2016 Legislative Session: Fifth Session, 40th Parliament
HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Tuesday, May 17, 2016

Afternoon Sitting

Volume 40, Number 4

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

TUESDAY, MAY 17, 2016

The House met at 1:32 p.m.

[Madame Speaker in the chair.]

Orders of the Day

Hon. M. de Jong: Committee of Supply, Madame Speaker. In this chamber, Ministry of Finance, and in Committee A, Ministry of Social Development.

Committee of Supply

ESTIMATES: MINISTRY OF FINANCE

(continued)

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

The committee met at 1:34 p.m.

On Vote 23: ministry operations, $178,497,000 (continued).

[1335]

Hon. M. de Jong: When we broke, the hon. member had just posed a question about payday loans, and we were scrambling about, trying to ascertain the status. I can confirm the essence of the member’s question, built as it was around an undertaking the governing party had given in the last campaign. Some of that work around protection for consumers has been undertaken. The specific adjustment around the borrowing rate, if I can use that term, has not….

The reason we were scrambling a bit is that the initiative is being led by Consumer Protection B.C., which is housed within the Ministry of Solicitor General.

[R. Lee in the chair.]

I was able to obtain some general information. The specific objective, though, to answer the member’s question, has not yet been achieved, but I am advised they are continuing to work on a proposal that would see it achieved.

C. James: Thanks to the minister. It’s certainly something that, from my perspective…. I mean, there are all kinds of issues that need to be dealt with around an individual’s personal debt. But I think the issue of the payday loans and the report certainly put some urgency to it, so I appreciate the minister getting the information.

Just a question — and it’s timely, with the shake-it house outside — around earthquake preparedness and disaster preparedness. I’m sure the minister has been having the same kinds of conversations, or certainly other members have, with the insurance industry around disaster preparedness and the request of the Insurance Bureau of Canada to take a look at options that could be there for government to partner with industry to look at providing protections.

I think the industry has done a good job of reminding people how important it is to look at earthquake insurance and to look at those options. I think everybody agrees. Certainly, the Insurance Bureau of Canada has pointed out that if there really was a major earthquake, insurance wouldn’t cover it. If we really faced that, we wouldn’t be looking at losses…. In fact, they’ve predicted we could be looking at 73 percent of losses not actually being covered.

The industry has put forward a number of ideas that they are certainly hoping government will engage with them on. One, obviously, is some work with the federal government to see if the federal government is coming to the table.

One of the other ones is related to working with private insurance to look at some kind of program that could actually be put together with government, with each of them taking some liability — not putting the money in place but in actuality providing the support that government would have to provide anyway if insurance wasn’t covering the issue.

I just wondered whether the minister has had those conversations at all with the Insurance Bureau and whether there’s any discussion. I recognize that the Minister for Emergency Preparedness is obviously engaged. I know they have also wanted to have discussions with the Finance Ministry around long-term liability for government.

[1340]

Hon. M. de Jong: I have a distinct recollection of the report that I think the member is referring to. I believe that the insurance sector met with me and other representatives of government either just before they released the report or at the same time it was released. The member is correct. There are dimensions to it that engage all levels of government and certainly the federal government.

As I recall, the report highlighted the risk factors that are at play, particularly with respect to British Columbia — transportation infrastructure, bridges, emergency infrastructure. It is, I think, the subject of discussion within government. I will say that, within the Finance Ministry, the work has tended to focus on the regulatory side of the insurance sector more than the specific recommendations around emergency preparedness.

I think the member’s point, though, about trying to quantify from the point of view of ultimate Crown exposure in the event of a catastrophic event is a valid one. I think, candidly, we’re somewhat exposed in our present circumstances. There would, undoubtedly, be in the way,
[ Page 13192 ]
I guess, that we saw…. As compared to what would occur in the aftermath of a major seismic event, the floods, as catastrophic as they were in Alberta a couple of years ago, might pale by comparison in terms of the financial challenge that presented.

With respect to the insurance sector itself, though, our work has tended to focus around specific regulatory questions and the statutory oversight that governs the behaviour and the work that the insurance companies do with consumers in B.C.

C. James: I appreciate the minister’s answer. I think we would expect that the emergency preparedness area would deal with emergency preparedness and would be looking at the nuts and bolts. I think, really, what the insurance bureau is saying is: “Let’s have the conversation sooner rather than later.” It really is about sharing risk and how you share risk.

Ultimately, government is responsible, in the end, for those disasters and the challenges of people who are either underinsured or not insured, or the disaster is so large that the insurance companies couldn’t manage the kinds of costs that we’re looking at. I certainly would encourage the minister to have those conversations.

I agree that it’s not specific to the regulatory structure, but it is specific to some kind of partnership that I would expect the provincial government, the federal government and perhaps the insurance industry itself could look at to try and cover some of that risk. As we all know, as I said, it’s timely — today, outside the House — to remind us that it’s not eventually; it’s when. I think it’s good preparation.

I’m doing a number of random pieces to make sure they get covered off. Just a quick question that I’ve been asked to bring forward to the minister — I believe I know the answer, but I want to get it clarified — from a volunteer fire department that is looking at the transfer of a fire truck from one department to another department.

This is the McLeese fire department. They were gifted an ambulance, in fact, from the Horsefly volunteer fire department. It used to be done without PST. Now they have to pay PST.

They’re asking: with that change, is the government looking at providing them with an opportunity to not have to pay PST on something? When the change was made, it made it very clear that it had to be a family member that you were giving a car to in order to be exempt from the PST. These, obviously, aren’t family members — with two volunteer fire departments. I think the answer is going to be related to becoming a registered charity, but I just want to clarify that with the minister so that we can get back to them as well.

[1345]

Hon. M. de Jong: I was casting my mind…. I’m pretty sure I recall this specific request. It was McLeese Lake, just north of Williams Lake — home of the Oasis Pub.

I think the dilemma we ran into is that there is no general provision that would allow for an exemption. The reason I remember it is that I — like the member, probably — struggled with the idea of how, in effect, a charitable endeavour or a logical endeavour might be frustrated by the application of general taxation laws.

The exemption that applies for the gifting of a vehicle of course applies, as the member just pointed out, to families, so that wasn’t applicable. There is no general exemption that applies with respect to charitable donations. I have seen some other examples where that has been problematic, sometimes to the tune of many thousands of dollars.

I recall attending — or hearing about it; I may not have been there — a case of a very valuable sports memorabilia donation being donated and fetching a sizeable amount of money. The donor later discovered that he was on the hook for remitting PST, and a similar circumstance exists here.

I think I’ll take advantage of the question for pointing out to the interested parties, to assure the member and them, that we looked at all of the available mechanisms through which this laudable donation endeavour could be accommodated and weren’t able, within the existing framework, to do so.

V. Huntington: Just for the minister and his staff, I’ll be asking, eventually, a question related to Vote 23 — specifically, the appropriation for internal audit and Crown governance, if his staff would like to familiarize themselves, or himself, with that committee description.

My discussion goes to information that came out of a number of Public Accounts Committee meetings that were dealing with government computing controls, the general computing controls, and the concern within the Auditor General’s office and government as a whole — and the committee, certainly — with the troubled performance management we’ve had over a number of years in a lot of these multi-million-dollar software programs that have been developed in various ministries.

[1350]

Now, please understand that I am not here criticizing anybody in particular. It’s the general issue of accountability that I’m speaking to.

What we seemed to discover in the committee was that there was an accountability gap within the government with regard to the development of these systems. In one of the reports, the general computing controls report of 2014, the Auditor General said that: “The B.C. office of the government chief information officer is mandated with governance authority for standards setting, oversight and approvals for the province’s information and communications technology.” Then the next line basically said, “B.C. government organizations are responsible for following the spirit and intent” of that.
[ Page 13193 ]

So right away, I thought: you can’t follow spirit and intent if there is a requirement and a mandate to develop processes and enforce those processes through the system. I asked the information officer how they developed the spirit and intent. What processes did they use? Did they approve the processes within a ministry as they were developing these huge data management plans and contracts? Did you assist them in developing them? Do you have compliance requirements? Do you go in and test and say: “Okay, we’re testing this before you proceed down the line?”

Apparently the answer was no. The answer was that they set up a general framework, and it is the choice of the ministries whether or not they wish to follow that framework.

As we pursued that a little further, we ended up understanding that within the last two years, the office of the chief information officer has developed what were called policies and tools. They brought in KPMG and Ernst and Young. They’ve developed policies and tools that they hope will engage the ministries. But what I’m concerned about is that there was an obvious accountability gap. They agreed there was an accountability gap. I don’t understand how, when you’re talking multi-million-dollar expenditures — many of them failed along the way — that there is no accountability and people that will go in and check.

I guess my question to the minister is whether the internal audit and Crown governance appropriation within his ministry has the capacity to do an audit to determine whether those new policies and tools are appropriate in order that the government is protecting itself from these multi-million-dollar losses that we’re seeing as a general occurrence — whether he has the capacity to take a look at the tools and policies being developed within the chief information officer’s office and whether those will do the trick to protect government from these risks.

Introductions by Members

The Chair: Hon. Members, with the indulgence of the committee, I would like to make an introduction. In the gallery now we have 21 students, led by their teacher, Mrs. Sabina McCloskey, and also 25 adults right now, over there, from Holy Cross Elementary School, one of the best schools in B.C. Would the House join me…

Interjection.

The Chair: In Burnaby North.

…to give them a very warm welcome.

[1355]

Debate Continued

Hon. M. de Jong: If the member will allow me just to complete the exchange that took place with the hon. opposition critic. I am advised, with respect to gifts of vehicles to a charity, that they are exempt from PST if the donor has paid the PST on the gift originally. I’m not certain, in this case, whether that was applicable or not. I just thought I should fill that in, in terms of that exchange that we had earlier.

Now on to the member for Delta South’s question about an admittedly very important part of government activities and government expenditures. It’s true that we still build buildings — hospitals and schools come to mind, highways — but beyond that, the most costly infrastructure that public moneys are devoted to tend to be the IT systems that are purchased and upgraded. The member will get no argument from me that, in many cases, the scale of investment is quite staggering — measured, sometimes, in hundreds of millions of dollars.

It is intended to connect disparate groups and locations across a large province. It is intended to ensure that people sitting at desks or dealing with citizens across this province are able to communicate with one another. I suppose it’s fair to say that, for most of us, the complexities associated with doing that are quite staggering, to the extent that most of us have some contact with technology either with our laptop or iPad and are able to navigate, probably in most cases, pretty well. Sometimes it must strike us as odd — it certainly strikes me — the measure of complexity and cost associated with upgrading systems.

I won’t — because I know the member knows this — go on at length about where I imagine much of that complexity derives from. There are certainly security components to it, privacy components, all of those things that members and the privacy commissioners and others urge upon government. Yet it adds dramatically to the complexity and the cost.

The member’s question, I think, confronted by examples where there have been slower than anticipated operationalizations of systems, or complications…. I think some of that often can be assigned to the challenges of change — period. But then there are examples where the system hasn’t performed. Certain assurances have been given, and the system simply hasn’t performed. I mean, I can think of several.

I think the member’s question, though, is: is the internal audit section equipped to directly involve itself in tracking some of that or assessing some of that? It is. I can advise the member that the section has not done so to this point in a separate, focused way but has done so as it looked at individual agencies as part of its ongoing audits. Actually, I think the member, as part of Public Accounts, occasionally has an opportunity to review the reports. Sections of the report have dealt with procurement of IT services and packages.

[1400]

What has not occurred is that kind of global cross-government assessment or review or audit of IT procurement. Probably the member will detect from my
[ Page 13194 ]
response so far that it’s not something that I would be in any way hostile to.

Some work has gone on. As I think about the projects that lie ahead and the need, I am told, to update on an ongoing basis and establish in a lot of areas more effective communication between departments and between systems, this is not a challenge that is going to end or go away any time soon.

V. Huntington: Just to briefly follow up. I thank the critic.

I guess my request of the minister and his ministry is that…. Previous to 2014, or the general computing control report of the Auditor General — which, if the minister has not read, he may be very interested in reading — the chief information office, even though they had a much broader mandate and responsibility and authority, tended to concentrate their interest and authority on risk and assessment — security issues, rather than the broader performance management of procurement issue.

Subsequent to these reports, it appears that in the last two years, they brought in big organizations to help them develop tools and policies — a governance framework, they call it — that will assist them with the broader authority. What I’m concerned about, given the total lack of accountability through the structure of government…. I asked the comptroller general: “Is your department responsible for ensuring management and performance management processes are adequate when a ministry goes to procure a large IT project?” No, they don’t do that.

If the chief information officer didn’t do it and the comptroller general didn’t do it, who does it? The only place I could see was the description of this committee in that, apparently, the chief information officer has now developed a new framework of tools and policies, he says, that will enable them to reach out into the ministries and follow those new projects.

I am asking the minister whether his office has the authority to do an audit of those new policies to ensure that they’re doing and will do what we hope they will, and that is: provide an oversight mechanism, on this expenditure of hundreds of millions of dollars, and an approval mechanism that the government can rely on in the future — an audit of the new process.

Hon. M. de Jong: I think the short answer is yes. The interest in doing so derives from the fact, of course, that at the end of the day, these projects — some of them involving tens or hundreds of millions of dollars — are capital projects that frequently require Treasury Board approval.

In fact, new directions this year require departments and agencies wishing to embark upon those kinds of procurements in excess of, I think, $50 million to present to Treasury Board and receive scrutiny. There is not only an interest but an imperative and a role for Treasury Board.

[1405]

To that extent, the authority, I believe, exists under the Financial Administration Act to conduct the kind of review/audit that the member speaks of.

C. James: I just want to move on now to talk a little bit about the commission on tax competitiveness that the minister announced and that was announced, obviously, in the budget as well. Interesting to note that this is the fourth commission in the last four years, if I’ve got my numbers right. There was the Expert Panel on B.C.’s Tax Competitiveness in 2012, an industry tax steering committee that was put together in 2012 and the job and investments board’s final report, in 2014, which also looked at taxation.

Just to ask a few questions specifically on the terms of reference…. I think it’s interesting. If you take a look at the terms of reference, they talk about allowing the commission to consider a range of options to encourage competitiveness and the added piece that the scope of the work will explicitly exclude consideration of a return to the harmonized sales tax. I wondered if the minister considered adding the word “fairness,” when it comes to the tax system, in the terms of reference.

Hon. M. de Jong: I’m not sure if I did or didn’t. I should think that the panel….

Maybe I should back up, because there’s no point talking about this in the abstract. I had hoped that by the time we had this conversation, the member would be able point to the inevitable press release appointing the individual and the individuals. Regrettably, I haven’t finalized that as yet and am hoping to do so in the course of the next few weeks. But we can still certainly have a conversation about the intended purposes and the mandate that that group will be charged with.

I would say fairness is an underlying principle that should guide not just this group’s deliberations but government’s as well. Its absence from the material should not, I hope, and will not be taken as suggesting that it’s not something that will be taken into account or that I would expect the committee to take into account or that government would take into account when considering the recommendations. The member’s…. I didn’t specifically exclude it or specifically include it, and I can’t honestly remember if, in reviewing the mandate, the inclusion of that term occurred to me or not.

C. James: I think it’s important. If you take a look at competitiveness and you take a look at fairness, they can often be at opposite, polar ends. I think, from the public’s point of view, there’s been a great deal of discussion during the term of this government around tax fairness, around the issue of fees and services and whether those are taxes or not taxes. From my perspective and from the public’s perspective, I think that really is the bigger discussion that needs to be had.
[ Page 13195 ]

I guess I would also ask the minister, given that the government doesn’t include fees and services — fees in particular…. Whether we’re talking about MSP, whether we’re talking about hydro rates, whether we’re talking about tuition fees, whether we’re talking about ferry fares, whether we’re talking about all of that range of fees and services that the public has been hit with, I recognize, as I said, that the government doesn’t include those as part of taxes.

I think the public would beg to differ. I think the public very clearly includes them as part of taxes. I think even the Premier herself, when she was running for leadership, said that she believed that government needed to take a look at the entire burden on taxpayers, which included those fees and services.

I wondered: from the minister’s perspective, is there anything to exclude the discussion around fees and services and affordability and fairness as part of this tax commission?

[1410]

Hon. M. de Jong: I think there is sufficient room and breadth of scope that the group will be able to address issues. I think, to the member’s point, for citizens and businesses, the costs that are imposed upon them by government and by society come in many forms. Some are purely tax-related and others fall into other categories. Some are payroll deductions and therefore referred to as payroll taxes.

Having said that, I also try as best I can to be forthright with the member and the committee. In establishing the committee, I must confess, I am seeking to have them address some large structural issues, as well, around things like the PST and personal income tax, corporate and small business income tax: how these things fit together; how they apply in the context of in British Columbia, vis-à-vis our trading partners, the manufacturing sector; and where we might be in a position to effect change — and how we might be in a position to effect change — that enhances our competitiveness as a trading province.

That is uppermost in my mind. But the opportunity for the panel to examine other questions as they relate to that, I think, certainly exists.

C. James: I think the minister raises exactly the point. If the discussion is going to be…. And I understand the issue around structural changes to the tax system. If the discussion includes personal income tax, certainly, from my perspective, it needs to include, as the minister himself said, all of that burden on the public. If you’re talking about personal income tax, people don’t simply look at their personal income tax. They look at the payroll tax. They look at MSP. They look at the other fees and services that they face.

This plays in to the people that are appointed, and I appreciate that the minister said those final decisions haven’t been made. So it’s good timing to put forward advice, or it’s certainly a view that a broader tax panel would be helpful in that regard. I think there are some very qualified people who’ve sat on previous tax panels, who have a great deal of experience but are very focused, as the minister has said, on the structural piece of tax competitiveness.

I think, from my perspective, it would be an interesting exercise for the minister to have representatives from, for example, the Fraser Institute and the CCPA on a tax fairness commission. You would have an interesting discussion and polar opposites of a view around the tax system.

Surely, if we’re going to look at a good discussion and a good debate around the tax system and the competitiveness of the tax system, it would be helpful to have those kinds of people. I wondered if the minister had ever thought about a bit broader terms of reference or a bit broader look at the individuals who are sitting on this commission.

[1415]

Hon. M. de Jong: Well, I think the member’s observation that the conversation will be guided by the nature and the backgrounds and the expertise of the participants is a valid one. I’m not in a position, unfortunately, to disclose some of the names of people that we have been considering. They are, I can assure the member, from a variety of backgrounds and, in a couple of cases, might, I hope, pleasantly surprise the member. Again, I apologize for the fact that we’re not able to have that conversation in more detail, knowing who those individuals are and who the Chair is.

I wonder if I might also, though…. Again, I value this opportunity to provide the member and the committee with as much information as I can, and this may highlight the importance of the point the member has made around the backgrounds of the individuals.

This may not be something that the member welcomes hearing, but I don’t actually see this as a huge road show exercise of travelling from town to town. We have a budget committee that does that. That is not to say there won’t be an avenue, probably an electronic one, for people to submit their views and ideas. I do see this more as a case of people with views, expertise and background sitting down and having that discussion.

I wouldn’t want to leave the impression and then have the member disappointed, thinking that this was going to be a travelling road show across the province, because I’ve never thought about it in those terms. There are other avenues for that. Members of this assembly participate in one of the important ones, and the member herself has as well.

C. James: I understand that from the commission’s perspective. They request people to put in submissions, and I think that’s another area where the commission
[ Page 13196 ]
could look at a broader base. It’ll be interesting to see the list when the list comes out. But if the group isn’t as broad as perhaps it might be by including academics or people from the tech sector or the resource industry or folks who have some expertise in that area…. If the panel isn’t as broad, the other way to ensure that that information comes to the panel, of course, is through submissions.

The minister points out that the group won’t be travelling. I think that’s completely understandable, but I think it is important to take a look at where the submissions have come from. This is an interesting exercise that we go through at the select standing committee as well. Where did we get submissions from, and more importantly, where did we not get submissions from? Where are the gaps?

I think it was interesting. I just took a look at the submissions from previous panels — 31 submissions from industry associations, nine companies, three municipalities and two individuals. A big gap, really, when it comes to submissions.

I wonder if the minister has taken a look at or had a discussion — and perhaps it’ll happen after the panel is in place — around how to encourage a broader base of submissions, how to make sure, if the panel is a little more focused on the technical side of taxation, that the panel has the opportunity to be able to reach out in a broad enough way through information to groups and organizations to get those submissions coming in to the panel.

Hon. M. de Jong: It’s probably a shared responsibility, and ultimately, the bulk of that responsibility falls to government to make sure that people are aware that the work has been commissioned, who the members are, how they may be contacted.

[1420]

There’s probably an ongoing role for the committee itself, but I certainly have tried not to be shy about emphasizing the rationale behind creating the body — what the objective is in terms of timing and what the objective is in terms of the report and recommendations that are introduced.

I think the value of the work will be enhanced by the breadth of the input that is presented and the ability for the members to debate some of those disparate views that, undoubtedly, will be presented to it. Yes, I’m sure a subject of this sort will elicit passionate and varied views from all corners of the province and all quarters of the economic landscape.

In many ways, I don’t envy the work of the group to try and distil it down into a set of recommendations, which, inevitably, will be influenced by the biases that people in the group bring to their duties. That is a dimension to this that exists for the select standing committee and other groups that perform this kind of function.

We’ll wait and see. In the fall, hopefully, we’ll end up with something specific that the member and I can discuss and debate the merits of.

C. James: I just wanted to check around the timelines. He mentioned the committee is a little behind. Is the reporting time still the fall of 2016?

Hon. M. de Jong: Yes. Still looking for a report in the fall.

C. James: Now I want to move to a couple of areas in the minister’s service plan. Goal 3, objective 3.1, talks about effective oversight of public sector organizations, and goal 1 talks about sound and transparent management of government services.

I want to speak a little bit about this, related to the direct operating debt that we hear the Finance Minister talk a lot about and, certainly, a lot about in this budget. The minister talks about reducing the direct operating debt by 2018-2019. I do think it’s important when the minister talks about that.

I’m sure the minister would do that, as well, to recognize that overall government debt has gone up by $4.6 billion in the last two years — expected to go up by $6.6 billion in the next three years. When we talk about direct operating debt, I think it’s important just to acknowledge that — to acknowledge the debt.

I want to talk about part of the minister’s calculation that he uses for reducing the direct operating debt. Part of that includes the dividends that come from Crown corporations. That’s a clear link. Where the dividend comes in, that’s included in part of that calculation.

When going through estimates with the Energy Minister, it was interesting to note that the Energy Minister said that the dividends from Hydro — that actually come into the general budget from the minister — are actually borrowed money. I just wanted to confirm with the minister that the Minister of Energy’s statements…. I wanted to make sure that those were accurate statements and that the minister agrees with them.

[1425]

Hon. M. de Jong: I think the first…. There was a lot packed into the member’s submission, so I’ll probably deal with parts of it, and we can talk a little bit about the parts I miss.

I’ll begin by saying this. I occasionally, or maybe even frequently, hear people and colleagues of the hon. member say: “Ah, this lofty claim about the budget being balanced — it is only balanced on the strength of the payment of dividends from Crown agencies like B.C. Hydro or ICBC.”

The point I have made and will make again for the purpose of the committee today is: for the purpose of determining whether the budget is balanced or not, the payment of the dividend is inconsequential. The numbers would be the same, were the funds, those amounts, to remain within the agency.

Now, the member has pointed out, in the case of B.C. Hydro, where amounts are transferred. I should point
[ Page 13197 ]
out — and I’m often interested that this doesn’t factor into the conversation at all — there are Crown agencies, Crown corporations, from whom the government takes all of their return — 100 percent. The B.C. Lottery Corporation — which we’ll talk about, I think, later in the program here — is such an example where all of it is returned to the government as a dividend.

Again, were it to remain with the corporation, the effect would be the same. It would be the same for the purpose of determining budget surplus or budget deficit. The Liquor Distribution Branch is another case where all of the proceeds are returned as a dividend to the taxpayers of British Columbia.

Attention tends to focus on B.C. Hydro and ICBC. But the notion of paying that dividend — and in the case of B.C. Hydro, that now steadily reducing dividend — is not dissimilar from what occurs with other corporations. The member is correct in the case of B.C. Hydro. Given the very, very expansive construction program that is underway, there is an element of direct borrowing involved in seeing those projects through to completion.

C. James: The minister is right. There are some agencies where all the revenue is taken; there are some agencies where a portion of the revenue is taken. The debate around whether that individual dividend makes a difference to balancing the budget is not the focus of my questions here.

The focus, really, is on utilizing borrowing to be able to pay a dividend to government. I think that’s the piece where the public and others scratch their heads, to say: “How does it make sense to have an agency in debt borrowing money to give to government, to take from one hand to give to the other hand?”

I guess that’s my question to the minister: how does that make sense to the public? A Crown agency that is in debt that is borrowing money to pay to government on a dividend — how does that make good fiscal sense?

[1430]

Hon. M. de Jong: Two things come to mind. One is to emphasize the fact that the degree to which there is borrowing on the part of the Crown corporation that we’re discussing has far more to do with the extensive program of construction that is underway. Obviously, Site C is a large part of that.

I can offer this to the member. The degree to which I share the notion that debt equity ratios are important — and the government shares that view and that concern — is reflected in the degree to which the corporation and the government have established a program over the next ten years to phase out the payment of a dividend — well, to phase it out and to return the corporation to a much stronger debt equity circumstance.

To the degree that the member is looking for some measure of comfort that the government recognizes the importance of ensuring a healthy balance sheet — not just for the central operation but for Crown agencies as well — and that the government is prepared to take steps to facilitate that, it is reflected in the steadily diminishing amount of the dividend that will be paid through the next decade.

C. James: There seems to be a contradiction from the minister’s comments around the dividend and the difference that the dividend makes in the budget. If you’re taking a dividend…. The minister admitted himself that you’re looking at reducing the dividend, that you are concerned or that you are cautious about the debt at other Crown agencies. I think, given the requirements of good oversight of those public sector organizations, it seems odd that government would continue to take money that has to be borrowed, that actually adds to Hydro’s debt.

Hydro’s debt is British Columbia’s debt. Hydro’s debt is the ratepayer’s debt. Hydro’s debt becomes how much people are paying in their Hydro bills. It’s not something abstract. It’s not something over here. This relates directly to British Columbians.

The other comment that the minister made was that the payment of the dividend is inconsequential when it comes to the budget, that it isn’t related to balancing the budget or not balancing the budget. Well, if it’s inconsequential and if the minister believes that there’s a challenge with the debt at Crown agencies and that has to be watched, why would the minister continue to take the dividend, then?

If the minister believes that the debt at Hydro is a challenge, if the minister believes that the dividend doesn’t make a difference to the budget, as he said, why would the minister, then, not stop taking the dividend from Hydro and digging a bigger hole for Hydro when it comes to debt?

Hon. M. de Jong: What I can say to the member is to emphasize the degree to which the government is seeking to both reduce the dividend by, I think, in two years, up to $100 million a year until such time as…. The dividend payable will reach zero and stay at zero until B.C. Hydro reaches a debt equity ratio of 60-40.

This may go to the heart of the member’s question. I think the notion that the shareholders…. The member is correct. It’s a Crown corporation. It is owned by the people of British Columbia. Its debt is considered self-supporting.

[1435]

We do track that very carefully because were that not to be the case there would be serious consequences for things like our triple-A credit rating. So we do track that very carefully. But the notion of having the shareholders benefit, to a limited degree, from the returns and the success of the Crown agency is, I think, a valid one.

Where I am compelled to agree or acknowledge is that we believe the degree to which the shareholders benefit
[ Page 13198 ]
from the transfer of a dividend should be strongly influenced by the strength of the balance sheet of the organization itself. We would like to see B.C. Hydro’s balance sheet grow stronger, even during this period of time when it is engaged in the single-largest public infrastructure build in the history of the province.

C. James: I think most of the public would agree that the bottom line for Hydro needs to be strengthened. Debt issues need to be addressed. I guess I would ask the minister again: how does borrowing money, which then adds to Hydro’s debt, to pay a dividend to government on one side when the Crown corporation is on this side…? How does that make sense?

I guess I come back, again, to the minister’s point that if there’s a problem with the dividends and the government has recognized that and they’re going to start reducing the dividend down…. When Hydro is having to borrow 100 percent of that money to pay the dividend to government, why wouldn’t the government do that now? Why wouldn’t they end that now?

Hon. M. de Jong: Two things come to mind. The first, of course, is something that the member and her colleagues would have heard from my colleague around the practice that has developed, dating back to, I think, 1990, 1991. I have, again, acknowledged and indicated my belief and my agreement with the proposition, and my role in establishing, that the creation and payment of a dividend should be reduced and phased out. We are doing that gradually, over a period of time.

The second point that I am advised and wish to convey is that there is a difference between borrowing for operations and borrowing for capital. Of course, B.C. Hydro is engaged in the single-largest public infrastructure build in our history and is borrowing largely for that purpose and some other capital programs. They do generate, however, extensive cash returns as a public utility. I’m not sure it’s entirely accurate to try and paint those dollars into separate categories.

[1440]

The operation of Hydro generates a return in the same way that other Crown corporations generate returns, and the practice has been to derive for the shareholder the benefits of that. Having said that, I have acknowledged and said to the member again that, in my view and the government’s view, until such time as the debt equity ratio hits 60-40, the objective will be to phase out the payment of dividends from B.C. Hydro to the government.

C. James: Just to touch on a couple of points the minister made, one about the fact that dividends have been coming to governments since the ’90s…. I think, as the minister himself has said, that for the shareholders, the public, to benefit from a well-run Crown corporation is not something that would be disagreed with. It’s not something we would disagree with, nor is it something that the public would disagree with.

I think there is a distinct advantage to public Crown corporations. There’s a reason that they’re there. It’s so that the public can benefit. I think no one would disagree with that approach. But I think when you have a minister admitting that the money is borrowed to give as a dividend and acknowledging that, it makes the public scratch their heads and say: “How can they pay the government money that they don’t have, that they’re having to borrow, that is adding to their debt?” I think that’s the real crux of the issue, from the public’s point of view. That just doesn’t make good sense.

As I said, if the minister himself is saying that the money is inconsequential to the balancing of the budget, then I think the public is even more puzzled about why the government would continue to take that money. Wouldn’t you shore up a Crown corporation so that later on, when dividends are coming, when it’s making a profit and it’s not in debt, you’d be looking at resources actually assisting British Columbians?

But that’s not the only piece in the area of Hydro that is a tool that’s being used. I think there’s another tool. I’m sure it will be of no surprise to the minister — the issue of rate smoothing and the issue of the rate-smoothing regulatory account that’s in place. I think it’s important to just ask a couple of questions about this piece as well.

For those who are watching, this account allows B.C. Hydro to show future unapproved and yet received revenue in the current reporting period. So for example, money from 2020 — is it being booked as revenue in 2015 and 2016 and 2017? I wonder if the minister could tell us what other jurisdictions this kind of account, this specific kind of account, is being used in.

Hon. M. de Jong: I’m just going to bring in Doug Foster, who, within the ministry, works closely with the corporation. He’s probably best equipped to advise me with respect to some of these questions. So if I might beg the indulgence of the committee for just a moment.

C. James: Does the minister want to move on to another section while we do this, or is he close by? Okay.

[1445]

Hon. M. de Jong: Joining us is Doug Foster from the ministry.

The specific question that the member has asked is: are there other jurisdictions that engage in the exercise of rate smoothing? My advice is that, in fact, there are. Certainly, U.S. utilities engage in a similar practice. The rationale is that as the corporation, the agency, is involved in significant expenditures, capital upgrades and capital infrastructure improvements, we would not ask the taxpayers today to foot the bill for that entirely. This
[ Page 13199 ]
is a mechanism by which the costs associated for that can be spread out over the life and duration of the project.

[R. Chouhan in the chair.]

But the member’s specific question, I believe, was: does this occur in other jurisdictions? I’m advised that it does.

I asked about whether, within the Canadian context of, say, Hydro-Québec…. I was advised that a similar mechanism — it may not be precisely the same — to account over time for the significant expenditure of dollars on large capital improvements is also employed to guard against ratepayers today shouldering the entire burden for improvements that will accrue to the benefit of multiple generations.

C. James: The reason I bring this up is similar to the previous discussion around Hydro and around the issue of dividends and utilizing borrowed money to be able to balance the budget.

In the case of the rate-smoothing regulatory account, in fact, what you are really looking at is that B.C. Hydro then shows a profit through the account, which then gives government a chance to be able to count the net income, the Hydro net income, towards balancing the budget.

So from the public’s perspective, the question that gets raised is, “Is the budget being balanced both on borrowed money when it comes to the issue of the dividend, and on unapproved money, not yet received money?” — which again, from the public’s perspective, raises all kinds of red flags about what the actual finances are and what the actual process is for the finances in British Columbia.

I guess I would ask the minister about counting revenue that has not come in yet — nor been approved yet — and how that is accounted for in our provincial budget.

[1450]

Hon. M. de Jong: I want to try and convey this in a semi-coherent manner for the benefit of the committee. We have a Crown agency that, in the case of B.C. Hydro, is making large, large, significant investments that will accrue to the benefit of generations. It is, in this case, not an exaggeration. The investments that lead to those benefits and to the creation of that asset are large, in the billions of dollars.

So the corporation, as a means of providing certainty and stability around rates, employs a mechanism that is accepted as being appropriate for sharing or spreading those costs out over time. It is an established mechanism for accounting for those expenditures and for the operations.

I’m reminded that the Crown corporation, in this case, doesn’t pay corporate income tax. It doesn’t pay property tax — some grants-in-lieu, in that instance. It enjoys those benefits that other businesses do not. It borrows, when it does borrow, on the strength of the province’s triple-A credit rating.

I suppose that might be a good place for me to offer this observation. To the extent that the member is doing her job, which is to poke and prod about whether or not the manner in which the financial statements for the Crown and Crown agencies are being presented….

I hope the member will take some measure of comfort from the fact that these are the questions that agencies like Standard and Poor’s, like Moody’s, like Fitch, like Dominion…. These rating agencies examine in great detail the state not only of the province’s books but of the Crown agencies that the province has created. They pass judgment on those books and the manner in which they are kept. They offer comments. One by one, we have seen jurisdictions in this country slip down the ladder farther and farther away from that highest rating that we in British Columbia enjoy.

Whilst I think it is entirely appropriate for the member to pose the questions that she has, perhaps the strongest response I can give is to highlight the fact that others besides her, in — if I can say — a less political forum, pose similar questions, offer commentary and do so on a comparative basis. Thus far, they have continued, happily, to assign to British Columbia the highest grade possible.

In the case of our books, I think it was Standard and Poor’s just last month who said that when it comes to transparency, when it comes to fiscal accountability, British Columbia sets the standard in this country. That’s something we’ve worked hard to achieve and, admittedly, are quite proud of.

[1455]

C. James: I understand the minister’s points that he raises. But I think it also, from the public’s point of view…. When you find projects that are exempt from the B.C. Utilities Commission, for example, and don’t have the opportunity for the examination that should happen from the Utilities Commission put in place for that accountability and that kind of independent oversight, it raises all kinds of questions from the public’s point of view. In fact, it defeats the minister’s discussion and purpose in trying to make sure that there’s transparency and oversight when the government refuses to send the projects to the B.C. Utilities Commission.

While I take the minister’s point, I think that the reality and the facts speak for themselves around the lack of transparency and the lack of accountability around projects and around what’s going on at Hydro, which therefore impacts the provincial budget. I think that’s the link that I really want to emphasize today, which is the concern about what appears — not my words; they were the words of a newspaper editorial that said it’s a shell game — a shell game, where money is moved around to appear that things look better than they are when they aren’t.
[ Page 13200 ]

To me, that’s not good fiscal management. That’s not being open and transparent. That’s not living up to the minister’s own service plan, which talks about that. But I think this is one where we’re going to agree to disagree on this particular point.

I want to move on to talk a little bit about debt collection and spend a few minutes on debt collection. We know that changes were made last year around collection of student loans. We had a discussion with the minister when the bill, Bill 13, was passed around the fact that ICBC was now going to be used to collect student loans. The minister talked about the fact that that was going to be rare and that it wasn’t going to happen very often.

I just wondered if the minister could share how many times ICBC has shared information with B.C. revenue services. How many times have they enacted that bill and the ability to utilize the licence provision to be able to collect from students?

Hon. M. de Jong: To the member, who correctly relates the conversation we had, the answer is none. The OIC that would authorize that process to begin — I signed it — was just approved a week or two ago. For the member’s information, it speaks to that tool and its application in the case of student debt and non-traffic-related court fines, so those are the two areas. I think we talked about that when the bill was being discussed.

The tool now formally exists, and at some point over the course of the next six months, I think we’ll presumably be in a position to have a conversation about how it’s been used. But it hasn’t been used yet.

C. James: So a future question, to look at that. I appreciate that. Thanks to the minister.

I want to talk a little bit about the contract that’s in place for revenue services and revenue collection and look at the HP Advanced Solutions — the contract itself. Our understanding is that the contract expired this year. It was first signed in 2004 as a ten-year contract. If I’ve got my numbers right, in 2006, the contract was opened again. Two years were added. It was called a refresh at that point and went from a ten-year contract to a 12-year contract.

I just want to ask the minister specifics. Is that contract expiring this year? Will it be renewed? Is there a process for that? Is it going to be tendered out through that process?

[1500]

Hon. M. de Jong: I’m reminded that the contract…. Well, to cut to the chase, last year the contract was renewed for a five-year period, which takes it to 2020 — so from 2015 to 2020.

The other point I’d want to make is that this is an example of where I think it’s entirely appropriate…. We are working to establish a system where, at that point in time, the contract would have been posted. The member would have the benefit of being able to go to the website and say, “Uh-huh. That contract has been renewed for X amount of dollars, and it is for such and such a term,” and can actually look at the contract itself and look at the terms that are applicable.

The short answer is that it was renewed in, I think, April of last year for a five-year term.

C. James: Just a few questions around the cost of the contract. It’s a little bit confusing for the public who are watching because there are portions of this contract that are paid out. The contract has a service provider’s share, a ministry’s share and what’s called net benefits that come to government.

When the contract was first put in place, the minister at the time said the contract was going to be about $58 million a year. That was going to roughly be the cost of that contract. If we take a look at Public Accounts, where the data comes out, we can see that that’s really ballooned over the last number of years. From the start of the contract at $58 million, we’re now looking at $90 million, $100 million; 2014-2015 lists it as $159.2 million.

I wonder if the minister could tell what justifies that increased cost. How has that increased cost occurred?

[1505]

Hon. M. de Jong: I’ve got some numbers for the member that I’m happy to share. Total payments to HPAS under the contract, actual payments, as at March 31, 2016, are $770 million. The extension, I’m advised, would see additional payments of $267 million to the end of March 31, 2020.

Those amounts account for base fees, performance, change orders and revenue management system completion payments. The bottom line is that given the construct of the contract, as more money was collected on behalf of the province, the contractor, HPAS, secured a higher return for themselves.

So those are the amounts, and that is the anticipated amount going forward, $267 million, to the year 2020.

C. James: Just to speak for a moment about the performance issue that the minister mentioned. I’m sure it’s the same for MLAs on either side of the Legislature. Probably one of the biggest complaints we get in our constituency offices are the wait times for MSP — trying to get through; trying to be able to even reach somebody; being on hold for 45 minutes, an hour; not being able to get through. It got so bad that MLAs were given a special line to be able to get through to assist people, to be able to reach them.

It doesn’t seem to me that those are great performance measures, just based on the volume of individuals who come in and complain in our offices. I know there used to be a monthly report that would come out that was re-
[ Page 13201 ]
quired, that would talk about service level reports to the government. We haven’t seen any of those, or we haven’t seen that those reports are continuing on. I wonder if the minister could talk about if there are monthly progress reports and monthly service reports that still come to the ministry. How is the ministry dealing with those kinds of complaints?

Hon. M. de Jong: The member’s specific question, I believe, was: are there monthly reports that track performance — things like call wait times? I’m advised that there are such reports, and we continue to receive them on a monthly basis. They are received on a monthly basis, and a report card is generated on a quarterly basis.

[1510]

C. James: I just wondered, then…. The Ministry of Finance used to include that in their annual report when they talked about revenue services. It appears, from the research we’ve done, that 2008 was the last time that that measure was included. I wondered why that’s not included anymore, from the Ministry of Finance’s perspective.

Hon. M. de Jong: Well, I’m not actually going to try and speculate as to why the change occurred, but I will say to the member that if the suggestion is that it might be these reports may be legitimate candidates for proactive release by government, I’m inclined to agree.

C. James: I’d say to the minister that I think it is an important indicator. I think it’s a critical indicator to include wait times, particularly with the complaints that come forward. There was previously a graph that talked about the wait times. From my perspective, I certainly would encourage that to be included in the report.

The last piece that I want to touch on for this section is the issue of MSP debt written off. I think the minister will have read the Canadian Taxpayers Federation report that talked about the value of MSP written-off debt. That was something that certainly was out there.

Interjection.

C. James: This is the report from the Canadian Taxpayers Federation that came out, that talked about the value of MSP written-off debt and how much it has increased over the last while. I wonder if the minister would like to make some comments on that.

[1515]

Hon. M. de Jong: I’ve been trying to get as complete a set of numbers as I could for the member. We calculate the amount owing and payable on MSP premiums for the current fiscal year in the range of $2.6 billion.

The member will know that there are two numbers of note. There is the allowance based on historical data that is made for non-collection. That is $149 million — we did the rough and quick calculation — which is just under 5 percent of the amount due and payable.

The other smaller number, though significant as well, relates to the amounts that are actually written off as ultimately uncollectible. That, for the current fiscal year, is believed to be just under $40 million. Both are large numbers. They are a relatively small percentage of the overall amount due and payable but still not insignificant, which I think has generated some of the conversation we’ve been hearing.

The conversation around MSP has tended to focus on the amount that British Columbians are asked to pay and contribute to the health care system. Then there’s a second conversation that I think the taxpayers federation touched on around the mechanism for collection.

This is where you get to have the conversation about (1) should there be a separate levy, but (b) if there is a separate levy, is there a better mechanism for collecting that separate levy? Is it at payroll? Is it as part of the income tax system? These are, I think, relevant and legitimate questions when confronted by the order of magnitude of non-collected amounts.

Then there is the separate conversation about the actual amounts that are levied, but we’re talking about the collection at the moment, so I’ll restrict my comments to that.

C. James: The minister walked into the other issue, of course, which is the cost of collection. Never mind the amounts written off, which, as the minister said, is a large amount in itself, but the actual cost of this contract and the cost of the collection, I think, certainly points — I’ll save that discussion, because we don’t have time to get into it today in estimates — to the discussion needed around MSP itself and the cost of administering, the cost of collection. That alone, never mind the unfairness of the tax, the regressive nature of the tax, the need to make changes.

I acknowledge that the minister made some changes in this last budget that will take place next fall and January, but I think it certainly points to the unfairness of the tax and the need to look at a better approach to utilizing it.

Now, I know we’re getting ready to move on to our next section, so I just want to ask a couple of quick questions to finish up. I know we’ve had this discussion, as well, during legislation, but I think it’s important to make sure that the minister also gets it on the record. It’s related to the prosperity fund and the funding of the prosperity fund in this year’s budget.

I think the first obvious question for the minister is why now. We have had the discussion in previous years. The minister has been very clear in previous years, and the Premier was clear this would be a fund that would be utilized for LNG revenue, when revenue came in.

We obviously have no LNG revenue in the province right now — that is, new revenue coming from a new part
[ Page 13202 ]
of the industry. Therefore, to take $100 million and put it into a fund at this point raises questions from the public’s perspective. I just want to ask the minister why now.

[1520]

Hon. M. de Jong: We had a little bit of this conversation, I think, with some of the budget legislation. The member presented her questions and, dare I say, her skepticism at the time. I don’t think my answers will vary a great deal from what I said at that time.

Firstly, it is to acknowledge that the conversation around the creation of this kind of mechanism certainly arose in the context of the possibilities around creating a new industry and a new form of industrial activity, that being LNG. I’m not going to suggest otherwise. It is also patently clear that we continue to await the first final investment decision that would see the construction phase of the liquefaction facilities begin.

It is not correct to say that there has not been LNG-related activity. The investment in the upstream that has taken place — billions and billions of dollars’ worth — is, in part, very much directly related to a burgeoning LNG industry, but we don’t have a final investment decision just yet.

So why now? Firstly, the government did make a commitment to create this mechanism by which a legacy fund could be created — took that obligation seriously and wanted to fulfil it. Secondly, here we are enjoying relatively strong and stable growth. We are, by every measure that is presented, leading the country in that regard — which is not to say that the benefits of that are accruing to every single family. They are not. It is not to say that the benefits of that nation-leading growth are accruing to the advantage of every single region of the province, because they are not yet.

Nonetheless, it is true that we are leading the nation in economic growth. It is true that we are leading the nation in job creation. It is true that we are leading the nation in the lowest unemployment. It’s the first time, I think, since 1976 that we’ve been able to boast of that — the first time since 1961, I am advised, that British Columbia will lead the country in back-to-back years in economic growth.

On balance, British Columbia as a jurisdiction is performing well economically. Our challenge, of course, is to ensure that the benefits of that accrue to people and families in all regions.

In addition to that, on the strength of that growth and coupled with the fiscal management and discipline that we have shown, we regularly post budgetary surpluses in a way that no other jurisdiction in the country has been able to over the last three or four years.

In that context, what I said to the member a few months ago and will repeat for the committee is the idea of taking what by budgetary standards is a relatively small amount of money — not necessarily so for real people, and I include myself, oddly, in that category…. To take a relatively small amount of money out of our chequing account and put it into a savings account to begin the process of establishing that fund is, I think, entirely legitimate, entirely appropriate.

I will acknowledge, in anticipation of what may follow, that there are always areas that are in need of more money and more spending. So the query or the question or the criticism or the admonishment that says, “But why didn’t you spend it here?” or “Why didn’t you spend it there?” — yes, there is always a very compelling case to be made for why those moneys weren’t spent somewhere else.

[1525]

The thing I would say in reply to that, however, is that as optimistic as we are and as positive as we are, there may come a day when British Columbia does not enjoy the advantages of leading the country in growth or where we may be confronted by some severe economic challenges that visit upon the whole country or the whole region. In that case, it will be of benefit to those that are confronted and governing at that time and to society as a whole….

It will be of benefit, in these relatively positive economic times for B.C., which we have achieved in the midst of some very fragile economic circumstances internationally, if we have tucked away a few dollars that the government of the day can tap into to help stabilize whatever challenges are being faced at that time.

If we are correct and if the work that has been undertaken comes to fruition and pays off and there is a final investment decision, then the incremental additional revenues that will flow from that will have a home, will have a place. But in the meantime, we’ll have demonstrated that we are not simply resolved to spend all of the revenues that come into government and that we do see merit in saving for more difficult days ahead — albeit with what is, initially, a very modest amount.

I’m sure to the member that I sound like a broken record — probably an unconvincing one at that, for her — but that remains the rationale. I believe it’s a legitimate rationale for the steps we have taken with respect to the establishment of this fund.

C. James: It’s not the broken record; it’s, again, the contradictions. The minister mentioned LNG revenue. There’s a difference between activity and new revenue coming in. Certainly, the impression given was that this fund would be put together for new LNG revenue, not activity to do with the LNG industry.

I also want to just touch on the point that the minister made that there may come a time when British Columbians don’t enjoy the advantage of a strong economy. I think the minister has described it before as “difficult days” may come. I think that it’s important to note that those difficult days are there for lots of British Columbians. Part of the challenge and part of the difficulty with a fund like this is that there are lots of British
[ Page 13203 ]
Columbians who, in fact, don’t enjoy the advantages of the strong economy right now.

The minister mentioned areas we’re leading. Well, we’re also leading in child poverty. We’re leading in personal debt. We’re leading in two cities which have been described across the country as the worst cities for housing affordability. Personal debt. I think those are the areas. When the public takes a look at $100 million and says, “I’m not benefiting,” or a senior citizen isn’t benefiting because they aren’t able to get the kind of care that they need…. I think the contradiction is the issue where I would profoundly disagree with the minister on priorities.

Just my last question, and then I’ll turn it over to my colleague. It’s related to how the fund is allocated. The majority of the fund goes to debt. The minister was clear about that: “Debt reduction is a priority.”

That again makes people wonder why it went into a separate fund. If the government is going to pay down the debt, they can do that any way they want. But 25 percent of the fund can be used for core government priorities, and it doesn’t appear to have any ties around it. It doesn’t appear to have any structure around it. I just wanted to ask the minister my last question, around accountability.

What transparency and what accountability will be there for how the decision is made for that 25 percent of funds? Will those resources be allocated to ministries? Will they go through the estimates process in ministries? Will the ministers, then, be accountable for making those decisions? Will the Premier be accountable for making the decision on that 25 percent? What are the accountability mechanisms in that area?

[1530]

Hon. M. de Jong: I think I understand the member’s question. That is: where there is a decision made to withdraw…. By the way, I answer the question not wanting to leave the impression that any such decision has been made for the fiscal year we’re in or the fiscal year ahead.

There is — and I think this is clear from the legislation itself and the discussion we had around it — the obligation for a Treasury Board process — beyond that, though, a reporting out, not just at public accounts but at quarterly financial updates and service plans for ministries for whom proceeds are assigned.

I think the member would agree that that will, in all likelihood, trigger an opportunity for…. Well, it would trigger an opportunity for the process that we are engaged in now — the estimates process for a more detailed scrutiny of what those decisions are and the purpose behind the allocation.

I am satisfied that, in the event a decision is made by a future government to affect a withdrawal, there is an obligation to disclose that in a very open and transparent way and an opportunity for the chamber and this committee to both scrutinize and criticize the decisions that are made.

D. Eby: My first questions are in relation to credit union guarantees for deposits in British Columbia.

It was in 2014 that FICOM commissioned a report about B.C.’s credit union exposure to risk and mortgage markets. It found that 67 percent of B.C. credit unions’ total loans are personal real estate–backed assets, and home mortgages represent half of consumer debt in B.C. The report said that: “Default risk is a particular concern given the continuously climbing housing price in the greater Vancouver area.” That was 2014. The housing market’s appreciated in some areas by 100 percent since then.

[1535]

It was late last year that a Nobel prize–winning economist, Robert Shiller, was on the Business News Network to caution Canadians in Vancouver and Toronto about the risk of the collapse in the housing market. It was echoed by the Royal Bank of Canada’s economist, who cautioned that Metro Vancouver’s housing market is “potentially detached from reality” as well as “dangerous.”

The Minister of Finance knows that B.C. guarantees our credit union deposits against default. Credit unions are also more likely to engage in higher-risk lending than traditional banks, including real estate. The question is quite straightforward in that context: what measures has the minister put in place to limit B.C. exposure to credit union collapse resulting from mortgage defaults, and what is our potential exposure to credit union defaults?

Hon. M. de Jong: I’ve got some data for the member that I’ve been provided with. If I don’t capture all of what he is pursuing with his question, I’m sure he’ll alert me to it. I am advised that 93 percent of the total loans are backed by real estate. That accounts for about $53 billion. Credit unions hold deposits of about $58 billion for almost two million members.

The question that the member asked was: what is the exposure? I’ll answer it this way, because I don’t want to leave the impression that the regulator is sitting here worried about an imminent collapse. The legal exposure is something that the member referred to. The government, in 2008, offered an unlimited deposit guarantee to credit unions, so it would be incorrect for me to ignore that fact, and it’s one of the reasons that the province and the regulator are very active and diligent about ensuring that the requirements are being met.

Now, I’m just reminded by the regulator that they do, as a matter of course, stress test on the basis of different scenarios. The regulator advises me that, in the most recent example of that, they contemplated a scenario in which residential property values diminished 40 percent and commercial properties diminished 50 percent — a dramatic shift in value. The regulator advises that the system of safeguards that is in place and capital requirements for the credit union movement within the province are robust enough and sufficient to accommodate that manner of sudden shift.
[ Page 13204 ]

I don’t know if that even begins to touch on the question that the member has asked. He’ll tell me, I’m sure.

[1540]

D. Eby: It does go some way. The question was: are there any new policies that have been put in place to manage risk since the dramatic run-up in property values in Metro Vancouver, which most commentators acknowledge increases risk.

I want to read you a headline from today’s Canadian Business magazine, talking about the Vancouver house-price surge, advocating for an independent agency to regulate runaway speculative investment.

“The Vancouver house-price surge is exactly the sort of thing the independent agency should handle. It is a national issue. Everyone knows who will be called on to clean up the mess if it bursts. The banks would feel it and likely would curb lending. CMHC would feel it because it has insured most of the mortgages Vancouverites have used to buy their inflated assets.”

Of course, it’s not just CMHC. It’s the government of British Columbia, through our guarantee to credit unions.

The question is: were there any new policies or are there any new requirements that have been placed on credit unions in this dramatic run-up in property values to ensure that our tax dollars are protected from having to bail out, for example, a small credit union or a medium credit union that doesn’t have the protection in place? We know the range of credit unions in B.C., from the very small to the very large, like Vancity.

Are there any new measures that have been put in place, new capital requirements or anything like that to deal with this run-up in property values?

Hon. M. de Jong: I can alert the hon. member and the committee to three specific areas and then another conversation that I had with his colleague earlier in these proceedings that I think is relevant to the discussion that we are having.

Within the last 24 months — three areas where policy has been altered, amended, enhanced to address the area of risk. One is as it relates to residential mortgage underwriting; the second, the question of internal capital targets for credit unions; and the third, governance standards or governance issues, particularly standards of competency for boards as it relates to risk assessment.

Those are three areas where the regulator, in concert with credit unions, is working to effect changes to address questions of risk.

There’s another area though, and the member mentioned it and may not have had an opportunity to hear the exchange I had with his colleague earlier as part of the FIA review. That is the fundamental discussion we are having with credit unions about the deposit guarantee itself. There are a variety of views that have been expressed.

I won’t take more time than necessary except to say that I alerted the member’s colleague to the fact that that process, which is very active, I am hoping to see brought to a conclusion this fall. The credit unions themselves have offered recommendations to the government as part of the financial statutes review, including a recommendation as it relates to the deposit guarantee that was put in place in 2008.

[1545]

It is very much an issue on the front burner and something that I expect he and I will be discussing in the months ahead.

D. Eby: I don’t want to put words in the minister’s mouth. I just want to be clear. The minister has listed three areas that definitely are areas that would be of concern if you were worried about risk: mortgage underwriting, capital requirements and governance. But my question was: are there any new policies in place at credit unions to manage the risk related to the run-up in housing prices? So I understand the minister to say: “No, there is work underway, but there are no new policies in place.” Is that correct?

Hon. M. de Jong: I’m sorry. I didn’t mean to be opaque about this. The areas I’ve referred the member to are guidelines in the sense that they represent the regulators’ expression of expectations of the credit unions. They have been developed over the last 24 months. I don’t know if that qualifies as new for the member, but they are new to that extent. They represent recent expressions by the regulator of expectations that credit unions must now govern themselves by.

In the case of my reference to the deposit guarantee discussion, it is entirely fair and accurate for the member to say that nothing has changed, but I did want to alert the member to the fact that the conversation is taking place and is something that credit unions are very engaged with.

D. Eby: Those requirements that the minister talks about in the last 24 months that have been modified or somehow communicated by the regulator — are those published anywhere? Are they available to the public, or would the minister provide them to me?

Hon. M. de Jong: I’m advised that they are on the website.

D. Eby: I will have a look, and I will check in tomorrow with the minister if I’m unable to find them.

The minister has set out the regulations. Just for background for the minister, I’ve been told before that stuff is on the website that’s not on the website. So I always double-check. I would appreciate it if the minister would commit, if it’s not on the website, to provide copies.
[ Page 13205 ]

The minister has told me that he’s got better regulations in place. He’s managing risk at the credit unions with the regulations. Are the regulations actually being policed and enforced? Are they being tested? Is the credit union’s activity being tested against the regulations by the regulator?

The reason I ask this is that there was an Auditor General report that said that there was a staff shortage at FICOM that’s dated back two years — this Auditor General report was released in 2014 — and that FICOM had completed only seven of 17 on-site reviews of credit unions. Four more were rolled over, and 16 planned on-site reviews have been reduced to three.

It would take over 14 years for FICOM to review all of B.C.’s credit unions. FICOM lacked staff expertise and competencies because they were unable to hire. They were increasingly reliant on contract resources. They desperately needed experienced and knowledgable staff to oversee the work performed by their own staff and any contractors.

The minister knows this isn’t just in relation to credit union risk around mortgages. This is around policing the real estate sector. This is around policing mortgage brokers. The question to the minister is quite straightforward. Where does the situation for staffing sit now, given that, at the time of the audit in 2014, FICOM had 25 staff vacancies, representing 35 percent of positions in its financial institutions division?

[1550]

Hon. M. de Jong: I can answer quickly and then take the follow-up questions. The member’s colleague and I had a brief exchange about this. I, at that point, indicated to her and the committee that FICOM was one of two areas where we have experienced challenges in terms of vacancies.

The ministry averages about 5 percent. In the case of FICOM, it fluctuates between 25 and 35 percent. Yes, it is an area of concern. Yes, we have found that people with the unique skill set that is required to do this work are very much in demand, and there have been challenges in terms of retaining those employees. So between 25 and 35 percent vacancy.

D. Eby: The minister knows…. Ms. Rogers came to testify at the Public Accounts Committee. When she testified — Ms. Rogers is the head of FICOM — she said:

“The Auditor General noted that the staffing constraints were not budget-related but rather stemmed from other constraints outside FICOM’s direct control, and that’s why the recommendation” — the recommendation to fix this situation — “was directed to the Ministry of Finance and not to FICOM or the commission. “Government supported the recommendation” — that was in 2014 — “and as I mentioned earlier, the Ministry of Finance subsequently requested that the Public Service Agency work directly with me and my management team to address the issues and develop a plan. Some work has been done in the area over the summer.”

Now the minister tells me that we are in the same situation. The Auditor General is clear that this is a Ministry of Finance responsibility, that the budget is there because the minister knows the money comes from the industries that are regulated. The industries are sending money over to the Ministry of Finance to hire the very inspectors and investigators and auditors that they want to ensure their industries are protected, and the minister stands up here and says that he has still failed to fill those vacancies.

This is a creature of the Ministry of Finance. It is entirely in his responsibility. Why has this happened?

Hon. M. de Jong: Well, there’s no question it’s been a challenge. I’m also prepared to acknowledge that, to the extent that some of the pressure relates to the private sector being in a position to offer more attractive salary packages, the responsibility for that ultimately rests with the government and, in this case, I suppose, ultimately rests with the Minister of Finance.

There’s also no question that through this period of time, when we have been asking the women and men who work in the public service to accept very, very modest wage increase packages, I have felt a certain obligation, a real obligation, to insist that we apply a similar standard and a similar approach in other areas and with other agencies. To that extent, I accept responsibility.

I can tell the member that the Public Service Agency, in respect of the specific circumstances, did establish a team, hiring compensation experts, to work specifically with FICOM to identify a means by which the pressure could be alleviated. That has led to some modest salary adjustments over the course of the past couple of years. We have approved three new executive positions. But there’s no question that these are specialized areas.

[1555]

We have been and I have been very much alive to the fact that we are asking hundreds of thousands of other people in the public service to make do with very modest increases and have asked the same. I think that is probably attributed to some of the pressure and some of the recruiting practices that we have seen.

I do feel that obligation to, on the one hand, ensure that the agency has the people it needs to perform its function but, on the other hand, ensure that the remuneration that is offered, or increases to that remuneration, is not wildly out of sync with what we are asking hundreds of thousands of others to accept, who work in the public sector.

D. Eby: I think the minister saw the effect of understaffing and the impact on public confidence in the real estate sector where, suddenly, everyone was quite startled by the fact that there were serious issues that needed to be dealt with.

I don’t understand. Maybe the minister can clarify this for me. I understand that industry sends money to
[ Page 13206 ]
the Ministry of Finance to pay for this regulation. They are funding their own regulation. If that’s the case, then I’m trying to figure out why it would be that the minister would be suggesting that somehow this was connected to the broader public service. They want the regulation to be done. They’re paying for the regulation. It’s the minister’s job to say: “Here’s how much it costs to do the regulation that has to be done to protect your industry, to protect its public reputation.”

I think the minister is giving a very convincing argument for why this needs to be an independent agency and not within the Ministry of Finance. It seems that the minister is actually blocking the hiring of the regulators that the industry is paying for.

The question is: how much money did these industries send to the Ministry of Finance for regulation? How much was actually spent on regulation, and was any money returned into general revenues of the provincial government?

[1600]

[R. Lee in the chair.]

Hon. M. de Jong: I’ve got the numbers for fiscal year 2015, where I can advise that there were recoveries — I’m talking about credit unions and the trust sector — of $6.3 million, expenditures of that amount of $4.9 million, leaving an amount of $1.4 million. To the extent that any of that amount was not expended, any unexpended amounts were returned to the consolidated revenue fund.

D. Eby: The minister knows that the superintendent is responsible for a number of different areas: mortgage brokers, realtors, the insurance industry. What were the recoveries from those sectors and the expenditures?

Hon. M. de Jong: For insurance, recoveries of $2.9 million and expenditures of $2.7 million. For real estate and mortgage brokers, $3.1 million and expenditures of $2.2 million.

D. Eby: Were there recoveries from any other industries that helped offset costs for the superintendent, and what were the expenditures relative to those industries?

Hon. M. de Jong: Pensions of $2.2 million and expenditures of just under $1.4 million.

D. Eby: By my total, the government underspent recoveries from industry by almost $3 million. Can the minister explain how it could be that industry is sending money to government to regulate it, and the government underspends by $3 million — returns that money into general revenue, doesn’t spend it on the regulators that the industry is compelled to pay? I’m sure that some of them are more enthusiastic than others about being regulated.

They underspend it by $3 million at a time when they still haven’t dealt with the report of the Auditor General that says that this is leading to risky situations where credit unions, in particular, in that report…. I think we can all look at real estate and say, “Boy, there were some serious problems there” — underspent by $900,000. Who knows what’s waiting in pensions, underspent by $800,000.

Why would we be underspending so dramatically when industry is sending this money for the express purpose of hiring regulators?

[1605]

Hon. M. de Jong: A couple of things come to mind. The member referenced the report of 2014. I can, of course, point out to the member, as of April of this year, the progress that has been made on those 11 recommendations.

Six related to policy and practice improvements. They have been implemented and are completed or substantially complete. Three of those 11 recommendations related to developing a deposit insurance payout plan, and those are in progress. It is, I’m told, a relatively complex project and will take some more time. Then two recommendations relate to addressing the staffing challenges that FICOM has experienced.

Members already heard me indicate that there have most certainly been challenges involved in recruiting staff to that agency. I can advise the member and the committee that that is primarily responsible for the issues that the organization has experienced on the staffing side. Believe me, by far the preference on the part of myself and government would be for the organization to be fully staffed with the professionals who possess the tools necessary to fill those positions and do the work.

I’m reminded, as well, that the fee structure that governs how much a credit union must remit to FICOM is governed and influenced by the size of the organization. Credit unions have experienced steady growth over the last number of years, and that has influenced — in a positive way, from the point of view of FICOM, and, I suppose, in a negative way, from the perspective of the credit union — the amount that they are remitting.

Amounts paid to FICOM have gone up. The ability to recruit the talent necessary to fully staff to the degree that we would like — those challenges have increased as well. But the objective, I can assure the member, is to see those positions fully staffed with qualified personnel and to make use of the other resources that are clearly available to do that.

D. Eby: We’re — what are we? — seven years since the collapse in 2008 in the United States, where we learned, I hope, a very valuable lesson about the importance of regulation and enforcement of regulation in the real estate market. Now we’re seeing our own dramatic run-up in real estate values in British Columbia.

[1610]

At the same time, chronic, years-long — that audit reported in March 2014, done in 2013 — understaffing of the regulator under this minister’s watch. And I don’t want to mention it, but the chair of the Premier’s fundraising committee benefiting significantly from the run-up in real estate values — Mr. Rennie: significant donations to the minister’s party from the real estate industry.

I put these things together, and I have to ask the minister: why would he not move regulation out of his ministry? Why would he not end any kind of question about his inaction in staffing the regulator? Why would he not move this FICOM watchdog, like all the other watchdogs, out of the Ministry of Finance and let them set the rates? Let them set the rates of what needs to be paid in order to ensure good regulation.

I think that we’ve learned from the Real Estate Council of B.C. that you can have great rules on paper, but if they’re not enforced, things get crazy. I think we need a regulator that has enough people on the ground to go and do the undercover investigations, to go and do the audits, to go and do the reviews, and you cannot do that. The Auditor General was unambiguous. You cannot do that.

It’s been a couple years, so…. The Auditor General said that “the lack of staff is stalling the effectiveness” of FICOM’s work. Although they’re establishing appropriate risk ratings, “the lack of staff is stalling the effectiveness of this work.” That’s two years ago, and the problem hasn’t been solved.

To the minister: why hasn’t he moved this agency out from under the umbrella of the Ministry of Finance where they can do the work independently without any concern that they won’t be able to hire the people they need because the minister has decided it’s somehow connected to broader public service issues, even though it’s funded by the industry itself?

Hon. M. de Jong: Thanks to the member for his questions and submission. Again, I don’t think he was here earlier when we had the conversation about the review that is underway with the industry that is statutorily obliged to take place and that is designed to consider fundamental structural changes that may be appropriate, and may be even more appropriate in the context of a particular set of market circumstances.

I think there are at least two issues at play, and I think the member is attempting to link them in a certain way. I have readily acknowledged that FICOM, the regulating body, has encountered and experienced challenges recruiting and retaining some of the skilled personnel with the unique skill set necessary to perform the work of the regulator. I have readily acknowledged that.

The question about the placement of the organization within government is an interesting and maybe relevant conversation to have. But to suggest, as I think maybe the member is, that it somehow is linked to what is taking place in the market is something I profoundly disagree with. I can assure the member that I’ve been doing this long enough that I have no sense of proprietary turf protection around any particular agency.

The objective is to ensure that we have a regulator and a regulating body in place that can do the job. It has for many, many years found a home within the…. Since the 1980s or beyond that — 1989, I think. I don’t know if it was Minister Curtis that…. Anyway, the 1980s.

[1615]

The notion of finding a different home or a different structure offends me in no way whatsoever. I am more skeptical, however, and ultimately reject the member’s suggestion, if this is one that he’s making, that somehow I am inclined — or the government is inclined — to be territorial as a result of trying to protect the interests of others. Our interest here is to ensure that we have a regulator in place that is equipped and able to perform the functions that are assigned to it statutorily in the public interest — full stop.

D. Eby: All wonderful ideas, if the minister hadn’t been chronically understaffing FICOM for years now and clawing back millions of dollars from industry revenues paid to FICOM for the purposes of regulation into general revenue. I agree with the minister: an effective, well-staffed, independent regulator — critically important; not what we have in British Columbia. The regulator is not independent, not well staffed. Don’t take my word for it; take the Auditor General’s word for it.

In the meantime, the minister is clawing back the money paid for regulation into general revenue. Clearly, we’re not yet at the level that he aspires. I wish him luck. I hope that he acts, in light of his lack of territoriality, and passes that surplus that he’s taking — so-called surplus; the regulatory revenues — over to an independent body that will actually hire the auditors that are needed.

It’s not without consequence. It’s not like we haven’t seen the impact of understaffing. The real estate industry has taken all kinds of hits. An unlicensed real estate practice — I can advise the minister if he doesn’t know — is absolutely out of control in Metro Vancouver. It’s absolutely out of control in the CRD. People are, with impunity, dropping leaflets at the doors — thousands of leaflets: “I’m not a realtor. I want to buy your house.”

Now, we’ve seen the Alberta regulator literally chase an unlicensed realtor into British Columbia. He says that they pursued him ruthlessly. He says that they made his life miserable. They fined him $100,000. They’re threatening to put him in jail for two years. That’s what happens in Alberta when you’re an unlicensed real estate agent. Yet in B.C., assignments are openly sold by non-realtors on Craigslist, and people are dropping professionally printed leaflets at the doors of people across Metro Vancouver and the CRD.

My question to the minister is: how many FICOM staff were allocated last year to the issue of unlicensed
[ Page 13208 ]
real estate practice? How many staff were allocated this year to unlicensed real estate practice? Has there been any change at all in light of changing market circumstances and realities on the ground?

[1620]

Hon. M. de Jong: Look, there’s just one thing. I appreciate that the member has views and, as part of the exchange, wants to express them. I thought earlier, though, he, in referencing the Auditor’s report…. I may have heard it incorrectly, or he may have been thinking of one thing and talking about another thing. But the suggestion that the regulator, the superintendent, does not operate in an independent manner….

I feel obliged to respond on the record and say that based on my experience and my conversations with others, it would be unfair and inaccurate to suggest that the regulator — I am speaking in the third person — who is here in these proceedings and in this chamber, has performed her duties independent and free from influence. I think that’s important to say.

As I said, I may have been mistaken in what I heard the member allude to. But I don’t at any point think the Auditor General has ever impugned the superintendent, the head of FICOM, for acting in a way that isn’t independent and discharging her duties responsibly in that respect. The member has thoughts and ideas about how the structure could be altered — fair enough. We’ve had a conversation about that.

I did want to get that on the record and, in so doing, have talked myself out of the answer I wanted to give to the member’s question, which he may have to remind me of now.

D. Eby: I know that the minister is a lawyer, and he’s familiar with case law around independence of the judiciary, independence of a public inquiry. One of those key measures of independence is the ability to have the resources necessary to do the job that’s assigned. And in this matter, this regulator is not independent.

This regulator does not have the resources that are necessary to do the job that’s assigned. That is determined by the minister, and those are not my words. Those are the superintendent’s words in testimony to the Public Accounts Committee. “The Auditor General noted that the staffing constraints were not budget-related but rather stemmed from other constraints outside FICOM’s direct control.”

That’s why the recommendation was directed to the Ministry of Finance, to the minister, and not to FICOM or the commission. So I’ll take the minister’s point. I certainly would never want to suggest, without evidence, that the minister had somehow interfered with the superintendent’s decision or the superintendent had somehow interfered in some inappropriate way with one of her investigators.

But there is no question that the independence of FICOM is dependent, in part, on having adequate resources to do the job, which is not an independent decision but which is made by the minister. I think the minister would acknowledge that. In fact, the minister is failing on that, because he’s underspending by $3 million the resources given by industry for the purposes of regulation. In my opinion, this is not an independent situation. The minister is deciding not to spend that money on staffing. Very clear.

My question, which the minister missed, is: how many staff are assigned to the issue of unlicensed real estate agents, people acting as real estate agents, without the appropriate licencing — a core responsibility of the superintendent for real estate — in an exploding issue in the Lower Mainland and the CRD, where people act with impunity? That’s in comparison to the situation in Alberta, where they’re pursued across the border and threatened with jail.

The question is directly related to this question of independence. If there’s not the resources to look into credit union stability, if there’s not the resources to do other things, if we’re underspending dramatically what should be spent on staffing…. How many staff are assigned to this critical area? How many staff were on it last year? Has it changed at all?

Hon. M. de Jong: Just to maybe try to close the loop on the earlier conversation and then get to the question and ultimately the answer to the member’s last inquiry.

[1625]

Look, the constraint, if that is the appropriate term, that exists for agencies that work and are related to government, on the fiscal side has, I acknowledge, applied directly to the remuneration that is being offered.

I have to say that every year, a couple of times a year, the member or his colleague, the ever-diligent member for Victoria–Beacon Hill, will look at compensation levels for officials within government and will point to the amounts being paid and to increases. That’s the scrutiny that those matters deserve. They’ll be very quick to point out when they see amounts that are inconsistent with the increases that have been offered to, for example, the unionized workforce, the hard-working women and men that work with the public and on behalf of the public.

I will say again that I acknowledge that to the extent there has been pressure on the recruiting side, some of that relates to the constraints that have existed with respect to the pay scales and the pay grades that are applicable and may well have to be adjusted. But I am also mindful of the fact, and must point out to the committee, that in the past, when we have made those adjustments, there has frequently been withering criticism from members of the opposition for how it is that certain
[ Page 13209 ]
select people, for certain positions, can be singled out for a significant increase above and beyond what others are receiving in the public service.

Now, to the question the member has posed in respect of the full-time dedicated personnel that are assigned to interact with real estate organizations, the Real Estate Council. Until last year, there were two full-time personnel. That has been increased by an individual, and there are now three full-time personnel who dedicate themselves on a full-time basis to that work.

D. Eby: As much as I would like to relish the notion that the minister lives in fear of withering criticism coming from this side of the House, and it restricts his actions in regulating the financial sector in British Columbia — because he’d love to do it, but oh god, the NDP might get up and say something bad about him — I have trouble believing that that might be the case. If anything, it’s probably a convincing argument for moving the agency outside of the minister’s purview, because industry is paying for the regulation.

This is not like any other public sector area. Industry is paying for the regulation that they are not getting. It is like a hidden tax for three million bucks this year, where the minister claws money over into general revenue from that money that comes from industry. So if FICOM was independent, the minister would be out three million bucks, according to his numbers.

Interjection.

D. Eby: It’s $3 million.

The minister would be out $3 million, but then the new superintendent could set pay rates and hire the people needed, and if they needed more money, they could go back to the industry and say: “Look, you’re not paying enough for the regulation that’s required for industry. We’re going to hire the necessary people.”

I don’t understand why regulation is a political issue. I don’t understand why this government, which continually says how affluent and extraordinary our situation is, doesn’t have the money for good regulation, to hire the necessary people to regulate the financial sector. I find that a very, very strange situation indeed, as well as the suggestion that it’s because the minister fears criticism from the opposition benches.

Mortgage brokers are also policed by the superintendent’s office. Can the minister tell me — a same question: what are the staff resources dedicated to policing the mortgage broker industry in British Columbia?

[1630]

Hon. M. de Jong: On the mortgage broker side, I’m advised that the establishment is for ten FTEs. There is one vacancy, and there are nine fully engaged at the moment.

D. Eby: Can the minister tell me how many investigations were commenced into unlicensed real estate practice and mortgage brokers in B.C. in the last fiscal year, and how many fines or prosecutions resulted from those investigations?

Hon. M. de Jong: The most recent year that I have data for on the real estate side is 2015 — 98 complaints. Of those, there was formal enforcement action that was posted on the website in two instances, voluntary compliance in eight, warning letters in five instances and referrals to external agencies in ten cases, and 33 investigations are ongoing.

For mortgage brokers, the equivalent number is 116. In that case, formal enforcement action in five instances, warnings in 16, conditions on registration in four, and open investigations remain in 19 instances.

[1635]

D. Eby: How do those numbers compare to last year?

Hon. M. de Jong: Sorry. That was last year. I take it the member means the year previous. In the case of real estate, the complaints went from 54 to 98, and in the case of mortgage brokers, not as wide a disparity in 2014 — 109, which grew to 116 in 2015.

D. Eby: The minister refers to referral to outside agencies. Who are those outside agencies?

Hon. M. de Jong: Examples would include the police, Real Estate Council or the Securities Commission.

D. Eby: Can the minister detail, in the two cases involving real estate and the five cases involving mortgage brokers, what the penalties or consequences of the enforcement actions were?

Hon. M. de Jong: In light of the member’s earlier warning, I’m hesitant to say they are available. Apparently, they are posted publicly, but I’ll endeavour to get them in hard copy for the member.

D. Eby: There definitely are decisions on the superintendent’s website. I assume that those decisions that are posted, then, are the same ones that the minister referred to when he said there was formal enforcement action taken. Is that right?

Hon. M. de Jong: I’m advised that the decisions I referred to from 2015 remain accessible and available on the FICOM website.

D. Eby: Does the minister have similar statistics in relation to staff levels for pensions, insurance and credit union enforcement?
[ Page 13210 ]

Hon. M. de Jong: I take it the member is looking for similar numbers on investigations.

D. Eby: The minister anticipates me. Yes, I will be asking about that as well, so if that’s the sheet he has in his hand, I’d love to hear about that. But I’m also curious about staffing levels in those sections.

[1640]

Hon. M. de Jong: Personnel-wise, in the pensions area, ten; in the credit unions area, 24.

What I don’t have available — and I’ve canvassed this already — is the follow-up data which relates to investigations — the number of complaints and investigations. I’m told that there are occasions when a complaint is received about a credit union that does lead to the creation of a file. We just don’t have the data readily available, and it may be that I can get that for the member for tomorrow.

D. Eby: I thank the minister for that. And with respect to insurance…?

Hon. M. de Jong: Sorry, I should have included that. That is included in the 24 related to the credit unions and trusts.

D. Eby: On my list, I have 46 full-time employees involved in investigations and, I guess, auditing at the agency. Is that correct?

Hon. M. de Jong: I’m advised that that is essentially correct.

D. Eby: Just for clarity, I asked the question just to make sure that we’re not double-counting — that there might not be one employee, for example, that was involved in real estate investigations but was also doing credit union audits, and that kind of thing. Just to make sure that the point of my question is understood.

Hon. M. de Jong: I am advised, again, that that is correct. These are not the same people wearing different hats.

D. Eby: If I might just have a couple of minutes from the minister to gather my thoughts and make sure I don’t have any more questions about FICOM. I think I’ve got them all on the record, but I just want to make sure before we send off the relevant staff.

Hon. M. de Jong: I wonder…. With the committee’s indulgence, it might be a good time for a break. I move recess for five or ten minutes.

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

The committee recessed from 4:43 p.m. to 4:53 p.m.

[R. Lee in the chair.]

D. Eby: I thank the minister for those minutes to gather myself, because there were a couple more questions.

In October of 2014, FICOM commissioned a report by Mingxin Li, titled Residential Mortgage Probability of Default Models and Methods. What it is, is a summary paper of a number of different models of different types of stress testing.

The minister talked about stress-testing credit unions for the impact of the institutions’ residential mortgage loan portfolios in the event of a negative external consequence of some kind, stimulus of some kind. The stress test — I presume, as this is pretty high-level stuff — is meant to tell us whether or not the credit union would collapse if the given stress was present.

[1655]

Now, the paper presents several different models, six different models, for stress testing. I have a couple of questions about the paper. One is: why was it commissioned? The second is: was the intent that we would choose one of these models or that we would apply all of these models? If it was to choose one, which one did we choose and why?

Hon. M. de Jong: I’m going to answer the first question first — the why. I will, firstly, indicate I have not read the report. I am advised that the report was designed to solicit information on the methodologies and models that are available to conduct a stress test of deposit-taking institutions and financial institutions — the regulator in this case, of course, having responsibility for credit unions.

As opposed to conducting actual stress tests on B.C. credit unions, one or all of the 42 credit unions operating in B.C., this was designed to obtain information and research about the various approaches to that task that exist and establish what the best practices were on that front. That’s the why. That’s what motivated FICOM to initiate the work in the first place.

I think I remember one of the other questions. I think the member queried: which one was selected? I’m advised that FICOM didn’t settle on one methodology over the other and say: “That’s the one we’re going to employ.” Rather, it examined in their entirety the various approaches and intended to draw or has drawn from the various approaches that are out there. It didn’t just select one of the options and say: “That’s the one we’re going to follow.”

If there was a third question, the member will have to remind me.

D. Eby: I think the minister got them all. If I understand that properly, then, this paper was meant to inform
[ Page 13211 ]
the policy changes that were brought in over the last two years with respect to governance, capital levels and mortgage underwriting, to ensure that credit unions would pass these stress tests. Is that an unfair generalization? Am I trying to simplify this too much?

[1700]

Hon. M. de Jong: I should confirm that we’re talking about the same report. The one that a staffer advised me on the basis of was dated 2015. Is that the…? I thought I heard the member say 2014, so I want to make sure we’re talking about the same document.

D. Eby: The one I’m talking about is titled Residential Mortgage Probability of Default Models and Methods by Mingxin Li from the risk, surveillance and analytics, Financial Institutions Commission. It’s a research paper dated October 2014. I understand that the researcher is a PhD candidate at SFU, if that helps provide any…. I’d be glad to send it.

Hon. M. de Jong: Right. We are talking about the same report. It was released or posted in March of 2015 so that, I think, is the discrepancy there.

There certainly is an interplay, I’m advised, between the work that the researcher did and the survey of approaches. I am, however, told that the motivating factor behind the commissioning of the work was to create a document that could be provided to credit unions themselves and provide them with information and background and perhaps influence best practices on the part of credit unions.

There undoubtedly was an overlay and a cross-pollination within the office, but the rationale or the motivation behind the work was to provide a collation of the approaches that have been developed and to make it available to the credit unions — I presume all 43 credit unions.

D. Eby: Well, I sure hope they can make more sense of it than I did. As I said, it’s some pretty high-level stuff.

We’ve talked about the superintendent’s investigations on unlicensed realtors in British Columbia. This question relates to licensed realtors in British Columbia. In the absence of the independent advisory role — which was sort of an ad hoc thing responding to specific circumstances — in good times, what is the role of the superintendent in relation to licensed real estate agents, given that they have self-regulation? Where does her office come in there?

[1705]

Hon. M. de Jong: The three broad areas of authority and jurisdiction under the act for the superintendent…. The first relates to the unlicensed. We already talked about that.

There are two other areas where the superintendent has a role. Firstly, to review and appeal, where appropriate, any disciplinary decisions of the council. Those are appealed to the Financial Services Tribunal. That is one area. Secondly, to investigate licensee misconduct that poses a detriment to the public interest in circumstances where the council purposely chooses not to take disciplinary action.

D. Eby: Were there any instances where the superintendent, in the last year, took action to investigate a situation where there was a detriment to the public interest and the Real Estate Council declined to take action?

Hon. M. de Jong: With respect to the two areas of jurisdiction, in the first instance, reviewing and appealing decisions, that authority has been exercised, I’m told, on a number of occasions. In the second instance, with respect to the general investigating authority, there is no case in the last year where that power was exercised by the superintendent.

D. Eby: Am I summarizing that power correctly in that this is a situation where the Real Estate Council requests the superintendent to do this or where the superintendent is acting as a superintendent and overseeing the discipline decision, saying: “No, in this situation, you should have imposed a penalty”?

[1710]

Hon. M. de Jong: I apologize for the delay, but I wanted to answer the question accurately. The power is contained in 48(1) of the act, specifically 48(1)(b).

The question that I thought the member was driving at was whether a prerequisite to the launch of that investigation was a request from the council. The answer is no, it does not require that. It does, however, require, in exercising that authority, that the superintendent notify the Real Estate Council. That’s under 48(3).

Then there are some other notice requirements that have to be issued as well. But there does not appear, in the act, to be any prerequisite for a request from the council as a prerequisite to exercising the power.

D. Eby: As the minister knows, there’s law, and then there’s the policy that agencies often use to guide their discretion in these kinds of situations. So is there a policy in place that guides the superintendent about when she or her staff would decide to intervene in a decision that had been made or not made by the Real Estate Council, given that the realtors have self-regulatory authority?

Hon. M. de Jong: I think I understand the question, but I take it that it relates to the exercise of the earlier power — reviewing decisions that flow from a council decision.

Here is a bit of a synopsis of the areas that the superintendent would examine in deciding whether or not to
[ Page 13212 ]
exercise that power of review or appeal. Did the council’s disciplinary decision consider the number of transgressions of the subject of the complaint? Did it consider the licensee’s discipline history? Does it align with council and Financial Services Tribunal precedent — the Financial Services Tribunal being the appellate body — such that it is consistent with precedent?

[1715]

Did it appropriately consider aggravating or mitigating factors? Do the penalties appropriately use the range of penalties available? For example, are technical breaches penalized at the lower end of the scale and more serious breaches penalized at the higher end of the scale?

There’s sort of a list of areas that the office would apply in determining whether or not to exercise that review or appellate authority under the act.

D. Eby: Has the superintendent ever exercised this power, and if so, when did that happen?

Hon. M. de Jong: Yes, that is the case.

D. Eby: When did that happen? Is the decision still posted on line?

Hon. M. de Jong: About six months ago. In that case, the decision was to facilitate the appeal. The decision is available. It’s posted by the Financial Services Tribunal, which is the adjudicative body that would have rendered the decision.

D. Eby: Did I hear the minister correctly that it was six months ago?

Interjection.

D. Eby: I thought I asked if the minister had exercised that power in the last year. Oh, you know what? I was conflating the…. No, I don’t think I was.

I was asking about the superintendent looking over the shoulder of the Real Estate Council and changing a decision. I thought I asked whether it had been exercised in the last year, and the answer was no.

Hon. M. de Jong: It’s why I asked the member specifically if we were back to the original. My answers in the last series related to the exercise of the review and appealing authority of the superintendent, not the separate investigative power.

D. Eby: In respect of the second power, has the superintendent ever exercised that power?

Hon. M. de Jong: I am advised that the present superintendent has not exercised that power. I have information that indicates it may have last been exercised in 2005.

D. Eby: I thank the minister for that clarification.

The superintendent has made some public comments, I believe, in a speech to the mortgage brokers about changing regulations around disclosure. Can the minister explain the thinking behind this change in policy — what’s motivating it, what the results will be for British Columbians who deal with mortgage brokers and when that’s going to happen?

Hon. M. de Jong: There has been a bunch of discussion around this. The superintendent and the office have initiated a conversation, and the rationale goes like this. The question that’s at play here is really one of consumer awareness and consumer protection.

[1720]

Mortgage brokers, first of all, play a very important role and a very legitimate role in facilitating financing for individuals — in some cases, corporate entities. Where the concern has arisen is where a potential borrower approaches a mortgage broker who may have secured a particular arrangement with a lender. There’s nothing wrong with that, but where a financial incentive exists on the part of the broker to direct traffic in a certain direction or to a certain lender….

The idea that has been advanced by the superintendent is that in those circumstances, the consumer — the eventual borrower, who is seeking advice from the mortgage broker — is entitled to know that, is entitled to have the knowledge of that disclosed to them. Now, to be sure, some mortgage brokers have taken exception to that.

They’ve probably contacted the member. Certainly, a few of them have contacted me and, I think, other members of the House to say: “Okay, but that’s not fair, because if you go to a bank, they have incentive programs with some of their employees, depending on the number of mortgages they write. If we have to do this, then the banks should be obliged to do the same thing.”

I haven’t made final decisions about this in terms of regulatory change. I will say this. I do see a difference. I do see a difference from the consumer’s point of view. If I go to a broker, part of what I’m expecting is that the broker will direct me to where I can get the best deal based on my unique set of needs. If the broker has a particular arrangement that might influence her or him to send me in a particular direction, I probably want to know that.

Conversely, if I go to a bank, I may be dealing with someone within the bank who is receiving incentive payments based on performance, but I made the decision to go into that bank. I made the decision to walk into that lender’s office and choose that lender. I’m probably less concerned about what the arrangement is for remuneration among the employees. That’s one perspective. That’s my perspective at the moment.

But these talks are ongoing. Discussions are ongoing. The mortgage brokers have a perspective, and I think it’s
[ Page 13213 ]
slightly different than the one I just laid out. The member may have a perspective, as well, and I’m happy to hear it.

D. Eby: Well, absolutely. I thank the minister for his question.

I think consumers deserve all the information that they can get when they’re involved in transactions and someone’s receiving payments they may not have disclosed — or in a consolidating industry where there are incentives that may not be apparent to the consumer, and they’re being directed in a certain direction.

But also, I’m very alive to the concerns of the mortgage broker industry. If there’s a way to provide the information to the consumers with the most cooperation and support possible in the industry, I’m sure the minister will find that somehow, which is his job in government. I’m sure we’ll hold him to account on both ends of that.

That brings to the end my questions in relation to FICOM. Before I wrap up, I just wanted to say thank you to the superintendent and her staff for coming and assisting the minister on this, and also to recognize that the superintendent is leaving British Columbia for greener pastures in Ottawa, which may be a reflection of the staffing challenges we’ve canvassed in some detail here today. I hope we’re able to find, certainly, an equally able replacement.

I know that the superintendent and I were off on the wrong foot when I called for an investigation into her office in a question period, but I’ve certainly grown to appreciate many aspects of her work, although I do have critiques. I am appreciative of her work, for example, in relation to mortgage brokers and in other areas. Certainly, when she attended Public Accounts on a credit union issue, she was very forthright with our committee. I know British Columbians don’t see a lot of work that FICOM does. Even as the spokesperson, I don’t.

[1725]

So for whatever that work is that’s taking place behind the scenes to ensure that we avoid various disasters — in pensions, in real estate, in insurance, in credit unions, in such critical areas of peoples’ lives — I wanted to thank the superintendent for her work in British Columbia and recognize that on the record.

I have questions about real estate. I have questions about gaming policy and enforcement branch and B.C. Lottery Corporation. I imagine I could finish B.C. Lottery Corporation and gaming policy and enforcement branch by close today if that would be useful. Or we could do real estate, which I imagine I could finish by close today. So it’s up to the minister — whatever, staffing-wise, would be the best direction.

Hon. M. de Jong: May I, recognizing that the superintendent is precluded from speaking for herself in this chamber, thank the member for his generous words and acknowledgments of the work that she has undertaken. It is one of those very important positions where the incumbent performs their duties largely anonymously until such time as issues arise that place them in the spotlight, but it is a crucial role.

Ms. Rogers has acquitted herself well, with full dedication, and professionally. I’m grateful and will join with the member in wishing her well in her duties elsewhere. She will, I’m sure, thoroughly miss the opportunity of coming to visit us once a year and many other aspects of the job.

With respect to the member’s suggestion…. Firstly, it would be my intention, based on what the member has said, to release the superintendent and folks for the duration of the estimates process. I would suggest that what would be helpful is that we move to gaming and B.C. Lottery Corporation, because they, too, have travelled from across the waters and would be in a position then to return to their homes.

D. Eby: I’m going to begin with the gaming policy and enforcement branch. I received a copy of the report the minister tabled today in the Legislature, the annual report, and that’s what I’ll be referring to in my questions. I’m on page 26 of the new annual report. It’s a table of incident reports related to gaming: theft, fraud, loansharking, cheat at play, illegal gaming, suspicious transaction reports and something called GCA violations.

I’m actually going to start at the bottom. My question relates to GCA violations. Can the minister explain what a GCA violation is, and can he explain why they appear to be up 735 percent over last year’s numbers? The numbers I have are 385 GCA violations last year. This year, it’s 3,215.

[1730]

Hon. M. de Jong: To ensure that we all know who’s participating, the head of gaming policy and enforcement branch, John Mazure, is behind me to the left. Jim Lightbody, immediately behind me, is from the B.C. Lottery Corporation, and Amanda Hobson, also from the Lottery Corporation, is joining us.

[R. Chouhan in the chair.]

While we’re gathering some information to respond to the member’s question, I should say…. The member has received the copy of the report. I regret that the copy was filed today. It may well have been on my desk for several days. I apologize for that, but I thought it would be worse to table it tomorrow than today. I apologize that he got it this close to the estimates but would have regretted it more if he got it the day after the estimates.

D. Eby: While the minister is getting that information, I just wanted to say thank you to the staff for coming and welcome. Also, I had the pleasure, the minister may
[ Page 13214 ]
not know, of going out to the B.C. Lottery Corporation, where they gave me a wonderful tour of the facility — the computer room and all kinds of things — and answered every question that I had. So actually, my questions for BCLC will be shorter than normal as a result. I just wanted to thank them for the outreach on that point.

Hon. M. de Jong: Well, GCA is the Gaming Control Act. I can fill in the member on what we’re dealing with in terms of the nature of the incidents. What I’m still trying to ascertain is a more fulsome description of what types of incidents or alleged violations might be captured by that number.

D. Eby: Just for the minister’s further information, if there’s somebody off site who’s watching and maybe shooting information over this way, with respect to the Gaming Control Act violations, despite them being up 735 percent, recommendations to Crown counsel are zero. Last year there were 37. The charges and administrative actions are down significantly from last year’s, and strangely, something called intelligence and police assistance is up dramatically.

I have a whole lot of questions in relation to this column of Gaming Control Act violations — why the numbers vary so radically from last year. It might be helpful, while the minister gathers information, to move on to the next topic, and we can come back to it. I am going to be asking additional questions about increases related to this chart.

On page 18 of the annual report, it’s set out that there’s…. And I may be reading this incorrectly. The minister will correct me, I’m sure, if I’m wrong. It appears to set out that 87 percent of charitable gaming, when audited, is non-compliant.

[1735]

It’s divided between severely non-compliant and just generally non-compliant, and it’s actually getting worse, not better. Last year 76 percent were non-compliant. So my question is: why is non-compliance up 10 percent on the year? Why is it getting worse, not better? And why are these numbers so remarkably high in terms of compliance with the act?

Hon. M. de Jong: As the member knows, first of all, a significant amount of the proceeds generated by lawful gaming activities in B.C. make their way to charitable organizations. I’m reminded that about 6,500 charitable organizations across the province benefit from revenue generated by gaming activities in the province.

The branch conducted audits in ’14-15 — 391 audits — and that gave rise to the findings of non-compliance. Although each audit would have revealed something unique about the particular organization involved…. There are strict requirements on the part of a charitable organization of the documentation they must have in place regarding their society, regarding financial statements, — in some cases, audited statements — proper documentation around the receipt and expenditure of the moneys. These are all laid out.

In a perfect world, each time a charitable organization received funding, they would have all of this material available, up to date and in full compliance. By the way, if the member is going to point out that in some cases the amounts of money are significant and sizable, he’s quite right. In some cases, they’re very small. In other cases, they are sizeable amounts — six figures in some cases — that go to these charitable organizations.

The challenge has been, with many of these organizations — some of them quite small — that they are volunteer driven and rely on the energy and passion of volunteers, and sometimes that material, the documentation, isn’t entirely up to date.

I will acknowledge that were we to apply the strict letter of the regulations, a lot of organizations wouldn’t receive their gaming contributions. Instead, what the branch has endeavoured to do is make clear to people that they have these obligations, make clear to these charitable organizations that they have these obligations and encourage them to bring their files up to date, ensure that the material is there and that they have complied with the conditions upon which they are receiving this money.

The member is correct. There’s lots of room for improvement with respect to the organizations that are receiving charitable gaming proceeds in B.C.

[1740]

D. Eby: Just a question of clarification. The report speaks of…. With respect to these audits, it talks about 391 audits inspections of “community gaming grants and licences.” When I read this, I thought those were audits of a community casino or a 50-50 draw or something like that. But as I understood the minister, this is community gaming grant audits of organizations that receive money through a grant.

What are the licences? Why does it say “community gaming grants and licences”?

Hon. M. de Jong: It sounds like we’re both right. I focused my remarks on the distribution of the $135 million in community gaming grants, and the audits touched on that. But there is this other dimension of the work that the branch does with respect to non-commercial licensing activities — the 50-50 tickets at the hockey game, the raffle tickets. Do we still do community casino nights?

Interjection.

Hon. M. de Jong: Yes, apparently we still do those. Don’t tell the Lottery Corporation.

Those two are accredited, and the audits touched on those. That would have been included in the 300-plus audits that were conducted.
[ Page 13215 ]

D. Eby: Just above that section there’s a discussion about commercial gaming audits. In 2014-15, the commercial gaming audit team completed 59 audits of B.C. Lottery Corporation and gaming service providers. But there is no discussion of what the outcomes of those audits were.

My question is: in line with the charitable gaming audits, what was the outcome of the 59 audits of BCLC and gaming service providers?

[1745]

Hon. M. de Jong: I apologize for the delay. I’m advised that the bulk of the 59 audits referred to under the heading “Commercial Gaming Audit” would relate to casinos, service providers operating under the auspices of B.C. Lottery Corporation and community gaming centres. I have asked and am not in a position to indicate whether or not there….

I have to verify that there were no incidents of either moderate non-compliance or severe non-compliance. The advice is no, but I do want to verify that before I offer an ironclad assurance to the member of that. These are audits of the major commercial gaming centres in the province that take place on a regular basis and, whilst they identify issues from time to time, are generally operating in compliance with the requirements.

D. Eby: I thank the minister in advance for his work to track that answer down for me.

There’s a page that discussed problem gambling and discussed calls to the help line, had statistics about calls to the help line, referral to programs and outreach sessions. Now, all of these were down in the year, despite gaming being up overall — calls to the help line for problem gambling, down 12 percent; referrals to programs, down 8 percent; 4 percent fewer outreach sessions.

My question is: why are all of these trend lines going the wrong way?

And I’d tell the minister that the relevant statistics are at page 28 of the annual report.

[1750]

Hon. M. de Jong: To the member’s question relating to the help line or referrals to the problem gambling program. In those two instances, there does seem to be a moderate year-over-year decrease. I am advised that it is not a budgetary issue, and it is not a wait-list issue, because in the case of identifying or someone self-identifying, the service is readily available without any kind of a wait.

The one area where there may be…. I can’t say this authoritatively. There was a modest decrease in the amount of advertising that was done around the availability of the program, and perhaps that accounts for the slight drop. I can’t say that authoritatively. But there is a decrease, and it is not attributable to either a wait-list or lack of resources or budgetary constraints.

That’s maybe the best answer I can give the member at this point.

D. Eby: The GameSense representatives that are at the casinos — this report says that they’re under contract, that they are independent of either gaming policy and enforcement branch or B.C. Lottery Corporation. So who is it that receives these contracts? Is it the service provider that provides that under contract, or is it some other third party?

Hon. M. de Jong: Like a lot of things in the gaming sector, an interesting web. The individuals that…. The GameSense advisers are contracted by gaming policy and enforcement branch. Their contract is with the gaming policy and enforcement branch. They work within the casino, within the facility operated by the service provider, but their oversight is and they report to representatives of the B.C. Lottery Corporation, who are also on location in the gaming facility.

[1755]

They pointedly have no contractual or reporting relationship with the service provider, with the casino operator.

D. Eby: Is this a fixed-rate contract, where everybody is going to be getting the same amount, or is this one company that provides all of the GameSense advisers, or these individual social workers? How do these contracts work? How many are there? How much are they worth?

Hon. M. de Jong: Individual contracts. There’s no single umbrella organization with whom GPEB contracts. The contracts for services are with the individual advisers, and they attend at and staff the 17 casinos operating around British Columbia. There are discussions taking place now about expanding that into the community gaming centres.

D. Eby: On page 18, it talks about that there were 495 inspections of lottery retailers. What were the outcomes of those inspections?

Hon. M. de Jong: I think if I understood the member’s question correctly, he was referring to a compliance assessment back in 2013-14. Of 482 lottery retailers at that time, 186 of them tested were found to have sold lottery products to minors. There were some penalties issued — written warnings, ticket violations — and those reviews were posted on the GPEB website.

[1800]

In June through September of last year, there was a follow-up investigation across the province, although it was smaller, to be sure. Eighty retail locations were approached, and at the conclusion of that investigation,
[ Page 13216 ]
compliance was 90 percent — not perfect but, happily, an improvement over the earlier 61 percent. In that case, warnings were issued to the 10 percent of the retailers who were found in violation.

D. Eby: I certainly thank the minister for that information. My reference was to page 18 of the Gaming Policy and Enforcement Branch Annual Report 2014-2015. Underneath the “Commercial Gaming Audit” heading, there’s some bold text that says: “See appendix A.”

Just underneath that it says: “The audit program also completed 495 inspections of lottery retailers throughout the province.” This must be, then, in addition to the June through September follow-up. Can the minister tell me what the outcome was of the audit program of 495 inspections of lottery retailers?

Hon. M. de Jong: I think the distinction here is that I was referring to, previously, a specific, focused audit with a particular objective in mind. I’m advised and reminded that the gaming policy and enforcement branch, on an ongoing basis, conducts inspections. This would have been part of that. It continues. It take place every year.

I don’t have…. I did ask whether, in the course of the inspections, violation tickets would be issued. I’m told that they would. I don’t have — and I don’t expect I will get immediately but can for the member — an indication of in how many instances a violation ticket might have been issued as part of that inspection process.

D. Eby: In appendix D, “Sources and Distribution of Gaming Revenues,” which is under the…. Again, I’m referring to the annual report. There’s a disbursement of money that I understand the gaming policy and enforcement branch is responsible for overseeing. Maybe not, but it’s listed here anyway: “Local economic development.”

I’m wondering where I would find a list of the local economic development programs that have been funded, let’s say for the last five years. Is that available on line somewhere? Where would I find that list of projects that have been funded and the amounts involved?

[1805]

Hon. M. de Jong: The amount that the member has referred to, I’m advised, relates to a specific but older program that was established at the tail end of the 1990s around destination casinos.

There are three remaining participants: Starlight Casino in New Westminster, Lakeside in Penticton and Casino of the Rockies in the Ktunaxa traditional territory.

This amount is set out separately to recognize the fact that those amounts are paid pursuant to that program and those agreements.

D. Eby: How are those amounts calculated each year? They seem to fluctuate fairly significantly. In 2013, it was $22.1 million. Now, their last couple of years — $9.3 million to $9.4 million. Are they based on net win, or what is the…?

Hon. M. de Jong: The agreement provides for a percentage of net win. But under this agreement, it was higher than the 10 percent. It was 17 percent?

Interjection.

Hon. M. de Jong: In the neighbourhood. There was a premium beyond the 10 percent.

But it capped out. So in the case of one of the casinos…. I can advise that the agreement in this case from ’07 provided for, under this, $40 million. That casino has, at March of this year, $1.9 million remaining under that program. When they have collected that amount, the program ends, and they revert to the reduced amount.

[1810]

That may account for the — I’ll have to check — significant reduction that the member noted.

D. Eby: It’s hard not to notice, while we’re on the topic of disbursements from gaming revenue, that there are fairly significant increases in transfers to the consolidated revenue fund. It seems like local governments are doing well under the program, and yet community organization grants have flatlined for the last number of years at $135 million. One of the groups, for example, that’s seen steadily lower funding is district parent advisory councils. In 2010-11 they got $14.8 million. Last year they got $11.4 million, down 22 percent.

But overall there’s a decline in the number of groups receiving grants. There was a high of 6,797 groups receiving grants in 2007-08. Now there are somewhere around 5,000 groups receiving grants. Similar declines in funding: $147 million in 2007-08, and we’re down to $134 million year over year. Fewer orgs getting money, less money being given, while money continues to grow going into the consolidated revenue fund.

The minister knows the deal that was struck with the charitable gaming sector when the province took over gaming, which was that there would be returns to community organizations that could no longer do the community casinos that they used to do or the types of fundraisers — bingos and that kind of thing — they used to do.

So why is it that gaming revenues are going up for many of the players here, but for community organizations, for the last number of years, this has been a constant $135 million resulting in fewer and fewer groups receiving funding?

Hon. M. de Jong: I do have data that might be helpful.

[1815]

The community gaming grant program in 2010-2011 was just over $68 million. By 2012, that was $120 million. Last year it was just below that at $119.6 million. So it has, as the member said, remained fairly stable.

Parent advisory councils have remained…. In 2011 it was $10.8 million; today it is $12.6 million. So it’s gone up slightly.

The overall amount, as the member pointed out, is just a hair below $135 million.

Interesting numbers around the application count. In 2010, just below 5,900; in ’15-16, just over 5,500. Then I have numbers for…. The approvals have been largely unchanged — just about a 90 percent approval rate for applications.

I think that there are two aspects to this. There is always a pressure. And we do try to guard against…. We have said to organizations that there’s a large subscription list of groups that are seeking access to these funds, and the distribution is conducted, and we try to be fair about the distribution of that.

I think the member’s point relates to growing the pie based on increased overall revenues from the gaming sector — fair enough. I think there is an argument to be made on that front — that as the pie grows, perhaps the benefits of that can accrue to charitable organizations that are already accessing $135 million but would like to access a little bit more.

I guess the only assurance I can give the member in that respect is that it will be part of the consideration that goes into the preparation of the next budget.

D. Eby: Hopefully, we can get through these B.C. Lottery Corporation questions. I’m still hoping for an answer on those increases in the GCA violations.

The government did an internal audit of the B.C. Lottery Corporation. In the audit, they note that when they talked to B.C. Lottery Corporation about anti-money-laundering initiatives, they were told the following: “In order to streamline reporting and better facilitate the new requirements, B.C. Lottery Corporation is implementing a new anti-money-laundering IT system in 2015. Expected results include increased capacity and improved accuracy, reporting and identification of high-risk persons and patterns of activity using data analytics.”

Now, the minister might recognize this from question period, where he undertook to provide additional information on this. Has the minister gathered that information on the IT system? Was it actually implemented? How much did it cost?

For the minister’s reference, that was page 39, I believe, of the government’s internal audit and advisory services audit of the B.C. Lottery Corporation.

[1820]

Hon. M. de Jong: The member is correct about the development of the software. It relates to the obligation that the Lottery Corporation has, and takes very seriously, to work with FINTRAC to track anything that is regarded as a suspicious transaction. There is a criteria that triggers, as I understand it, whether something qualifies as a suspicious transaction and the obligation to monitor the client, the author of that transaction.

When the corporation, I’m told, cast about to find whether there was technology or software available to assist with that work and assist in their interactions with FINTRAC, they discovered that none existed. They set out, made the decision, to develop a program of their own.

They retained the services of Statistical Analysis Software, who are, I’m told, a leader in providing this kind of statistical analysis software to financial institutions, including three of the five large chartered banks in Canada. The original budget for this work was $7.2 million. The most recent estimate is that the work will be completed for less than that, at just below $7.1 million.

But the work has…. It’s new work. It’s new territory for the company, for the software company, and the Lottery Corporation. Rather than having been completed in 2015, the estimate is that it will not be on line until just a little bit later this year, in 2016.

D. Eby: The minister can correct me in his next answer, but I understand the name of the company is Statistical Analysis Software, which seems very on the nose, if that’s actually what it is. That’s what I understand the name of the company is, just to confirm that with the minister.

B.C. Lottery Corporation’s operating costs are forecast to be $10.3 million over budget in 2015-16. I note that already in the budget, there was a $23.5 million year-over-year increase from the previous year. Why has there been a $33.8 million increase from the previous year in operating costs at B.C. Lottery Corporation? Why are they so far over budget?

[1825]

Hon. M. de Jong: One of the things we talk about, and I do with the corporation, is their comprehensive cost ratio, which in the budget was set at 43.3 percent. They’ve come in at 42. Now, I don’t say that to distract from the question that the member has asked. They have done a good job keeping those administrative costs under control and within the ratio set as part of the budgeting process.

Where the numbers have been influenced is as a result of the application of accounting rules, which have seen what has previously been accounted for on the capital side of the ledger, particularly with respect to ancillary costs associated with technology and even labour associated with technology upgrades, transferred into the operating side of the budget. The member will notice that though the operating side is up, the capital side of the ledger sheet is down.

I might also point out that, overall, the Lottery Corporation’s return to the taxpayers, the shareholders,
[ Page 13218 ]
via the funds transferred back to government are up, and — I don’t think I’m telling tales out of school — the numbers for ’15-16 look positive and will be reported out in the public accounts in just over a month or so.

D. Eby: Just before we note the hour, I wanted to thank the staff that were here.

I still have concerns about the gaming policy and enforcement branch numbers related to the gaming violations, but I don’t see any point in keeping the B.C. Lottery Corporation folks here any longer. Any questions, I trust the minister would provide me in writing if necessary. With respect to the gaming policy and enforcement branch, I’m in the minister’s hands on that.

Hon. M. de Jong: I thank the member. I think I understand specifically the nature of his interest on the gaming policy and enforcement branch and the gaming act statute.

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

Motion approved.

The committee rose at 6:28 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. M. de Jong moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:29 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
SOCIAL DEVELOPMENT AND
SOCIAL INNOVATION

The House in Committee of Supply (Section A); S. Hamilton in the chair.

The committee met at 1:35 p.m.

On Vote 41: ministry operations, $2,739,239,000 (continued).

The Chair: We’ll call Committee of Supply, Section A, to order and recognize the Minister of Social Development and Social Innovation.

Hon. Michelle Stilwell: Thank you, Chair. Nice to see you today.

The Chair: Very nice to see you.

I recognize the minister for — the member for — Nelson-Creston.

M. Mungall: I’ve got a year to wait, hon. Chair, before I get the title of minister, I’m sure.

My first question, just picking up where we left off yesterday…. I had a few more questions on the topic of the PWD application process, and then we’ll move on to some other topics. I just want to get in a couple of questions that I wasn’t able to yesterday before the end of the day.

The minister will recall that the announcement for what was Bill 3, this legislative session, highlighted that the ministry was reducing red tape in terms of the persons-with-disabilities application process for about 1,000 people. I think it’s good that the government acknowledges that the application process for PWD has some red tape attached to it. We canvassed some of those aspects yesterday.

I’m just wondering, at this stage, if the ministry is looking at the application process for the other 7,000 people that are applying each and every year — if government is looking at ways to reduce red tape for their process, whether it’s something that they experience as they apply or something that maybe they don’t see but is happening within government itself.

[1340]

Hon. Michelle Stilwell: To the member opposite. We, obviously, are always open to suggestions and ideas. If she has some that she would like to bring forward, we’re open and willing to look at those suggestions when it comes to the application form.

I know we talked yesterday about the length of the application form, the 28 pages. I just thought it would be important to ensure that the member opposite knows, as well as those at home and anyone who would be possibly filling out the application form, that the amount of pages that an individual applicant actually fills out is three pages of the application. Five pages are a part for the physician to fill out. The remaining eight pages are for the assessor to complete, for the third part of the application.
[ Page 13219 ]

An assessor is someone who is one of the defined medical practitioners that we had talked about yesterday as well. It could be a medical practitioner, registered psychologist, certified school psychologist, registered nurse, registered psychiatric nurse, occupational therapist, physical therapist, social worker, chiropractor or a nurse practitioner — as, we mentioned yesterday, is the member’s husband.

We also mentioned yesterday…. We talked a little bit about asking for assistance and ensuring that people had the opportunity to acknowledge that there is support from our staff. On page 1, right at the very top, right after an individual puts in their name, birthdate and address, the question is: “Do you need help completing this application?” So it is something that is evident for individuals to get the support that they need to help fill out the application.

As we look to always improve the services that we deliver to our clients, we work with our advocates and keep in strong communication with them and take their advice as well.

M. Mungall: Just hearing the minister’s response…. I appreciate it. What I’m hearing, though, is that at this time, while the ministry is always open, there’s no formal process or no formal review that is being taken place to look at the application process for the other 7,000 who are applying for PWD every year. Is that correct?

Hon. Michelle Stilwell: There is no formal process. As I mentioned, it is discussions that we’re having with the advocates and that we’re open to those discussions and working through any ideas and suggestions to improve the application form.

M. Mungall: Just wondering if those discussions have yielded any specific direction for the ministry to be taking at this time.

[1345]

Hon. Michelle Stilwell: The form, actually, is not really seen by the advocates as a priority right now. They know how to support the clients with the form. They’re familiar with the form. They are, however, having active conversations on improvements to the PPMB application process, and that’s something that we are working on with them.

I think it’s important to note that over the last few years, 80 percent of the applications received were approved and 20 percent of them were denied. It’s important to note that the vast majority of these were approved at the initial decision point — 72 percent of them at the initial approval point — and that 80 percent were approved after reconsideration.

M. Mungall: Quickly, just to make sure I understand. Of the 20 percent that are denied, that is after they’ve gone through an appeals process and everything. Or is it that on first application, 80 percent are approved, 20 percent are denied, and then that 20 percent is able to go through the appeals process? If that is the case, then how many of the 20 percent are ultimately approved?

Hon. Michelle Stilwell: Eighty percent are ultimately approved at the final.

M. Mungall: I’m just going to move on from the application process within income assistance to service delivery, which is supporting the roughly 200,000 clients of the ministry.

The minister is obviously aware of the issue around the 1-800 number. It’s something that we brought up last week during question period. It’s something that organizations got together and actually filed an official complaint — or a request, perhaps, is the appropriate term — with the Ombudsperson’s office to investigate the call wait times with the 1-800 number. Their concern, and what they are putting forward, is that people, effectively, are not getting access to the ministry to address their concerns — whatever their concerns may be.

Now, we did a recent freedom-of-information request and received information that the average wait times in November 2015 were an hour and 13 minutes; in December 2015, an hour and 10 minutes; and then in January 2016 of this year, wait times had gone up to a record high of one hour and 47 minutes.

I was shocked when I saw those numbers. I had asked the minister about this very same issue over a year ago when wait times were just at 34 minutes, and we thought that was inappropriate and too high. The minister assured me at the time that wait times were at ten minutes. Coming to this, I don’t know where she’s getting the ten minutes from.

If the minister can tell me — not now, not what’s going on right at this moment…. I’d like to know, in the last year and a half, when call to wait times were ten minutes on average per month.

[1350]

Hon. Michelle Stilwell: As the member knows, I am always committed to improving the quality of the service that we deliver through the ministry and ensuring that we are treating people respectfully and fairly.

She asked about, specifically, last year’s records of average wait times. I don’t have all the average wait times for her for the entire date back to what she requested. We’d be happy to give that to her. However, I do have many of the results, the more recent results, because of the significant changes that we’ve made to the phone call centre and the changing of shifts.

We now have a shift that runs from 4 p.m. to 6 p.m. to allow the staff to ensure that we are calling back individuals who are waiting for their callback and so that there
[ Page 13220 ]
isn’t a backlog the next day when they come in. I can tell the member that from April 1 to May 9, the longest time anyone had to wait was one hour, and that’s including the callback.

[1355]

We have to acknowledge, of course, that there are certain peak times and longer wait times than normal, depending on the time of the month and on certain days that include things like cheque-issue day or some of the times…. Over the last year, significant policy changes were made — for instance, the single-parent employment initiative, the gifts and assets changes, the changes that we have made within the ministry — where we did receive more frequent calls.

The call centre receives about 130,000 calls each month and 1.6 million calls each year. That being said, our goal, of course, and our service standard are to ensure that we are responding to people as quickly as possible, trying to aim for the ten-minute time period.

Many businesses around the province, around the country, have now gone to the phone service, and I would say our delivery model to date is better than you would see from some of those businesses that people use. Knowing that they’re not waiting on hold, our clients have the opportunity to have a callback feature and go on with their daily business — not sitting on the phone, waiting on hold, using up their minutes. They have the option to get a callback feature so that they would save those minutes on their cell phones.

In the last months, April and May, I have several average wait times that…. For instance, on April 7, the average wait time was 2.4 minutes, and the longest wait time for an individual was 9.5 minutes. When we looked at the April to May overall average, we saw 18 minutes and 43 seconds. That includes the cheque issue day as well as the callback feature on what people were waiting. The overall average time was 18 minutes and 43 seconds.

We have made those significant changes, while we try to ensure that we are delivering the best possible service. The phone service has become quite popular with many of our clients, and the call centre sees increased activity all the time as people are choosing it as an option to receive information and to talk to those individuals who can provide them with the information they need. I’m very proud of those changes that we’ve made.

M. Mungall: Well, the reason why the phone service is popular is because people have to use it. The minister characterizes it as a choice, but I’ll tell you. When I talk to people — many, many clients, in fact, every PWD or income assistance client I talk to — they always tell me about how they are directed to the 1-800 number all the time. They’ll go down to the office to try and talk to somebody, and they’ll be: “No. You’ve got to call the 1-800 number.” So it’s not popular by choice, and that would be a mischaracterization to suggest so.

That being said, I just want to make sure that I heard her correctly. I heard that from April 1 to May 9 the wait time was an hour. Now, she mentioned the callback feature. Does she mean that it was a one hour wait to get a callback or that, whether somebody got a callback or they were on hold, they were there for an hour?

Then she mentioned that over an April-May period, the average wait time was 18 minutes. So if she can just clarify which it is. Is it 18 minutes or one hour?

Hon. Michelle Stilwell: We tracked the shortest and the longest, and then we get the average. The shortest callback wait was zero, the longest was one hour, and the average was 18 minutes and 43 seconds.

M. Mungall: When something is an hour, what’s going on there? Why is it taking so long? The minister said that there are busier days and so on around cheque issue day. Why not increase staff for those days?

We all know what day cheque issue day is. Year after year it shows us that those are going to be busy days. so why not increase staff on those days to ensure that people are not having to wait an exceptionally long period of time, often in urgent situations, because something, perhaps, is wrong with their cheque?

[1400]

Their rent is dependent on that. Their ability to pay bills is dependent on that. Why not look at those heavy call days and seek, specifically, to reduce the wait times for those days?

Hon. Michelle Stilwell: Overall, I have increased the staff. I think the member opposite asked me in question period, prior to these estimates, where I informed her of the number of staff that have been increased to help ensure that we are delivering the service that we do.

In reference to the comments she made in regards to cheque issue and ensuring that individuals do get their cheques in time so they can pay their rent, that is why we have a policy in place to ensure cheque issue day happens at least two business days before the end of the month. If the end of the month falls prior to that, it gets bumped to the week ahead of that to ensure that there is plenty of time for individuals to do their banking and to have their rent paid on time.

As far as the one-hour wait time that the member opposite made reference to, I would say that waiting one hour is a reasonable amount of time when you’re sitting at home or when you are waiting for the answers that you need.

[1405]

We are trying to, of course, deliver the best service we can while also balancing tax dollars to ensure that we’re being accountable in that way as well. We always want to maximize the impact that we have on our clients to provide the best service.
[ Page 13221 ]

M. Mungall: Does the minister really want to say that waiting one hour is a reasonable time frame?

Hon. Michelle Stilwell: Yes, I do want to say that it’s a reasonable time to wait if you look at other businesses across the province or country that deliver a service by phone.

It is an individual who does not have to get in their car or find transportation to get to the ministry office to wait in line to see somebody. They can pick up the phone. It is what we heard from clients before we even had phone services — that they wanted to have the opportunity to call in and have their questions answered, to have that option. It is what we heard from them. It’s what we’re providing to them.

M. Mungall: No one is disputing the value of having a 1-800 number so people can call and why it’s important to have that. No one’s disputing that, so there’s no need to make an argument of why we need to have a 1-800 number. What we’re talking about here is that the 1-800 number stinks. It is inhibiting access for people to get to talk to somebody in the ministry when they are in an urgent situation.

Now, if Air Canada came up to me — and I have to use Air Canada every week — and said, “You waiting on the phone for one hour is acceptable,” I would be one very unhappy customer, very unhappy. So no surprise: people with disabilities, people on income assistance are very unhappy to hear that the minister says it’s reasonable for them to wait for an hour before they can get any service.

When I say that there are urgent situations going on, I have heard stories of people calling the ministry, calling this 1-800 number, waiting well over an hour. Nobody gets back to them. Finally, when they do, they get a dropped call. We’re going to get to the numbers on the dropped call issue soon enough.

They get a dropped call or nobody calls back or they have this phone tag going on for days. What ends up happening in those days? They don’t get their cheque, because they didn’t get it the first place, but rent is due. I’ve heard of people having to fight with landlords over evictions. I mean, these are serious things happening in people’s lives, some of the most vulnerable and marginalized people in our communities, and that’s not okay. Would this be fixed if we took the one-hour wait more seriously and took the service levels that are happening with this 1-800 number more seriously? I think so.

Again, I want to ask the minister: what is being done specifically to ensure that wait times are not one hour or anywhere near one hour? As I said in January, they were an hour and 47 minutes. You could sit down and watch a movie in that time frame — if you had a TV, if you had a DVD player, or whatnot — if you had that kind of stuff going on.

To me, one hour is not reasonable. It’s not acceptable. I would like the minister to first acknowledge that and then say what she is doing to get it down to the ten minutes that she keeps saying is where things are at.

[1410]

Hon. Michelle Stilwell: There have been significant changes that have been made in reference to the telephone system. As I mentioned earlier, we have changed a shift. There are people that come in from ten to six. From four to six, they particularly spend the time on the callback feature.

We have hired 55 extra staff members, and we have made improvements to the technology as well. We have seen significant recent results, as I mentioned in my prior comments. The one-hour time frame was the longest in the month of April to May, which I mentioned. That is the longest any individual had to wait, but the average was only 18 minutes. Also, I think, 18 minutes is a very reasonable time to be served.

That being said, there are other options as well. We have the My Self Serve option, where people can go to our on-line portal and facilitate service requests that way. That is something where we have seen an increased uptake. As well, to date, we now have over 22,812 individuals who are authenticated, linked clients to My Self Serve, where they can go on line and access their information and put in a service request. It is one of the fastest ways to get that service request moving.

[1415]

As well, there’s the option for the phone-line services, which deliver an option for individuals who don’t want to wait in line, don’t want to come down to the office — although it is still always an option for individuals to come to a ministry office to be supported.

M. Mungall: Well, I’m wondering why things got worse before they got better. A year ago we were upset to see wait times being at 34 minutes, and then they got so bad — up to an hour and 47 minutes, as I mentioned. I would like to know why they had to get so much worse before they could get better, down to an average of 18 minutes.

Hon. Michelle Stilwell: As we know, the phone-line system was new technology. As we learn from new technology, there are learning curves from both the client side and the staff side. We have learned a great deal over the last year, and we have made improvements, as can be seen in the results that we are seeing now in the wait times and the service delivery that we are able to provide to the clients.

It has been something that we continuously work on. It is something that I am committed to, ensuring that we make improvements where we can, when we can. This last year has been a learning moment for both staff and the clients as they learn to navigate the system.
[ Page 13222 ]

M. Mungall: Just wondering if the technology that the minister speaks of is related to ICM.

Hon. Michelle Stilwell: The answer is no. It is not related to ICM. It is a separate system. It is called the telephony system.

M. Mungall: When was the telephony system purchased?

[1420]

Hon. Michelle Stilwell: We don’t have the exact date of the purchase. We can provide that to the member opposite another time. But I can tell her that we implemented the system in 2014.

M. Mungall: Can the minister say which company produces this product and where they’re from?

Hon. Michelle Stilwell: The company is called ComputerTalk. It’s a Canadian company.

M. Mungall: Anybody else using telephony? Any other jurisdiction using this particular computer technology?

Hon. Michelle Stilwell: The product is being used in other jurisdictions that we are aware of. Ontario would be one of those jurisdictions. That being said, it is something that falls under MTICS, because it’s a technology question. If you have further questions, I would advise that you ask MTICS.

[1425]

M. Mungall: All right. The minister mentioned the My Self Serve portal. I’m just wondering what the turnaround time is for that. I’m assuming, like most on-line features where someone can ask a question, they type that in, and then they wait for a response. I’m wondering what the turnaround time is — that wait time, essentially — for that response.

Hon. Michelle Stilwell: I think the most important thing that we need to just confirm with the member opposite is that the My Self Serve doesn’t have a chat functionality. There isn’t somebody on the other end waiting to talk and respond to individual clients.

The requests that get put in by clients really depend on what the request is. They get put into the provincial queue, and then they are triaged the same way as the other requests: based on priority. For instance, if there was a request for a crisis grant, that request would be answered within 24 hours.

One of the significant bonuses of having the on-line My Self Serve is that stub processing is now automatic. Prior to My Self Serve, clients every month would have to check out and fill out their stub and mail it in or drop it off at a ministry office.

[1430]

That can now be done on line, and it is automatically updated within the system. If they fill out the form correctly, it would have an automatic update to the system, and they would be able to move forward that way.

M. Mungall: What I’m hearing, then, is that the queries are triaged. If something is urgent, it’s responded to within 24 hours. If something’s not urgent, what is the wait time for that? What would be considered not urgent?

[S. Sullivan in the chair.]

Hon. Michelle Stilwell: The urgent consideration, as we mentioned before, is 24 hours, or one day is our expectation. A “non-urgent” would be five business days. The category of “urgent” would include things such as crisis grants — someone who is fleeing abuse, domestic violence. If there were to be a shelter change at the end of the month, that would be considered urgent.

Those things that would fall under non-urgent would be general information queries, where general information is required; a change of address at the end of the month; the diet supplement; perhaps adding a dependent; any medical equipment renewals; or things that aren’t urgent in the medical supply department. Those would be considered non-urgent.

M. Mungall: I just want to go back to the phone line here for a moment. Prior to January 2014, we were able to access information on abandoned calls. These are dropped calls. Since that time we have not been able to access that information. Is that because the ministry is no longer tracking dropped calls?

[1435]

Hon. Michelle Stilwell: I think what the member opposite was referring to is specifically looking for results in dropped calls from June ’14 to November 2015. We actually had some issues pulling those reports back out of the system because of the new technology, but we have now got staff able to pull that reporting. They have learned how to use the technology and the functionality of the system, so those reportings are happening now.

I can report to the member that the abandonment rate of dropped calls is at 23 percent between April 1 and May 9. That seems to be the time frame that we’re working on through these estimates, April 1 to May 9.

[1440]

I think it’s also important to note that when we talk about dropped calls, the recording of those abandoned calls includes those times when people decide to hang up and call back later, or perhaps decide to redial again and again into the system to try to get faster service, or they
[ Page 13223 ]
punch in the wrong numbers as they’re going through the system, so they hang up and they start again. Those numbers are reflected in the abandonment rate.

M. Mungall: Is the minister able to go back from now…? We have current numbers, now that people have gotten a better hold of the technology. Is she able to go back to as far as January 2014, which was the last time we were able to access abandonment rates, and provide that information for us today? And if not today, at some time in the near future?

Hon. Michelle Stilwell: We can get the numbers back to June of 2015 for the member, if she so chooses or wishes. We’d be happy to provide that, but the other months are lost to us. We cannot access that data. We have December 2013 up until March 2014, and then we can go from June 2015 to today.

There is a little bit of lost data in there. I can tell the member that in February of 2014, it was at a 35 percent rate, and like I mentioned, we are down to a 23 percent rate. There have been improvements to the system as we try to improve our service delivery.

M. Mungall: Great. Well, I look forward to getting those numbers, hopefully, within the next month. If not, I will endeavour to contact the minister and remind her.

My next question is around some of the overall service delivery. We know that wait times on the 1-800 number shot up. The minister gave some reasons for that. Going back to that a little bit, I’m just wondering if the ministry has looked at all into office closures impacting those wait times as well.

I know that in my area, office hours were reduced. That also seems to be coinciding with the time frame that call wait times shot up. I’m wondering if the ministry has looked into this at all and is able to find a correlation between reduced office hours and closed offices and increased volume and wait times for the 1-800 number.

[1445]

Hon. Michelle Stilwell: We haven’t looked at a specific correlation between the two, but when we are trying to improve our service delivery, we look across the board at all our options, at what we can potentially do to provide better service.

Having said that, we reviewed the hours in those communities, and we have now re-enacted the original hours. Those offices are open from nine to four to deliver service in those areas.

M. Mungall: The reason I was wondering or asking that previous question is that I speculated that, perhaps, the ministry had noticed that correlation or had done some reviews that found a direct correlation between reduced hours and closures at offices and increased volume in the 1-800 number. But the ministry hasn’t done that.

Obviously, it’s a good thing to increase the office hours. I’m just wondering why the ministry chose to do that.

Hon. Michelle Stilwell: To improve service delivery is our ultimate goal, so that’s why we did that.

M. Mungall: If the ministry is recognizing that reducing office hours is a decrease in service delivery, then why did they decrease service delivery in the first place?

[1450]

Hon. Michelle Stilwell: In reference to the closures of the offices, it was mostly related to staffing issues. You can acknowledge, being from a small community yourself, that sometimes it’s hard to find and retain staff in offices, for smaller communities, to serve the clients.

Maintaining enough staff was challenging. That’s why we continue to look at our partnerships with a variety of different ways, such as Service B.C. As the member opposite knows, we’ve integrated some of our offices with Service B.C. to help fix that challenge that we face, especially in smaller communities.

M. Mungall: So having some difficulty retaining staff. I assume that is the EAWs — the employment and assistance workers, I believe. I live in acronym soup, as many of us do, so pardon me if I got the full title incorrect.

I’m wondering. Is she specifically talking about EAWs? Why is it that the ministry is having trouble retaining and recruiting front-line staff?

[1455]

Hon. Michelle Stilwell: I just want to let the member know that it’s not an actual problem of us recruiting talented, qualified individuals. We have been very lucky to be able to find talented, smart individuals to take up the jobs.

The job, however, is an entry-level job. Oftentimes we see those individuals, while they’ve been trained up and learned the job through our ministry, then move on further into government with higher-up positions. We also see many times now that there are often retirements, as people are aging and finding their way to the good life and retirement.

M. Mungall: Having formerly been the spokesperson for advanced education and skills training before 2013, I know very well about the skills gap that all provinces and all North American jurisdictions are experiencing, 2015 and beyond, as a result of retirement. I can appreciate that answer from the minister.

I’m just wondering, though, at this point, if this issue that the minister has highlighted, with staffing levels being lower than needed to deliver full hours at offices, is continuing anywhere else. Are there any other offices that will be experiencing reduced hours this year or any
[ Page 13224 ]
other office closures that will be taking place in other parts of B.C.?

Hon. Michelle Stilwell: No, there is nothing planned at this time.

M. Mungall: I was hoping to ask this question yesterday. Unfortunately, I forgot, and then we adjourned for the day.

Yesterday we were talking specifically about maternity and parental leave clawbacks. Of course, there are a variety of employment assistance benefits that anybody who is working is able to access. People with disabilities who are working and earning up to the full exemption rate that this province allows also pay into employment insurance and are able to access those benefits if they’ve been laid off or if they are on sick leave as well as maternity and parental leave.

I’m wondering what the annual total of all EI benefits that persons-with-disabilities clients claim…. In other words, how much money each year is the government clawing back from people with disabilities in terms of all the EI benefits?

Hon. Michelle Stilwell: That is not information that we currently have with us, but it will be something that we can endeavour to calculate for the member opposite and provide her.

M. Mungall: I’ll just ask if the ministry can please do that. I understand that we’re also going to be meeting tomorrow afternoon after question period, so hopefully, I can get the numbers from the minister at that time.

I’ve always relied on the minister to call for a five-minute recess or so, but I imagine that that option is available to me as well. Chair, may I call for a five-minute recess?

The Chair: Okay, we will have a five-minute recess.

The committee recessed from 3 p.m. to 3:10 p.m.

[S. Sullivan in the chair.]

M. Mungall: I’d like to move on to a few questions about income assistance rates. The minister will know that the shelter portion of the rates for an individual has been $375 since 2007. Before that, since 2001, it was $350. When I look at the Canada Mortgage and Housing Corporation’s annual reports every year on average rents around British Columbia, I have never in my time here ever seen any community that has an average rent that’s even close to $375 a month.

I’m looking at that information right now. That was based on data collected in 2014. The lowest rental rate that I can find at all, out of any type of unit in any community, is at $460 a month. That’s in Williams Lake. That’s up $60. Average rent in Williams Lake went up $60 in a one-year time frame. In 2013, rent in Williams Lake for a bachelor apartment was $402. In one year, it went up to $460.

I think this shows that the affordable housing issue is felt right across this province, when we see an average rent in one community jump by $60 over the course of a one-year period. According to CMHC, the lowest rent available in B.C. is in Williams Lake, at $460 a month for a bachelor suite. That’s $85 more expensive than the $375 that the current PWD and income assistance shelter portion provides.

I’m just wondering if the ministry is aware of the work being done by the Canada Mortgage and Housing Corporation. If they are, why are they not using that information to determine the shelter portion of income assistance and PWD rates?

[1515]

Hon. Michelle Stilwell: Yes, of course we are aware of CMHC and the work that they do, but I think it’s important to note that CMHC only covers purpose-built rentals — apartment buildings that were built as apartment buildings or as rental units. They don’t include, or it excludes, basement suites, rented rooms, rental condos, shared accommodations, which is typically where most of our clients live.

The CMHC overestimates the average amount that clients pay, so what we use is the census data. Historically, 25 percent of the rental units in B.C. are covered by our rates.

M. Mungall: Are they using the most recent available census data, or are they using older census data to determine that?

[1520]

Hon. Michelle Stilwell: We do use the most recent census data that is available, and then we adjust it up for inflation.

M. Mungall: The minister said that 20 to 25 percent of the rental stock, based on their calculations, is available at $375 a month. Is that throughout British Columbia? Or does that cover just the Lower Mainland, for example? Regardless of where it is, has the ministry ever looked into the quality of this type of housing that’s available at $375 a month?

Hon. Michelle Stilwell: I was referring to the housing stock in all of B.C.

In reference to the question of if we monitor the quality of those rental housing stocks, that’s not within our mandate. We don’t have the capacity to do that. We leave it up to B.C. Housing and to municipalities to monitor the condition of rental units and the housing stock in the province.
[ Page 13225 ]

M. Mungall: In the 20- to 25-percent range that the minister mentioned, is she including in that the B.C. Housing–subsidized rental stock as well?

Hon. Michelle Stilwell: Yes, that would be included in the 25 percent.

M. Mungall: In terms of monitoring, then, the quality of the rental housing stock in this province, in particular at the lowest end being done by B.C. Housing, does B.C. Housing share that information with the ministry? Or does the ministry request that information, in terms of what kind of quality of housing is available at $375?

[1525]

Hon. Michelle Stilwell: Again, what we provide for our clients is the funding that they need to find the housing to live in. It is their choice where they choose to live. We are not the supplier of the housing. We are the funder of the moneys needed to support them in their housing.

That being said, if there was a crisis situation or a displacement of an individual from their current housing situation, our staff would support them in the transition while working with our partners at B.C. Housing within the community to ensure that there would be a solution to their housing and ensure that they are supported.

M. Mungall: Well, when people only get $375 a month, or if there are two people in the family — for example, a single mom and her child…. She might get $570 a month. If there’s a single mom or single dad and their two children, they’ll get $660 a month.

Now, I know the minister doesn’t agree with using the Canada Mortgage and Housing Corporation data, because apparently they just expect people to…. They up the rents, apparently, in their data. I don’t take that at face value at all from the minister. But if you have a parent and two children, most people would expect a three…. I know when I worked with the Ministry of Children and Families front-line staff, they would expect that that parent would have their own bedroom and the two children would each also have their own bedroom.

An average rent in this province…. Again, the lowest rent available in this province is $843, still in Williams Lake. That’s a far cry from $660 that they would be getting from this ministry.

When the minister suggests that people have the choice of where they would like to rent, the point I’m making is that the choices available to them, based on the types of supports that they get from this government, are very, very limited — to what is often substandard housing to overcrowded housing.

[G. Kyllo in the chair.]

The thought of children growing up in homes that are substandard — that have mould, that have infestations, that are overcrowded — is hugely disconcerting. It’s part of the ongoing problem around child poverty in this province and the reason that we have such high rates of child poverty in this province.

I’m trying to dig down and find out from this minister why this government continues to think that there’s something available that is appropriate to live in at $375 a month for a single person or at $660 a month for a family of three or at $700 a month for a family of four. If the minister can please comment on what kind of housing is available to people in this province at the rates that this government insists are sufficient.

[1530]

Hon. Michelle Stilwell: The clients that we deliver services to have a range of housing options. They choose a range of housing options. And CMHC, it’s important to note, is an average in the formal market, the rental housing market, not including the shared accommodation, the basement suites or those that I mentioned before.

I think it’s important to note, as well, that there is a wide range of extra benefits and resources, especially to those individuals the member opposite specifically referred to — a single parent with two children.

[1535]

If you put together all their tax credits and additional benefits, the total monthly income for a single parent with two children is $1,856.19. Plus, that single parent may have family maintenance payments, which we changed the policy on, as the member is well aware, to help assist the children. There are also earning exemptions.

I think it’s important to note that the shelter rate isn’t a true reflection of the family’s income. On top of those additional tax credits and benefits that they are receiving, there is also the comprehensive social safety net that our clients receive benefits from, whether that be not paying into MSP, receiving PharmaCare and prescription costs completely covered by the ministry, the dental and optical services, the subsidized housing, the child care subsidies. The list goes on.

More importantly, I think, if the member opposite wants to speak to a single parent with children, the most important thing that I can share with her is the single-parent employment initiative that our government launched in September of this year.

It is a fantastic program to give the opportunity — to those single parents who so choose to take part in the program — to get into an education program, a skills-training program, for up to a year, and government will pay for their schooling, their child care and their transportation to get to schooling. As well, when they graduate from that training program and leave income assistance to go into employment and the workforce to financially
[ Page 13226 ]
create a better life for themselves and their children, they will still remain on the Medical Services–only benefits.

They will also receive another year of child care provided to them so that they can truly get their feet off the ground and find a way to achieve better financial outcomes, lead more independent lives and be able to create a better future for both their children and themselves.

M. Mungall: The minister brought into play some of the other supports and income that people receiving income assistance and PWD are able to get. That being said, in November 2015, a group released a report called Canada Social Report: Welfare in Canada. They looked at income assistance rates all across the country. They included all of the supports that the minister just mentioned, and they compared it with LICO, which is what’s often referred to as the poverty line. It’s the low-income cutoff.

What they found is that, for the single, employable individual, the supports that they are able to get from government are 38 percent of LICO. For a person with disabilities, the percentage is 56 percent of LICO. So they are about $8,745 below the low-income cutoff. For a single parent with one child, they’re $7,259 below the low-income cutoff. For a couple with two children — this is where it really gets bad — they’re $16,193 below the low-income cutoff.

Despite everything that the minister insists is used to top up the base income assistance rate, people are still living, clearly, in poverty, below the low-income cutoff. My question to the minister is: does she find that acceptable?

[1540-1545]

Hon. Michelle Stilwell: I think I just want to start by saying that the low-income cutoff, the LICO, is not a relative-income measure. It is often claimed to be one, but it is relative to the average expenditures that Canadian families make on basic goods and services. The low-income cutoff actually doesn’t include all the extensive in-kind benefits that government provides — the ones that I did list off earlier — those things such as the B.C. child care subsidy, the social housing, the healthy kids program, the Fair PharmaCare benefits, the Medical Services Plan premium reduction.

All those values vary across provinces across the country. That being said, I would argue that the majority if not almost every recipient across Canada is below the LICO level. That’s why it is so critical that we have all the programs and services that we have in place within the ministry — that robust supply of programs and services that eliminates the expenditures that these families have to make.

M. Mungall: I’d love to get some of the leading experts around the country like Dr. Michael Prince to come in here and have a good conversation with the minister about the value of the low-income cutoff as a poverty measure in comparison to the market basket measure, which the federal government developed in partnership with all the provinces.

The minister ought to know, if she doesn’t, that the rates here in British Columbia don’t come anywhere near the market basket measure either. Even the Fraser Institute has come up with a measure, and B.C. does not meet that measure either. You’d think that being such good friends with this government, maybe the Fraser Institute’s measure would have at least coincided with what this government does. It doesn’t. That’s how low the rates are in British Columbia. That’s how unacceptable they are in British Columbia.

I’m going to, myself, stick with LICO. It is a well-regarded and well-used rate to measure what is needed just to barely hold the line in this country and in this province.

I’m pulling open the book that gives us a bit of a breakdown in terms of the estimates for each budget. As I was going through this, I just had some questions about the numbers associated with the income assistance portion.

First off in that, for temporary assistance, we see $550,000 being recovered from external sources. For disability assistance, we see $4 million being recovered from external sources. For supplementary assistance, $5,000,530 is being externally recovered. That normally means from, in my experience, another level of government.

If the ministry can just answer where those external recoveries are coming from.

[1550]

Hon. Michelle Stilwell: The member is correct. They are actual federal recoveries from programs, such as EI and CPP.

S. Fraser: Thanks to the minister and staff for being here.

I’m going to keep it generic. I’m not going to use names right now, but I have a constituent whose son has a developmental disability. He’s receiving that $906-a-month payment for that.

He is a young adult. He’s 19, I believe — the son. He has been working, at least in part, which is good. He’s learning independence, but he had an injury on the workplace. It was a significant injury. His father made sure that he applied and filed for WCB.

My constituent — his concern to me — was that he was told, I think by your ministry, that there would be a reduction of his son’s $906 a month because of the WCB payments that he was going to receive. That doesn’t ring right to me. Can you tell me: does that happen?

Hon. Michelle Stilwell: I thank the member opposite for bringing the question forward about his constituent. I reflect his comments that it’s good news that the young
[ Page 13227 ]
man is working and finding that independence. I feel terrible that he’s had an injury at work.

That being said, it depends on a variety of things — whether it’s temporary or long-term disability. I’d be happy to work off line with you to work through the constituent issues.

S. Fraser: He cut off two fingers was the nature of the injury. I don’t think I’m disclosing anything too much there.

If there were a takeback of his developmental disability payments because of money received through an injury through WCB, I’d just like to submit that I believe that’s a problem in other ways.

The workers compensation boards in this country are based on what’s known as the Meredith principle. It goes back to 1913, I believe. It’s over 100 years old. It was a compromise that was made, and it ensured that somebody who was hurt in the workplace could…. The workers gave up the right to sue their employer. In return, they were to get a fair and adequate payment for their pain, their suffering, their loss of use — fingers, in this case. That’s independent of everything.

[1555]

It’s an insurance policy, so if insurance policies somehow allowed for his disability payments to be reduced…. I mean, that’s taking away the very basic principle of the Meredith principle, which would mean that there would…. In other words, his disability and his injuries are separate. His payments for his injuries are based on the pain, suffering and loss of use, which are real. His disability is still there, and it’s still real.

I will take the minister up, if need be, on some help on this. But I’d just like to put in the record that I think that if the ministry was doing that as a matter of policy, it might be an affront to the very basis for the WCB system. It could be a problem.

Hon. Michelle Stilwell: So noted, on the comments that the member made. Of course, again, we will work through the particulars of the constituent case. Obviously, there will be a variety of factors that are affecting it. Happy to do that off line.

M. Mungall: Just going back, one more question pulling on the blue book. I noted from last year’s budget to this year’s budget that we see about a $100 million increase to disability assistance. I recognize that that’s going to be, partially, the rate increase, which, for this year, in my calculations, does not have it anywhere near $100 million.

I’m wondering if the minister can account for why that increase is so large. Are we expecting to see a larger number of people accessing PWD benefits this year? Is there another reason? Or so on.

[1600]

Hon. Michelle Stilwell: The member is correct that there is $36 million allocated to support the disability assistance rate increase that we put into the budget, as well as $65 million for the caseload pressures we see in the disability assistance caseload.

M. Mungall: When she talks about caseload pressures, is she talking about staffing? I remember the government announced in Budget 2016 that there would be increased staffing to address caseload pressures. Is that what she’s talking about? Or is she talking about the government anticipating a greater number of people in this upcoming fiscal year to be receiving PWD? Is that what she means by caseload pressure?

Hon. Michelle Stilwell: The member opposite would be correct that we are referring specifically to caseload pressure. It has nothing to do with the staffing.

M. Mungall: So that’s the number of people — when the government says “caseload pressure.”

I’m just cognizant that there actually are people watching at home. I saw a little bit of their commentary on social media. There are people who are actually watching at home and sometimes don’t speak the bureaucratic language that’s used to define everything that goes on in government. I call it governmentese, Mr. Chair. I just want to make sure that we had it in a way that they’d understand we’re talking about that that increase will be that we’ll be seeing an increase in actual people receiving PWD.

Ever since 2013, I’ve seen the government repeatedly hint at increasing all income assistance rates. We saw the government this year increase rates by $77 for PWD clients only. Then we saw a bus pass clawback and the alternative transportation subsidy clawed back from most of those rates. We’ll eventually get to that. I’m sure the minister has been anticipating that all day.

What is important is that the promise that we’ve seen repeatedly by this government in the media — most recently, actually, over the holiday season in December 2015, I believe…. It was the Minister of Finance making that same commitment, hinting at a possible increase of maybe around $50.

It left people with the impression, if not the distinct direction, that that type of increase would be going to everyone receiving income supports from this government. But of course, government has not delivered on the promise that we saw in the media, in the quotes from the Premier, the former minister, and from the Minister of Finance.

I’m just wondering why this government made that choice to not increase rates for everybody but instead chose, in the same fiscal period, to give $1 billion worth of tax cuts to the richest 2 percent.

[1605]

Hon. Michelle Stilwell: I can’t actually comment on what other people say or may or may not have said in regards to the rates. I can’t control what other people speculate on what we may or may not do with the rates.

[1610]

What I can say is that since I’ve been minister, I’ve always said that we will look at the rates as the fiscal situation allows. That’s why we on this side always are focused on growing the economy and creating jobs and providing opportunities for people to get into the workforce to benefit not only the revenues that government brings in to pay for the programs and services that we deliver through my ministry but also to provide those individuals the opportunity to increase their independence, for them to achieve better financial outcomes.

That’s why I’ve worked very hard as minister in the last year to ensure that the annualized earnings exemptions were implemented and that we came to family maintenance exemptions being implemented as well as the gifts and assets exemptions that we put into place and, most importantly, as I mentioned before, the single parent employment initiative, which I am extremely proud of and, I would say, most members of the government are extremely proud of.

We have more than 2,700 individuals who are now taking part in the program. That’s only been implemented since September. They are finding their way to employment. They are finding their way to build the skills that they need to provide a better life for themselves and to take part in the economic opportunities and the jobs that British Columbia has to offer.

That is truly what we believe. We believe in creating opportunities for people, wrapping supports around them and ensuring that they can reach their full potential.

M. Mark: It’s an honour to be able to rise in this House and to be able to ask the minister a question about income assistance rates. As you can imagine…. I’m the MLA for the poorest postal code in the province. Really, my question…. I appreciate that there is no simple answer and there is no easy formula. To put it into perspective….

I’m not sure if you took part in the welfare challenge last fall. I did. The advocates in Vancouver–Mount Pleasant asked me to participate to bring awareness to the fact that they were living on $610 a month in 2007, and here in 2016, they’re still living on $610 a month. I had lots of questions on what they need to do on the side to make do and put a roof over their head and food in their fridge. That is $21 a week for food.

I did the challenge. I had to take my kids off the challenge because, quite frankly, I saw it as a child protection issue.

My question for the minister is really on behalf of the many advocates in Mount Pleasant who are just wondering whether or not there will be any plans to increase the income assistance rates for all of those individuals that need assistance. I appreciate all the economic plans. I’ve heard many of them messaging in the last little while. But quite simply, will the rates be increased any time soon? And if so, by how much?

Hon. Michelle Stilwell: The member opposite asked a question in reference to: will we see an increase to the rates and is there a commitment to do that. That is something that is always part of the ongoing discussion. This fiscal year we have already made our commitment to ensure that persons with disabilities — our caseload, the largest portion — will be receiving an increase to their rates.

[1615]

As we move forward in the next fiscal year, those are discussions that we will have at the Treasury Board level and at the staff level to see what we can do, as the fiscal situation allows.

M. Mungall: Well, if the economy and the fiscal situation for the province doesn’t allow a full rate increase to everyone receiving income assistance and disability and a more significant one that is reflective, at the bare minimum, of inflation since 2007…. If the fiscal situation doesn’t allow for that, why does it allow for a $230 million tax break to the richest 2 percent every single year?

Hon. Michelle Stilwell: Of course, the comments that the member opposite made are outside of my mandate within my ministry. That is part of the budget debate.

But the member well knows that it’s not a 2 percent tax break. It was something that was implemented from government to have those individuals pay increased taxes for two years. It was a commitment that we made. They helped us through the most difficult times that the government saw. She knows very well that her comments are misguided.

M. Mungall: My comments are not misguided at all. It’s a valid question about government choices. The government has made a choice. I am being told, British Columbians are being told, that there just simply isn’t enough money to put forward a rate increase for some of the lowest-income earners, for some of the most marginalized people, for some of the most vulnerable people in our community. “Oh, there’s not enough money for them, but we have this money over here for the wealthiest 2 percent.”

That is a government choice. It is not a misguided comment. It is a government choice that this minister sat at the table to help make, and I’m asking why. Why did they make that choice?

[1620]

Hon. Michelle Stilwell: The budget debate and the issues that arise from making investments are always
[ Page 13229 ]
taken into account. Those are discussions that we have as the budget goes forward.

There was a $170 million investment into my ministry — something that I fought hard for to ensure that we would have the opportunity to increase the rates for people with disabilities across the board, for all those in the province who rely on funding from the province.

There were also significant investments that we had made in other ministries, like Housing and MCFD, other social services, to ensure that people are being supported in a multitude of ways, not just through my ministry.

M. Mungall: Well, let’s get started on that $170 million increase that the minister fought so hard for and some of the facts that are actually behind all of that.

Part of that $170 million, of course, was not…. While we saw a $77-a-month lift to the rates for PWD, we also saw a few other things that the $170 million is going to be paying for.

It’s going to be paying for the alternative transportation subsidy, at $66 a month. People who require that will only be getting $11 of that rate increase. People who want to get a bus pass will be paying a maximum of $52 a month and only seeing $25 of the rate increase. Actually, if we’re going to be truly honest, $52 a month, plus the $45-a-year administration fee for the bus pass — they’ll only see around $23, $22 of that rate increase.

This weird thing happens. Every time in the last four months that I’ve gotten up to ask the minister questions about this — specifically asking her to reverse this decision and allow everyone to keep the $77 increase because it is so desperately needed and, as I already pointed out, so below every single measure of poverty in this province and in this country — I’m heckled.

Among the many things that I hear from members on the government benches is that I’m just wrong. Wrong, wrong, wrong. That is what I hear all the time when I say that this is taking place, that people will be paying an extra $624 a year for their bus pass — wrong.

My question to the minister is…. If I’m wrong, then that means the ministry actually is not charging another $624 a year for the bus pass, that it is actually going to be staying at $45 a year. Is that correct?

[1625]

Hon. Michelle Stilwell: I know that we’ve canvassed this question many times in the House with the member opposite — multiple times where, really, I needed to reiterate the transportation allowance and the changes that we made in the budget this year and how it will affect and impact the lives of the people with disabilities that we support.

I have said it before, and I’ll say it again, that 45,000 individuals who were receiving PWD assistance were not receiving any type of transportation support, basically just because of where they lived. It didn’t mean that they didn’t have transportation needs. They still needed to get to work, to school, to doctor’s appointments, to the grocery store. But because they didn’t have B.C. Transit or TransLink available to them in their community, they were not provided with the additional transportation support.

That was something that I thought was fundamentally wrong. I wanted to ensure that everyone had the same equal opportunity to have the transportation available to them. So what we are seeing in this budget is a transportation allowance of $52 to ensure that people have the opportunity to get to and from where they need to be. They will also see a $25 rate increase to help them with their other needs to spend how they want.

The other reason I put it in the way that we have within the ministry, as a transportation allowance, is specifically because in some communities, a monthly bus pass costs less than $52. It didn’t make sense that government would pay that $52 directly to B.C. Transit or TransLink when an individual who lives with a disability could have the choice and the independence to make a decision for themselves.

In some communities, such as Agassiz, for instance, a monthly bus pass is $35. And 100 Mile House is $35. For an individual, to have that money put into their account that comes with their cheque every month, they can then go to a grocery store, a library, a city hall — wherever bus passes are available — and purchase one themselves and then have a remaining $42 in their pocket so that they have additional funds to buy food, pay for their other needs, whether it’s for health care products or whatever they choose to spend it on.

There are multiple examples. In Boundary, a bus pass is $24. For those individuals, they have the opportunity to choose to keep $53 in their pocket and buy the bus pass themselves in that community.

[1630]

Perhaps those individuals who are using the bus aren’t using the bus as frequently as a monthly bus pass would require. Perhaps some individuals are only taking the bus once or twice a week. It makes more sense for them to have the money in their pocket and to pay for a bus fare with concession rates. It leaves more money in their pocket to pay for food and the things that they require.

That being said, we also hear a lot from the Lower Mainland and those areas that are served by TransLink and B.C. Transit. I’d note that in the Lower Mainland, in Vancouver, a one-month bus pass can be up to $170, for one individual to travel, per month. That’s why we are still providing the subsidized bus pass to those individuals.

That is a savings that they are realizing when they still want to get that subsidized bus pass through the ministry. It is still offered to them, in the same way it was offered to them before, at a reduced rate of $52. They are in fact saving a large chunk of money for having the opportunity to have that subsidized bus pass that the ministry still provides to them with no change.
[ Page 13230 ]

What has happened, and what is reflected for those individuals, is that prior to the change, the $52 was paid directly by the ministry. Now the $52 is put into their account. They have the choice to buy that subsidized bus pass, realize the savings, or when they live in the smaller communities where a bus pass costs less, they have the opportunity to have more money in their pocket. It makes sense. It’s a rational decision, and that’s why it was made.

M. Mungall: Right now, how much are people paying per year for the bus pass?

[J. Yap in the chair.]

The Chair: Minister.

Hon. Michelle Stilwell: Thank you, Chair. Nice to have you join us now in this tantalizing conversation.

In fact, the $52 is paid, on behalf of the client, by the ministry, and the client pays $45 per year out of their income assistance cheques.

M. Mungall: So people right now are paying $45 a year for their bus pass. How much will they be paying starting September 1?

Hon. Michelle Stilwell: We will be paying it in the same way as we did before — the $52 if they choose the bus pass.

M. Mungall: Will that $52 be coming off their cheque if they choose to get the bus pass? Rather than getting $983, will they be getting $983 minus $52 each month?

[1635]

Hon. Michelle Stilwell: What individuals will see is that they will receive $931 on their income assistance cheque plus a bus pass. It is a choice that they will make. It is much like the decisions they make when we pay directly to Hydro. We pay that on their behalf, and we will pay the bus pass on their behalf.

M. Mungall: How much does the government anticipate to be collecting each year from people choosing the bus pass option?

Hon. Michelle Stilwell: We don’t actually collect the money. We are paying for the bus pass. The money is spent to provide the bus pass to the individuals at a subsidized rate.

M. Mungall: How much money will the government not be giving people with disabilities so that they can give that money instead to the Ministry of Transportation for a bus pass?

Hon. Michelle Stilwell: The payment that is made to B.C. Transit and B.C. TransLink is no different than the payments that have been made in previous years. We will still make those payments to TransLink and B.C. Transit to ensure that people have the bus pass if that’s what they choose.

M. Mungall: What I’m hearing from the minister is that they haven’t done any budgeting at all for the upcoming years to determine how much money that they’ll be giving to the Ministry of Transportation and TransLink for B.C. bus passes for people with disabilities.

Hon. Michelle Stilwell: In fact, in the past years, it has cost $15 million for the B.C. bus pass program. That is including the seniors’ portion. The majority of the clients who receive the B.C. bus pass program are seniors. It was 35,000 who received the bus pass through the ministry.

M. Mungall: Does the ministry currently deduct anything off of PWD cheques for the alternative transportation subsidy?

Hon. Michelle Stilwell: I assume that the member opposite is referring to the special transportation subsidy. No, there is nothing deducted. That is cash that is put into their hands to make the decision on how they choose their transportation supports.

That’s why this change is now affecting another 45,000 individuals who didn’t have a transportation subsidy and will now have a transportation allowance and will be able to make the choices on how they get around their communities.

[1640]

M. Mungall: Starting September 1, if someone continues to receive the special or alternative transportation subsidy, will the $66 that’s associated with that per month be deducted from their monthly PWD cheques, or will they just not receive it on their cheques altogether?

Hon. Michelle Stilwell: The individual clients that receive STS, the special transportation subsidy, will see the increase on their cheques as a transportation allowance.

M. Mungall: Will they only see $11, or will they see a $77 increase on their cheques?

Hon. Michelle Stilwell: What the individuals who are receiving a special transportation subsidy will see is a $52 transportation allowance as well as a $25 rate increase to their monthly cheques. That’s 20,000 people who are receiving the STS. They will see a total of $77 increase on their cheque.

The 45,000 individuals again, that I mentioned earlier, that were not receiving any type of support will also
[ Page 13231 ]
see a $52 transportation allowance, a $25 rate allowance. That’s what we call fair.

M. Mungall: Now, I’m going by the government’s own infographic that was sent out to all PWD recipients, that was put on line and so on. It said anybody who currently has STS, the special transportation subsidy, will be getting $11 of the $77 rate increase. That’s $66 that will be kept back by government to directly pay for whatever alternative transportation sources they have, or however it’s done.

That’s the government’s own infographic. That’s also what they told advocates. That’s what the minister has said in the House over and over again.

Is the policy changing at this point, and somehow everybody who at one time got a special transportation subsidy is now going to get to keep the full $77 rate increase, and it’s only people who get a bus pass that will only see $25 of it?

Hon. Michelle Stilwell: I know exactly which infographic the member opposite is referring to. I think the confusion that comes into play is people don’t understand how the specialized transportation subsidy was administered. It was administered yearly. It was paid in a lump sum. Now it is going to be paid in a monthly payment, starting in September. That’s where the confusion, perhaps, is coming into play for her.

M. Mungall: My question still hasn’t been answered, and it still stands. If the minister could please answer it.

[1645]

Hon. Michelle Stilwell: Do you want to re-ask your question?

M. Mungall: My question is…. The minister says that everybody’s going to get this new $52 transportation allowance. It’s what she’s now calling a portion of the rate increase. So people who access the STS will get that as well as the $25, all of it, on their monthly cheque.

Now, the infographic that I got and everybody else got and saw that was posted on line, on Twitter, everywhere, from this ministry is that the STS has been broken down to $66 a month and that people who were using that for their transportation will only see an $11 increase.

Is that correct? When they get their monthly cheque, they’ll see a big total of $917 on their cheque as opposed to $983.

Hon. Michelle Stilwell: To confirm for the member opposite, the cheque that they would receive — those individuals who receive the STS — this month is $906. In September, their cheque will be $983.

M. Mungall: Is the STS, then, discontinued and people are on their own to pay for their transportation needs? There won’t be any type of special transportation subsidy anymore?

Hon. Michelle Stilwell: Now, with the change, everyone is receiving a transportation allowance. Those who were receiving a specialized transportation subsidy still receive funds for transportation, just as they did before. Now it will be, instead of administered yearly, administered monthly. They can choose how they spend that money to meet their transportation needs.

M. Mungall: Does the STS, as a program, no longer exist starting September 1?

Hon. Michelle Stilwell: The member opposite is correct. It will be replaced with the transportation allowance so that everyone, all 100,000 individuals receiving disability, has a transportation allowance and can meet their transportation needs.

M. Mungall: If the STS doesn’t exist, why on earth would they craft an infographic and tell advocates and individuals that the STS still does exist, that it’s $66 a month and they’re only going to see an $11 increase? Why would they say that if the program doesn’t even exist anymore as of September 1?

[1650-1655]

Hon. Michelle Stilwell: The infographic was developed as just one of the tools that we were using to ensure that we could communicate to our clients about the changes and how the investment of $170 million over the next three years will benefit them. It was an attempt to provide some clarity, but it was only one of the ways. We also had our website that we listed the information on.

We also spent a great deal of time at community meetings and speaking to advocates. I’ve gone to self-advocate groups and spoken to them myself and helped them understand what the changes mean for them, how they will impact their lives and how the changes now are affecting not just them but the special transportation subsidy. When we look at that…. It was something that clients had to be in receipt of. They had to meet certain criteria in order to receive the specialized transportation subsidy.

Now those 45,000 people who were not receiving any transportation allowance are receiving a transportation allowance. As well, the specialized transportation group are receiving a transportation allowance. Technically, I guess you could say they’ve been rolled into one another.

You can name it a transportation allowance, or you can name it a specialized transportation subsidy — the point being that the change we made allows every single person on disability assistance to receive a transportation allowance, no matter where they live in the province.
[ Page 13232 ]

M. Mungall: What I’m hearing is that the government increased rates, cut back the specialized transportation subsidy and increased bus pass fees. That’s really what’s happened.

What was needed in this province desperately after nine years was a rate increase. I’ve already made the argument that this government found $230 million per year for a total of $1 billion over the fiscal time frame of three years. They found that much money, $1 billion to hand over to the richest 2 percent, but they couldn’t seem to find any dollars for a real rate increase.

What we see is a cancellation of a transportation subsidy. We see an increase to bus passes and some really great languaging or attempts at languaging from this government, saying that it’s all now a transportation allowance. Well, that’s not how it was originally characterized at all until the minister found herself in a lot of hot water over this.

Now, the minister talked about how this is something that she fought for, that this is something that she wanted. She wanted to make sure that 45,000 people also got supports with transportation. I would agree that finding transportation supports for those people was very, very important to do. The direction this government has taken is not the direction that was in Accessibility 2024, however.

I am very curious. Since that was such a large and well-done…. As the critic, I watched how Accessibility 2024 rolled out. Members opposite might have noted that I didn’t have anything negative to say about it and, in fact, commented very positively that this was done very, very well.

People throughout this province gave government very clear direction on Accessibility 2024 around transportation. We don’t see the government implementing that. So I would assume that if the government is going to scrap this excellent, well-done consultation process in favour of a new direction for transportation…. I mean, when your rates are that below the poverty line, we’re going to get to the real types of choices that people make ultimately.

Clearly, the government and, clearly, this minister, who is saying that that was a priority for her…. I’m guessing that this particular policy decision and this financial decision was her brainchild.

[1700]

Has she at all consulted with advocates, with self-advocates, with people with disabilities, with the 100,000 people who are clients of PWD? Has she consulted with anybody before she actually made the decision to go in this direction?

[1705]

Hon. Michelle Stilwell: Well, first and foremost, I want to thank the member opposite for acknowledging the process of Accessibility 2024 and the consultations that we undertook. I think they were very worthwhile, and a lot of positive outcomes have come from the discussions and the stories that we heard from individuals as we went around the province. In fact, some of the very compelling stories that we heard during that consultation were about the transportation issues that people were experiencing around the province.

Perhaps the member doesn’t know. Just for those who are at home, watching, perhaps, and for the member’s information, the special transportation subsidy was only available to those individuals who lived in a transit area and couldn’t take the bus or the transit system for a specific reason related to their disability. They had to have the criteria, they had to have that rationale filled out, and they had to be approved for the special transportation subsidy.

There were some very, very compelling stories that we heard from the consultation, from people around the province, that found it very frustrating that they didn’t have the support.

I would, actually, share with the member that up in the north 74.6 percent of our clients were not receiving any transportation allowance to help support them. In the Interior, 57.1 percent; in the Fraser region, 42.3 percent; in the Vancouver Coastal Region, 32.7 percent. Here on Vancouver Island, the area that I represent, 43.6 percent of people receiving disability assistance were not receiving those kinds of supports.

I would say that the changes we’ve made to the transportation allowance, which we’ll be seeing in September’s income assistance cheques…. Those supports address two of the building blocks within Accessibility 2024, when we look at the transportation building block and the financial security block.

The transportation building block is about the expansion of transportation services. Obviously, as I mentioned, there were some limitations to the bus pass system, and what we heard was people wanting that change. Then, when it comes to the financial security building block, there is an increase to the rates and supporting that building block as well.

We are working continuously to work towards the goals we have set out in Accessibility 2024. It’s a work in progress, and I’m happy to see some of the steps that we’ve made so far.

J. Wickens: I’m happy to stand to ask some questions of the minister and the ministry today. I just wanted to start by saying that I have many people in my life that are affected by the policies of this ministry and many people in my life who will be affected by the policies of this ministry. My background is disability studies. That’s how, ultimately, I’m standing here today.

I’d like to just take a second to take a little bit of exception to something that the minister said. She said that we’ve done these things because that is what we call fair. I just want to say that many people with disabilities who
[ Page 13233 ]
are living in poverty…. That situation is so far from fair and just.

We have a lot of people in this room, in this House, who are very privileged people that have no idea what it’s like to live in the circumstances that these people live in. What I would challenge the minister and the ministry to understand is: what would have been fair was to extend transportation to those who weren’t currently getting it. That would have been fair; that would have been just.

The minister has said that she consulted with the disability community around this policy and this decision. I’m in connection with many people in the disability community, and what they have said is that consultation did not take place.

I’ll move on to another question. There is a current budget for strategic initiatives, and that budget is around $11.2 million. This includes citizen engagement. My question is: why didn’t this ministry use some of that budget to consult with the disability community around this specific issue?

[1710]

Hon. Michelle Stilwell: It’s unfortunate that the member’s friends or family, or whoever she is referring to, weren’t able to participate in the disability consultation. That is where we got our information from. That is where we had our discussions, so I would regret to tell her that it was a decision that we made based on the information received during those consultations.

M. Mungall: What I’m hearing from the minister is that she’s referring to the consultations specifically for Accessibility 2024 as the consultation that put her in the direction of this particular decision to increase rates by $77, increase bus pass fees by $52, get rid of the specialized transportation subsidy and then just call it all a transportation allowance.

Hon. Michelle Stilwell: Yes, we did use the consultation process to reflect the changes that we have made to extend the transportation allowance to those 45,000 individuals who were not receiving anything and to make the modest rate increase.

M. Mungall: Well, the guiding document, Accessibility 2024, is where the government is clear with the public on what it’s going to be doing. Nowhere does it say: “Please increase bus pass fees by $52 at maximum for everybody. Please end the specialized transportation subsidy, and give everybody $77 a month. Where you pick that number from, we don’t care. Just please give us something, and then call it a transportation allowance. Make it, please, the first rate increase that we’ve seen in nine years.”

Nowhere on page 9 of this document, where it says “Accessible Transportation,” does it say any of that. This is actually what it says: “B.C. Transit and TransLink are committed to fully accessible bus fleets. B.C. Ferries is committed to improving accessibility and continues to improve service for customers with disabilities. Continue to work with communities to support discussions on transit options for persons with disabilities.”

When I read that last one, particularly, I think of the Creston Valley, in my riding, which does not have full transit services. I think that the ministry might have actually taken the time to sit down with the town of Creston and the regional district directors and actually talk with them about how they can expand transit services. I did not anticipate that there would be a rate increase but that people who were in Nelson then wouldn’t get to keep the vast majority of it because they get a bus. That’s absolutely ridiculous.

My colleague pointed out that in the government communications and public engagement sector, there is $11.2 million set aside for strategic initiatives. So if the government was going to go in a different direction than was clearly laid out in the public document that is the plan that this government said that they were going to follow when they talked to the public, following their consultation process…. If they weren’t going to follow this, why didn’t they take some of that GCPE money and use it to do a proper consultation and ask people: “Hey, are you okay with us switching directions?”

[1715]

Hon. Michelle Stilwell: As the member opposite said, we did a very good consultation during Accessibility 2024 with the white paper. It was an extensive consultation, and it was then that we heard the issues with rural communities and those living in rural areas about their concerns on transportation and their ability to get around their communities.

The changes we have made reflect the extensive consultation and what we heard, and it was what we can do now. Accessibility 2024 is a ten-year plan. There is still more work to do, and we will continue to focus on the work that we do within the ministry. There’s been significant work already done in reference to Accessibility 2024 — significant changes that are changing the lives of many people with disabilities.

We’ve spoken of them already today — when it comes to the gifts and assets, the child payment exemptions and the other opportunities that we have created within the ministry to break down barriers and create opportunities for individuals who are receiving assistance from the government.

With that, I ask that we take a short recess, if that’s all right.

The Chair: This committee will take a short recess.

The committee recessed from 5:20 p.m. to 5:34 p.m.
[ Page 13234 ]

[M. Hunt in the chair.]

M. Mungall: We left it off with the minister asserting that the consultation process that led to Accessibility 2024 is the consultation process used to put government in this particular direction of increasing rates by $77 and calling it a transportation allowance.

[1735]

If that was true, then really, there was no rate increase to cover the inflation that is associated with food costs, with bills, with rent, with child care, with clothing, with all the basics that exist in a person’s life. Therefore, then, there would have been no rate increase at all. That’s really what the minister is saying, if that’s what we’re going with — that the $77 is a transportation allowance.

Now, if we go with what’s actually going on, which is a rate increase and people are being put into difficult choices…. During the consultation for Accessibility 2024, did the minister hear from anybody saying: “Please create a policy that will cause me to take a step back and make a hard choice between food and transportation”?

Hon. Michelle Stilwell: Again, we provided a moderate rate increase to the rates for individuals with a disability, and we created a transportation allowance to provide for all 45,000 individuals who were not receiving anything. Now everyone that receives disability allowance has a transportation allowance to provide their transportation needs.

M. Mungall: I take it that the answer to my question is actually: “No, nobody said that they would like the government to put them in between a rock and a hard place — whether they choose between food and transportation.” If the minister thinks that that’s not the choice that people are being forced to make by this new policy, how does she know that?

She actually didn’t sit down and consult with self-advocates, individuals, advocacy organizations or family members. She didn’t consult with anybody about this specific policy, this choice, to increase rates by $77, claw back $52 of it for a bus pass and to stop the specialized transportation subsidy. She didn’t consult with anybody on this specific policy, so how does she know that she is not putting people between the choice of transportation or food?

[1740]

Hon. Michelle Stilwell: The specialized transportation subsidy has been in place for almost 20 years. The way it works is that the individuals were making independent choices on how to spend that transportation subsidy. What we heard in the consultation was that people wanted to see a modernization of the system so that they could have more choice — that we could move to more individualized funding so that they could make those choices — and that’s what we have done with this change.

J. Wickens: The minister stated that there has been consultation, since the budget, with self-advocates and disability groups. My question is: what was their feedback, and how has that consultation been documented?

[1745]

Hon. Michelle Stilwell: Meeting, both myself and staff, with different groups and organizations. I’ve gone to the Garth Homer Society and met with self-advocates. The staff has been meeting with the Supporting Increased Participation, which is the SIP group — also have been up at the B.C. People First conference, which was up in the Comox Valley. The B.C. CEO Network — I spoke with them, as well, last week. There are multiple things.

With the Supporting Increased Participation individuals, we heard several things. They wanted to ensure that the increase would apply to the comfort allowance, and we have ensured that, indeed, the increase will be reflected in the comfort allowance for those individuals who are relying on that program. They’ve also asked that people be able, and have the opportunity, to switch back and forth between receiving the bus pass or receiving the cash. That is something we have agreed to, to ensure that will be possible for people.

We have heard some individuals ask if we would consider eliminating the $45 bus pass administration fee. That is something that I’ve been advocating for and working towards being able to put in place. We also saw individuals ask for interoperability between the TransLink and B.C. Transit services. That was something that we were able to implement. We provided every single person who has a bus pass available to them, to have a Compass card so that there is interoperability between the various transportation systems around the province.

The member asked what I heard from the self-advocates. What I heard from the self-advocates were some very compelling stories about how they were upset that they were having their bus pass taken away, that their bus pass was being cancelled and that they didn’t know how they were going to get places because their bus pass had been cancelled and was being taken away.

For me, that was upsetting, and it was upsetting for them. I had to spend a great deal of time explaining to them that the bus pass was still available to them, that they still had the opportunity to get to Special Olympics, to get to employment, to get to school, to get to the grocery store, to visit their friends — whatever they used that bus pass for — that they still had it and that they had a $25 rate increase.

That is what I heard from the self-advocates. In fact, they referenced why people had told them otherwise. That I will leave to the member opposite and to the members opposite, for why they believe that.

Certainly, from my department, we have never said that the bus pass would be cancelled or that anybody was losing a bus pass. We have always said that the subsidized
[ Page 13235 ]
bus pass is still in place for any individual who wants it. They can have it, they rely on it, and they will apply for it in the same way they always have. In the summer months, the application will come, and that’s how they will go forward to get the bus pass — no changes to them.

M. Mungall: I have never said to anybody that the bus pass program is cancelled. Since budget day this February, I’ve been actively trying to figure out what the heck is going on with this ministry, along with many other advocates. Things have, just plain out, not been transparent from this ministry, at all, on this issue.

I mean, we already went through the weird communication that happened around the special transportation subsidy. In fact, we’ve now uncovered and had it confirmed that, actually, that program has fully been cancelled. I have been clear, when I talk to people, that the bus pass is still available to them. When the minister tries to insinuate that that is not what I’ve been saying to people, she is just plain wrong. She is wrong, and she is making accusations that she has no business making.

That being said, what I have been telling people — and what people have been tell me, which is the more important situation here — is that bus passes are increasing by $52 a month. That will be coming off of their cheques. Did the minister tell any of the groups that she met with: “Yes, the bus pass is still available, but they’re just going to have to pay more for it”?

Hon. Michelle Stilwell: What I told individuals is that they will receive a $25 rate increase and that if they choose to have a bus pass, they will receive the bus pass from the ministry — in the same way they had before, the same way that they always have in the past — and that that is their choice.

[1750]

For those individuals that I mentioned before, I listed the variety of communities where, in fact, bus passes cost less and they are in a better position financially to keep more money in their pocket, if that’s the way they choose. They can buy a reduced-cost bus pass directly from their community to get around their community. That is in the best interest of individuals, to put more money in their pockets so they can make more independent choices, so they can live in independence.

M. Mungall: …tell people that they could keep the full…?

The Chair: Through the Chair, Member.

M. Mungall: I did. I said: “Did she tell people.”

The Chair: I thought I heard a different word. Thank you.

M. Mungall: Did she tell people that they would be getting to keep the full $77 if they chose not to get a bus pass?

Hon. Michelle Stilwell: What I have told people is that they’d have choices in how they want to spend their transportation allowance. If they choose a bus pass, they can receive the subsidized bus pass at a huge, significant savings, as I mentioned earlier. In areas such as Vancouver, a monthly bus pass costs up to $180 a month, and therefore, for them to get a $52 subsidized bus pass is providing them an extra savings. We will deliver it to them the same way we have in the past, by them applying for it through the ministry and receiving it in the same way that they have in the past.

M. Mungall: When the minister spoke to people, did she tell them that they could pay more for their bus pass at $52 a month, and if they chose not to do that, they would get to keep the full $77? That’s the choice people have to make. Did the minister make that clear to them?

Hon. Michelle Stilwell: That did not come up in any of the specific conversations I had.

J. Wickens: I know that many disability groups, advocacy groups, have come forward to relay messages that they do not agree with this policy decision and these changes. The minister talked about groups wanting choice — some months to have a bus pass and some months not to have a bus pass.

The reality is that the reason people want that choice is because they are living in poverty. When you’re living in poverty and living in a situation where you have to make tough choices, you will go without so that you can get something that you may need that month.

The choice that this government is giving people with disabilities monthly is a choice between transportation, maybe food some months, maybe something else. Those are the choices that this government is giving people with disabilities who are living in poverty. What disability groups….

If the minister would be so kind as to face me when I’m speaking to her in estimates.

The Chair: I’m sorry, Member. You are out of order.

J. Wickens: Sorry. I withdraw.

The Chair: Thank you. Please continue.

J. Wickens: What I know that the disability community has asked this minister is to ensure that people with disabilities have enough money to live in dignity, with respect, and have access to their transportation. What has the minister done to address the disability groups that
[ Page 13236 ]
have come to her to say that they do not agree with this policy and this decision?

[1755-1800]

Hon. Michelle Stilwell: The thing I really want to stress to the member opposite is that everyone still has access to transportation. No one is being denied access to transportation. What this change has done, in retrospect, I guess, is extended the specialized transportation subsidy to everyone. Those who had the specialized transportation subsidy still receive the transportation in the form of a transportation allowance. Those 45,000 individuals who weren’t receiving a specialized transportation subsidy now receive a transportation allowance.

The choice is up to individuals, the point being that there is flexibility in the system now. Some people were only taking the bus once or twice a week or once a twice a month, even. If we look at the specialized transportation subsidy….

It has been in effect for almost 20 years, where people have been given cash to make choices, to make independent choices on how they want their transportation delivered to them and how they want to meet their needs for transportation. This is now extending that to the other 45,000 people to now have the ability, to have the finances, to provide transportation services to meet their needs.

What the member opposite should also know is that we have seen a growth in the specialized transportation subsidy over the years, and we have actually seen a decline in the bus pass, which reflects that people want that choice. People want the ability to have the financial means to make their own independent choices.

She asks me about what the advocates are saying, the ones that we have met with. I have heard from some of the advocates that they actually think the flexibility is a good move. It is providing the clients they work with, the people that they work with on a daily basis, the ability to perhaps save some money so that they can go on trips to visit family.

They perhaps don’t take the bus for a certain period of time because in the summer, they don’t go to school, or maybe they work more in the summer and they need the bus more frequently. It provides them that ability to have the flexibility to keep more money in their pocket or pay for their transportation in other ways, whether that be through the bus system or getting rides with friends. Perhaps they have a car, and they use it for gas money. It is about providing that independence for people.

The specialized transportation subsidy has done that for more than 20 years. We trust individuals to be able to make those decisions, and that’s what this change is doing.

M. Mungall: I think what’s important for the minister to understand is that policy often, while not maybe a directive type of impact…. So bus passes — yes, they’re still available to people. But there are systemic impacts that happen. Through a systemic nature, a policy can effectively result in people not getting the transportation they need because of the broader issues that are going into their choices.

That’s what advocates were trying so desperately to communicate with this government. That is what I have been trying so desperately, on their behalf…. They don’t get to sit on the Legislature floor, so I bring their voices there.

I’ve been trying to communicate with this government, and we have come up against a brick wall when we are trying to communicate the systemic results of this policy decision that this government has made. When you take into consideration the incredible poverty that people with disabilities are living in because income assistance rates are so below, as I said earlier, any poverty line, whether it’s LICO, whether it’s the market basket measure, or whether it’s the Fraser Institute’s poverty measure — and they’re by no means a left-wing organization….

[1805]

When people are in that type of desperate circumstance and told that they can keep $77 in their pockets if they choose not to get a bus pass and then have to pay an extra $52, many of them are going to make the choice to keep the $77 in their pockets to pay for food; to pay for increased hydro bills, because those have gone up under this government; to pay for increased rents, because Lord knows that increases in rent are astronomical in British Columbia; to pay for increases in clothes, increased food costs — all of these things.

People are being forced between a rock and a hard place, and that’s what we’re trying to communicate — that this government, while I have no doubt, had good intentions…. No one has been questioning their actual intentions. What we’ve been questioning is the results, and the results are not going to work for people with disabilities.

What I’ve heard from the minister is that the specialized transportation subsidy has been effectively rolled out to everyone in the province receiving PWD, but that doesn’t actually address the issue of a rate increase. A rate increase was desperately needed after nine years because costs of living have gone up, and yet the rates had not, and people are living in poverty.

We’ve addressed this issue. We’ve canvassed it a lot. I really hope that the minister isn’t in denial about that particular fact — that people are living in poverty. A rate increase was needed — full stop. Period. If we really wanted to address the need to give people flexibility and this resource that they needed for their transportation needs, we should have looked at expanding transit and expanding the specialized transportation subsidy.

I hear the minister talk about how there was a need to modernize that. Fair enough, but I don’t think this is the way to have gone about it, because you’ve given people a false choice. That’s what government has done.
[ Page 13237 ]

To the minister: what I’ve heard her say in this exchange over the last hour and a half to about two hours now is that the minister did not consult on this specific policy. This policy was not based on what was communicated in the public document Accessibility 2024 but based on some of the conversations that she heard or some of the feedback that may have been given during that consultation process, but nothing specific to a policy like this.

I heard that the minister didn’t fully disclose the choices that people had when she spoke with them. She told them that they could still get a bus pass, but she didn’t tell them that if they did not get that bus pass, they would be able to keep the $77. That is not a full disclosure.

I heard her say that she’s made the choice to, on one hand, cancel the specialized transportation subsidy and then say that she’s rolling it out just to everybody. What I hear, though, is that the transportation subsidy was cancelled and rates were increased, and they’re supposed to go to transportation, but in reality, they likely will not, if we’re actually going to listen to the communities who are impacted by this.

The minister hasn’t done that. She’s chosen to ignore them. She’s chosen to ignore the thousands and thousands of voices that are crying out to her on this particular issue. She chose not to expand the STS. She chose not to look at expanding transit. She chose to ignore the voices, as I said, and chose not to raise the rates, while giving a tax break to the richest 2 percent.

These are all the types of choices that this government has made that are resulting in the type of life choices for people with disabilities. Do they leave their house to go to a doctor’s appointment? Do they get that bus pass that they need? Do they use the $77 for a taxi, or do they use it to buy food? That’s the choice that’s going be happening in the homes of 100,000 people because of this government’s decision.

Does the minister recognize the rock and the hard place that she has actually put people in? If she’s going to acknowledge that, is she going to work with advocates, self-advocates and families to find a better way to support people’s transportation needs than giving them this kind of choice?

[1810-1815]

Hon. Michelle Stilwell: I think what I want to stress again, for the record, just to be clear, is that we are expanding the special transportation subsidy as an option to everyone in the province with the transportation allowance.

Now everyone will receive a transportation allowance, including those 45,000 who did not have any transportation support prior to this. It is an expansion of the special transportation subsidy. It is also a rate increase for every client, and the bus pass is not cancelled. I am proud to say that we are the only province in the country that provides a provincial transportation subsidized bus pass.

M. Mungall: Noting the hour, I’ll ask one last question. The minister’s language around this has consistently been shifting.

So now what I hear is that she has expanded the special transportation subsidy to everybody, but it’s also a rate increase. It can’t be both. It cannot be both, because the rates are there to support people for food, for housing, for basic necessities, for hydro bills, for heating bills and so on. All of those have gone up in the last nine years — all of them — and people are now forced to make a choice between paying those with the increased $77 or using it for transportation.

The minister repeatedly says, over and over again, that this is a transportation allowance. It’s either a transportation allowance, or it’s a rate increase. If it’s a new…? So now three categories: shelter portion of the rates, cost-of-living rates and transportation rates. Is that what it is? Or is it an increase to the rates, and transportation programs have been cancelled? It’s one or the other.

The communications around this has been an attempt to make something awful look good because there are such good intentions behind it. But at the end of the day, the results in somebody’s life is that those good intentions will not be realized.

Can the minister come clean? Is it one, or the other? It can’t be both. Just like: is it food, or is it transportation? It can’t be both, and it’s not going to be, when people are sitting in their kitchen trying to decide what to do with that $77.

[1820]

Hon. Michelle Stilwell: The member opposite wants to suggest that it can’t be both. In fact, it can be both. It can be a rate increase, and it can be a transportation allowance. That’s, in fact, what people will see on their income assistance cheques. They will see an increase to the rate allowance, the shelter allowance will be there, and they will see a transportation allowance.

I have acknowledged before — I have always acknowledged in the House and outside of this House — that we continue to want to do more. We want to invest in the futures of everyone in this province. The way to do that is to grow the economy, to create jobs and to make sure we say yes to economic development and to things like Site C, the Port Mann Bridge and the George Massey Tunnel. We say yes to ensure that we are generating the revenues that pay for the programs and services that are delivered through my ministry.

What I want to know is what was the member opposite’s commitment to raise the rates in their election platform in 2013? What I want to know is…. She wants to be in government. She said today she looks forward to being in government next year. What is her commitment to raise the rates for people with disabilities and on income assistance so that they can make a change?
[ Page 13238 ]

Interjection.

Hon. Michelle Stilwell: Well, why won’t you say it today? Why won’t you commit today?

The Chair: Though the Chair.

Hon. Michelle Stilwell: Hon. Chair, why won’t she commit today to what her investment would be?

We made a $170 million investment to help increase the rates for people with disabilities across this province, to create equity, to ensure that everyone has a transportation allowance. I have said it over and over again. I will say it again. We continue to work on economic development in this province so that we can grow the economy so that we have the resources to fund the programs that are delivered through my ministry.

We will continue to look at policy reforms to ensure that we are putting ourselves in a position to break down barriers and create opportunities for people with disabilities and people on income assistance, and to create unique programs like the single-parent employment initiative that I already mentioned earlier today, which is a fantastic program. Yet the member opposite hasn’t had any time to ask any questions about that program. Perhaps tomorrow she’ll take the opportunity to ask about that program.

Noting the hour, I will continue tomorrow.

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

Motion approved.

The committee rose at 6:24 p.m.

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