Orders of the Day

Hon. M. Farnworth: In this chamber, I call committee stage of Bill 4. In the little House, Committee A, I call continued debate on the estimates of the Ministry of Education.

Committee of the Whole House

BILL 4 — BRITISH COLUMBIA

(continued)

INNOVATION COUNCIL
AMENDMENT ACT, 2018

(continued)

The House in Committee of the Whole (Section B) on Bill 4; R. Chouhan in the chair.

The committee met at 1:34 p.m.

On section 5 (continued).

A. Weaver: Continuing with section 3, I have one somewhat technical question and a number of broader questions.

The Chair: Members, we are on section 5.

[1:35 p.m.]

A. Weaver: Sorry, section 5 of Bill 4, section 3 that is being amended in the BCIC Amendment Act. Thank you for that clarification, hon. Chair.

The first question. With respect to section 3(e) of the act that is to be amended — by section 5 of the bill that’s the amendment act — it says specifically there that one of the purposes is to “gather and organize information on scientific research.” I’m questioning why the word “technological” was not added, as well as “scientific research.” Is this being left out explicitly, or is science to include technology here?

The reason why I do that is that a number of times in this section — that is, section 3 of the act that’s amended, section 5 of the act that’s doing the amending — “science” has been replaced by “science and technology,” and it’s really this one place where it hasn’t. My question to the minister is: does this mean to include scientific and technological research, as it says, actually, earlier in the same section?

Hon. B. Ralston: I just wanted to clarify the member’s question. In the previous act, he seems to be referring to section 3(e), which reads: “…gather and organize information on scientific research.” Is that correct?

A. Weaver: Yes, that is correct. I’m wondering whether it should be “scientific and technological research,” because we’re changing it in (d) and (f) there. Also, earlier in that actual section 3 there, it talks about the importance of the “development and dissemination of scientific, technological and scholarly knowledge.”

[1:40 p.m.]

I’m wondering whether the research is actually also technological here. It may sound like semantics, but I don’t know whether it’s just inadvertent or whether it’s deliberate.

Hon. B. Ralston: I better understand the member’s question now. Section (e) in the previous act focuses on scientific research. The amendments are to (d) and (f), substituting, for “science policy,” “science, technology and innovation policy.” The focus there is not on research but on policy.

I don’t think there was an intention to change (e). It was rather to expand the scope of the policy that would flow from it, whether it’s scientific research or technology in general. I think that’s the reason for the distinction.

A. Weaver: I appreciate the clarification. To further that, though, if the minister is able to look at section (c), it actually talks about the “development and dissemination of scientific, technological and scholarly” information.

I’m wondering whether there’s an inconsistency there. On the one hand, you’re disseminating and developing scientific, technological and scholarly research, but on the other, you’re just looking at the science aspect.

Hon. B. Ralston: I don’t think there’s an intention to emphasize or create a difficulty there. The focus is on the development of a broader policy beyond science policy, technology policy and innovation policy.

That’s clearly not the intention. I think the member has made a perceptive point, but I don’t think it really detracts from the purposes of the amendments.

A. Weaver: Thank you for the clarification.

I have a number of general questions about the role of Innovate B.C. In particular, I’m wondering if the minister could identify the relationship between the innovation commissioner and Innovate B.C., as reconstituted in this amended act here.

Hon. B. Ralston: Innovate B.C. and the innovation commissioner will be separate entities, but they will work closely together, obviously.

The commissioner is mandated to be an advocate for the tech industry, both here in British Columbia, to our federal counterparts, and, indeed, abroad. The commissioner will interact with board members and will be an ex officio member — will be invited to participate with Innovate B.C.’s board members as an ex officio member. There will be a close relationship, but the office of the innovation commissioner will be independent of the agency.

A. Weaver: Thank you for the answer. It actually answered my next question. Would the innovation commissioner be a member of the board or an ex officio member? That has been clarified as well.

My next question is with respect to…. With this new vision, as outlined in section 5 of the amendment act, pertaining to an amendment in section 3 of the original act, what is the…? If the minister could articulate in a few words what he would define as the new mission statement for Innovate B.C. Has the minister got an idea in mind? If he were to succinctly express, in two sentences…. What is the mission statement of Innovate B.C., as reconstituted here?

[1:45 p.m.]

Hon. B. Ralston: I’ve attended — and I’m sure, probably, the member has — board meetings or retreats of organizations where a mission statement will sometimes be worked on for days, if not weeks, and a lot of internal debate will take place about the exact wording of a mission statement. So to ask me to give a precise mission statement here is something that I approach with some caution.

The goal of the organization is to focus and use innovation and support for innovation to catalyze companies to be more successful in what they do, or even research institutions to be more successful. It’s a broad look at the power and the transformational force of innovation as applied to a wide range of human and societal problems.

A. Weaver: That’s very helpful, and I would never ask the minister to develop a mission statement in committee stage. It would simply be something that he could not be held accountable to — understandably so. I have, too, been in those board meetings that have taken days to decide whether it should be a “the” or an “an” or “they.”

My next question, then, is following on that previous question, actually. As articulated here in section 5(b), where it uses the words “innovation policy,” I’m wondering if the minister would be able to define specifically what he means by “innovation.”

Hon. B. Ralston: I did have a discussion with the member before lunch, and I got an opportunity to think about the question, which he very kindly told me he was going to ask me in advance.

I don’t think I’d want to be confined to a single definition of “innovation.” One looks at different institutions, and innovation has different effects and consequences. For example, research institutions — whether it’s catalyzing or driving the creative and intellectual abilities of researchers and students or whether it’s the kind of innovation that drives companies of all sizes to develop either new products or new services that allow them to grow and fuel the economy.

Clearly, innovations can be big, can be huge, whether we’re thinking of a company like General Fusion, which I’ve met with and I’m sure the member is familiar with, where the innovation that they’re recommending would literally transform the world — I don’t think that’s an understatement — or whether there are small process innovations in the way in which a manufacturing process goes forward. Sometimes practitioners on the shop floor will think of a way that things might be improved. That, too, would be an innovation.

I think what we’re hoping to do is to take a wide view of innovation in all its aspects and look to it, in a competitive and rapidly changing world, to draw on the creativity and talent of the people of British Columbia and use innovation and creative change to solve human problems, make things better, make companies grow and prosper and generally enhance the quality of life of everyone in the province.

A. Weaver: Thank you for the very helpful response.

My last question is on the issue of technology. We’ve heard a lot of discourse. I thank the member for Shuswap, who asked a number of probing questions, and the minister for his responses.

We’ve heard a lot about innovation in technology. I’m wondering if the minister could expand upon what he means by “technology,” more for clarifying the public record. Many people often think that technology means apps and stuff that has chips on it. Here, the minister has a broader definition of what “technology” is — innovation in technology and innovation in general.

In what areas other than just chips, computers or apps is he thinking when he’s talking about innovation, perhaps, in technology and elsewhere?

[1:50 p.m.]

Hon. B. Ralston: I would adopt the answer that the member suggested, which is a broad scope of innovation. I agree with him. Sometimes there’s a view that innovation is confined to software developers in downtown Vancouver. That is most assuredly not the case.

Whether it’s in Kamloops, at the Kamloops Innovation Centre; in Prince George, at the clean-tech innovation hub that’s being developed by the economic director there at the city hall; or in Victoria here with Tectoria, it’s certainly geographically broad. The scope of the problems that are tackled, and what is meant by technology, is very broad indeed.

Technology is capable of revolutionizing and changing very traditional industries, such as the mining industry. I think I’ve repeatedly given a couple of examples.

MineSense, which is a company using the Internet of things and sensors, devised a process to examine ore that’s been extracted and sort it more quickly, more thoroughly and more efficiently, thereby increasing the efficiency and, ultimately, the profit of the company. LlamaZOO has a visualization technology that looks at a mine before it’s developed, inputs all the data and then represents that in a visual display of the minesite itself in a way that helps people to understand what the mine might look like, what the ore body might look like it or how it may be extracted more efficiently.

I don’t think I would want to be confined by that narrow definition of technology, certainly, whether it’s technology, or it’s innovation solutions applied to climate change, or life sciences or ICT — across the board. There’s an institution at Simon Fraser University that speaks of social innovation — in other words, applying some of the same techniques, some of the same inspiration and some of the same talent to major social problems, whether that might be addiction or the problems of aging.

I think there’s always room, and the hope is that there are lots of solutions coming that can be implemented to solve problems and make life better for everyone.

T. Stone: I just have a few questions as well. Obviously, this piece of legislation is of great interest to me as a former tech CEO. I certainly applaud the government for taking some steps here to modernize the government’s approach, doing more to enable expansion within the tech sector.

My first question relates to the board itself, the board of Innovate B.C., which will be appointed, presumably, in the weeks and months ahead. I’m just wondering if the minister could provide a little bit more detail as to the kind of timing that he has in mind for the board, and if he can give some assurance to this House that there will absolutely be representation on that board from rural British Columbia.

I think we all acknowledge that innovation is taking place in communities large and small, in every corner of this province, so it will be very important to make sure that there is representation that reflects the breadth of that innovation that’s taking place across B.C., including representatives from rural British Columbia.

Hon. B. Ralston: I thank the member for his question. I know he raised this issue in his speech at second reading. I thank him for that. As the member will know by my reference to Kamloops Innovation Centre, I’m aware of the dynamism and creativity in the Kamloops tech sector. Indeed, they won a national award for the start-up of the year. The expectation is that once the agency is reconstituted legally and is in place, then appointments will be made. I don’t want to confine myself to a time frame, because sometimes people that you ask and think would be good don’t always accept.

[1:55 p.m.]

Certainly, the goal is to have the kind of representation that the member refers to on the board. I think it’s important, one, because that’s the reality. Secondly, I don’t think it would be right, or a proper reflection of the kind of change we want to bring about, to confine it only to people from, say, the Lower Mainland, for example.

I certainly appreciate the member’s comments. In fact, probably we could talk about this off line. If he has people that he thinks would be good for the board, then I would be prepared to consider them.

T. Stone: I certainly appreciate the minister’s comments, and I will take him up on his offer there to sit down and have a chat. There are some exceptional people that come to mind in different parts of the province that would be, I think, outstanding participants on the Innovate B.C. board.

I was pleased to read the communication that was wrapped around this bill when it was introduced that indicated there would continue to be support for the important work that’s done with the First Nations Technology Council. I think every member of this House fully supports doing everything we can to encourage and foster more success with respect to Indigenous entrepreneurship, whether that involves technology and innovation or not.

I’m just wondering if the minister could share a few of his thoughts as to how he sees that relationship between the First Nations Technology Council and Innovate B.C. really evolving over the months ahead.

Hon. B. Ralston: I want to thank the member for that question. I think that’s certainly an important question.

BCIC, the predecessor organization, has a number of programs that will be continued that support Indigenous technology entrepreneurs, including the venture acceleration program and the tech works program. I can give more details if the member wishes.

In addition, the tech summit, which was begun under the previous government, is being continued enthusiastically by this one. There are a number of Indigenous stakeholders who are being asked to provide meaningful participation.

I can briefly list them here: First Nations schools; First Nations Schools Association of B.C.; First Nations Education Steering Committee; Indigenous Adult and Higher Learning Association; the First Nations Technology Council, which is the organization the member referenced; the First Peoples cultural council; the Indigenous Business and Investment Council; and the Aboriginal labour market committee.

They are all being asked to provide their input into the content of the tech conference. Some of that, I think, will translate into participation, although I haven’t formally considered it. I think it’s important to note the future structure and composition of the board of Innovate B.C.

T. Stone: I appreciate the minister’s answer there.

In this section, there is reference to building capacity to access new markets. I know this has been canvassed a bit with a few other members. I expressed this in my comments in second reading, as well. As a former tech CEO, I remember back in the day, when we were really in the early stages of our business, trying to build it in British Columbia. It was far more difficult to do business with British Columbia government entities than it was to do business in other jurisdictions.

[2:00 p.m.]

I think some progress has been made on this front, without question, in terms of where we are today. But in talking with friends in the tech sector and other folks I know that are still actively engaged in bootstrapping their companies and looking for those initial pilot customers and so forth, I still hear far too often that it’s not as easy as it should be to actually get your foot in the door with local governments, with Crown corporations, with provincial government entities here in our own province.

I’m curious if the minister could offer some thoughts as to what kinds of strategies he thinks may flow from the work that Innovate B.C. will do and the innovation commissioner — obviously, with direction and input and support from the minister himself — to really give B.C. companies, B.C tech start-ups and those in the early stages of growth that better opportunity to actually get their foot in the door within the public sector here in our own province.

Hon. B. Ralston: I thank the member for his question. The member raises a recurring question, and I think he’s right in his characterization of it. It’s still too difficult.

Quite often what one encounters is companies who say they’re out globally trying to sell their product or service, and people say: “If you’re so good, how come your local jurisdiction, your local provincial government, from your very sophisticated tech sector, hasn’t hired or bought your service or bought your product?” It is a way of establishing credibility in the market for future sales and building the strength and the sales of the company.

Some work has been done. The member might be familiar with it. There’s a program called start-up in residence which draws local companies and invites them in to look at what sometimes in the business jargon they call pain points — problems of operation or service or delivery in government. It brings in companies and matches a start-up company with the ministry or agency, and they devise a solution.

This is borrowed directly from the private sector. One of the legendary start-ups in Silicon Valley has a very similar program where they invite start-ups in and pair them off with industry leaders, whether it’s in transportation or finance or tourism or shipping, and then have a start-up bring fresh eyes and fresh enthusiasm and an innovative approach to solve problems that are vexing the company.

There is a program called start-up in residence. I attended an awards ceremony for the first class, I guess you could call it, of that. It seems to be successful. But I would agree with the member that it’s still far too difficult and that there is more to do. Government is….

There’s another program, which is called the continuous service improvement lab, here in Victoria that, again, brings talented people from the government, in a hothouse atmosphere, and asks them to examine problems in service delivery and operation in the technology within government. They’ve had some considerable success as well. That’s been running for about a year or so, I believe.

[2:05 p.m.]

Those techniques and that trajectory are being followed, but I certainly agree that more can be done and more should be done. It would provide an important shot in the arm, an important incentive, to those companies and help them get up and running. I think if that’s the case, we all benefit.

T. Stone: I would concur. The start-up in residence program, which was an initiative of the former government, is, I think, working. There seems to be an appetite in the sector to actually expand it. Hopefully, it would be the intent of the government to take a look at potentially doing that.

Another initiative that, again, I’m not certain as to where it is today — and perhaps the minister could fill me in a bit — is this concept of a procurement concierge, some type service that would best match government’s needs with companies in British Columbia that are innovating and that potentially could meet those needs. We called it the procurement concierge service. It was received with a fair bit of excitement within the tech sector when it was announced, but I don’t believe it was actually…. I think this was just before the last election campaign.

I’m not certain that it was really lifted off the ground. Nevertheless, I think it’s an idea worthy of exploring. I would ask if the minister could offer some thoughts on whether or not that’s something that he and government would be prepared to look at.

The second piece would be…. I think some progress was made on simplifying the RFP process, as well, inside of government. I was always one to be pushing, pushing, pushing to simplify it — more, faster. Again, with B.C. tech companies in mind, it wasn’t that long ago that to bid on a project with B.C. Hydro or with a different arm of government, it would involve an RFP of hundreds of pages. I think that was whittled down quite dramatically.

Perhaps the minister could provide some thoughts on whether or not he would be willing to entertain any further gains that could be made at really simplifying that RFP process.

Hon. B. Ralston: Let me deal with those two in the order that they were raised. The procurement concierge, I’m not…. Staff is not aware of where that was at. I think it may be for the reasons that the member set out. It was an idea that had not come close to beginning implementation. The way in which the member has described it, it sounds like something that might well be worth investigating. I’ll follow up with my staff, and we’ll see what we can find out. We can advise the member of our efforts.

Certainly, we would want to make access to government, in that way, easier. Again, it’ll lower the transaction cost, and we’d get a wider range of bids if we make it easier and more accessible. That would be an advantage to government that I would welcome.

On the RFP process. Some of the logistics of procurement, of course, now fall in the Ministry of Citizens’ Services and don’t fall within the new structure. I’m advised that for contracts under $250,000, there is a two-page RFP, which was implemented and is being continued. Again, I think it’s important to make access to government…. The methods by which we can encourage and contract with small business in British Columbia are important. I also have the mandate for small business, so I’m keenly interested in that as well.

[2:10 p.m.]

I think that’s being continued, and any enhancements that could be made to that process, I’m certainly open to hearing about.

T. Stone: I appreciate that.

My final question relates to what is a critical component of any successful tech strategy. That is ensuring that we’re focused on the talent side of the equation and, first and foremost, growing talent here in British Columbia. I think that starts by ensuring that we are adding more seats in our post-secondary institutions, which was initiated under our former government. The current government has followed suit.

I know that up in Kamloops, folks are very appreciative of soon having a full-fledged software engineering program. It is another option for Kamloops kids to stay in Kamloops for their education. It’s good for industry there, for the hundreds of tech companies that now exist and that are yearning for good talent. I would hope that the government would intend on continuing to look at further opportunities to expand the number of science, technology, engineering and math positions at post-secondary institutions around the province. Perhaps the minister could speak to that.

Secondly, co-op placements are critically important as part of the equation. We need more co-op placements, opportunities for co-ops around the province. Perhaps the minister could speak to that.

Last but not least, I was very proud when our former government introduced coding in the schools in grade 6. I speak to this in a bit of a personal…. As a dad, first and foremost, I was a bit taken aback, in a good way but very proud, when my 11-year-old daughter came home and couldn’t wait to tell me that she had just done her first line of code at school. She was in a grade 5-6 split class.

I realized, in that moment, the power of what that initiative really meant: sparking the imagination of kids, a little girl like my daughter. So I’m a very strong advocate of expanding coding beyond grade 6 into later grades as well. I would like to see it expanded, ideally, to grade 9 as a next step. I’d ask the minister if he has any thoughts about the impact of coding in our schools and our kids being exposed to that and if he feels that there’s any appetite to expand coding to grades beyond grade 6.

Hon. B. Ralston: I thank the member for acknowledging the announcement that was made throughout the province, but particularly as it affected Thompson Rivers University. I know I’ve spoken with the president, Dr. Shaver, and he was delighted that a full software engineering program was going to be funded at Thompson Rivers University.

As he pointed out, and as the member has pointed out as well, there’s demand for that program. It will be filled very rapidly. Although it’s a big expansion, I think we’ll be monitoring it. I can’t speak for the minister, nor for the Finance Minister, who would have to pay for a further expansion, but I think we’re quite proud of the fact that, for that sector, particularly in Kamloops, we’ve implemented that program.

[2:15 p.m.]

In terms of co-op placements, there is a $10.5 million line item for Innovate B.C. — or BCIC, the predecessor organization — for tech co-ops. I totally accept what the member says about the value of co-ops. They’re valuable for the employer, in the sense that they get a good chance to look at enthusiastic students and decide whether they are the ideal candidates for permanent employment — plus the students themselves get real-life work experience and also can decide whether they want to be at that company or in that particular field. A lot of companies really value the co-op experience. Certainly, that’s why we’ve committed to funding it further.

On coding in schools, I recall the member’s story about his daughter from his second reading speech, and I was touched by that. I would say, though, that the decision to expand coding or not would be a decision for the Minister of Education. I think I would be straying jurisdictionally into his area. So I probably shouldn’t venture an answer. Certainly, I will speak with him and find out what his views are on that, and I would encourage the member to perhaps pursue that in estimates with the minister.

Sections 5 to 11 inclusive approved.

Title approved.

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

Motion approved.

The committee rose at 2:16 p.m.

The House resumed; Mr. Speaker in the chair.

[2:20 p.m.]

Report and
Third Reading of Bills

BILL 4 — BRITISH COLUMBIA

INNOVATION COUNCIL
AMENDMENT ACT, 2018

Bill 4, British Columbia Innovation Council Amendment Act, 2018, reported complete without amendment, read a third time and passed.

Hon. S. Simpson: I call second reading of Bill 8, the Supply Act.

[R. Chouhan in the chair.]

Second Reading of Bills

BILL 8 — SUPPLY ACT (No. 1), 2018

Hon. C. James: I move that Bill 8, Supply Act (No. 1), 2018, be read a second time now.

Existing voted appropriations will expire on March 31, 2018. Consistent with past practice, Bill 8 provides interim supply for ministry operations and other appropriations for approximately the first two months of the 2018-2019 fiscal year while the House completes debate of the appropriations presented in the ’18-19 estimates. Interim supply for ministry operations and other appropriations is required to ensure continuity of government services until the final supply bill comes into force.

Bill 8 also provides one-third of the combined vote amounts in schedules C and D of the ’18-19 estimates for disbursements related to capital expenditures, loans, investments and other financing requirements. The one-third authorization provided for in relation to these disbursements is higher than that authorized in relation to ministry operations, as the disbursements described in schedules C and D aren’t evenly distributed throughout the year. Therefore, you require a higher level of interim supply to accommodate the payments that will be made under these schedules.

Bill 8 also authorizes the full amount of the disbursements related to in schedule E of the 2018-2019 estimates. Schedule E of the 2018-19 estimates outlines the revenue collected on behalf of, and transferred to, specific programs or entities. There’s no impact on the operating results, the borrowing or the debt resulting from the collection and transfer of this revenue.

These interim supply appropriations are based on accountabilities and allocations outlined in the 2018-2019 estimates. The final supply bill for the 2018-19 fiscal year will incorporate these amounts to ensure it reflects the sum of all voted appropriations to be given to government in that fiscal year.

S. Bond: Thank you to the minister. This is second reading, so I certainly don’t intend for the opposition’s comments to take a very long time. My co-critic and I, as we move through Committee of Supply, will have perhaps one or two questions. Obviously, we’ll shortly be moving on to another bill which will be much more lengthy in terms of our discussion.

The minister certainly characterizes this bill in the appropriate way. It is a consistent practice that as we watch the budget process unfold, we see the Finance Minister table her budget. And when she tables that budget, she also tables the estimates for the various ministries. In essence, the fiscal plan of the government is laid out.

The estimates process is incredibly important. It has been really interesting to see the evolution of that process over time, as a person who has been in this place for a fairly lengthy period of time. It’s fantastic now to see MLAs having direct access to ministers. Yes, sometimes that takes longer, but it’s really important because it’s the chance for locally elected representatives to bring their issues, their concerns, from a local perspective, to ministers. While I understand that may often require additional staff support and briefings, the estimates process is absolutely critical to ensuring that there is a transparent budget process.

Certainly, over the course of the next number of weeks, both opposition members and, of course, members from the Green Party will engage in a very lengthy process. Basically, it’s an extended question period time, where every day we will walk through various ministries and ask some very important questions.

[2:25 p.m.]

The point of the supply bill is pretty straightforward. It basically allows government to continue to operate. It makes sure that public servants continue to get paid while this estimates process goes on over the next period of, as the minister has pointed out, two months.

The bill itself notes that the allocation, particularly on the expense side, related to the public service will be about 2/12 of the total amount of the votes of the government. I think it’ll be interesting, also, to have the minister walk through, perhaps more specifically, a little bit of information about the uneven distribution of payments, which is requiring a greater allocation of supply for some of the other aspects of the bill. That matters a great deal.

Technically, this bill will allow the government to take and withdraw those funds from consolidated revenue. As I said earlier, it’s obviously a very important piece of legislation, as we want government to continue to function during the period of time while we are going through the estimates process.

I think that inherent in the discussion around the budget process will continue to be some of the significant concerns that the members of the Green Party, the opposition and, in fact, British Columbians have been raising over the last number of days since the budget has been tabled.

Certainly, the opposition remains very concerned about the ability of this government to deliver on the promises that it made without relying on revenue from what essentially is a surprise tax increase to British Columbians, and in significant ways. We’re talking about over $5 billion this year alone.

When we talk about the more significant issues that we want to spend our time on, it is not unlike what I said. It was interesting. I went back to look at what we focused on in the supply bill when we were at the budget update period when the government was first put in place. I’m just going to quote what I said at that time. I said: “So we have aggressive spending, very little additional fiscal room left for any other spending, and increased taxes to pay for those initiatives. Add to that the other side of the equation: promises made to British Columbians about key programs and service enhancements. No sight of them in the budget.”

Well, I probably could say ditto, because we’re seeing exactly the same kind of approach to the budget that we saw with the budget update that took place in the fall. I have regard for the minister. We have been in this place together for a long period of time. These questions are not personal in nature. They are about a different approach between a government and an opposition. So those questions are important.

From my perspective, there is added weight when it’s not just the opposition bench sitting up and trying to figure out what kinds of questions we’re going to ask every day. Members on this side of the House, and I am positive members on that side of the House, have been flooded with emails expressing concern about the employers health tax and the so-called speculation tax. Those are important issues.

I have to admit to a degree of frustration when in question period every single day. I’ve been on that side of the House too, and I know what it’s like. You know, here are the answers. How do we get through question period?

British Columbians are concerned, not just members of the opposition sitting on this side of the House. Whether you are a university, a municipality, a small business owner, there is deep concern about the impacts of the tax. So that relates to supply. I’ll tell you, what I’m concerned about is that we’re actually going to have supply that’s going to deliver the budget that the Minister of Finance laid out.

I think British Columbians deserve some thoughtful, careful answers and respectful ones. When a small business owner tells me that he or she is concerned about the viability of her or his business, that should be a concern to the members opposite — every single one of them in their individual ridings. Yet that’s not the attitude that we’ve seen in this House. It’s: “We’re eliminating the MSP.”

[2:30 p.m.]

Yes, we admit the government is eliminating the MSP premiums. But at the same time, they are replacing that tax with another tax. It is a replacement tax. It is an NDP replacement tax that, in essence, is being passed on to businesses in British Columbia.

[L. Reid in the chair.]

If the Minister of Finance does not think that that somehow does not impact average British Columbians, she would be wrong. All of the people contacting members on this side of the House and on that side of the House are making it clear that they have several options. One of them includes transferring the additional burden that they will bear on to the average consumer, whether it’s a product or it’s a service.

We remain incredibly concerned, and the thing that is particularly enlightening is when the comments made in September can be repeated almost verbatim about the Supply Act in March, I think that we have a concern about the thinking, the planning, the execution of this budget. I know that the minister knows that there will be much more discussion about this.

We’ve seen, since — and I said it in a way that was pretty graphic — the keys to the Legislature have been handed over to this new government, $8 billion in tax measures either in place or announced.

Interjection.

S. Bond: Well, we used to say seven months, but I actually heard a member the other day talk about eight months, so I think we’re up to eight months now.

Today what I want to make very clear to the minister is that what we support, in terms of the Supply Act, is keeping government operating. Our comments today and our support will obviously allow for that to take place. But we question the long-term sustainability of this budget, and we certainly are very concerned about the issues that British Columbians have been expressing for the long-term supply issues, the long-term viability of this budget.

My co-critic and I will have more to say as we work through other bills in the Legislature. But I will end my comments about the Supply Act there. I know that the Leader of the Third Party intends to speak as well. With those comments, I appreciate the opportunity to make those remarks about the Supply Act.

A. Weaver: I rise to speak to the Supply Act. I thank the member for Prince George–Valemount for her comments and the minister for her introduction of the bill.

This bill, as the member for Prince George–Valemount pointed out, is, essentially, following tradition, where, after the budget is announced and estimates are brought forward, a portion of the budget getting us through this legislative period is requested up front to ensure that people get paid, in essence — that government can operate, that capital projects can go forward.

In this Supply Act, we’re approving 2/12, or 1/6 — quite remarkably, not to do fractional division, 2/12 is 1/6 — of the total amount of the main estimates, as well as one-third — you could have said 4/12, if you wanted, as opposed to one-third — of the capital budget. I won’t be proposing an amendment on that, although I think it is sloppy mathematics.

On a slightly different note, I do have a number of concerns, serious concerns, with respect to the Supply Act because the Supply Act is making assumptions with respect to the implications of the budget. And, of course, the budget, which we’ve discussed, has got some assumptions in it.

I and my colleagues are frustrated here in the B.C. Green caucus. We’re frustrated because on July 18 of 2017, this government was sworn in. We are now nearly eight months since government was sworn in, and we’re still questioning what legislation is going to be brought forward. In the 19 days of debate — we’re in our fourth week now, of debate here — here we are, and what’s being brought forward?

We’re getting the Supply Act to debate — fine. Fully four of the eight bills that the government has introduced, including this Supply Act, are really housekeeping bills or bills that every government has to bring in. We have the bill, of course, to ensure the supremacy of the parliament. I won’t talk to that, obviously, because that’s a different debate. We have the Budget Measures Implementation Act. Of course, I’m not going to speak to that bill either. It’s another debate.

[2:35 p.m.]

We have the now famous Miscellaneous Statutes Amendment Act, which we’re all waiting with bated breath to debate as we define things like Pacific daylight-saving time. These are what the government’s agenda is. This is troubling. These are what the government’s agenda is. This is troubling.

Let’s go back to July 24, 1972, when an election was called. On August 30, 1972, a new NDP government was formed. In the first session of that 30th parliament in the fall, they sat for nine days, and they passed 13 bills. In the second session, they passed 93 bills in 61 days — 93 bills.

This government has had 16 years in opposition to come up with an agenda, and now we’re being asked to approve a supply act when we don’t actually know what that agenda is. We’re 19 days in, and we’ve seen precisely four non-traditional bills to debate, one of which is the Supply Act.

We’re troubled about a number of the assumptions in this bill that are leading to the Supply Act. We have seen government talk about an employers health tax. We’ve seen government talk about a speculative tax. We’re not sure what they mean when they’re talking about it.

I had thought, after conversations and reading the media, that a speculation tax wasn’t going to apply to British Columbians. Silly me for actually listening to the Premier and the Finance Minister say that in media scrums. But then I see an interpretive bulletin that actually says that what’s going to happen, leading to estimates that we have to approve here, is that in fact, if you’re a B.C. resident, you’re getting a tax credit. That’s what the interpretive bulletin says: you’re going to get a tax credit.

You tell that to the constituents of mine or other colleagues across this who aren’t earning any income but happen to own a family cottage on a lake that happens to be in the boundary of Nanaimo regional district or on one of the Gulf Islands — that now that person is going to be charged $12,000 a year as a speculation tax. They’ll get a tax credit, sure, but they’ve got no income on which to apply that tax credit. How’s that a speculative tax?

This government clearly believes that this real estate market is a market from which they can sap revenue. We’ve asked: what is the outcome? What are the outcomes you’re looking for your measures? That has yet to be defined.

We see projected budget increases, and then stabilization of revenue, coming from things like this so-called speculation tax. If it was a speculation tax, you would hope it’d go to zero. It’s being applied, in our sense, as a paper wealth tax. We feel that what’s happening here is that policy and finance and tax measures are being made up in press scrums.

The market needs certainty. What are your outcomes? We have got a supply bill that’s made budget estimates assuming income from a speculation tax whose implementation has literally changed three times since the budget was announced.

Is it going to apply to the Gulf Islands? Is it going to apply to the city of Kelowna, where the rental accommodation right now is critically dependent on owners renting their houses to students for eight months of the year and using those houses in the summer for either vacation rentals or to live in themselves? This is critical for the Kelowna economy, yet we call that a speculation. No. They’re playing a critical role to rental properties there.

We understand that Vancouver is out of control. We understand that the Vancouver market’s completely out of control, and we understand that it was far too long to deal with it. But the revenues here, we’re uncertain of. We’re frustrated, because we don’t know what the agenda of the government is, we don’t know the direction that they’re going in the housing market, and all they’ve done is signal to the market that it’s going to be chaotic times ahead because we haven’t articulated what this critical new measure is to broader society. That’s not how tax measures are going to be brought in.

We proposed, of course, dealing with the problem, which was the foreign capital that’s flowing into this province. This would have given certainty here, because we would have assumed that when you start to tax that foreign capital or you actually eliminate the source, you know those revenues are going to go to zero.

[2:40 p.m.]

This government, in the supply bill, is actually counting on those revenues and basically taxing the grandmother in Oak Bay who happens to have a house from 150 years of family on Saltspring Island that they want to leave to their children.

How many MLAs here have properties on the Gulf Islands? How many government MLAs have properties on the Gulf Islands? Well, one just has to look through the disclosure. I can tell you it’s a number of them. Are they getting a surprise, knowing that they’re going to pay $12,000 a year, if it’s worth 600 bucks? So $12,000 a year, but they’ll get a tax credit. They get a healthy salary here. Okay, that’s fine. But most of them don’t.

We’re very worried down here. We’re worried that the government is actually falling into the trap that they have branded on themselves over many years, which is one of not being able to be fiscally responsible with the money, the hard-earned, taxpayers’ money, in our economy. That is troubling. It’s very troubling.

Obviously, we support the supply bill. Obviously, we must have a continuation of the government operating and all the schools and hospitals around this province. Obviously we must support this bill. But we want government to stand back and reflect upon what it’s been doing.

It has had 16 years — or the dreaded 17 years, depending on where you count, 16 or 17 years — to develop a legislative agenda. We are now 19 days into this session, and we’ve had nothing.

We stuck our necks out. We recognized that British Columbians wanted a change. We recognized that they wanted to have people put first. We recognized that they wanted a child care plan, which we see in the Supply Act. We recognized they wanted real measures done in the housing market. We recognized that they wanted bold action in the housing market. What have we got? A tepid response that, frankly, is botched up from its first introductions through the present day we are here.

I’m worried, because let me say that the measures that are being brought forward are not dealing with the problem there. If you want to tax speculation, tax speculation. But we’re not actually taxing speculation here. You could still, here: buy a townhouse; take possession; flip that townhouse four times; pay zero property transfer tax because you bought it in a bare trust.

Government has known about this for months and years and railed on the B.C. Liberals to close that bare trust loophole. Have they done it? No. Why? Because they have to collect more data. How much more do we need to study these issues? How much more studying do we need? Clearly, too much, in that case, but what about the employer health benefit? Well, we don’t need to study that, even though we have a MSP tax panel to actually do just that.

We decide, as reflected in this Supply Act, that we know what the answer is. We struck a panel of distinguished academics who put their careers and credibility on the line to write a report on which government is going to base decisions, and government determines the way it’s going to deal it with before their interim report is there. And it had to, because you don’t make budgetary decisions two days after an interim report is done.

What does that say that government is actually doing? Is it listening to the experts? Only on what it wants to listen to. Only on what it wants to delay, what it wants to kick down the road.

It’s not listening on the employer health premium — again, a piece of tax policy that, as far as we can tell, was introduced, realized it was done inappropriately. Now we’ve got the MSP panel coming in with their final report clearly articulating that they don’t approve or recommend the direction government has taken. How’s government going to respond? They’ve boxed themselves into a corner. They’re going to respond in a way that’s going to hurt schools and hospitals all across this province.

Now they’ll say: “Okay, we’re going to cut it for the average person.” Yes, they will. They’ll cut it for the average person. And I get that there are unions out there — I was one of those negotiators — who’ve negotiated MSPs as part of a collective agreement, and it was costed against the settlement. I understand that. But what you do then…. I mean, there are also unions right now going back to their employer, saying: “You’re not going to have to pay that. Give us the money back.” Now the employer is getting doubly hit, because they’re going to get a health care tax. Not only are they going to get a tax; they’re going to get an increased tax.

I don’t understand the logic of this government not thinking this through and not recognizing that there are models out there and that you don’t hit the economy with a baseball bat. You recognize that there are problems. You send a signal to market, and you do so slowly, and you don’t make policy up in each individual press scrum.

[2:45 p.m.]

I will quote one of the legislative reporters here who accurately assessed some emails that my constit office was sending out suggesting that in fact the speculation tax wasn’t going to apply to British Columbians, because we heard, in press conferences, government say just that.

They said just that — that it’s not going to apply to British Columbians. But in fact, it does. It’s applying, through a tax credit, not only in the problem area of Vancouver but in downtown Kelowna, which will absolutely devastate their economy.

In Parksville. The member for Parksville-Qualicum talked about a development that likely won’t go ahead. Parksville is a community that caters to — guess what — snowbirds, people from the prairies who are trying to escape the cold winters and come to Parksville for four or six months a year to live. Sometimes they rent out their home in the summer, for summer vacations. It’s a community whose entire economy is based on tourism — snowbirds and others.

What about if we go to Cultus Lake? I had a passionate plea from a citizen from Langley who said they just bought a house. They’ve been saving their life for a place in Cultus Lake. They’ve entered into a contract, and now they have to move from the contract and get out of it, out of fear that the speculation tax will apply to them. They’re afraid that they’re going to be sued because government hasn’t given the market certainty as to the direction it wants to go. This is unacceptable.

We’re debating a supply act where the government is asking: “So give us two-twelfths.” It should be one-sixth. That’s actually a beautiful demonstration of what I’m saying. Get the numbers right. British Columbians deserve that. They deserve a signal. They deserve a real estate sector that actually deals with the problem — not Whac-a-Mole, where you put a foreign buyer tax in Victoria and one in Nanaimo regional district. Guess what. You go to Cowichan Valley regional district.

There’s no difference between Cowichan Valley, CVRD, GVRD and Nanaimo. There are just a few arbitrary roads in between. So we Whac-a-Mole down here. We Whac-a-Mole up there. When you Whac-a-Mole in Nanaimo regional district, you’re going into the rural communities of Coombs and Errington. They’re not actually communities that have any housing problem. You’re going into these rural communities and Whac-a-Moling there. Meanwhile, you’re leaving Cowichan Valley open — pristine farmland that is being bought up and turned into mansions. But you’re not dealing with that.

The CEO of the Royal Bank has identified what the problem is. We know what that problem is. CIBC has identified the problem, by clamping down on foreign mortgages. This government is actually not viewing what the problem is. Instead, they’re viewing this tax, to generate revenue in the Supply Act that we’re debating, solely as a form of income to fund its other expenditures. That is reckless, and we deserve better.

We deserve government to declare its agenda. We’ve given them a full eight months now, and we are waiting. We continue to wait to know: what direction? What are they going to introduce? You promised a bunch of things. I sat here for years and watched private member’s bill after private member’s bill being introduced.

I come back to Dave Barrett. Ironically, and sadly, we celebrated his life last week. Dave Barrett, who in his first session, in the spring…. His government passed 93 bills, many of which are around today — one bill every three days over the short term.

Here we are, government saying: “Trust us. We have an agenda. Give us some money now. We’ll kick it down the can, and we’ll vote again later. But we’re not really going to tell you what that agenda is, even though we’ve had so much time to do so. What we’re going to do is make up tax policy, on the fly in press scrums, creating chaos in the market.”

We deserve better. So while I stand in support of this Supply Act, because we must pay the government, I could say we have very serious issues with the budget implementations.

Interjections.

A. Weaver: People are joking: “Well, you have to support the Supply Act.” We have to. If we don’t support the Supply Act, basically, nobody gets paid, whether it be in schools or hospitals. The government shuts down.

[2:50 p.m.]

I mean, they do that in the U.S. all the time, and it seems to be okay. But we don’t want to do that here. We don’t want to do that here in Canada.

With that said, I say that now we have very serious issues with the way government is implementing the speculators tax and very serious issues with how the government is implementing the employers health tax. We have nothing now before us in legislation. We’re told it’s coming in the fall. Government has months to fix it. I expect them to fix it, because frankly, right now it’s unacceptable. Frankly, right now we need to have certainty.

I plead on government to stop making up tax policy on the fly, in press conferences. Give us certainty, so we know what’s going on, and stop scaring people across the province. They’re contacting me. They’re contacting our colleagues across…. They’re contacting members here. We deserve better.

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

Hon. C. James: So much to respond to. This is the Supply Act, so I am going to actually stick to the Supply Act — tempting as it is to get into budget debate with members from both sides of the House.

There are just a couple of things that I think are important to note. First, I want to say that the member, my critic on the other side, from Prince George, made a very important point, which is that the opportunity for questions, the opportunity for making sure that the opposition has a chance to be able to question ministers, is exactly why we bring forward the Supply Act. It’s an opportunity for the estimates to occur, for accountability to be there. That is a strong part of our democracy, whether you’re on that side of the House or this side of the House. A critical piece of democracy is to provide for that debate and discussion.

The member also spoke about differences of opinion. That is in fact why we’re here. That is why we’re having this discussion around the Supply Act and around estimates. It’s so that we can talk about our approaches. It’s so that we can talk about our beliefs, our directions, our principles and the values we’re bringing forward in the work that we’re doing as ministers and in the work we’re doing as government.

I look forward to that debate. I look forward to that debate about differences when it comes to the budget, because we do believe in this budget that we have brought forward — a budget that focuses on the people of this province, who help build the strong economy that we all benefit from. We do believe, as I’ve said over this last couple of weeks, that the people of British Columbia should benefit from the prosperity of British Columbia. That has not been happening in this province.

Did we bring forward a budget with some bold measures? Yes, we did. Are we taking action on areas that the public has expected and asked for, for years in this province? Yes, we are. It’s because the people of this province deserve to share in the benefits of this province. They help build those benefits. That hasn’t occurred.

I know we’ll have an opportunity to talk in other bills and in other debate about the budget. As the Leader of the Third Party mentioned, there are not measures in this bill, in the Supply Act, that speak specifically to the speculation tax or to the employers health tax. We have had discussions over that, and I expect those discussions will continue.

When you are bringing forward a new tax measure like the tax measure around speculation, it is the responsible thing to ensure that we listen and take the opportunity — as we’ve been doing since we announced the principles of that tax in the budget in February — to analyze all of the issues that have come forward. That’s exactly what we’ve been doing since February, and we will continue to do that. The details will come out, and we will ensure that people have all the information they need, well before we are moving into the fall and well before the legislation comes forward.

With that, I will move second reading of Bill 8, Supply Act (No. 1), 2018.

Motion approved.

Hon. C. James: I move that Bill 8 be referred to a Committee of the Whole House for consideration at the next sitting after today.

Bill 8, Supply Act (No. 1), 2018, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. S. Simpson: I would call committee stage of Bill 2, Budget Measures Implementation Act, 2018.

Deputy Speaker: This House will stand recessed for three minutes.

The House recessed from 2:55 p.m. to 2:58 p.m.

Committee of the Whole House

BILL 2 — BUDGET MEASURES
IMPLEMENTATION ACT, 2018

The House in Committee of the Whole (Section B) on Bill 2; L. Reid in the chair.

The committee met at 2:58 p.m.

On section 1.

The Chair: Minister, did you wish to introduce your staff?

Hon. C. James: I have with me Richard Purnell, who is acting director of tax policy, and David Karp, director of income tax policy. I’m going to introduce the staff who may be coming and going. For the members opposite, we may have some staff coming in for particular areas. Jord Goss is executive director of the consumer taxation programs branch, revenue division. Jeffrey Krasnick is executive director of the income taxation branch, revenue division.

These are people who’ll be coming in and out again: Duncan Jillings, director of property tax, and Brad Snell, who is the senior policy analyst in the mineral, oil and gas revenue branch. They’ll be coming and going as we’re going. I look forward to the discussion.

T. Redies: Thank you very much to the minister, and thank you to the staff for coming. This is a very technically heavy bill, so I’m sure the minister feels very happy to have some experts around her. I know I would. This is, again, quite a technical bill. We are going to be asking for clarity, because we really just couldn’t, in some cases, make heads or tails of some of the changes.

[3:00 p.m.]

With respect to section 1, can you explain what’s happening here and how these changes are being reflected through other sections of the bill? It does make reference to other acts. Maybe you can just sort of set the framework for the rest of the discussion. Where else do these changes occur, and what does that mean?

Hon. C. James: Maybe I can talk about the principle of bringing forward the change. As the member has pointed out quite rightly, there are a number of sections. That applies across a number of these pieces of the bill where, by making a change on a taxation piece, you have to make sure that it’s reflected in a number of different acts. So that’s what you’ll see. You’ll see, often, what appears to be repetition in a number of the pieces, and it’s because those changes also have to occur in other acts. The member quite rightly points out that references to the School Act and the exemptions will come up in other parts of the bill, and we can reference those as we go along.

Just to talk about the general principles of this, this is related to providing enabling support to municipalities. Right now, municipalities can exempt property tax for municipal revitalization areas or zones. They can zone a particular area. They can exempt property tax to encourage development. What we’ve said is that the province could also be a partner in that by exempting school tax in that area, in that zone, if the municipality chooses. So this isn’t directive. This is permissive and gives an opportunity for municipalities to make a determination, to set this revitalization area and then have the opportunity to have the province match that with the school tax.

I think it’s important. I know the members on the other side know this, but for people who are listening: a school tax doesn’t relate to schools. I think that’s important to acknowledge. I think many people…. I know the member across the way, my critic, was also on a school board. I can’t tell you how many times I had to explain to people that the tax on their property bill that said school tax wasn’t related to the school board and the spending of resources at the school board. It’s a provincial tax. It may have had a relationship way back when, but there isn’t a connection now. Basically, what this amendment does is add the provincial rental revitalization exemption from property tax imposed by B.C. Assessment.

S. Bond: Thank you to my co-critic. We’re going to work our way through these sections, and I very much appreciate her beginning.

That’s a very interesting description, and I appreciate it. Did municipalities make a request that there be the opportunity for the province to provide an exemption? Could the minister give us an example of when a municipality might want to use that tool?

Hon. C. James: We’re going to make sure that the staff who deal with the municipal tax come in, in case there are specifics.

We did hear, during the housing consultation that the Minister of Housing was doing, that municipalities were looking for the opportunity to provide further incentives. For example, if they had developers who wanted to come in and look at building purpose-built rental housing, they had the opportunity, as a municipality, to be able to say: “Well, we can give you a break. We’ve got this tool already.”

Any other tools that are possible and were available were the kinds of ideas that were coming up during the consultation. The Minister of Housing did a number of round tables and forums with members from not-for-profits, from housing, from municipal governments and heard a number of ideas. This was one of the approaches that came up.

[3:05 p.m.]

We’ll get staff. We can get some specifics where it’s been utilized — not this tool, because this is obviously a new tax, but where the municipalities have utilized this revitalization. We can get some specifics for the member if she wishes.

S. Bond: Thank you to the minister for that response. It’s basically, then, a tie-in to the housing strategy that the government has tabled, most specifically, but there may well be other things.

Does the minister or the ministry have any idea of the quantum in terms of forgone revenue?

Hon. C. James: To go back to the purpose of the revitalization, it’s utilized by municipalities in a broader sense than simply looking at rental housing. It’s often used, for example, for a downtown revitalization. It’s a fairly broad approach.

Our approach from a province’s perspective and from the school tax perspective is simply rental housing. That is the only portion that we’ll be looking at. We’re expecting very little revenue loss based on that because we’ve narrowed it. We’re not looking at the broad revitalization for municipalities. We’re looking at the revitalization focused on purpose-built rental housing. This really is, as the member said, part of the housing strategy.

S. Bond: Since we’re discussing the sorts of overarching principles in this, and it will help us later when it’s reflected in another act…. At this point, it’s rental housing and an incentive as part of the housing plan, but there are other opportunities. You look at how municipalities incent economic growth. Prince George has just been given a new designation. One of the ministers of international trade was in Prince George talking about a new development zone.

Is there the likelihood or possibility that…? Is this basically a pilot, where we’re looking at a specific government initiative? Are there other ways that the municipalities could approach government to say: “You know what? We really need some thinking about whether this could make the difference in attracting some investment or some other economic projects”?

Hon. C. James: The member brings up a very interesting point — whether this is a tool that will be successful in spurring on further work and partnership between municipalities and the province. I certainly wouldn’t rule that out. It’s not the intent of the changes that you see in these bills and the number of changes that you’ll see coming up.

It’s just focused right now on purpose-built rental housing, but I think the member raises an interesting point. As the member knows, government tracks all of the tax changes that happen. We will certainly be tracking this one to see whether it’s utilized and to see whether it’s helpful to municipalities to do a review, as we do with all of our tax changes each year, and take a look at whether there are opportunities or requests.

I think it would be an interesting discussion at UBCM to see where there were requests, to say that this would be helpful to municipalities. We certainly wouldn’t close the door, but that’s not the intent of these changes.

Sections 1 and 2 approved.

On section 3.

[3:10 p.m.]

T. Redies: With section 3, can the minister explain the changes that are occurring here and give a real-life example of what this applies to?

Hon. C. James: Again, I’ll just give the bigger picture around the reason for this amendment. Then, if there are any specific questions around the amendment itself….

When the carbon tax was implemented in 2008, it was implemented with a security system which would enable refiner-collectors — and I’ll get into explaining this a little bit more — to acquire fuel from one another without paying security on the fuel, instead paying security to government only on the first sale of the fuel to the person that was not a refiner-collector. So basically avoiding double paying. That really is the purpose here.

What this amendment does is it clarifies the legislation by making sure that all fuel swaps are exempt. The amendment brings the legislation in line with the current practice that is already there. And just to define a refiner-collector — that’s something I certainly asked — it’s persons who own and operate a crude oil refinery in Canada. There are eight of them in British Columbia.

This, as I said, is basically clarifying the legislation, bringing it in line and ensuring that when they acquire fuel from one another without paying security on the fuel, they pay the security to government only.

Section 3 approved.

On section 4.

T. Redies: With section 4, can the minister provide some insight as to how this particular change is going to impact the industry, if at all?

Hon. C. James: Basically, this doesn’t change practice. It clarifies practice. There will be no change. They’ve been taking these credits now. This is the way it’s working now. This change will just clarify that in legislation so it’s certain that it works the way it was intended to work, which isn’t a double tax, when it’s changed, but that we receive the security once.

T. Redies: Just to be clear, could the minister confirm that there’s no new fee and no new tax here being put on the industry?

Hon. C. James: The member is correct. It’s a refunding provision. So there’s nothing new — no new taxes, no new additional costs in this section.

Sections 4 and 5 approved.

On section 6.

T. Redies: This section refers to, I guess, the reimbursement of costs for auditors travelling outside the province. Can you talk about what types of costs are incurred by auditors now to travel outside of B.C.? What has been happening in the past? Has something changed here?

Hon. C. James: It happens more frequently than you might imagine — that people have their books outside the province. It requires, then…. The kinds of costs you’re looking at, really, for an auditor are airfare, hotel costs, travel costs to be able to access the books. That’s paid for by the Ministry of Finance.

[3:15 p.m.]

What we’re saying is we want to look at recovering our costs. We want to make sure that if there are out-of-province audits that are required to be done, we eliminate the need for the province to cover these costs and that we ask the individual or the business to cover those costs.

Again, remember that the individual could, in fact, bring the books to British Columbia and there would be no cost, so this, basically, is a fee…. If someone isn’t able or doesn’t want to bring their books to British Columbia, then we would recover the costs for the ministry.

T. Redies: Thank you for that, Minister. I want to, again, be clear here. The intent is for cost recovery, not to add on any additional fees. It’s just cost recovery of the auditor’s travel expenses to that location.

Hon. C. James: Yes, it is cost recovery. We’re not going to look at billing as you would for someone who travels. It won’t be saying to the company: “Here’s the cost of….” We will create a fee structure. It won’t be a cost of: “Here are the air travel costs and the hotel costs, and you’ll pay that exact amount.” It will be a fee schedule that will be worked out. Again, remember that the individual or the business can eliminate that completely by bringing their books to British Columbia.

T. Redies: Will you be charging for the auditor’s time?

Hon. C. James: The fee schedule is still being worked out. But the idea is that it would be a per-diem cost that would include the travel costs and the time of the auditor.

T. Redies: How long is it going to take for this fee schedule to be worked out? It seemed to be quite open-ended language. If I was in industry, I’d be wondering what the potential impact is here. How long is it going to take to get the fee schedule, and how much do you anticipate?

Hon. C. James: The specific fees still have to go through Treasury Board. That’s an important step. That hasn’t occurred yet. We expect, in the next few months, that that will be worked out. It’ll go to Treasury Board, and those determinations will be made. But I think it’s important to stress, again, that there is a very clear option for people to avoid the fee and not have to pay the fee at all.

T. Redies: This fee is to be set by regulation. Why not through legislation?

Hon. C. James: In fact, it’s the administrator or the director that sets the fees. It goes through Treasury Board. The director has the opportunity there, sets the fees. The regulation will look at the maximum that can be charged. It will determine the maximum.

The reason it’s in regulation is just to give the flexibility around hotel costs or travel costs or those kinds of things changing. There will be an assessment, obviously, as this is a new piece coming in. There will be an assessment around what the actual costs are, what the money is coming in. It gives the flexibility to be able to make those changes, if needed.

[3:20 p.m.]

T. Redies: Minister, in the briefing, we were given the understanding that this fee was going to be used to recover costs of operating an audit office in Mississauga. Is that the case? What’s the cost of operating that office in Mississauga?

Hon. C. James: There is an office in Mississauga, as the member knows. Just to mention, because people will wonder why the Ministry of Finance in British Columbia has an office with staff in Mississauga, it’s precisely because of these kinds of reasons. Where there are many books that are outside of British Columbia, it provides an opportunity for us to be able to do those kinds of audits for people based there. That actually saves the costs of the individual who is looking at auditors if you have auditors in the province.

That is one of the considerations that will be looked at — the fee. No decisions have been made. No costs have been determined at this point. We’re obviously bringing forward the changes to look at the fee. But that is one of the considerations that may be on the table when we take a look at the fees.

T. Redies: Just to ask again: could the minister tell us what the costs are of operating that office annually? Is there any planned expansion with these new regulations coming through?

Hon. C. James: I can get back to the member. I know we’ll be taking a while on this bill over the next week, I’m sure. We can make sure we can get the specifics. I don’t have them with me, but I can get the specifics.

There is no intent to expand. The office is working well. It’s functioning well. It’s serving its job, which is to provide audits, so we don’t foresee any kind of expansion.

Section 6 approved.

On section 7.

T. Redies: I’m sorry, Minister. I’ll be asking these questions quite a bit. Can you clarify the purpose of this section and under which authorities a penalty would be imposed and on whom?

Hon. C. James: Just to clarify, this section actually is focused on the notice of assessment of a fee. The penalty piece was already an existing piece in the act, so this isn’t changing it related to the penalty. This is talking about making sure that a notice of assessment comes out if we impose a fee.

Section 7 approved.

On section 8.

T. Redies: With respect to section 8, what deficiencies are there in the process that the minister believes may occur and why they’re putting this particular piece in place?

[3:25 p.m.]

Hon. C. James: This is a common clause in tax acts, That’s why it’s included in here. I don’t have any specific irregularities that the court may find, but I can go back and talk to the lawyers and see if they have specific irregularities that might be included in this. This is a standard clause that is included in the act.

T. Redies: Not being an expert in how this stuff is done, it seems to me a bit odd. Why would a court be barred from disallowing or varying a fee related to a deficiency in the process? That doesn’t seem to put a lot of onus on government to make sure that the processes are correct. I’m just kind of curious that, if you say that’s a standard clause, it seems it banks towards government.

Hon. C. James: I’ll look at the two sections. There is a process for a judicial review of the imposition of a fee. That’s a process that is still there. Someone can take this issue to judicial review, where they look at the process and determine if the process was fair or not — which gives a better balance, as the member was talking about, between government and the individual. If the judicial review finds that the process was not followed, they have a right to overturn the fee. That is there within the act.

In this clause, what the “changed” talks about when it looks at irregularities is that they can’t overturn because of an irregularity that happens as it’s coming forward. They can’t overturn the fee based on that, but you still have the opportunity, through a judicial review, to have the fee overturned based on administrative process or based on the process not being fair — which, again, makes sure that the individual, the business or whoever it may be has a fair opportunity against government, as the member has raised.

Sections 8 and 9 approved.

On section 10.

T. Redies: To the Minister of Finance: can you again give a little bit of context of why this clause is in here? Why is it being done through regulation? Why is the limitation value not actually being set in the legislation?

Hon. C. James: Similar to the previous discussion we had, again, the administrator determines and sets out the fee. The regulations set out the maximum that can be there.

Again, this is simply related to the ability to be able to increase or decrease. It’s not always an increase. I know most people expect that most times, when fees are put in place, they’re an increase, but there may be a fee that needs to be decreased. This provides the flexibility, through regulations, to look at an increase or to look at a decrease, but the maximum will be set out in regulations.

[3:30 p.m.]

T. Redies: I can only hope that in my lifetime I actually see a decrease in government fees. But thank you for that, Minister.

Section 10 approved.

On section 11.

S. Bond: There are several sections of the bill that talk about information-sharing. We certainly have seen, with experiences in other jurisdictions and even here in Canada, that there is significant concern when personal information is either collected or shared. An important part of that concept is also protection of privacy. It’s not just about the freedom of information.

[R. Chouhan in the chair.]

As I understand it, section 11 takes away, removes, some of the exclusions of some uses and disclosure of taxpayer information. First of all, can the minister describe exactly what data will be treated differently?

Hon. C. James: This piece is about sharing information that’s already gathered, but sharing it between acts. The Home Owner Grant Act right now sets out the opportunity to share information with the Income Tax Act, for example. They can also get and share information with the Land Tax Deferment Act. If they get information on the Income Tax Act, they can’t share that with the Land Tax Deferment Act. So there is a pass through. You can’t share the information between those three acts.

What this provides is an opportunity for that information to be shared. It’s using existing information, opening that up, so we can gather information on the homeowner’s grant, income tax and the land tax deferment, and share that information.

The purpose of this — and I think the member has heard us talk about this — is to make sure that we have the information we need for audit purposes. Information is the first step. Once we get audit information, and if an audit is warranted, that gives us the ability to then move to enforcement if people are avoiding paying the taxes that they need to pay.

That’s really the purpose of this change, to allow information to be shared with those three acts. Information that’s already gathered now by the Home Owner Grant Act will now be able to be further shared with the Land Tax Deferment Act and the Income Tax Act.

S. Bond: Thank you, Minister. All of the information that is being collected is currently collected. British Columbians will be asked for no new information?

Hon. C. James: That’s correct.

S. Bond: So what we’re doing is, in fact, broadening the distribution of that information. We’re connecting various parts of the tax system, and we’re allowing them to share that information.

Will there be monitoring? I know that certainly we have had lots of discussion about how information is shared, who looks after it, what happens with it. The good news is, it’s no new information. The question is: how will we monitor what is a new information-sharing system, in essence?

[3:35 p.m.]

Hon. C. James: There are strict provisions that exist already. Those will continue to exist. I can just give the member a couple of examples. Using the Income Tax Act, for example, taxpayer information can only be used by authorized persons for very specific uses, such as administering taxes or formulating fiscal policy. It would be an offence to knowingly share the income tax payer information for an unauthorized purpose. There are fines. There’s imprisonment. So very, very clear restrictions.

On the operational protections, those are kind of the legal protections on the operational protections. Right now, data file exchanges with CRA, the Canada Revenue Agency, are all secured via Entrust encryption. There’s encryption built in there. It provides for maximum security of the data by making the files accessible only to individuals who have the cryptographic key, which is the term that’s utilized, to be able to access the encrypted files. The exchange can only occur through a file transfer protocol. Again, there are protocols built in.

Then a number of safeguards around communicating the information in a secure way and destroying it in a secure fashion. Keeping and maintaining the records is also covered by this. So very clear restrictions that do not change with this amendment that we’re making.

S. Bond: I appreciate that answer. I think also that across government…. I know that at Public Accounts we recently looked at some work done by the Auditor General about how the evolution of making sure that we’re protecting information is improved. I actually think it’s a work in progress. We had a good discussion about that at Public Accounts.

The minister referenced the CRA and made it clear that they would be using some of this information. I’m assuming that is not a new practice.

Hon. C. James: It’s an existing practice, Member. You are correct.

S. Bond: Are there any other agencies through which the information would be shared? So CRA, internally through a tax branch. Is there anywhere else where the information will be shared?

Hon. C. James: This does not make any other changes. There are no other agreements. This does not expand in any way, shape or form any other sharing of information other than what is named in the change.

If the member was looking for an example of where information might be shared — in a broad sense, not related to this amendment — it could be, in a very limited way and with all the protections that I talked about earlier, another ministry that administers tax credits, for example. There may be very limited purposes, where they’re allowed to utilize information to be able to determine the eligibility of someone for a program or a credit. So that may be an example. But this amendment makes no changes to any of the existing processes.

S. Bond: I just want to confirm for the record that it doesn’t involve other jurisdictions. We’re not sending this information anywhere outside of Canada, I would assume.

[3:40 p.m.]

Hon. C. James: Correct, Member.

S. Bond: I want to just explore…. The minister did speak about it in a way that I think was helpful, but I think if you’re trying to work through…. Information-sharing, as I said, is going to come up a few times, and we’re probably going to ask fairly repetitive questions. British Columbians, as you know, are quite reluctant at times to share information, and they want to be sure that it’s properly protected.

What is the ultimate purpose of increasing the connection between a variety of acts, as the minister described it? What does she hope to accomplish with the broadened network?

Hon. C. James: I think the best word to describe it would be “consistency” of information. The example I might use would be B.C. homeowners who are deferring their property taxes. You have to be a resident of British Columbia to be able to defer your taxes. These measures and the sharing of this information will allow tax administrators to be able to identify taxpayers who have different information, for example, on their income tax return than on their property tax form.

That raises red flags on why there is different information. This provides that opportunity to, then, identify those red flags and make sure that people are actually paying what they should and providing the information they should and that that information is accurate between acts.

Section 11 approved.

On section 12.

S. Bond: Here’s one of the repetitive sections in terms of reference to the School Act. I think the minister did a great job of clarifying what that meant in terms of the first section. Could the minister just lay out for us how it relates to the Hospital District Act?

Hon. C. James: Indeed, as the member described earlier and as I described earlier, this basically mirrors the school tax change that’s going to happen with the rental revitalization exemption. It provides an opportunity, then…. When you see your property tax bill, they have a number of organizations listed that take a tax off.

We are requiring, through this change, hospital districts to mirror that same exemption for rental properties, in the rental exemption that the municipalities may put in place. It mirrors that to make sure that, again, there are exemptions for rental properties. It does not look at the broad revitalization piece that we talked about earlier with the member. This simply applies to the rental properties.

[3:45 p.m.]

S. Bond: It’s becoming clearer to me now. There will be a package, then, of potential tax exemptions that a municipality can request of the province — so school tax, hospital tax — if it’s related to a rental housing initiative. Is that correct?

Hon. C. James: The onus is on the province. The municipality determines the rental revitalization or the revitalization exemptions — the area. They make their changes that need to occur in the municipality. The province, if it’s rental property, would then say to all of these other provincial organizations: “You must exempt it if it’s rental housing.”

Section 12 approved.

On section 13.

T. Redies: Could the minister explain what the current practice is that’s requiring clarification in this legislation? Specifically, are there properties that B.C. Hydro owns that are currently not assessed school tax that they’re trying to capture with this change?

Hon. C. James: This basically was a piece that was already in place via regulation. It was put in place by the previous government. That regulation expires. It had a two-year term. So it’s taking that regulation, putting it into the legislation and making that change permanent. It isn’t changing anything. It’s taking the existing regulation and basically putting it into the legislation around how their land is assessed as a Crown entity.

T. Redies: Could the minister give us some sense of how much school tax B.C. Hydro pays today, and will that change with this regulation? It sounds like it won’t, but I just would like the confirmation.

Hon. C. James: I’d be happy to get the member the number. We don’t have the number of exactly how much school tax they pay. There are some areas that are exempt from paying school tax. We can take a look at that, but there is no change with this. This basically takes the regulation that was put in place two years ago and puts it into legislation.

Section 13 approved.

On section 14.

S. Bond: I know that often tax measures have to be changed to align with federal changes. Obviously, this section talks about the infirm dependent credit and the caregiver credit. Can the minister explain how this aligns with the federal bill and whether there will be additional benefits available to British Columbians?

[3:50 p.m.]

Hon. C. James: The member is quite right. There will be a whole series of these that parallel the federal changes. There were changes federally in 2017. We aren’t required, as a province, but often, as the member knows and as she mentioned, if we parallel, there’s an opportunity to be able to further support individuals in our province.

That, indeed, does happen with this benefit. The changes are expected to provide taxpayers with an additional benefit of $5 million in ’18-19 and $4 million in ’19-20 by paralleling with the federal credit.

S. Bond: Thank you to the minister. I look forward to the details about the B.C. caregiver credit — I think that’s what it’s called — and how those additional benefits might accrue to a family, in particular. We know that’s a huge issue for many families in the province.

Could the minister just confirm for me, then, that there is no impact to the 2017 taxation year?

Hon. C. James: That is correct. It begins in the ’18-19 year.

S. Bond: Does the minister expect, anticipate, that there will be additional people who will claim the credit or the ability to claim the credit? Does the minister expect to see additional people benefit from the credit?

Hon. C. James: There are some benefits. There are people who do benefit with the changes that have been made. Those would be individuals who care for an infirm spouse or single individuals who care for an adult relative. They’re going to actually benefit, who weren’t previously benefiting.

These individuals could previously only claim the spousal tax credit or the eligible dependent tax credit. Even if the caregiver tax credit or the infirm tax credit would have given them a larger credit, they weren’t able to claim those. They will be able to now, under these changes. They’ll get a top-up to make sure that the higher of the spousal tax credit or the eligible dependent tax credit and the B.C. caregiver credit is received. So it gives them that flexibility.

The other piece that is a change is that individuals who are caring for an infirm relative but don’t live with that relative will also have the ability to be able to get a larger tax credit, depending on the relative’s income. It obviously looks at the relative’s income. But that’s another area where there may be an expansion in the services or in the supports that individuals are able to collect.

S. Bond: I appreciate hearing…. So in essence, expanded scope. Where there was more limited ability to apply for other types of credit, a family or an individual, for example, will be able to claim both. There will be a cap, I’m assuming, based on income?

Hon. C. James: They don’t apply for both, but they’re able to get the larger of the two. So it ensures that they get the larger amount, when they didn’t previously.

S. Bond: We have lots of debates in the House about where we differ, but I think that’s an important expansion for some families who will certainly need that.

One question I do have, though, is…. The minister noted…. I think she said there would be a $5 million investment in 2018-2019 and then a $4 million investment the following year. Is there a reason that there was a differential of $1 million? Is it based on just availability? What was the reasoning in terms of not just continuing a $5 million enhancement in the second year?

[3:55 p.m.]

Hon. C. James: I think, as we talked about, people who can access more support…. There are also people who are no longer eligible to receive the tax credit. I think that’s important to recognize. The federal tax credit said that individuals who live with a healthy senior parent will no longer be eligible to receive the caregiver tax credit.

It’s the federal government, through their process — and we’ve mirrored it through our process — targeting the need to infirmed, and that’s where the support is. We believe that because of that targeting, there will be a drop in the second year. It’s a small drop. Again, that’s what the modelling shows. Whether the tax credit needs to be larger, it’s a small enough amount that that difference will be there.

We believe that with the changes…. With the extra individuals coming in and then the limiting of the support for healthy individuals, we think those are the numbers that are there.

S. Bond: When you look at sort of the puts and takes of the programs, is there an anticipated number of people who would no longer receive a benefit that they are currently receiving?

Hon. C. James: I’ll go through each of them, because I think it’s helpful. This a good piece, for an issue, as the member says, that we all care about. When I was talking about the individuals who care for an infirm spouse or single individuals, that will impact about 40,000 taxpayers, who’ll be better off. That’s the number that we’ve used around the modelling.

People who care for an infirm relative but don’t live with the relative…. That’s approximately 2,500 additional people that will benefit. It’s estimated at approximately 30,000 individuals who live with a healthy senior parent who will no longer receive the caregiver tax credit. That gives the member the kinds of numbers that were used for the analysis.

S. Bond: Can the minister quantify for me what the monetary loss to the 30,000 people is? Is there an average benefit that those families would lose?

Hon. C. James: We have it back at the office. We’d be happy to get it for the member. It will really vary because of the family income and the individual’s income. But we’re happy to do a follow-up and get the information for the member.

S. Bond: I apologize for being repetitive about this, but could the minister perhaps more broadly explain to me the difference for the 30,000 people? The minister noted that it was a federal government sort of realignment of a program. Perhaps the minister could just explain exactly who and what their circumstances are.

I think it has to do with a healthy parent, but obviously there was a benefit being provided to these families for a reason before, and now there isn’t. So could the minister just articulate for me who those families are?

[4:00 p.m.]

Hon. C. James: Previously, there were two tax credits that were available. So an infirm dependent credit is for taxpayers — I think that’s pretty straightforward — who provide care but generally do not live with an infirmed adult family member. I’ve got the definition of “infirmed.”

The second credit was called a caregiver credit, which was for taxpayers who live with and provide care to a senior parent or grandparent and/or adult family member. The senior parent or grandparent was not required to be infirmed.

What the change has been is to focus on the care, the amount of care and people who are providing more care. Basically, what they’re looking at are people who have an impairment, a physical impairment or a mental impairment. That’s really the definition that they’re using around infirmed, and that’s where they’re focusing the credit: to make sure that people who are most in need are getting the supports that are there.

S. Bond: That’s a rather large group of people. I think that…. Anyway, I do appreciate the minister’s answers.

Was there any consideration of closing that gap? I can understand the need to focus on those most vulnerable and those who are infirmed, but caring for elderly parents is also incredibly challenging for many families today.

We’re seeing $1 million less in costs. That’s a fairly substantive program that families were taking advantage of. Was there any thought given to the loss of that benefit for families who are in those circumstances?

Hon. C. James: As the member knows, the complexity of the tax system in making changes based on the federal tax system is very difficult and causes, again, more administrative costs.

We believe that it made sense to mirror the federal agreement that’s in place. Remember, these are tax credits. These aren’t programs, so this doesn’t take into account the work that we’re doing in the area of the Ministry of Health, for example, on seniors care, on support or on home care. This doesn’t take away from any of the work that’s going on in programs and services. This is simply looking at the tax credit.

From a tax credit point of view, mirroring the federal tax credit makes good sense. Then looking at making sure that we’re supporting those individuals in other ways through government programs and services can still occur and will still go on.

S. Bond: Certainly, I know we need to move on, but I do want to reflect on the fact that when you look at seniors care, we require a continuum of care. No matter how many programs, government incentives and all of those things are in place, we still have a gap in how we can care for our seniors.

I would think that as you look at the options in terms of supporting families as they care for their seniors, one of the things…. Tax credit or not, if that’s an incentive that allows a family to care for their elderly parents in a particular way….

I certainly understand that the minister is juggling a lot of priorities. I just think it’s worth noting on the record. The minister looked for innovative ways to support municipalities, for example, in building rental units. I think this is an important place where people will feel that gap. I know that choices are made, but I think it is important to reflect on the fact that 30,000 people, or 30,000 families, will be impacted by the loss of this credit.

[4:05 p.m.]

I do appreciate the minister’s comments. I just want to…. For the record, I think that a series of incentives are required to support families who take on that important care of seniors.

Hon. C. James: I couldn’t agree more with the member that a range of services and supports are important. A tax credit is simply one piece that provides support, and it provides support to certain individuals who are able to claim that as a tax credit and utilize it. I think we’ve got to remember that, again, it doesn’t catch all the people who are providing support to seniors.

I think we can’t look at one particular tax credit as an opportunity to provide support for seniors, and I couldn’t agree more. I think we have to look at a range of supports. That includes the Ministry of Health, with the work they’re doing around seniors, the issue of PharmaCare and drugs. There are a whole range of pieces that have been put in place that will make a huge difference for seniors and for the people who are caring for them, which I think are critical.

Sections 14 to 16 inclusive approved.

On section 17.

S. Bond: Again, I think we’re looking at what is alignment with some changes at the federal level. We’re talking about the education tax credit for 2017 and 2018. Perhaps the minister can once again walk through the alignment that’s being made here, from British Columbia’s perspective.

Hon. C. James: When the federal government changed, there were a whole range of tax credits that were in place and that the federal government eliminated. Just to give context around this credit, this was a non-refundable tax credit that was based on the number of months that a taxpayer was a full-time or a part-time post-secondary student. Full-time students qualified for a benefit worth $10.12 per month, and part-time students qualified for a benefit of $3.04. I think there were certainly good reasons to take a look at this credit and make changes.

The previous government was making the changes in 2018. We’re going to be making the changes a year later, in 2019. January 1, 2019 will be the end. We think there are better ways, more ways, more opportunities to be able to support post-secondary students. This was very limited. It was a very limited credit. We wanted to make sure that we provided the transition while we looked at priorities around post-secondary, had discussions with institutions and looked at the best ways to provide support to students.

Section 17 approved.

On section 18.

S. Bond: Maybe just to follow up on what the minister said, I want to confirm, then, that it extends it a year. I do recall that our government was going to make the same adjustment, but I did want to follow up on her comments about future thinking around advanced education. This will not, at this point, be replaced with any equivalent credit, but there is a contemplation of how post-secondary students might be supported with another type of credit, perhaps.

Hon. C. James: Correct. We are not looking at a replacement for this credit. We are in discussions. The member will know, from the commitments that we have around post-secondary, that there are a number of areas that we’ve looked at for post-secondary students — everything from grant programs to interest on tuition. All of those discussions are going to continue.

Section 18 approved.

On section 19.

[4:10 p.m.]

S. Bond: I want to ask one thing to reflect that basically in section 19, simply, there is no change to the tuition tax credit. I think the language was that they were attached, together. I’m assuming that what this does is simply adjust the Income Tax Act to reflect the elimination of one part, which is the education tax credit, but the tuition tax credit stays in place.

Hon. C. James: That is correct, Member.

Sections 19 to 22 inclusive approved.

On section 23.

T. Redies: To the minister, this relates to the mining flow-through tax credit. I see it’s being renewed annually. Has there been any thought given to extending it for a few years to give the mining industry some certainty?

Hon. C. James: This is a credit that for the last number of years has been one year, each year. We always evaluate. You’ll see that, as we get into further discussion around other tax credits, there are different amounts of time that tax credits are reviewed. I think that that often relates to the importance of taking a look at the tax credit, seeing whether it’s still effective, whether it’s meeting the goals that you want, whether we see it supporting the industry — for example, if we’re looking at the mining flow-through share tax credit — and having discussions with the industry itself, as well, around the tax credit.

I think there have been a number of tax credits where you’ve seen changes that have occurred over the years and where you’d want to go in and make some changes to the tax credit. So we won’t rule it out. It’s certainly a big support to the industry. We support it. That’s why we’ve extended it. We wouldn’t rule out looking at a longer period of time. But those will be discussions we’ll have with the industry as well.

T. Redies: Thank you, Minister, for that answer. You’re right. There are different periods of time for different tax credits. There doesn’t seem to be a rhyme or reason to why. I was just thinking. Given some of the challenges with the industry and the fact that this has been a long-standing program, why not extend it for a few years?

Hon. C. James: I agree with the member. It’s something that we’ll consider and take a look at. This was our first full budget. In many cases, it’s continuing on the practice that was there. That certainly will be considered as part of the review.

Sections 23 to 25 inclusive approved.

On section 26.

S. Bond: This section relates to the farmers food donation tax credit program. I’m wondering if the minister could explain to us the purpose of the credit and, perhaps, how many people claimed it last year.

Hon. C. James: I think the member knows well that this is a non-refundable personal and corporate income tax credit, which is to encourage farmers and farming corporations to donate food, fresh produce, to registered charities that provide free food — food banks, school meal programs and those kinds of things.

[4:15 p.m.]

The credit is worth 25 percent of the market value of the donated food, and individuals have to claim the charitable donation tax credit first. That’s a piece that they have to claim. Corporations have to claim the charitable donations deduction, which means they get the provincial and the federal tax incentives on this piece.

It’s not — and this is why it’s extended, back to the conversation we had earlier — about whether you extend it for one year or further years. Right now, in 2016, for example — we haven’t got 2017; we’ll be gathering that data — 30 individuals claimed the program, $9,000 in personal tax credits. So it’s not been a huge boom. Certainly for those communities, it probably has made a big difference, for those individual communities that are able to access food that they weren’t able to offer before. This is why, in a review of the program, we want to take a look at that. Corporate claims can’t be disclosed because there are so few of them. If we did, it would reveal taxpayer information.

I think we certainly have some work to do. If this is a program we want to expand or extend, I think there is some work to do. As the member knows, the Minister of Agriculture is looking at a large program around Buy B.C., Feed B.C., Grow B.C. This will certainly be part of that review — to look at whether this is the most effective way to be able to get produce to food banks and school meal programs, etc., or whether there’s another program we should be looking at. That’ll be part of the Minister of Agriculture’s review over the next while.

S. Bond: That was, obviously, going to be my next question: is there going to be an annual review? In many ways, it’s disappointing that there are only 30 individuals. I know that it makes a difference, because I have farmers in my constituency who are very generous and who make a significant contribution to organizations in our community.

I want to just confirm, though, that there has been no change to the criteria and that basically, the program today is the program that it was. Is the minister suggesting that the Minister of Agriculture is looking at the overall program related to the benefit?

Hon. C. James: Correct. There have been no changes. This is the same program that is being extended for another year. The work by the Minister of Agriculture is looking at the broad issues of supporting farmers, supporting food banks, supporting fresh produce, whether we’re talking about food banks or talking about hospitals and schools.

It’s a much broader view, but the review will occur there to look at whether we need to expand this program, whether we need to do better advertising, whether we need to get the information out or whether there’s another program that would be a better fit or a better opportunity. All of that will be under review.

S. Bond: I’m going to take the opportunity to just get a plug in with the Finance Minister. I used to have a much more direct route. Now I have to use this platform.

I just want to also note that — I’m sure the Minister of Agriculture will be looking at it — the farmers market nutrition and coupon program is absolutely fantastic. I see the Minister of FLNRO nodding as well, so I’m happy to see that. I’ve certainly had communication from a number of people in my community, encouraging the government to maintain that program. It does make an enormous difference. I think it’s in over 50 locations across the province. I thought I’d take my opportunity to get in a plug.

That’s it on this section for me.

Hon. C. James: I couldn’t agree more with the member across the way. I think the farmers markets have done a very good job of making sure they reminded all of us of the value of that program.

I’ve had those visits as well, at my own farmers market, to talk to families who’ve benefited from the program. It makes a huge difference. The fact that it’s coupons that people get — they can just go like everyone else and make their choices around the market — makes a huge difference around respect for individuals who are also there as well. I couldn’t agree more that it’s a strong program.

Sections 26 and 27 approved.

On section 28.

T. Redies: This is, again, another one of these information-sharing changes, I think, between different acts. So perhaps some of this has already been discussed. Can the minister explain exactly what is being done here and what new authority is being created here with respect to information-sharing?

[4:20 p.m.]

Hon. C. James: I think you’ll see a number of these pieces. We’ve dealt with one already. I think there are a number of other ones coming forward that deal with the specific acts talking to each other.

This will allow information to be shared from the Income Tax Act to the Land Tax Deferment Act — not the other way, as we talked about in the other one. You’ll see different specifics coming forward. This is the Income Tax Act sharing information to the land tax deferment.

Again, for the purposes of consistency of information, this gives us the opportunity. Again, if people are putting different information in different places, it gives a chance for auditors to have the red flags raised and to know whether we can go in and take a look at whether there are issues around information or whether there are issues around paying taxes or qualifying for programs.

T. Redies: Thank you, Minister, for your answer. I guess just maybe asking for a little bit more clarity. Specifically, what taxpayer information is going to be disclosed to what branches of government?

Hon. C. James: The example I would use…. It was an example when we talked about property tax deferment as well. If a requirement — for example, in the Land Tax Deferment Act — for someone to be able to defer is to be a resident, we would have the ability in the Income Tax Act to confirm that information and make sure the information was consistent. If it wasn’t consistent, that again would raise red flags and would give the opportunity for us to do some kind of audit or make sure the information was provided and is correct.

T. Redies: Thank you to the minister for the answer. Can you give us a little bit of clarity, too, in terms of how this information is going to be shared and the process whereby it would be shared?

[4:25 p.m.]

Hon. C. James: A fairly straightforward process but with all the safeguards in place that I talked about earlier in the previous section. The CRA downloads the income tax information to our income tax branch here in the province. Then, if there was a request or a requirement to check on residency, for someone to be able to look at the program, the income tax people would be able to look at that information, only that information, and only that information could then be provided for the purpose that was needed to be able to determine whether residency was there.

It’s very limited on the scope of the information. Again, with all the checks and balances that we talked about earlier — the legal safeguards in place, the privacy safeguards in place — and on the individuals who can access that information, safeguards are in place as well.

T. Redies: Can you maybe give us an example of what would constitute a potential red flag — i.e., what would cause an auditor to question the residency of a particular individual? How would that be solved with this particular piece?

Hon. C. James: In most cases, it would be the example of somebody applying for a program. So somebody applies through the Land Tax Deferment Act to defer their taxes. The land tax deferment people would come to the income tax people and say: “Could you check on someone’s residency? They’re applying for our program. They’re required to be a resident as part of this program.”

The income tax people then would have the ability to go in to be able to check that very specific piece. Then a red flag could come up if somebody was not a resident yet they’d applied, or if they went back and discovered no income tax forms had been filed for ten years and they’re looking to defer their taxes.

It’s the issue of someone applying, of looking at a program and then being able to do the checks and balances to make sure the government program’s integrity remains, that people are applying and providing their correct information and that they fall under the program. That’s really the kinds of examples that this will provide.

T. Redies: Just to confirm, the trigger is somebody applying for a program. That’s when this might come up where you would be looking for more information with respect to residency.

Hon. C. James: That’s correct. In the ordinary case, that’s how the process works. Somebody applies, the check is done, and if there’s a problem there, that raises the red flag.

T. Redies: In terms of the problem that you’re trying to solve with this particular change, can you give us some sense of what you think the scope of the problem is out there and what this might lead to in terms of, I guess, additional taxation recovery or whatever? Could you just provide some clarity around that?

[4:30 p.m.]

Hon. C. James: I think this is…. It fits with most of the information pieces that are coming forward as sections in this bill. The lack of information really means we don’t know. We don’t know at this stage what increase we may see, whether there are a lot of people taking advantage or whether there aren’t.

[L. Reid in the chair.]

That’s really the purpose of these changes. It’s to give us that ability, in a very limited way and in a scope that serves the purpose, which is making sure people are paying their fair share of taxes, as they need to within the law. This will hopefully provide us with this information.

We haven’t built any revenue into the budget, for example, around this piece, because it really is an unknown. I think we’ll have a better sense next year and the year after on some of these measures of the changes we’ll make. At this point, it really is an unknown.

There’s lots of discussion out there, as the member knows, lots of conversation about this being a very big issue. I think gathering the information, and doing it based on the facts, is the first step in making sure we get to the bottom of this issue.

T. Redies: Thank you, Minister, for that answer. I do agree with you. It’s hard to know exactly what the scope is when you don’t actually have the information. We also have to be very careful that information like this is handled with due care. I think you’ve indicated that the only time people would be accessing the income tax information is if somebody was applying for a program.

I guess just maybe a little bit more clarity around the controls in place so that not just anybody, for any reason, can go and look up someone’s income tax information. I think we’d like to know that there are some proper controls around that.

Hon. C. James: First of all, the amendment speaks to that specifically. It says: “…official solely for the purposes of the administration or enforcement of the Land Tax Deferment Act….” I think that speaks very clearly to that piece.

Government, as the member would know, in a number of areas, has information-sharing protocols and security in place that are already covered by freedom of information and the purpose there. The Income Tax Act is very clear that information can only be shared for a very specific purpose. And there are penalties. There are penalties that are in place for when that’s not followed or if that’s not followed.

So very clear guidelines. This does not alter any of those. It does not alter any of those provisions. It’s important to us, as well, to make sure that the taxpayer’s information is only being shared for a very specific purpose and that those safeguards are in place.

Section 28 approved.

On section 29.

S. Bond: Section 29 talks about removing a requirement for the Lieutenant-Governor-in-Council. That’s a code word for cabinet. Can the minister explain why the requirement is being removed?

Hon. C. James: This is, again, a harmonization of an approval process, right now, for information-sharing agreements around other tax statutes. Just to give the member…. This is not an exhaustive list but just to give some examples. The provincial sales tax, the property transfer tax, the carbon tax, the tobacco tax, the insurance premium tax, among others, are all entered into without Lieutenant-Governor-in-Council approval right now. This is just harmonizing the approval process under other tax statutes.

[4:35 p.m.]

S. Bond: Does the minister anticipate any other information-sharing agreements may be required under the income tax and land deferment acts?

Hon. C. James: We have an agreement in place between CRA and our income tax branch. We’re looking at that now, whether that will need to be amended. That hasn’t been determined yet, but that may need an amendment to include this act.

Section 29 approved.

On section 30.

T. Redies: This is a relatively large section dealing with, I think primarily, tax avoidance. Given that it is such a large section, could the minister explain what you’re trying to achieve here, what problem you’re trying to fix and, I guess, the scope of what it is that you’re doing?

Hon. C. James: We talk about paralleling the federal act. This change in this section amends the Income Tax Act to better parallel the federal government’s anti-avoidance rules, which would ensure, then, that a taxpayer can’t benefit under B.C.’s Income Tax Act by misusing or abusing a provision in the federal act.

This, in fact, tightens it up. It closes some opportunities that people may utilize and makes it consistent with other anti-avoidance rules in other provinces and federally. As I said, it’s really to make sure that we harmonize with the federal approach that they’re using and cut down on the ability for people to be able to abuse or misuse an act and gain a benefit in another place.

T. Redies: Could the minister explain, maybe an example, how our current regs basically enable somebody to avoid tax? Now you’re making these changes. So I’m just curious as to how it would happen.

[4:40 p.m.]

Hon. C. James: There was a very specific court case that, in fact, pointed out exactly this issue, where someone took advantage of different year-ends between the Quebec tax act and the federal tax act and ended up avoiding paying taxes in British Columbia. I think the very specific case showed that because there wasn’t a reference in our act to this issue, to the other provinces and to the federal act, we weren’t able to go after them and get the taxes that should have been paid. This will close that, and this will provide an opportunity to ensure that that can’t happen.

T. Redies: Does the minister have any sense of how much additional tax the ministry will expect to recover with these measures?

Hon. C. James: Again, it’s hard to know what taxes are missing. We hope we won’t lose taxes. Whether we’ll gain more, I think, really depends on how many people are taking advantage of loopholes. I think it’s hard to judge, but regardless of whether it’s a big gain or a small gain, it’s a fairness issue. It’s a fairness issue for taxpayers in British Columbia who are paying their taxes fairly, and everybody should be treated the same way. I really see it as an important fairness issue here.

T. Redies: Thanks for that answer, Minister. How is this process going to unfold? Is it going to require any additional staff? If so, are there any associated costs with that?

Hon. C. James: No additional requirements here. It’s basically just giving CRA the power and the ability. That will be covered and done, and there are no additional resources.

Section 30 approved.

On section 31.

T. Redies: What prompted the need for this particular change?

[4:45 p.m.]

Hon. C. James: This is related to tax advice and tax advisers, basically, who are providing advice to their clients around a tax scheme. I don’t mean to use the word “scheme” in a negative way. There may be legitimate schemes that are put together to help someone with their tax planning and to help someone with their tax pieces, but there are also schemes that are not. I think the Quebec example was one example. If there was an adviser who was providing advice on that kind of scheme, the amendment that we’re making requires them to report on that scheme.

There are two of the three hallmarks that have to be met — I think that’s important to just go through — around the avoidance transactions and how they’ll be reported. One is that the taxpayer pays a fee to their adviser, such as a contingency fee, based on a tax result. So the fee is based on how much they save, in most cases. The taxpayer or their adviser signs a confidentiality clause. That, again, can certainly raise some questions. The taxpayer or their adviser receives contractual protection in respect to the transaction.

The reportable transaction obligations in B.C. will be very similar to the federal. These are very similar to the federal Income Tax Act. If your transaction meets two of these three hallmarks, it has to be reported. That will be the requirement under this act, as I said, really getting at the advisers and the individuals who are providing this information, to make sure that it’s all above board and that they’re paying their fair share of taxes.

T. Redies: As I understand this, this is to align with federal practice. For advisers, are there penalties involved if they don’t report? What is the plan around that?

Hon. C. James: The federal act has penalties in it, and those will apply to British Columbia as well if someone is not reporting.

T. Redies: Just a bit of clarity, if I may. By what means will taxpayers and advisers be required to disclose these transactions to the CRA?

Hon. C. James: We’re going to use the same process the federal act uses. Whether that’s on the income tax form or whether that’s a letter, we don’t have the specifics in front of us. We can get that for the member. But it will be the same procedure that’s used at the federal level.

T. Redies: Again, just a little bit more clarity around this. Is it incumbent upon the taxpayer to disclose, or will that be a requirement for advisers to automatically complete on their behalf?

Hon. C. James: The requirement is for both.

Section 31 approved.

On section 32.

[4:50 p.m.]

S. Bond: Obviously, the film tax credit…. Certainly, our government spent a long time working with the film sector, digital effects — an incredible sector in the province. I think they’re up to about $1.6 billion in motion picture industry spending — at least that was it the last time I was aware of it — and 20,000 direct jobs.

This adds a new tax credit. It’s related to script writing. Maybe the minister can start with how we got there. Did the industry ask for this credit?

Hon. C. James: I certainly heard, and I know our members heard, from the industry itself that this was a piece that really was missing to provide an opportunity for B.C. writers to get the experience they needed.

I think the member mentioned the credits and the success of the credits. It is one of those — in B.C., you don’t look at many — that had been started by our previous government, continued by your government, continued on now. It is one that has crossed over governments that have been in place.

It was certainly a discussion and a conversation with the industry itself to look at how we could provide further incentives to be able to build up that network. If you look at the film industry itself, one of the real strengths — and I know that the member knows this — that the industry will talk about is having the talent pool here in British Columbia. There may be other incentives offered in other jurisdictions, but having the ability to have that talent pool that is well qualified and can hit the ground running is a real benefit.

One of the areas that was raised with us around the challenges was the fact that B.C. writers aren’t recognized, and therefore we don’t have the pool in the same kind of way and the support for the B.C. writers that needs to be there to make sure that all of the industry is supported and ready, to be able to make sure that those dollars come to British Columbia and not other places.

S. Bond: Certainly, that is one of the criteria. The fact that we’re in the same time zone and the climate that we have also are important assets in how we ended up being sort of Hollywood North.

I’m wondering…. One of the big debates around the film tax credit — and we did a lot of work on this — is ensuring that cheques are not delivered to Los Angeles — that there are actually going to be benefits for British Columbia writers.

Maybe the minister can walk through how we’re going to ensure that there are the kinds of criteria in place — the monitoring, the process — that ensure that the benefits that are being paid by taxpayers in British Columbia actually stay to benefit the industry here.

Hon. C. James: This, as the member can see from the amendment, expands the Film Incentive B.C. tax credit to include script writing. Therefore, that covers Canadian content, and that covers B.C. residents. The script writer would have to be a B.C. resident. That ensures that the dollars and the labour and the resources are spent here in British Columbia.

S. Bond: With the addition of this tax credit…. And I know that our government, in working through a number of very constructive dialogues with the industry…. I believe that the subsidy was approaching half a billion dollars.

Has the ministry done any modelling in terms of the addition of this tax credit and what we can expect the overall subsidy to the film industry to be?

[4:55 p.m.]

Hon. C. James: The estimated cost of this measure is $1 million. That’s in ’18-19 and ’19-20.

The member asked where we are in the film tax credits. The credits are forecast to cost $574 million in ’18-19. This includes that $1 million.

S. Bond: Thank you to the minister. That is certainly a significant increase, $574 million. We’ve crossed the half-billion dollar threshold. And $1 million of that…. Is that included in the $574 million?

Hon. C. James: Yes, it is.

S. Bond: Is there any intention…? Has the government looked at whether or not they would plan to adjust the film tax credit either upward or downward?

Hon. C. James: In looking at tax credits, particularly a large tax credit like this, I’ve certainly met with the industry since I became Minister of Finance and talked about the dollars that are here, the jobs that are created and the importance of that — but the importance, as well, of making sure that we’re being fiscally responsible and that we ensure that the jobs happen in British Columbia and that the resources happen in British Columbia. Those conversations are going to continue.

These are large resources. It’s a great industry. They provide great jobs in British Columbia. But it’s important that we always do that kind of check and balance around the dollars that are going out the door, so those conversations will continue.

S. Bond: Has the ministry been able to model or track…? We’re at $574 million. Prior to that, the last number I recall was below the $500 million mark. Has there been modelling done as we look to the next year or two?

Hon. C. James: I mentioned the $574 million for ’18-19. For ’19-20, $594 million; and for ’20-21, $614 million.

S. Bond: Can the minister describe, because I know there’s always a discussion about…. When we say foreign films, we know what that means. That means Los Angeles and other places. Is there a way to break down the percentage of funds out of that $574 million that actually go to studios outside of British Columbia?

[5:00 p.m.]

Hon. C. James: The breakdown is…. There are two separate tax credits, as the member knows, the Film Incentive B.C. credit and the credit for production services. The Film Incentive B.C. tax credit is Canadian content–driven, so it tends to be for Canadian-B.C. productions. That’s $86 million, and $488 million is for the production services tax credit — again, for the larger productions, the Hollywood kinds of productions. They’re filmed here — B.C. labour is still the focus — but they’re the larger productions.

S. Bond: Will the tax credit be required to undergo a review of any sort? It’s not just, necessarily, the new tax credit but the overall package of tax credits. The minister has spoken about…. Agriculture is looking at things, and we’re looking at a variety of reviews. Is there any intention to look at the overall tax credit package to the film industry?

Hon. C. James: There is no question that every new minister coming in is taking a look at all of their budget, all of their expenditures and all of the programs and services. That may be with an eye to expand, to improve. I think we’re always doing that, and I think that particularly happens when you have new ministers and a new government coming in. I think there is no question that, just as with all programs in ministers’ budgets, the ministers will be looking at all of the programs and services.

S. Bond: Certainly, one of the key factors in terms of the film industry is competitiveness with other jurisdictions. Are the minister and her staff looking at how British Columbia continues to compare? In light of the fact that we’re obviously seeing significant dollars, not only this year but in the next couple of years, being invested in this subsidy, is the ministry monitoring what’s happening in other jurisdictions?

Hon. C. James: Ongoing monitoring. Particularly for an expense, obviously, this large, but in all of the expenses that are there, there’s ongoing monitoring. Certainly, the film industry is quick to provide information as well. So it’s important that we do the monitoring as well on the information that comes forward.

Section 32 approved.

On section 33.

S. Bond: Simply, if the minister can just…. Obviously, one of the things…. I remember how important this was to our government, the availability of the book publishing tax credit. I’m pleased to see that continuing. Obviously, the minister in this budget has decided to make that a three-year extension. I remember that last session I think I asked her why it was only one. So it’s now three.

Having said that, we see a tax credit following it that is a five-year extension. So just a couple things. Are the criteria the same, in terms of being able to claim the credit? It’s an important industry in British Columbia. The minister has decided on three. Can she just explain her rationale there?

Hon. C. James: I think the member will be talking, and then we’ll get there, about the parameters for the interactive digital media credit. Those are set by the province.

The parameters for the book publishing credit are based on a federal program — the member, I know, knows this, because I know we’ve had this discussion, about how successful this is — the Canada book fund’s support for publishers program. That program changes from time to time, so we’ve given an extension to give certainty.

[5:05 p.m.]

We’ve also made sure…. If the federal program changes, we may have to make adjustments to our credit, and this gives us the ability to be able to do that.

Section 33 approved.

On section 34.

S. Bond: Again, talking about digital media, film, all of those important sectors which are job creators, this section refers to the extension of the interactive digital media tax credit. It’s for five years. Maybe the minister could explain five years here and three years for book publishing. Maybe just give us an update on the utilization of that tax credit.

Hon. C. James: As I mentioned, the previous program, the book publishing credit, was a credit that also benefits from the federal support. That’s why we made it three years, in case there were changes that happened at the federal level.

This is a tax credit set ourselves here in British Columbia. A very successful industry, a growing industry, a burgeoning industry, so we felt that looking at the extension was worth doing and would help the industry.

The member asked around data on the tax credit. I’ll give you the ’14-15, ’15-16, ’16-17 years, which are the most recent that we have. So 68 claims in the ’14-15 year; in the ’15-16 year, 81 claims; and in the ’16-17 year, 96 claims.

Just to give a dollar figure, for the ’14-15 year, $43½ million roughly — I’ve got the exact numbers, if the member wants the exact numbers — in the ’15-16 year, approximately $53 million; and in the ’16-17 year, approximately $49 million.

S. Bond: Just perhaps a bit of explanation from the minister. We have more claims in the final year that she provided and, in fact, a lower amount of money. Can the minister describe how that circumstance emerged?

[5:10 p.m.]

Hon. C. James: Again, we’ll take a look at the specifics if the member wants it, but we’re guessing it really has to do with the size of the companies and the size of the claim, which would make a difference. It’s not a huge difference when you’re looking at 49 and 53.

It also may have to do with the timing of when the claim comes in, because, again, claims may come in later. We may find, when we’re looking at ’17-18, that there’s a catch-up there as well, but those are likely the two areas.

Section 34 approved.

On section 35.

The Chair: Minister, on an amendment.

Hon. C. James: Thank you very much, Madame Chair, for reminding me that we have a proposed amendment to section 35.

I move the amendment to section 35 standing in my name on the orders of the day.

[SECTION 35, by deleting the proposed section 5 (2.1) and substituting the following:

(2.1) In the circumstance referred to in subsection (1), in relation to dwelling property, as defined in section 117.1 (1) of the School Act, in that area of Indian land taxable under the Indian land taxation law, the power of the Lieutenant Governor in Council to prescribe tax rates under section 120.1 of the School Act for the purposes of imposing a tax under that section includes the power

(a) to prescribe tax rates for that dwelling property that are less than the tax rates under section 120.1 of that Act for dwelling property not taxable under the Indian land taxation law, or

(b) to prescribe nil tax rates for that dwelling property.]

On the amendment.

Hon. C. James: Just to speak to the amendment, if I may. I want to say thank you to the members. This was an issue that was raised by the members when we met, and I think by our Green colleagues as well, around the wording that was in the change that was coming forward — whether there was an opening there to create a new tax power for the province on First Nations lands.

As we mentioned in the briefing, there was absolutely no intent in doing that, but it did raise the question around whether these were necessary provisions with the questions that were being raised. You don’t want to create a worry about something that isn’t the purpose of the changes that we’re doing.

The intent continues and remains to allow the province to back away from taxes if an agreement is reached between the First Nations and the government on tax room and a tax model within the Indian Self Government Enabling Act. We believe that this amendment makes that clear.

We went back to the drafters and asked whether there was ability to make those kinds of changes and whether it would still be clear in the intent and not leave the impression that there was additional tax room. That was agreed to, so we brought this amendment forward. I want to say how much I appreciate…. This is where it works — where questions were raised, where we’re able to make the changes and able to bring in an amendment that probably more clearly focuses on the change that needs to happen.

T. Redies: Thank you, Minister. We were quite concerned when we saw that note, so I appreciate that. I feel like I’ve actually accomplished something in the last eight months.

All joking aside, though, something I do want to raise…. We did raise it in the briefing to some extent. I’m a little troubled with the terminology used in this act. I guess I’m a little surprised, again, with the fact that this government has talked a lot about UNDRIP and, rightly so, reconciliation. Why are we still using, dare I say, outdated and kind of sensitive language to describe this? It seems to me it’s an opportunity to kind of rewrite some of the language here in a way that is much more respectful to our First Nations communities.

Hon. C. James: I agree with the member around the terminology and the use of the terminology. We are only opening up a part of the act. This is consequential, so we aren’t opening up the entire act. This is language, of course, that came from Canada and came from the federal government.

We are, as part of our process through the Ministry of Indigenous Relations, looking at all of the terminology, looking at the use of government terms. I think there’ll be a whole series of pieces that will come forward where we’ll open up the acts and take a look at making these changes, but this is a consequential piece. We’re not opening up the entire act, and that’s why the change in the title wasn’t there.

T. Redies: Well, thank you for that clarification. I guess I’m still a little troubled that we’re passing something that has language that is really almost offensive. I hope that we can see change come through at a later date, and hopefully, not too far from now.

S. Bond: Just to the amendment, I, too, want to express our thanks. The first version of it was incredibly concerning. I think my co-critic and I appreciate the fact that there was a reflection of that back to the minister, and we see some change here.

[5:15 p.m.]

Perhaps the minister could just carefully walk us through this. In the event that there is a settlement…. Maybe give us the specific circumstances where this would allow the government to, in essence, prescribe no taxes at all — move away from taxing at all. So maybe just what the circumstances are that would drive this amendment.

Hon. C. James: This is a little history lesson, as well, around taxation on First Nations reserve lands. Government can tax properties that are on reserve lands. That’s the ability and power they have. In 1988, First Nations also received the power to tax on reserve, on First Nations lands.

There are models that can be chosen by the First Nations when they take on that responsibility. They can choose a concurrent model of taxation, which is to share the tax room with government — the existing room that we already have to be able to tax those properties. The First Nations may choose concurrent, which means sharing that tax room.

No one has chosen that model. I think that’s not a surprise. I think if you’re looking at self-government and you’re looking at moving to self-control, it’s no surprise that a little over 100 First Nations right now have chosen the independent route, which is that they have the ability.

This act gives government permission not to tax. It seems like a very odd thing to have to do, but that’s really what we’re talking about here. If you looked at it previous to the amendment, that’s where the mixup came, around looking like it was giving opportunity to tax. In fact, it’s giving permission not to tax for bands that have chosen.

As I said, the concurrent model is not the model that I expect is going to be moved ahead. I expect most First Nations are going to be looking at the independent model.

Amendment approved.

Section 35 as amended approved.

On section 36.

Hon. C. James: I move the amendment to section 36 standing in my name on the orders of the day.

[SECTION 36, by deleting the proposed section 6 (2.1) and substituting the following:

(2.1) In the circumstance referred to in subsection (1), but subject to section 7, in relation to dwelling property, as defined in section 117.1 (1) of the School Act, in that area of Indian land taxable under the Indian land taxation law, the power of the Lieutenant Governor in Council to prescribe tax rates under section 120.1 of the School Act for the purposes of imposing a tax under that section includes the power

(a) to prescribe tax rates for that dwelling property that are less than the tax rates under section 120.1 of that Act for dwelling property not taxable under the Indian land taxation law, or

(b) to prescribe nil tax rates for that dwelling property.]

On the amendment.

Hon. C. James: I won’t repeat what we said — just appreciation again. This is, again, trying to clarify the intent, which was not the intent to tax. It was the intent to give permission not to tax. The amendment, hopefully, makes that clear.

Amendment approved.

Section 36 as amended approved.

On section 37.

[5:20 p.m.]

S. Bond: We’re back to another section related to the School Act. This time it is related to the Islands Trust Act. Perhaps the minister could just reflect how this fits with the other items we’ve discussed.

Hon. C. James: It’s very similar to the other. I think we have two more coming in this list — at least one more coming that I can remember. There may be two more.

If the province supports the rental revitalization exemption, as we’ve said we will if a municipality moves in that direction, this also requires the exemption by Islands Trust. Again, it keeps it consistent, as we talked about with the hospital tax. This ensures the consistency around the rental revitalization.

Section 37 approved.

On section 38.

S. Bond: Another expansion of information-sharing. We’ve learned today about connecting networks, making sure that we’re making the system more effective. Hopefully, it’s alleviating concerns for British Columbians in the collection of their personal information.

Perhaps the minister, once again, can outline for us: what information is currently collected? Whom will it be shared with?

Hon. C. James: This is the flip side of the previous amendment that we brought forward, which provided an opportunity for the Income Tax Act to share with the Land Tax Deferment Act. This is the reverse.

This provides the Land Tax Deferment Act an ability to allow information to be shared with the Income Tax Act, again, for similar kinds of purposes: to make sure that we’re looking at consistency of information that is coming from taxpayers when they’re applying for programs and services. It will help us identify individuals who may not have filed a tax return, even though they were required to, and therefore gives us the ability to do audits, if necessary, and enforcement, if necessary.

I think the member raised the issue around individuals and making sure their information is protected. I think that’s an important part of this discussion, for people to know that there are very clear protections in place. I think the other side of that, as well, is for the public to know that we are looking at the integrity of our tax system, that there’s a fair opportunity and requirement for everyone to pay their fair share of taxes.

I think that’s about building the trust back in the system as well. It supports both, I hope. I’d say to the member, in the long term, that it will support individuals in feeling comfortable that their protections are there — those clear protections are there — but also build trust back in the public who are worried about people who aren’t paying their fair share of taxes. I think that’s important as well.

Section 38 approved.

On section 39.

S. Bond: If the minister could just, once again, articulate…. This is obviously consequential to the School Act, but it’s now the Local Government Act. Perhaps the minister could explain this section.

Hon. C. James: This, again, adds to that list that we’ve been talking about. I’m going to try and see if I can remember, by the time we get to the end of our discussion over the next days or so, whether we’ve got the list.

This just adds to that. The regional districts, to ensure that their tax powers…. If the province, again, is supporting the rental properties, they aren’t able to add their tax on top of that as well — so similar with the hospital tax, similar with the Islands Trust tax.

Section 39 approved.

On section 40.

[5:25 p.m.]

S. Bond: I’m assuming this is just another one added to the list.

Hon. C. James: Correct.

Section 40 approved.

On section 41.

S. Bond: Probably just a simple question. Again, removing the requirement for cabinet, or the Lieutenant-Governor-in-Council, and the minister, related to the Logging Tax Act — perhaps the minister could just explain why the move away from that.

Hon. C. James: This, again, is looking at the harmonization approval process between acts. This was an older act, and it still had the provision of the Lieutenant-Governor-in-Council approval for information-sharing agreements. This harmonizes it with other approvals and other tax statutes, as we’ve talked about.

Section 41 approved.

On section 42.

T. Redies: With respect to the Motor Fuel Tax Act, I think there are some changes being made to taxation for Victoria residents. Can the minister explain how much this increased cost will, I guess, cost both individuals and the average family of four in the CRD?

Hon. C. James: To the member across, we don’t do modelling around families. It’s so different. There’s not a family that you could point to that you would say: “This is their driving, these are their habits, and this is their….” Every family has a different experience. Every family has a different neighbourhood that they live in. Whether they’re able to walk and bike and not use a vehicle, whether they use buses, and whether you account for that….

I can give the revenue. That gives an idea to the member. This is two cents a litre that is being provided to the Victoria Transit Commission. This is a request that has come, for the last number of years, from the transit commission here in the CRD, in the Victoria area. They have requested this to be able to expand transit services. They think that’ll be a benefit to all of their citizens. As a Victoria member, I certainly support that as well. And $7 million is the revenue that will go to the transit commission.

I have to say that we’ve already seen the difference that this is making. They’ve already started with the rapid bus lane that is going in. That’s something that started this week. They’re utilizing some of the increase in resources. So that’s going to assist in expanding transit services in this area.

T. Redies: This is going to be on top of the carbon tax increase. Is that correct? If you could just, maybe, clarify for us what the total impact of this and the carbon tax is going to be.

Hon. C. James: We’ll get the specifics around the rates. We’ve got the 2018 budget, and they were in the September 2017 budget.

[5:30 p.m.]

I’ll make sure we get those specific dollar figures. It won’t be broken down by region, though. It’s the general increase in the budget that comes via the carbon tax, and yes, this is on top of the carbon tax.

T. Redies: Is there any concern, from the Ministry of Finance, that you’re adding both a carbon tax and an additional tax of 2 cents — how this is going to impact families, how it’s going to impact businesses doing business in the CRD, and their costs?

Hon. C. James: I have to say this was an issue that united the CRD — that business, the chamber of commerce as well, came forward together to say that this was a request that they wanted. They recognize the support of transit in our area.

We have very high usage of transit, very high usage of bikes in our area. The business community and the general community saw it as a real support to increasing services, which in fact will save families dollars if they’re able to take transit — and not have to have cars or not have to utilize their cars often — or use it for work, for example. That’s a big savings on insurance, to be able to just use it for pleasure.

This was one of those areas that over the last couple of years has brought the community together — to look at expansion of services and supports for transit.

T. Redies: That was probably before the carbon tax increase was put in place. You’re adding, basically, a double tax on people using fuel in the CRD. There might have been some agreement previously, but I would suspect that that was prior to your increasing the carbon tax.

I guess my question is around what agreements are in place regarding the use of this revenue. Are there criteria for projects? Are prior provincial approvals for projects required?

Hon. C. James: Strong support was given on budget day when this measure came forward. That was after September, after the carbon tax increases had been supported from the transit commission, from municipalities and others, who cheered the support for this initiative. In fact, there was great support across the regional district, after the September numbers had come out, around the carbon tax.

On the specifics, this money goes to the regional transit commission. They have the ability to set their priorities and make their determination around where these dollars are spent. It is their determination around the money, how the money fits with their long-term budget, and the priorities that they set.

T. Redies: I wonder if everybody will continue to be happy after they realize the carbon tax is increasing 67 percent over 3½ years.

My final question on this particular section. You mentioned rapid buses. Are there any other improvements that are expected to come out of this with the CRD?

Hon. C. James: I think the long-term plan for the CRD is all kinds of expansions of the number of buses on routes. It’s not simply looking at a fast bus lane. The fast bus lane is one key to looking at transit. If people sitting in cars can see the bus going by them, they are more likely to ride the bus. It’s a big, important part of a transit plan.

I know the transit commission has numbers around increasing supports on lines that have leave-behinds. We have a university; we have a college here. We have very good transit use when it comes to that university and college. I’ve been there at the bus stops and seen the leave-behinds that are there, so it’s also looking at expanding services. They’ll be talking, as they do, and consulting communities and making sure that they’re putting their plan together.

T. Redies: Just one final question. So it’s only improvements to bus service — nothing else, no other transportation improvements for the CRD.

Hon. C. James: That’s up to the commission. It’s the commission’s workplan; it’s the commission’s resources. They will be able to make those determinations.

Section 42 approved.

On section 43.

T. Redies: If I can ask the minister to provide some clarity as to what changes are being made here and why.

[5:35 p.m.]

Hon. C. James: This is exactly the same as the previous amendment that was coming forward, which ensures that the security scheme works as was intended — that we only receive the security once, in respect of fuel sold in British Columbia. This clarifies the intent, and the process that is being used now. It doesn’t make a change. It just clarifies it in legislation, as the previous section did.

Sections 43 and 44 approved.

On section 45.

T. Redies: Can the minister explain what exemptions are actually being created here?

Hon. C. James: Again, this is a clarification. In the act, it’s ensuring that there is an exemption when one refiner collector buys from another. That’s a piece that was left out and that we’re clarifying to make sure that it’s consistent with the other sections that we’ve talked about in this bill.

Section 45 approved.

On section 46.

T. Redies: I think this is again related to some discussions we’ve had already, but I just want to get clarity from the minister about what they’re trying to achieve with this. I presume it’s the auditing of companies, or their books, outside of the province, similar to what we were talking about before. If she could just clarify that, please.

Hon. C. James: This is exactly the same as the previous section that we’ve talked about. It allows the province to recover the annual cost with out-of-province audits. It’s important to note, just again, that the change is permissive. It allows the ability for the fees to be collected, provides the flexibility that’s there and, again, the opportunity for the individual to avoid the fee by bringing their books and bringing their records here to British Columbia.

Section 46 approved.

On section 47.

S. Bond: Section 47 relates to the Motor Fuel Tax Act. Part of it sounds administrative in nature. Having said that, there was something that certainly got our attention. Before I get to that part, could the minister just walk through the purpose of this section, and the fees that can be imposed under this section?

Hon. C. James: This again speaks to the fees for out-of-province audits. What this enables the director to do is to provide a notice of assessment for the fees for audits that may be done under a number of different acts. For example, if the audits are being done under three different acts, this provides the ability for the administrator, for the director, to provide one notice of fees.

[5:40 p.m.]

They wouldn’t be taxed three times for three different acts or twice for two different acts. This provides the ability for notice of assessment for the out-of-province costs for one, even though it may be under a number of different acts.

S. Bond: I’m sure that many British Columbians feel that even one assessment of tax is probably one too many, so I think probably narrowing it down to one instead of multiple is good. I’m sure it’s still not necessarily welcomed.

The part I think that was surprising was that the section also talks about: “Subject to reassessment, a fee imposed under section 41.1 remains binding despite an error, defect or omission….” It sounds fairly unusual that even if there’s been a mistake, an error or an omission, somehow the fee imposed is still binding. Perhaps the minister could explain to us how that’s possible.

Hon. C. James: This is a standard principle under consumption tax acts. It’s there. It’s been there for years. It’s in all the other acts as well, so it’s a pretty standard act. It basically provides certainty for the tax act and for the government that says that if a fee is imposed and is owed by business, even though it may have a mistake in it, that that fee is then owed.

The individual or the business, whoever it may be, has the ability to come back to government. That’s why we have the “amend, change or varied” in there, because government then has the ability to amend, to vary or to change the assessment to be able to address that.

I agree with the member. It’s a very odd clause. It is part of the tax act. It is part of a tax principle in government acts, but that’s the standard clause that is in acts that comes forward.

[5:45 p.m.]

It doesn’t, as I said, prevent an individual from coming to government, asking for a change or asking for a reassessment and for us to be able to make that adjustment on behalf of the individual or business.

S. Bond: Thank you for that explanation. I would certainly concur that it is odd.

Perhaps just so that I have better clarity, what is a typical example of an error, a defect or an omission? Who would normally create that kind of issue, and how often does it happen?

Hon. C. James: One of the examples. With a fee, it doesn’t happen often. It’s a rare occurrence, but an example would be that it’s a daily fee, and one extra day is added. That would be the kind of example that, perhaps, could be an error that would occur, but as I said, it’s rare. It doesn’t happen very often.

Section 47 approved.

On section 48.

T. Redies: With respect, again, to the Motor Fuel Tax Act. It appears that this change is looking to enable a situation where, if government makes a mistake in establishing a process, this grants the government immunity from the courts — or, at least, the courts can’t rule against government if they make a mistake. Was that the intention of this?

Hon. C. James: Yes, this is very similar to the previous one. Administrative fairness can still be seen and be done for individuals who’ve come forward. As you can see, it exists already for penalties. We’re just adding in fees, in the amendment. It protects government from a court disallowing a fee, but the court can still make a judgment around administrative fairness on the process. That could occur in court.

Sections 48 to 50 inclusive approved.

Hon. C. James: Noting the hour, I move that the committee rise, report progress and seek leave to sit again.

Motion approved.

The committee rose at 5:48 p.m.

The House resumed; Mr. Speaker in the chair.

Committee of the Whole (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. Farnworth moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 10 a.m. Monday morning.

The House adjourned at 5:49 p.m.