why he’s ending his review of this particular question at 2014, as opposed to….

Interjection.

Hon. T. Stone: Well, then it’s of benefit to the member to know that the total number of those earning $150K has actually gone from 145 to 74. That’s almost a 100 percent reduction from 2014 to 2015.

[1525]

It’s the same in the $200K plus as well as the $300K plus. Furthermore, while we’re on the topic of compensation — again, in the spirit of wanting to be purely factual about these numbers — let’s consider the following. ICBC’s executive team has actually decreased from 11 in 2012 to six today. Total executive compensation at ICBC today is at its lowest level since 2011. Those are facts. There has been a salary freeze on the executives since 2012 as well.

Following the government review in 2012, there was also the decision taken to reduce the workforce by about 260 positions, the vast majority of whom were management and senior management. In 2014-15, ICBC went even further, and they reduced senior management by another 25 percent. When new executives are brought into ICBC, their compensation levels have been set at 10 percent less than the current incumbent.

All of these guidelines that I’ve just rattled off are all consistent with government and Crown corporation executive compensation guidelines. So for the member to cherry-pick here and cherry-pick there to try and create this perception that there is a compensation crisis at ICBC is just simply, and factually, not true.

A. Dix: There’s a service crisis at ICBC. There’s a service crisis for ICBC customers who are paying more. There’s a service crisis when government drains ICBC’s account.

There’s no cherry-picking here. We went through every single year of the Financial Information Act material that’s available, and we provided the information.

Last year the minister said here in this House: “The total FTEs in the corporation has come down considerably…. The vast majority of those reductions, about 95 percent, have been management positions.” Only this is not true, of course. The fact is that, as he will know, the vast majority of them are unionized positions.

Where do I get this information? Well, from ICBC, of course, which notes that…. I’m just quoting ICBC on the bargaining unit. The cuts to the bargaining unit represent about 70 percent of the cuts. Management includes, obviously, people under $150,000 and people above $150,000.

[G. Kyllo in the chair.]

What we have are direct cuts to claims staff and increases in management. That’s the information available. If the government would like to file early its Financial Information Act statements, then we’ll be able to see the raw material again and to see what, in fact, has happened and is happening at ICBC. What’s happened in this period….
[ Page 12597 ]

The minister talks about a freeze on executive compensation. The vice-president for claims was paid $333,000, according to the Financial Information Act, in 2011 and was paid $403,000 in 2014. Those are facts, according to the Financial Information Act filings — not by me but by ICBC. That’s the most unusual freeze in history, I think — a $70,000 increase. Equally, Mr. Crombie saw a $36,000 increase in the same period. The issue isn’t under the Financial Information Act material, which is what we have from ICBC, what they share with the public about what they’re doing.

It seems to me that the substance speaks for itself, as do ICBC’s own reports. So I was wondering if the minister wanted to amend his inaccurate statements of last year — that 95 percent of the staff reductions at ICBC were from management.

[1530]

Hon. T. Stone: Yes, I stand by the comments I made previously. When you look at the total number of forced departures, managed departures…. These are the reductions in staff that have nothing to do with attrition, have nothing to do with efficiencies that are achieved and so forth. When you look at the forced reduction, the 260 number that we know represented reductions at ICBC, 95 percent of those were at the management level. That’s a fact.

Again, the member can try and create a sense of crisis or mismanagement here. When it comes to overall compensation, he is simply wrong. Executive compensation is down since 2012. It’s at the lowest level, actually, since 2011. The total number of executives is cut almost in half. The total number of management is at a very low number now. The total management compensation has been cut, and for the member to suggest anything other than that is simply not true.

A. Dix: Well, I suppose, in light of the other problems that the government is facing, this issue of providing the information…. I’ll just quote the minister. This is what he said last year. “The total FTEs, globally, in the corporation has come down quite considerably, from…5,200 positions in 2011 to just over 4,800 positions in 2014. The vast majority of those reductions, about 95 percent, have been management positions.”

That is simply false. It’s simply false. Let me read from ICBC’s report, and I’ll give you pages 14-35, ICBC’s response to the government review report of ICBC. Here’s what it says. It gives us FTEs by employee group. There’s the little “ICBC” on the top there. It says: “Total manager and confidential: 2008, 891; 2011, 1,053; 2013, 970. Bargaining unit….”

We’re talking FTEs. Remember what the minister said. He said that the total FTEs, globally, in the corporation have gone down considerably and 95 percent of the reduction of FTEs have been management positions. That is plainly untrue on the face of it. This was information that was presented to the public as fact last year in these estimates, in this House — 95 percent.

Here is what their document says, the one that shows it going from 5,200 to 4,800. It shows bargaining unit positions from 4,044 to 3,703. Now, for that, if you have a reduction of 341 in bargaining unit positions, to get to 95 percent management, you’d have to take out, just about, the management of every insurance company in the world. The fact is, what the minister told us — he’s talking about the reductions in FTE positions — was entirely false last year.

All I am saying to the minister is: would he please correct the record. The record is very clear from ICBC that they have dramatically reduced bargaining unit positions. Those positions, those front-line staff positions, represent, overwhelmingly, the reductions.

If he doesn’t want to accept ICBC’s own evidence here, when he made these statements about FTE reductions and position reductions…. That’s the statement he made — positions, right? Now he’s trying to say: “Oh, when a bunch of people leave and we don’t replace them, that’s not a reduction of positions.” Of course, when you’re waiting to get your claim settled, that’s a reduction of positions.

[1535]

Is he actually saying — in spite of what his own staff says, in spite of the fact that the number of people in the bargaining unit has reduced in that period by about 300, which reflects his own documents — that 95 percent of those FTE reductions and, to quote him, “5,200 positions to 4,800 positions…”? So he’s including all of these reductions in that number. Is he saying that 95 percent of those are management? Was he, in fact, correctly informing the House last year when he made that preposterous assertion, based on the evidence provided by ICBC in its own report to government?

The Chair: I’ll remind the member to canvass his questions through the Chair.

A. Dix: Through you, hon. Chair.

[1540]

Hon. T. Stone: Again, I stand by the comments that I’ve made previously. If the member and I are actually talking about the same period, and I think we are, there is about a 365 FTE difference from the beginning to the end of the period in question, and 260 of those positions represent the managed or the forced departures, which I’ve spoken to already. We stand by our statements previously that 95 percent of those positions are management positions. The balance represents positions that were largely attrition and/or positions in non-customer-facing roles that represented positions that were no longer deemed to be required at ICBC.
[ Page 12598 ]

Again, ICBC is doing the best job that it can to drive down total compensation in the corporation, all the while ensuring that it’s hiring in those areas of the corporation that involve the most face-to-face, direct, front-line customer service roles, which would largely be in the claims department. That’s why they’re increasing the claims department total, moving forward now, by a net 40 positions across the corporation. They’re going to continue to do that.

[1545]

Their desire to improve customer service is why they’re also investing in the transformation program and, specifically, the new claims tools which, complemented with the additional staff, are going to enable the corporation to continue to do an even better job than they do at serving the public.

A. Dix: I presume that the minister has read the corporation’s submissions to the B.C. Utilities Commission, which shows a reduction in claims staff in the period in question — a reduction in the staff providing service to the public. And that he also understands…. This document from ICBC talks about total FTEs reduced by 393 FTEs compared to 2011. This is the document from ICBC where they defended what they were doing in this area and, of course, a majority of them — according to ICBC if not the minister — were bargaining unit positions. That’s what their report said because that’s what’s happened.

Just so that we understand that the reduction in bargaining unit positions…. The number of members of the bargaining unit has gone, in that period, from 4,392 to 3,942. Clearly, there was a reduction in bargaining unit positions that the minister isn’t talking about.

What happened was…. The government decided to engage in something called the transformation program. So we understand there are more managers at ICBC today, according to ICBC, than there were in 2008. Some of them are, of course, transferred to the transformation program, so they’re in a different line here. The transformation program, the idea…. And this is a transformation program that is not finished and has, so far, taken longer than World War II. Nonetheless, that’s the transformation program.

What they did was…. They started down the road of significant information technology changes, and before those changes had been implemented, they started laying off front-line staff. Which, according to their evidence to the BCUC, they did — if not according to the minister today.

I guess I’m asking him to reflect on this very important area of unpaid claims that are growing very dramatically in the last period since the transformation project started — increased, I think, by $1.2 billion. The rate has increased significantly. I think it was 2010 when it was $100 million. It’s now $500 million. That’s significant. Those are claims that ICBC is anticipating but aren’t paid. That’s what we’re talking about.

Does the minister acknowledge — does ICBC acknowledge — any link between the layoff of claims staff and the failure of ICBC to manage unpaid claims? Do they acknowledge any link between the layoff of claims staff and the dramatic increase we’ve seen in the cost of claims? Do they acknowledge any link to the fact that they’re now hiring — somewhere between — some claim staff to make up for this problem now — that they made mistakes in 2011, ’12 and ’13 that they’re paying for now on the cost side?

Because remember, their status quo rate increase to deal with costs this year, before they transferred a whole bunch of money from the optional side, was 11.2 percent. Do they acknowledge any responsibility for the failure on paying claims, for the increase in the cost of claims, and do they link this at all to the cuts to services to the customer?

[1550]

Hon. T. Stone: Again, I will begin by refuting the member’s suggestion that staff reductions in the corporation have any correlation to claims. Said simply: there’s no linkage there.

The fact of the matter is — and I’ve said it many times, and I’ll say it again; whether the member chooses to acknowledge it or not is his choice — there have been no layoffs in the claims department. The layoffs have taken place on largely administrative roles. These are not front-line service roles.

We are actually increasing the number of staff in the claims department. I’ve answered that several times here today — a net increase of 45 claims staff to provide better service to British Columbians.

Again, I hope we’re going to get to it, but I’ll throw a few bits out there now. What is going on with claims in this province is quite significant, and it bears noting for the record. There were 7,000 more claims in 2015 than there were the year before. Bodily injury claims are up just 10 percent, year over year — actually, 64 percent since 2008. We also know that while the total number of crashes is remaining, roughly, flat, it is beginning to uptick a little bit. The total number of bodily injury claims per crash is actually increasing.

We also know that the rep rate, the representation rate, has been increasing steadily over the last number of years. When a customer makes that decision to engage a lawyer — often, and increasingly often, before even having an initial conversation with ICBC — we know that that claim is going to cost more, and it’s going to take longer to settle. That’s a fact.

[1555]

We also know that fraud is ticking up somewhat as well, which is why it’s important to be focusing on fraud detection and cracking down on individuals who are trying to cheat the system.

The point is that there is a tremendous amount of pressure on basic rates in British Columbia because of the
[ Page 12599 ]
number of collisions; because of the bodily injury costs associated with those collisions, the number of BI claims per collision; the rep rate; everything else that I’ve talked about here. That is the underlying driving pressure on rates which ICBC and government are unrelentingly focused on in order to ensure that rates are as affordable for British Columbians as possible.

A. Dix: Well, it appears that the minister and ICBC take no responsibility for the present situation, a significant portion of which is of their making. The information with respect to FTE reductions is contained in, for example, ICBC’s rate review applications and responses of 15 October 2015; 2013 rate review, exhibit A2-15; and on and on we go. All their responses to specific questions show year-by-year reduction, including reduction in claim stats.

In a period where the unsettled claims increased from $109 million…. They increased $109 million in fiscal 2010 to $523 million in fiscal year 2014. That’s a fact. ICBC has changed its approach. It has shifted away from having claims staff, it has taken responsibility away from claims staff to senior management, and the result of this has been negative for ICBC.

The minister is quite right. When the rep rate goes up, it indicates an increase, history tells us, in terms of the cost of a claim. If the minister is saying that ICBC is not responsible for that when they’ve been cutting the number of claims adjusters…. It’s extraordinary. I mean, the evidence is quite the contrary. It shows a direct correlation between ICBC’s management decisions — it doesn’t mean it’s the only factor out there, of course — including the increase in the rep rate from 38 percent to 48 percent over the last approximately seven years.

That’s a huge increase. If you think of that in the total numbers, it sounds like only a 10 percent increase in the total number of claims in question. If it was static, it would be an increase of 25 percent, which is a very significant increase in the rep rate. They’ve taken power away from claims staff, they’ve moved authority away from the regions and centralized it, and they’ve reduced the number of claims staff. The result has been that they’ve been less effective in managing claims. This is a direct result, and we are paying the price for that today.

I wanted to ask the minister, given that they’re now trying to replace some of the positions they got rid of over the last number of years with more claims staff, whether he agrees with me that it was a mistake.

At the beginning of the transformation project…. We’ll come back to that later, because it’s a subject of great interest to me, the long-standing transformation project. If only we could all be transformed over eight-, nine-, ten-year periods.

Can he just specifically address the issue of the growing rate of claims that are not settled in the fiscal year, year after year after year? Is he seriously telling the House that if you reduce your claims staff, it doesn’t lead to an increase in the number of unpaid claims?

[1600]

Hon. T. Stone: I will simply repeat what I’ve said several times here today. There has not been a reduction in the front-line service to customers in the claims department — those staff that deal face to face with the customer, that actually handle and manage the claim. There has been no reduction in those positions.

There have been some reductions in other non-customer-facing roles, largely administrative support roles that have not been deemed to be necessary anymore, but no reduction in the number of claims staff that are actually managing those claims and dealing with the customer directly.

I will say again that the member is correct, insofar as suggesting that the total cost of claims is increasing. The total dollar value of unsettled claims is increasing. He’s correct about that. But I just indicated the clash of forces which are all coming together almost as a perfect storm that is driving a tremendous amount of pressure on claims.

For the member’s benefit — just to, I think, remind him and perhaps those few folks watching this scintillating debate between the two of us — this is an insurance company. There are some factors that are within their control. There are many factors that are not within their control. They operate within the framework that’s in place, which is a full tort system where British Columbians have the right to engage legal representation.

Increasingly, British Columbians are opting to do that. When that decision is made, that has a direct impact on both how long it takes for that claim to be settled and, at the end of the day, the overall cost of that claim.

As I mentioned, we’ve seen very significant increases in the total number of claims in British Columbia. I mentioned 7,000 more claims in 2015 than the previous year. I mentioned bodily injury claims costs are up 10 percent year over year and 64 percent up since 2008.

[1605]

That cannot be glossed over. That is a very significant cost driver at ICBC, the most significant. Bodily injury claims — a 64 percent increase in those costs since 2008. Then you layer on top of that the increasing rep rate, which I’ve talked about, and the increasing incidences of fraud that we are seeing taking place, which is why ICBC is working so diligently and is so focused to develop mitigating strategies to deal with each of these challenges.

What can be done to encourage people not to make that choice to commit fraud or to try to commit fraud? What more can be done
[ Page 12600 ]
to further enhance and strengthen the customer relationship practices at ICBC so more people know that they will get a reasonable and fair offer from ICBC and perhaps not proceed with engaging a lawyer and legal representation? What more can be done to arrest the significant increase in not just the number but the dollar value of bodily injury claims that’s taking place on our roads in British Columbia?

These are all very complex issues, and ICBC is developing and implementing mitigating strategies — all, again, in an effort to apply as much downward pressure on rates to keep them as affordable as possible.

A. Dix: The unpaid claim liability in 2014 was $6.25 billion on basic, $1.96 billion on optional. What is it in 2015? The fiscal year has now been closed for four months.

Hon. T. Stone: The total dollar value of unpaid claims for 2015, as the member knows well, is always included in the annual report for ICBC. The annual report will be released, we anticipate, at the end of May, early June.

A. Dix: You needed five minutes to not answer that question.

One thing that I think the minister would have to agree with me is an unprecedented cash grab is the scooping up of ICBC optional capital to government. I mean, I’m astonished they didn’t have an answer to that previous question. It’s as basic a question as one could ask in these estimates, and apparently we get no answer to that.

[1610]

I’ll ask the minister about the disposition of optional policy holders’ excess capital to government. I know the answer to this part of the question. It’s an unprecedented cash grab. How do I know that? Because if you take all the period of ICBC from 1973 to 2010, when the minister joined the board…. These events are not necessarily linked. In that period, from 1973 to 2010, the total cash grab by ICBC, in that entire period, is zero. The total cash grab by the government since that time, since they changed the rules to transfer ICBC from a cash source to government rather than a non-profit auto insurer, is $1.28 billion.

Does the minister agree with me that this has had a significant and negative effect on ICBC’s financial position and on its capital threshold — this scooping up of money? In addition to that, of course, is the transfer from optional to basic and the scooping from optional to the transformation project. It’s a triple-scoop policy, but the largest scoop, the biggest scoop, is being held by the cabinet. They’ve taken $1.28 billion, which is exactly $1.28 billion more than all of the cabinets in all of the history of British Columbia.

Does the minister think, given that ICBC, in 2016, is set to have a net deficit of $11 million, that it’s still appropriate that they transfer $150 million in cash to the government?

[1615]

Hon. T. Stone: Again, I know that we have a philosophical disagreement here — the member opposite and his colleagues and the government.

The member knows full well that excess capital that is made available for initiatives like the transformation program and that has, on occasion, been transferred to general revenues is only derived from the optional side of ICBC’s business. That’s an important point. I think, to be fair, that should be well understood.

ICBC operates in a competitive environment on the optional side of their business. They have actually implemented a significant number of reductions in the optional rate over the years to ensure that the rates that they charge for the optional side of the business are competitive, recognizing there are a number of private sector providers on that side of the business.

There has been, year over year — most of recent years — excess capital generated on the optional side of the business. Now, during the same time period — the member is correct — $1.2 billion of that has been transferred to general revenues. That’s a Treasury Board decision. I will talk more about that in a moment.

But I think it’s also important to recognize that during that same period of time, $936 million of excess optional capital has been transferred to the basic side of the corporation. Why? It has been transferred to the basic side to apply as much downward pressure on the basic rate as possible. If we want to talk about the whole story here, I think it’s important to, again, acknowledge that the excess capital is generated only on the optional side, and government has transferred $936 million from optional to basic to keep the basic rates as affordable as possible.

Furthermore, in terms of the $1.2 billion. We hear this often from the member and his colleagues — that this is some kind of activity that goes into some slush fund somewhere inside of government. The member knows this simply not to be true. This is a Treasury Board decision that has been made in previous years as a result of government policy whereby some of this excess capital that’s generated is retained for the transformation program. Some of it goes to keep basic rates down, and some of it — unbelievably — has been moved to general revenues to support critically needed health care, education and other government programs that British Columbians come to expect and rely upon.

I think British Columbians generally would agree that we have struck a balance here. Is it a perfect balance? Certainly, that can be debated. But $936 million has been retained within ICBC as a transfer from optional to basic to apply downward pressure on rates. And $1.2 billion has not gone into some black hole somewhere. It has gone directly into providing exceptional health care and education and other critical services in British Columbia.

A. Dix: What they’ve done is they’ve jacked up rates, and they’ve scooped the money. It comes from the taxpayer and the ratepayer. They take $1.328 billion, including the year that they didn’t make any money, and they
[ Page 12601 ]
order them to send it over. And yes, it’s like other revenue brought in by a government.

But all of the governments in history…. Think of all those governments. Think of Premier Bill Bennett and Premier Barrett and Premier Vander Zalm and Premier Harcourt and Premier Clark — the other one — and Premier Campbell. Right up to 2010, never happened.

[1620]

And then these guys, managers that they are, go in and they scoop that up — just as they scooped it up from B.C. Hydro — and left ICBC in a significantly worse fiscal position. They, of course, needed the cash. People understand that this isn’t related to the deficit. They needed the cash in this case, so they took the cash. It had never been allowed before until this government decided to do it. That’s the fact of the matter.

It’s ICBC customers who have been paying the price for that. That’s the point here — that it is a disguise. The minister aptly described it, really, there. It’s a disguised tax increase on drivers. That’s how he describes it, and that is correct. He had all the options of the world, including, of course, returning it to drivers if they were overpaying. But it’s a disguised tax increase on drivers. That’s what they did.

I’m going to continue to talk and ask about the three-year service plan, which was a key element of the questions. But there was something that came up last week that I just felt like I had to ask the minister. He’s a former ICBC board member and now is minister responsible for ICBC. I feel that I can learn something here.

The Vancouver Sun reported last week about a number of senior lawyers in B.C. resigning from an advisory committee. What they’re referring to is an OIC passed by the cabinet, of which the minister is a member. OIC 032-16, January 28, 2016, changed, essentially, the schedule of costs, rule 15, that the court could award.

This change was brought in. It was approved by the cabinet, and it has now been withdrawn. According to the Minister of Justice…. They apparently pass OICs over there without any serious consideration at the cabinet level.

Here’s what ICBC said about that change. I’m quoting Lindsay Olsen from ICBC. I’m sure she was just speaking for ICBC, and this reflects their corporate position. ICBC said: “Our preliminary estimate on what the change could cost ICBC customers” — I guess it means ICBC; they go and get the money in rate increases — “is approximately $250 million in the first year and an ongoing annual cost of at least $90 million.”

I wanted to ask the minister, first of all, how it could be that a change with that level of financial implication — half a billion dollars over four years — could be approved by cabinet without that being even considered. How is it possible they could have been that incompetent, first of all? It’s a fair question, I think, given the result and given the resignations from the committee and the fiasco that has followed.

Secondly, what is the basis? Is there a written basis, aside from numbers falling from the sky, for this $250 million estimate, which is pretty large. It’s pretty much two-thirds of the amount ICBC pays all of its employees. It’s a big number, and $90 million is a big number. These are big numbers in terms of costs.

Where is the basis for this analysis? Is there a basis for it? Is it written down somewhere? Can the minister describe how it could be that these changes that he approved as a minister, a member of cabinet, could cost that much money?

[1625]

Hon. T. Stone: There was always intended, as part of the original process, as I understand it, for there to be engagement and consultation, not just with ICBC but with a wide array of different stakeholders, remembering that this matter of the civil tariffs actually impacts a much broader stakeholder audience than just ICBC. It was always intended that there would be engagement and consultation with all of the stakeholders, including ICBC, when the tariff changes were first announced, with the tariff changes taking effect in July.

However, that being said, when the tariff changes were announced…. I can’t speak for the Doctors of B.C. or risk management groups out there or all the myriad of other organizations that would be impacted by these changes in the civil tariff. Insofar as ICBC was concerned, and in doing their due diligence, yes, they ran the numbers and determined that these proposed changes would likely have a very significant impact on costs. Those costs would add another entire layer of pressure on rates.

The decision that was taken, the decision that the attorney recommended, was to actually hit pause and to get out there and do this engagement and this consultation and then come back to the tariff decision at a later date. That is what is happening. I think, in the interests of all ratepayers across the province, it is only wise, on the part of ICBC, in this particular instance, to have raised the red flag that they did as to potential impacts on costs and, therefore, rates at ICBC. I think that was very prudent.

[1630]

I do want to correct one thing that the member said in his preamble to his last question. He talked a lot about the rates and the management of ICBC under the current government versus previous governments. Again, we can all cherry-pick whatever dates and numbers that we want. I would remind the hon. member that a huge amount of what matters to British Columbians, to ratepayers, is how much their rates are. I think we can agree on that, the member and I.

In the last ten years, if you look at the combined rate, 80 percent of British Columbians pay for the ICBC optional insurance, as well as the basic insurance which is compulsory for everybody. Over the last ten years, the combined rate for those, for both basic and optional, under our gov-
[ Page 12602 ]
ernment has been about 7.79 percent. In the ten years the member opposite’s party was in power, through the 1990s, the combined rate increase was 34 percent.

While the challenges vary from one year to the next and one decade to the next — and certainly there is no shortage of headwinds at ICBC these days, which we talked about earlier in the context of the pressures on claims — let’s just make sure that everyone understands the apples-to-apples comparison here of what I think is very prudent, very sound management and oversight of ICBC today versus the ten years that he and his colleagues were in power.

A. Dix: I asked the minister directly where the $250 million number comes from and if he could justify it, if they had any information on that that they could table in this House or he could provide for this House. He was able to do exactly none of that. All of the explanation in the world…. He provided none of it. So $250 million, they said, one time, $90 million per year thereafter. What is the source of that information? What is the explanation for it?

According to the minister, the Minister of Justice tried to put thing this through, a half-billion dollars in policy implications over four years, without even a discussion or an understanding of those increases. And he can talk about other stakeholders being involved. What did the Ministry of Justice say? ICBC put up its hand and said: “The implementation of this policy is going to have an impact on us.” That impact, according to ICBC, was half a billion dollars over four years.

Does the minister have any explanation for that half a billion dollars — the $250 million and the $90 million? Does he have any explanation he can offer as to why this package would cost half a billion dollars over four years?

The Chair: Member, through the Chair. You were directing the questions directly to the minister rather than through the Chair.

[1635]

[J. Yap in the chair.]

Hon. T. Stone: Again, the numbers that ICBC has mentioned in the public domain are numbers that actuaries in the corporation have crunched, and it’s very straightforward. You take the proposed increases to the civil tariff, and you plug them into the formulas, and the result is the result. ICBC believes that the civil tariffs, as they were proposed, were going to have impacts in that range, which they spoke to publicly.

Now, that being said, of course, it’s all a moot point at this point because the process has been paused. The order was rescinded. The member knows that. Now it is…. Well, it always has been and continues to be in the domain of the Attorney General. She is working to define what this engagement is going to look like. Those details, I’m sure, she will be making public forthwith.

The member is more than welcome, obviously, to canvass this line of questioning with the Attorney, who has not yet done her estimates, although I’m sure the member will be looking forward to that day, which is just around the corner.

A. Dix: The minister’s response to a statement by ICBC that this would cost half a billion dollars is: “We talked to some actuaries, and we crunched some numbers, and that’s what came out.” We asked questions about it in this House, and that’s what he comes up with.

I mean, they missed half a billion dollars in costs when they put this through cabinet. ICBC comes up with this alarmist figure about what it would cost, and they provide no evidence about it. It’s just: “We crunched the numbers, and we think it’s half a billion dollars.” That’s how big the Minister of Justice’s mistake was: half a billion dollars. I mean, imagine if he was criticizing someone who wasn’t a fellow member of cabinet.

I wanted to ask the minister, since we’ve had these things before…. ICBC said, with respect to the 2014 changes to the discount rate, in their annual report in 2014 — which I think is one of the most recent — that the annual cost of that would be $211 million. I’ve gone through the detailed financial statements. We’ve looked at them through the RA process, and I don’t see that. Is it still ICBC’s view that those changes to the discount rate cost $211 million annually?

[1640]

Hon. T. Stone: I can confirm that the impact of the change in the statutory discount rate was actually a one-time impact, initially, for 2014, of $211 million. So the member is correct about that number, but I want to strongly reiterate that that’s a one-time impact. The ongoing annual impact we expect to be in the range of $55 million to $60 million per year. Of course, we don’t have the 2015 numbers finalized yet, but we expect the impact to be in that range of $55 million to $60 million this year, and then in forthcoming fiscals.

A. Dix: Would the minister be prepared to provide the detailed analysis on that and on the $250 million estimate of the court changes in writing after the estimates? I mean, my look at the detailed financial statements put it at about $49 million, but will the minister provide both a detailed explanation of the $250 million and $90 million on the court, and the $211 million one-time change and the $50 million annual change on the discount rate? Will he be able to provide that in writing after the estimates?

Hon. T. Stone: With respect to the change, the impact of the change and the discount rate, I would be pleased to provide, in writing, details for the member subsequent
[ Page 12603 ]
to the estimates process on how the one-time impact of $211 million was reached. We’ll provide the details to the member and the analysis that went into that.

[1645]

Obviously, the ongoing annual impact of $50 million to $60 million…. We don’t have that final number yet, but once we do, as part of the financials, we can disclose the analysis that went into that for the member as well.

On the final piece, the proposed changes to the civil tariff, which we just canvassed, I’m going to defer to the engagement process that will be underway soon. Again, the Attorney General can provide the member with more details as to when and how and who and so forth, as opposed to providing any detail on that ahead of that process.

A. Dix: That’s a bit disappointing, because the ICBC raced out to provide these numbers that are unbelievably embarrassing for the Minister of Justice. It’s a bit disappointing that he’s not able to provide that.

I wanted to ask him about the coding error in optional insurance, the 2014 coding error which led to — I think it was the case — $40 million in overpayments by customers and $71 million in underpayments. The minister will know that 350,000 customers underpaid as a result of that glitch, of that mistake by ICBC, and about 240,000 customers overpaid. That’s not a small miss.

I wanted to ask the minister because…. I think the number, if I’m correct, is $111 million — $71 million which, presumably, was people underpaying, which ICBC wrote off, $40 million which led to them overpaying. There were a couple of reviews subsequent to that, one by Deloitte, I think, one by BLG. I may have missed it. This is absolutely possible, and that’s why I defer to the minister. I might have missed these reviews. When the minister published them, when he held a press conference to lay out these things, I may have missed those moments.

If the minister would be able share with me the reviews done of this $111 million mistake.

[1650]

Hon. T. Stone: I do find it interesting that the member is canvassing budget questions from two years ago. This was a matter that happened in 2014, or at least the error was discovered then, and it was completely rectified. It was thoroughly canvassed two years ago. I’m not sure why the member sees fit to ask questions about something from two years ago. Perhaps we could canvass the details of the fudge-it budget from the 1990s while we’re engaged in some trivial pursuit here.

At the end of the day, I will say this. The VIN VIC issue was determined to be a technical glitch. That is correct. It was an issue that impacted a number of optional policy holders, both positive and negative. It was determined that a good number of British Columbians had been underpaying, and there was a number that had overpaid. Everyone that overpaid was refunded the amounts that they had overpaid. Everyone that underpaid was forgiven for the fact that they hadn’t paid what they should have paid, and file closed.

The board engaged two external firms, as the member mentioned, to produce independent and confidential reports for the board so that the board could ensure that the board was doing its due diligence to find out exactly what happened, why it happened and how you make sure it doesn’t happen again.

The two firms that were engaged…. Deloitte was engaged to look at the numbers and to verify the accuracy and the completeness of the numbers. Borden Ladner Gervais was engaged to look at the governance side of the equation. Who knew what, when, and how were decisions made on this particular file?

The board, as a result of those two reports, was able to confirm that the numbers that ICBC had determined in terms of overpaid and underpaid were accurate so that the payments could be made. Likewise, we were able to glean, from the governance review, areas for improvement, where governance — through the corporation, right up to and including the board — could be tightened and improved so that this kind of situation could not happen again.

The Chair: Committee, I call a brief recess, five minutes.

The committee recessed from 4:54 p.m. to 5:04 p.m.

[J. Yap in the chair.]

A. Dix: When we were finishing, just before our brief break, the minister was expressing astonishment that I would ask about reports about something that happened in 2014. There were two reports ordered by ICBC into it, and I was asking whether the minister would provide copies of those two reports.

[1705]

Is it his position that a $111 million error — that the two reports commissioned by ICBC to look into what’s a pretty serious matter…? I mean, it’s a $71 million, in one case, underpayment by customers and a $40 million overpayment, which had a $111 million net impact on ICBC. You know, once you get over the $110 million mark, we’re talking real money, even for this government, Minister.

So it’s a $111 million error. Is he saying that it’s his position that those reports should be kept secret by ICBC?

Hon. T. Stone: I just confirmed with ICBC that, indeed, both of these reports were long ago published on the ICBC website. They’re there for the member’s consumption. Sadly, the member must have missed the news release or the press conference, but the documents are published in full on ICBC’s website.
[ Page 12604 ]

A. Dix: I suspect there wasn’t a press conference, at least not one involving the minister, on that one. I think there is a list of priority for those. I’m delighted at that news.

A question to the minister about something I gave ICBC notice of yesterday. It was a case in the Supreme Court which involved Christopher J. Medds, plaintiff, and Michael Zietsoff and Amanda Carbino, defendants. There was a significant judgment in the Supreme Court against the defendants, $2.319 million.

I wanted to know whether concerns about this judgment have been raised internally at ICBC, specifically with the audit committee of the board or the board of directors, and whether any action had been taken to follow up on this case. I provided ICBC with the case and the claim number yesterday.

[1710]

Hon. T. Stone: Perhaps the member could provide a bit more detail as to exactly what he may be wanting to get at with respect to this particular claim. I’m not aware of the details of this particular claim, other than to say that there was a settlement reached back in 2013. That’s about the only specific detail I have on this particular claim.

I will say that at a high level, the entire claims process is very detailed, and everything is documented. There’s a very well-defined process that one goes through when filing and negotiating a claim. There are opportunities through that process to express one’s displeasure or to file a complaint if one doesn’t feel that the process is fair, and so forth. Again, my very limited understanding of this particular claim is that it was actually settled back in 2013.

A. Dix: I’m asking if concerns about this claim, which exceeded the policy…. The policy was a maximum of $2 million, the claim was finally settled at $2.2 million, and ICBC paid the full shot. The facts are that they went against policy in this claim, that they made errors initially in taking the case forward and that eventually the claim was settled $200,000 over the policy limit. I’m asking if the concerns about this claim were raised with the board of directors and the audit committee of the board — whether that occurred and whether there was any internal review of the way this matter was dealt with.

[1715]

I understand it from the information that’s been forwarded to me, and that’s why I gave notice on this question, that the way the claims committee deals with it, and the people in charge of this at the senior level of ICBC dealt with it, was to make a payment of $196,500 where there was no coverage. I’m asking if there was any review of that and, in the absence….

We’ll be ongoing tomorrow, so I’m sure that staff will be able to bring back confirmation of that, whether concerns about this claim and others of its kind were raised with the board of directors and whether any action was taken on that. I think that’s not an unreasonable question to ask. If the minister doesn’t have the answer now, then that’s fine. I’m happy to go on to the next questions and get his answer when we return tomorrow.

Hon. T. Stone: Again, we don’t have the details that would answer the member’s specific question about whether or not there was a referral to the board or to the audit committee of the board. So I will take the member up on his offer. Staff are going to, tonight, when we’re done, go back and look everywhere they can to determine exactly what happened.

As I said earlier, the very cursory analysis of this particular claim was it was settled in 2013, but we’ll get back to the member. He did provide us with the exceptionally good news that we’ll be back for more ICBC estimates tomorrow. We’ll make sure that we provide the member with a more detailed response to this question at that time.

A. Dix: Well, as you know, hon. Speaker, as the song says, you have to give the people what they want. The case…. I’ll share it with the minister. I think he’s got it in a general sense. The decision was, in fact, the 13th day of May 2013. I’m curious about how ICBC pays $2.2 million on a $2 million policy, which is that, and about whether people raised issues about this policy, issues about the decision.

With respect to the designated driver case, which we had a bit of an exchange about over the last number of weeks, sometimes known as the Felix case or Felix v. ICBC, which has now, I think, finally been resolved…. Hopefully, Ms. Felix has received what she is owed as a result of this case.

I guess I wanted to ask the minister the question that I think we put to him publicly, which is that…. In this case, the minister received in his mandate letter, which I know he has posted in his office somewhere, which room I don’t know…. But he has it posted in his office somewhere. That mandate letter advised him to deal with this issue of designated driver liability.

[1720]

The Court of Appeal ruled favourably to Ms. Felix. If you accepted the Court of Appeal’s position and then acted on the case and then understood that the protection of designated drivers and others…. There are other issues in the case, but this was widely seen, including by the judges involved, as a case that directly dealt with designated drivers.

It had been addressed directly by the Minister of Justice; I believe, by the Premier; and certainly, by the minister. After the Court of Appeal had ruled in B.C, how could it be that ICBC sought leave to appeal this case to the Supreme Court of Canada, effectively trying to overturn the hard-won insurance protections for designated drivers?
[ Page 12605 ]

Hon. T. Stone: Let me first begin by saying that the member is correct that we have had a few exchanges on this. I’ll lead off again by saying that we’re very proud in British Columbia of the fact that we have amongst the toughest drinking-driving laws that you’ll find anywhere in the country. We do know that the net result of the tough regime that we have established in this province against drinking and driving has saved a good number of lives, so we’re proud of that.

I also want to reiterate how important it is — certainly, it’s my view and government’s view — that the public make sound decisions when they’re out and engaged in the consumption of alcohol, or with a group of friends, and how important it is to make that decision, perhaps the most important decision of all, to ensure that everyone has a safe ride, whether that’s transit or a taxi or a designated driver.

This particular case, as the member knows well, first involved the B.C. Supreme Court ruling that the plaintiff did not have a claim against the passenger’s ICBC third-party liability insurance policy, indicating that the passenger was not a user of the vehicle. Recognizing that the B.C. Court of Appeal then overruled the Supreme Court’s decision, ICBC determined that it would be in the best interests of all policyholders, and the impacts that there could be on all policyholders, to really clearly define who exactly is a user and who is not, for the purposes of the insurance policies in place.

That was why the decision was appealed. The member is quite correct that the Supreme Court of Canada determined not to hear the case and to allow the Court of Appeal’s decision to stand. ICBC, obviously, fully respects that decision, as does the government of British Columbia.

A. Dix: The question is, given…. The minister is quite correct. When the initial decision came out, he said he planned to talk to the Attorney General about how to respond. He said: “I think the government is concerned about this ruling.” Then Ms. Felix, of course, appealed. She won on appeal. What happened then was that government was….

I have to say, I think people who watch television are quite appreciative of excellent advertising and might say to Mr. Crombie and others who were involved in this that the designated driver ad that ICBC does is not just effective, but it’s quite moving, which is to say why people do it, and that’s to get their friends and their relatives, their co-workers and sometimes people they don’t know home safely.

What happened here was that the Court of Appeal established a law, and ICBC decided to appeal the case and tried to overturn that. And while the minister was directed to improve designated driver liability questions through legislation, he did not do so, so the government’s response was to try to overturn the Court of Appeal. I’m curious to know why ICBC would have done that, given what they’ve said about designated drivers and given what the minister and the government had said on this very question.

[1725]

Once the Court of Appeal had ruled on the matter, why did they seek to overturn the decision of the Court of Appeal that would protect designated drivers?

Hon. T. Stone: I believe I answered the member’s question in my previous response.

As I said a moment ago, and I’ll say again, the decision that the B.C. Court of Appeal made implied that being a passenger is considered “use of a vehicle” and that being invited into the vehicle is consent. In ICBC’s view, this determination at the Court of Appeal could have pretty significant and pretty profound impacts on the broader policyholder community at ICBC.

The member knows this is an extremely rare case — very, very rare, indeed. A very unique, rare set of circumstances. As I said, it was determined by ICBC upon the legal advice that ICBC receives from its lawyers that it would be prudent, in the interests of all policyholders, to appeal the ruling of the Appeal Court to the Supreme Court.

The Attorney General and I determined that it would be prudent on our part to put on hold any legislative or other policy considerations until this issue was completely through the legal process. That has now taken place. The Supreme Court has opted not to hear this case, thus upholding the decision of the B.C. Court of Appeal.

As I said in my previous response, certainly the corporation, as well as the government of British Columbia, is willing to, obviously, stand and accept that decision.

A. Dix: I have some questions about the 2016-17 service plan, the three-year service plan, and in particular, page 14, which describes the earned income forecast for the next three years.

They’re presumably based on specific rate change assumptions for basic and optional. So I wanted to ask the minister, specifically, what those rate change assumptions are for basic and optional contained in page 14 of the service plan.

[1730]

[M. Hunt in the chair.]

Hon. T. Stone: The member has asked what the rate assumptions are in the service plan. Obviously, we consider a range of possibilities. Those details, including the actual rate assumptions, are all included in the BCUC filing, which, as the member knows, we do on an annual basis. The next one will be this coming August.

A. Dix: I’m delighted. It’s always a mystery what happens in these huddles when the answer is: “I’m not going
[ Page 12606 ]
to give you the information.” But presumably that was an extensive and thoughtful discussion.

On page 15 of the service plan, they note proposed changes in accounting standards. I just wanted to ask what these changes are and how they’ll affect other components of equity.

[1735]

Hon. T. Stone: This particular assumption relates to the fact…. As the member knows well, there’s a number of international financial reporting standards that progressively have been rolled out over time. There is one standard that’s called the financial investment standard. It is a plan by the IFRS folks that this would come out in 2018.

Staff indicate that that date has been shifting somewhat. Nevertheless, it is noted here as an assumption, as potentially a risk, insofar as this standard is coming. It obviously would have an impact on the measurement of the fair market value of the investment portfolio, so it could potentially have a fairly material impact on how those numbers are reported. Therefore, it’s flagged here.

Again, the earliest that management understands it could be coming is 2018, which is on the outside of this service plan. That is why it’s reflected here as a potential assumption.

A. Dix: I wanted to ask the minister about a couple of elements of payments that are made by ICBC. Just to put them in context, I’ll ask him the historical information for both body shop rates and agent commissions, fees. When were they last raised, and what is being considered about future increases?

[1740]

Hon. T. Stone: Certainly, I appreciate the questions relating to supplier rates. I think there were a couple of parts to the member’s question.

I’m happy to read into the record the most recent rate increases that have been provided by ICBC. In December of 2015, ICBC announced inflationary rate increases for suppliers as follows. The majority of collision repair, glass and towing suppliers received a 1.8 percent labour rate increase. That was effective January 1, 2016. At the same time, ICBC also announced a 5.8 percent increase for refinish materials and an 8.2 percent increase for sheet metal materials for all commercial and personal collision repairs, as well as a 1.8 percent increase to all regional daily storage rates for towing and recovery plus suppliers.

With respect to the Autoplan brokers, they received a 1.8 percent increase on the commission that they’re paid to process basic insurance transactions. That was also effective January 1, 2016. Prior to that, brokers and a majority of ICBC’s material damage suppliers last received a rate increase in January 2015, a total of about 3 percent for each supplier group.

In addition to that, last year ICBC announced that it would be engaging with the Automotive Retailers Association and New Car Dealers Association on doing a broader review of how rates are established to ensure that all of the factors that should be considered are being considered. My understanding is that both of these associations and ICBC have agreed on a terms of reference.

They’re going to look at the recruitment and retention of staff. They’re going to look at investment in facilities. They’re going to look at market-based mechanisms for determining rates, taking into account, as well, regional variations, the cost of doing business, the availability of certain suppliers. Obviously, that varies greatly from one community to another. My understanding is that a consultant has been engaged and this review is currently underway.

A. Dix: Just a detailed question about the capital reserve target. As the minister will know, although I missed him in the House for this debate…. It was very enlightening to debate the Minister of Finance on these questions. The government has seized control of the capital target from the ICBC board, so I just have very specific questions, which I’m sure the minister will be able to answer within nanoseconds.

The 2015 optional target, and what was the actual for optional? For basic — target and actual? What are the 2016-17 targets for both, now that they’re being set by the government?

The minister will know, of course, that the capital targets are profoundly affected by the unprecedented Liberal raid on ICBC that has taken place in the last number of years, which is, if members will remember from the earlier debate, $1.328 billion. If you think of that time, from the beginning of ICBC to 2010, that number was zero. Since 2010, $1.328 billion. And, you know, $1.3 billion here, $1.3 billion there — you’re talking about some real money.

The ICBC board had set the optional target at 260, so that’s the context in which I’d like to ask the minister about the coming years, given that the government has now seized control of this mechanism away from the ICBC board and ICBC management.

[1745]

Hon. T. Stone: First off, the member has suggested that the legislative changes that were made recently on this were all about government seizing control from the corporation — taking over control. That is simply not the case. What this does do is provide an additional tool that can be used amongst an array of different initiatives to apply as much downward pressure on rates as possible. ICBC will still have…. Actuaries will still do their good work. But what I think is important for the member not to lose sight of here, which he may be losing sight of, is that there are very significant cost pressures at ICBC.
[ Page 12607 ]

We talked about this earlier today. The cost of claims is increasing very significantly. The frequency has been flat. It’s ticking up a little bit, but the severity is going up — the cost of bodily injury claims, in particular. The number of BI claims per collision is increasing. The incidence of fraud is increasing. These cost pressures are all layers of pressure on rates.

Now ICBC’s mandate, very clearly — their number one mandate — is to do everything they can to ensure that basic rates are as affordable as possible. That’s why they’re pursuing a broad array of mitigation strategies to apply that downward pressure on rates. This is yet another tool that could be used in future years to assist in that effort to keep basic rates down.

[1750]

Remember, we talked about it earlier today. ICBC has transferred $450 million from the optional side of the business to the basic side of the business solely to apply downward pressure to rates. This legislative change, again, just provides maximum flexibility when it comes to those management capital targets, so that we can do everything that we’re doing to keep rates as affordable as possible for British Columbians.

A. Dix: I think people watching this debate may be questioning their basic understanding of English.

The minister says a legislative change that takes power away from the ICBC board and gives it to the cabinet is not seizing control, but merely some sort of means to avoid a rate increase. It is seizing control. They’re transferring control over setting the capital target for optional from the board to the cabinet. That’s seizing control, as if words have no meaning in the Liberal cabinet. That’s what they did.

I asked the minister, I believe, in a clear and understandable way what the capital targets were in 2015 — I sense a 15-minute huddle coming — and in 2016 and so on. I asked him those questions specifically. They are important questions. There is an issue.

I think it’s fair for the minister to make the link to rates. There is a fair question as to whether a capital target of 260 for optional is too high. There’s a legitimate question on that front. But they’ve been much higher in the past. The government has been draining them down for their own fiscal reasons, charging people more than they need to, building the capital. That’s what they’ve been doing.

I ask the minister — in an understandable way, I think — what the targets were, what they are and what they’re going to be. Since that power is in his hands and he’ll be making the recommendation to cabinet, presumably, he’ll be able to tell us what, at least, they were in the last year and what they’re going to be in the current fiscal year.

Hon. T. Stone: First off, the member knows full well that the MCT for basic for 2015 is not public, is not out there yet. It will be part of the BCUC filing, which is in August. We’ve talked about that several times today. So there it is.

This nonsense that the member opposite continues to peddle in, this sense that there’s this raid on drivers when it comes to optional insurance, is getting somewhat tiresome. The member knows full well that the optional side of the business is revenue that ICBC earns in a competitive environment. The BCUC does not set the rates. The government does not set the rates. ICBC doesn’t set the rates. The rates are what the market will bear.

I mentioned previously that since 2005 the optional rates in this province that ICBC charges have gone down by 30 percent, in direct correlation to what the market will bear. I don’t know what part of that that the member opposite does not understand, or maybe he chooses not to understand that part.

There is no raid on the drivers of British Columbia when it comes to the optional side of the business. The rates charged are competitive. You and I, the member opposite — we all have the opportunity to go and take out those optional products from ICBC. Or we can go to any number of private insurance companies and pay for the services — the optional coverages that they provide.

[1755]

We are fortunate that 80 percent of drivers do opt, in a competitive environment, to stick with ICBC on the optional side of the business. As a result of that, that has generated, over the years, a significant amount of excess capital — again, I submit, a good portion of which, $936 million since 2010, has been transferred from the optional side of the business to the basic side of the business to keep basic rates down, and another $400 million of which is being used to modernize and upgrade ICBC’s systems to provide a much more efficient and much better customer service now and in the years ahead that will save $90 million to $100 million per year.

Yes, some of those dollars, that excess capital, have been moved from ICBC to general revenues to cover critical programs in health care space, education space and other critical services that British Columbians have come to rely upon.

It’s all there. The member chooses to try and create the sense that there is some crisis, that there is some nefarious activity that’s gone on here, that the government is pilfering the corporation, etc. It is simply not true.

A. Dix: Of course, optional is not covered by the BCUC, as the minister has said. I’ve asked him directly twice now to tell people in British Columbia this answer: what was the optional target last year, and what was the actual? That’s a reasonable question. Last year, 2015, what was it? I mean, the minister says it’s not a raid. They took $1.328 billion out of it. Not a raid. They transferred $936 million to basic. Not a raid. They sent $200 million over to the transformation project. Not a raid. So $2.464 billion. That’s not a raid. Not a raid. They’re not taking the money out — $2.464 billion.
[ Page 12608 ]

The consequence of that is that it affects, amongst other things, the capital threshold. The “o” in “optional” doesn’t stand for “opaque.” It stands for “optional.” This is not subject to BCUC review, but this corporation is owned by the people of British Columbia, and we should get an answer to this question. They seized control of it by legislation. This was established in the Legislature. We voted for the bill, on division.

I simply ask the minister. If the minister isn’t prepared to tell the people of B.C. basic answers to these questions about optional…. He says: “Well, I won’t tell you about basic, because we’re going to tell you in August.” Right? And we ask him next year, and he’ll say: “I’ll tell you the August after that.” Fortunately, I’m not sure he’s going to be here next year.

In any event, I guess, I ask the question again: what is it? What is it for optional? It was 260. That was the limit provided by the ICBC board. What is it in 2015?

[1800]

Hon. T. Stone: Well, the “o” doesn’t stand for “obstinate,” either. It stands for “optional.” You can keep asking the same question. I am going to give you the same answer. The MCT level has never been disclosed on the optional side, because — surprise, surprise — ICBC is operating in a competitive environment.

If the member would like to go on the record to suggest that ICBC should, essentially, lay out all of its metrics and all of the confidential information so that the private companies that it competes against in the optional side of the business can see all of ICBC’s cards and make decisions on that basis — which would likely drive more business to the private companies, away from ICBC — then the member should say so.

That is as simple as it gets. To publish the MCT for the optional side of the business would compromise that side of ICBC’s business, because they’re operating in a competitive environment. It’s very simple.

A. Dix: Wow — 90 percent of the market. That’s some competitive environment they’ve got going there.

We have the answer from the minister, that — even though it’ll be decided by the cabinet, even though this is a public corporation, even though other Crown corporations and insurance provide that information — ICBC won’t tell the public the truth about this question. They’ll keep it secret.

That’s the answer we got, and I guess we can leave it at that for now. But it is an absurd answer that the minister has just provided. It is absolutely absurd and embarrassing that the public can’t get basic information from its public insurance corporation about what’s going on at ICBC. It is absurd. And the minister came up with that answer on the third try.

I guess I’ll ask him some questions on some different topics. I wanted to ask him about part 7 accident benefits. He’ll remember — or maybe he won’t, because it was a long time ago, in September 2007 — when the B.C. Coalition of People with Disabilities asked for changes to the current benefits being provided by ICBC under part 7 accident benefits, which are obviously substantially less than in other jurisdictions. They fall way short of meeting basic medical and rehabilitation needs.

In fairness to the minister and in fairness to ICBC, they haven’t changed since 1991, which means that it’s not just been the Liberal government that hasn’t acted on this. Other governments haven’t acted on it. But it’s also true that 1991 to 2016 is a long time for people. In effect, the people who need rehabilitation benefits under this are traumatically affected, I think, by a threshold that hasn’t been touched in some 25 years.

Is the minister considering making changes to this? I mean, one of the reasons why people are pushed to optional, why optional really isn’t optional, is that nobody who is at all responsible would not buy optional insurance in British Columbia. It is optional in name only. They have to buy it, given the low level of coverage they receive in some of these areas.

I wanted to ask the minister simply whether ICBC or the minister, given the lack of protection from inflation…. I think conservatively, since 1997 alone, the value of the thresholds that are in part 7 have lost 44 percent of their value, which, if you’re in these circumstances, would be a lot. Is the government, the minister or ICBC considering any changes in this? This affects profoundly people with disabilities who are often — let’s be clear — at fault in accidents, but, nonetheless, are struggling and dealing with those disabilities.

[1805]

Hon. T. Stone: The statutory minimums for the coverages that the member is referencing, the part 7 coverages, are actually generally comparable with coverage levels that are available in other provinces. There is the opportunity for policyholders to actually purchase additional coverage to top up their levels for part 7 coverages if individuals choose to do that. The individual can purchase…. I think it’s called access benefits.

At this time, we’re not contemplating any whole-scale changes to these rates, recognizing that the impact of doing so would be to increase rates for all policyholders, when, in fact, there is the opportunity for those who really need these benefits to actually purchase these benefits separately and to top up the benefits that they need, which are not necessarily benefits needed by the broader policyholder group.

A. Dix: Well, just to put it in context, the basic limit for income replacement is $300 a week. That’s $110 less than WorkSafe, $274 worth of employment insurance and, obviously, dramatically less than other insurance systems.
[ Page 12609 ]
Albeit, many of those systems are no-fault systems. That $300 a week is unchanged since 1991.

[1810]

The minister is correct. He says that those who need them can buy optional. Well, of course, you don’t know…. People, obviously, should buy optional. Clearly, the reduction in coverage…. I mean, look at home care. So $145 a week is what’s provided under these bases. What the minister is saying is that there’s no consideration for any changes to these basic limits. He feels that not accounting for inflation with respect to these for approximately 25 years is fine, because people have the option — obviously if they know about it in advance — to buy other forms of policy.

Is it the case that…? And I think the minister will know, because he will have read the significant contribution of the Coalition of People with Disabilities to this matter, the dramatic increases of costs of medical care in the period in question. There’s no question that costs of insurance have increased over that time. There’s no question that costs of medical care have increased over those times. There’s no question that people have lost 44 percent of the value of the benefit through inflation in that time.

So I guess the question to the minister is…. I realize that the low level of benefit under basic is an incentive to optional, but it also means that optional really is not optional but an extension of basic. So I’m surprised that none of these things — not home care, not the maximums and not the weekly allowance on basic limits — are being considered for any change by the minister.

If you would just clarify to say that that part of ICBC’s coverage is not going to be reviewed in the foreseeable future.

[1815]

Hon. T. Stone: What I’ll say in response to the member’s question is this. The coverages that are provided in part 7 — and, for that matter, the coverages that are provided across the broad suite of products that ICBC provides its customers and offers to its customers — are the subject of regular review and scrutiny within ICBC.

While I can’t say that, as of this moment, the part 7 benefits are currently the subject of a review within ICBC, what I can say is that the part 7 benefits and the broad array of benefits that are provided are reviewed by ICBC on a very regular basis, with the goal being to always do the best job that the corporation can to balance, on the one hand, meeting the needs of individual policyholders, all the while ensuring affordability for all policyholders.

The Chair: Noting the hour.

A. Dix: I always like to help the minister out. Noting the hour, I’d just say that I look forward to dealing with a whole series of new issues, the exciting issues, tomorrow. I look forward to picking up the debate where we left off tomorrow.

With that, I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:16 p.m.

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