Orders of the Day

Hon. M. Farnworth: In this chamber, I call continued committee stage of the Budget Measures Implementation Act, Bill 2. In Committee A, I call continued debate on the estimates of the Ministry of Education, to be followed by the Ministry of Environment.

If we finish Bill 2, then I will be calling the Ministry of Forests, Lands and Natural Resources estimates.

Committee of the Whole House

BILL 2 — BUDGET MEASURES
IMPLEMENTATION ACT, 2018

(continued)

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

The committee met at 1:35 p.m.

On section 85 (continued) .

Hon. C. James: We were having a discussion, before we broke for lunch, about some language that is in the act that, as I talked about, was routine language that is in all tax statutes — in fact, it’s in all tax statutes across the country — and that the protection is there for basic clerical errors. I think that’s probably the best way of describing it.

This doesn’t absolve administration or staff or the bureaucracy from making errors, but it ensures, if there was an error — an example, like somebody’s name is misspelled on the form or somebody’s phone number is wrong — that it prevents the court from overturning a fee that is in place for good reason and that has gone through due process. If somebody has a fee to pay, it protects government from having that fee overturned.

That does not take away from the ability for people still to say: “There was a problem here. Due diligence wasn’t done. I can go to court. I can still have the opportunity to have the administrative process taken a look at to make sure there was due process.” But this protects government against a simple clerical error overturning what is a valid reason for someone to have a fee in place so that they have to pay the penalty and pay the fee.

Section 85 approved.

On section 86.

S. Bond: Good afternoon, Minister.

I understand that section 86 is simply consequential to the amendments made in section 32. But perhaps the minister could just outline for me: what types of “Regulations in relation to tax payment agreements” under section 32 does the minister envision may be necessary with respect to this new eligible tax service? Is there some way to provide an example of what would be captured under that clause?

Hon. C. James: I think the easiest example would be timing of self-assessing the tax. That could be in the regulation: here’s the timing of how they have to self-assess the tax that is here now, with the eligible taxable services. That wasn’t there before. Timing might be an example of what would go into the regulation.

Section 86 approved.

On section 87.

T. Redies: Section 87 adds regulation-making powers to exclude some on-line marketplaces from being on-line accommodation platforms. What is the purpose behind this — for exempting some on-line marketplaces from the obligation to pay tax? Could you give us some examples of how this would fit?

Hon. C. James: As we talked about in previous sections, this is related to on-line accommodation platforms, where money exchanges hands — where a service happens and money is exchanged or payment is received. An example would be somewhere where that isn’t happening.

[1:40 p.m.]

That would kind of be the flip side of that: where there is no exchange of money — simply an ad, for example — where it’s not an on-line accommodation service, where people don’t reserve and then pay on the on-line platform. It may be just a basic ad advertising something or asking for something, where no money is exchanged. The key, really, on these pieces, on the previous section that we talked about, and on this section, is the collection of money or the collection of the fee for the accommodation.

T. Redies: Thank you for that clarification, Minister. In terms of this particular section, are all operators currently required to collect and remit provincial sales tax with the on-line marketplace platform?

Hon. C. James: This really is focusing on those on-line accommodation providers outside the province. They’re currently outside British Columbia. Therefore, we are putting in place this enabling language to enable those individuals to be able to collect and remit to government. That’s what the sections provide for.

There could be, right now, people paying on line for hotels that exist in British Columbia. They already have the ability to be able to collect tax because they’re based in British Columbia. An existing hotel could be going through this process and collecting the tax. This is focused on those on-line accommodation providers outside the province. Currently there is no provision for them to collect and remit to government. This provides that opportunity.

S. Bond: We’re setting up the framework and the system to allow for taxes to be collected for platforms like Airbnb and others. We always use that one because it’s the one we all remember, and it’s probably the most mentioned.

What requirements will be increased at the ministry level? I’m assuming, if we look at the accumulation of the sections that we have…. We’re now on section 87. There’s a lot of new work being handed out here. We’re looking at how we collect taxes and when we collect taxes, and we’re adding new taxes. Now we’re adding a new on-line accommodation platform. What are the ministry requirements in terms of managing this new tax collection system?

Hon. C. James: There is work being done within the ministry, so existing staff, to set up the geography and the information that’s needed from the on-line accommodation providers, but the existing tax structure for people to register and then to file returns is already there. There’s no additional work required for that. That’s already an infrastructure that’s in place. They will just use the same infrastructure as other businesses do to register and to file returns.

It’s really making sure that they’re set up to get the right information in. We’re going to provide some additional support, but there’s not an expectation that it will require additional staff. Right now that’s being managed within the ministry.

S. Bond: Could the minister just describe for me what a “prescribed designated accommodation area” is, please?

[1:45 p.m.]

Hon. C. James: A prescribed area is related to the municipal and regional district tax. So it is the geographic area. The municipality or the regional district, however they put themselves together to be able to access the MRDT — that’s what a prescribed area is.

Sections 87 and 88 approved.

On section 89.

T. Redies: To the minister: can you explain what the intent of this particular section is in terms of creating a category of dwelling property?

Hon. C. James: I think maybe the best way to start this, before I go through the definition, is just to look at what the goal was. The goal, through this school tax, is to identify the homes or the types of homes where owners have benefited the most from rising property values without having the tax fall on providers of rental housing, for example.

As I go through it, you will see there is some included and some not included. That’s really what we’ve done in defining dwelling property. The tax base for dwelling property includes — and I’ll just run through the list, if that’s helpful for the member — a residence and related residential buildings on farmland but not farm outbuildings; vacant land in class 1, unless the vacant land is in the agricultural land reserve; fee-simple homes and unstratified duplexes and triplexes; stratified condominiums and townhomes that currently receive a property assessment notice and a property tax notice.

What does the tax base not include? I’ll just continue on with that, because I think that’s helpful. It does not include certain types of properties as described in the Residential Tenancy Act, so co-op housing rented to a member is not included; certain living accommodations of an educational institution; emergency shelters or transitional housing; certain health care facilities.

[1:50 p.m.]

Then there will be regulatory powers that go with this act that allow you to remove things, not to add things. To add things is here in the legislation, but the regulatory powers will allow you to remove things if an exception comes up that needs to be addressed.

T. Redies: Thank you, Minister, for that clarification.

In subsection 3, it refers to the ability to apply regulation retroactive to tax years 2019 or 2020. Is it the intent of this subsection, then, to not allow any retroactive regulations after the 2020 tax year, or is it the intent to capture tax regardless of when the tax is implemented? How would this apply?

Hon. C. James: This really is a section that’s put in place to address a new tax coming in. It’s not a new tax. It’s an expansion of a tax — but a new tax coming in — and the ability to be able to, again through regulation, address any timing issues that may arise that weren’t the purpose of the bill. So it gives us the chance for two years, as we implement this, and if we catch that there were timings when….

For example, the year finished on December 31. You started the new year. The tax bill came out. There were months in there that were charged that shouldn’t have been charged. This gives us the ability to be able to address that through the regulation, for those two years, as we implement this tax bill.

T. Redies: Why is it necessary to authorize the Lieutenant-Governor-in-Council to make regulations respecting any matter for which regulations are contemplated by the definition of this “dwelling property”? It seems to give the Lieutenant-Governor very open-ended powers to tax property owners.

Hon. C. James: The restriction on this power, so to speak — or the authority, so to speak — is that: “…may make regulations respecting any matter for which regulations are contemplated by the definition of ‘dwelling property.’” It refers back, again, to the dwelling property list. That comes back, again, to the piece that I talked about before, where you won’t be able to add to that list.

It’s the definition that is here and any regulations related to the definition that is here, not additional pieces where it may be decided regulations are needed. So it’s limited by the dwelling property definition.

Section 89 approved.

On section 90.

[1:55 p.m.]

S. Bond: I understand that this is consequential to the amendments. I’m just interested in…. Maybe the minister could explain the context.

We’re talking about section 90, referring to the School Act, section 119. What is the purpose of striking out the word “school”? In fact, it also takes out “school taxes under this Act.” We’re creating a different framework here. Also, “substituting ‘taxes under this section’” and striking out “each class of property.” Could the minister explain to us what exactly section 90 is doing?

Hon. C. James: Basically, what we’ve done is created a new section, a separate section to deal with the additional school tax, and cleaned this one up to deal with the current school tax.

These amendments make no changes to the existing school tax. The terminology has changed so you can distinguish this section, with the existing school tax, from the new section, with the new school tax. We felt it was important to make sure that the definitions were clear for people.

The definitions of “variable tax rate system” and “property class,” for example, which applied only to the existing tax, are moved into this section — again, to make sure that this section is clear, that it’s talking about the existing school tax. The new section talks about the new school tax.

Sections 90 and 91 approved.

On section 92.

T. Redies: This section, of course, deals with the implementation of the new school taxes. So we’re going to have some broad observations as well as some questions for the minister.

I know there was a little bit of a discussion yesterday about what modelling the government does to determine the impact of some of its decisions. I think we got to a point where the minister confirmed that they actually do analysis and modelling ahead of just bringing forward their taxes. What I would like to hear from the minister is actually what analysis has been done in advance of the budget to determine the impact of this school tax increase in conjunction with all of the other tax increases that were announced with this budget.

[2:00 p.m.]

The Finance Minister is on record as having said that she would like to see the housing market go down. I guess what I’m trying to understand is…. Exactly what are you predicting will happen with these tax increases, particularly in the context of your 30-point housing strategy? What are you expecting to have happen in terms of the housing market, particularly around prices and affordability?

Hon. C. James: Just to, once again, make sure that the record is clear, I have certainly said that I hope that we see more affordable housing in British Columbia. I have certainly said that I hope we see a moderation in the market. I think that’s going to be critical in our housing market.

As we look at the analysis of our 30-point plan, as we look at the measures that we’re putting in place, we’ll be continuing to look at a number of indicators to track over the coming year. Vacancy rates, obviously, is one of those critical pieces. Foreign ownership is another piece that we’ll be tracking in our province. House prices is another piece that we’re going to be tracking — construction numbers, development in British Columbia. That’s just an example of the kinds of indicators that we’re going to be tracking as we go along.

Certainly, as I said, I do hope we see a moderation in the market. I do hope that we see more affordable housing in our province. We believe that this is one measure that will, again, provide support for a number of the other measures in our 30-point plan.

T. Redies: Maybe I was not clear enough in my question. What I’m asking is: what analysis was done before you brought the budget forward with respect to the total number of these taxes on the housing market? I presume that there was some analysis made, and I’d like to understand what that analysis told you.

[2:05 p.m.]

Hon. C. James: I think this is a repeat of our conversation yesterday — I think it was yesterday; I’ve lost track — around the number of measures that influence what will happen in the housing market. Certainly it’s why, as I said yesterday, we took the time to put together a comprehensive housing strategy.

We analyzed not only the tax measures but the supply and demand measures — all of the measures that are within our housing strategy. We believe the mix of measures that we have provided will move in the direction of, as I said, moderating the market, providing more affordable housing and creating that balance.

When it comes to the impact that occurs after the taxes are in place, as I mentioned in the discussion yesterday, that gets built into our economic modelling. Once they’re in place and once those taxes have been passed or become part of the budget, that then becomes part of the economic modelling that then looks at first quarter, second quarter and building into next year’s budget.

T. Redies: I think I understand the process now, but what I’m not hearing is an answer to my question. The minister has indicated — actually, even indicated yesterday — that we do economic modelling, obviously. We take a look at implementing and do the modelling of new taxes coming in. I presume that they did that with the school tax and the property transfer tax.

What I’m asking is: what did that analysis tell you, particularly in light of the other taxes that you were looking at implementing with this budget?

Hon. C. James: I come back again…. I know the member and her colleague didn’t agree yesterday around supply and demand.

Again, when it comes to measures, our analysis when we took a look at the percentage of homes in British Columbia that are impacted, when we took a look at the formula that we used to put together this tax, we believe it’s a modest rate. We believe that it will generate revenue that helps with affordability.

We felt that it was a measure that could be implemented and that along with the other measures being put in place around supply and demand, that’s going to have a positive impact on affordability of housing for families.

S. Bond: Well, thank you very much, Minister. We appreciate the commentary. However, budgets aren’t built on feelings and thinking about what might or might not be put in at some later date. Just weeks ago the minister tabled a budget in this House and projected revenue attached to a whole series of new taxes. I find it quite implausible that there were not assumptions and modelling that actually generated those numbers.

Let’s see if we can get to an answer that speaks to us about exactly what assumptions were made in terms of the revenue, the impacts on British Columbians, the fact that when it comes to developing a project in British Columbia now, there will be taxes levied at three different times, with the impacts being felt by British Columbians.

What we’re trying to do here is understand the assumptions that were made in the budget and how the revenue projections, which are captured in a budget that was tabled in this House, were arrived at.

[2:10 p.m.]

Hon. C. James: As the member knows, there is analysis done on all changes that occur and certainly when you’re looking at tax changes. Analysis was done on the revenue that could be generated on the various measures that we are looking at — on the number of individual homes or homeowners or dwellings that were going to be impacted by the various taxes. All of that was analyzed to arrive at the decisions around which measures were going to be utilized and which measures were not. That was a choice, as it always is, by government and by cabinet. Those were the numbers that came forward.

We looked at the revenue that would be generated. We looked at the revenue streams. We looked at the impact on the households and the number of households for each of the various measures, including whether a household was impacted by one or two measures. We looked at our supply and demand, our comprehensive housing strategy and the revenue that would be utilized to provide those programs and services for affordability, and made the decisions that we made.

T. Redies: I hear what you’re saying. I guess what I’m asking is: was there any modelling done on the cumulative impact to housing prices of the property transfer tax increase, the spec tax increase, the school tax increase, the EHT? If so, what was the impact going to be on the housing market to make it moderated or more affordable for British Columbians?

Hon. C. James: As I’ve said over our couple of days of discussion, a couple of these measures, as the member knows, are new, including the speculation tax. That is something new and bold, a bold measure that we are bringing forward in British Columbia. As we bring our comprehensive housing strategy forward, we will be analyzing it as we go along. We wouldn’t presume to predict a new impact. We certainly, as I said, believe that all of our measures taken together will have an impact on affordability and housing, both in supply and demand.

[2:15 p.m.]

Those are the big areas, as I talked about yesterday, that certainly we have been encouraged to move ahead in, whether you’re talking about economists or researchers or professors in the area of housing or individuals’ recommendation. To move, in a broad way, on those issues is what we are looking at and coming forward with. We will be continuing to analyze, as well, all of the outside factors.

I think we also have to remember that there are outside factors that impact the housing market — interest rates, the changes that were made mortgage-wise at the federal level. It’s not simply an analysis of our measures. Those are critical, and we are going to analyze those as we go along.

As I said, they will become part of the economic model. Therefore, we’ll start getting that, in first quarter and second quarter. It’ll give us a chance to be able to do that kind of analysis that’s needed.

We will also be tracking, at the same time, the kinds of changes that have been made on the outside that also have an impact on the housing market — to be able to make sure if there are changes that need to occur or additional measures that need to be put in place. That’s what we’ll be looking at.

We certainly don’t expect, as we look at the housing market five years from now, that we might not need some different kinds of measures or different approaches. We believe that that’s why we’re bringing in a long-term, comprehensive strategy. One measure isn’t going to address the housing affordability crisis that we have in place now. It’s going to take a number of measures. It’s going to take real analysis of those measures as we go ahead, as we bring them in, and that’s what we plan to do.

T. Redies: I think what you’re telling me is that you actually don’t know what the cumulative impact of these taxes on the housing market is, which is incredulous to me — that you would not have some idea as to how these various tax measures that you’re taking are going to impact the housing market. Am I correct or not?

Hon. C. James: In fact, the analysis that is done…. As I said, we analyze each tax as we’re looking to bring it in, or a housing change that we’re looking to bring in. That is analyzed. We certainly believe, and our analysis shows, that we will see upward pressure around vacancies. But if you increase supply and demand — looking back, again, to supply and demand — we will see downward pressure when it comes to foreign ownership. And we will see a moderation on housing prices. That is what our analysis shows.

If the member is looking for a percentage or price point that will adjust…. I think, again, as I mentioned earlier, we are looking at both our measures that we are putting in place and external pressures that impact the housing market. So we are not setting a particular price or a particular percentage. We are going to do that analysis month by month. That’s going to be critical as we look at our plan.

Certainly, the analysis, as I said, that we showed…. That’s why we took our time to do a comprehensive housing strategy. It was to make sure that the measures that we brought in had been looked at around how they will impact vacancies, how they will impact a moderation of prices, how they will impact foreign ownership in a way to address affordability for British Columbians.

[2:20 p.m.]

S. Bond: The minister suggests that there’s been an analysis and that it’s going to begin to deal with the issue of affordability. There are significant numbers of builders, people who are going to be part of the solution in terms of the housing and affordability challenge in British Columbia, expressing significant concerns and, obviously, not having had input previously. In fact, when you look at the property transfer tax, the foreign buyers tax, the school property tax and the yet-to-be-defined speculation tax, this will add to the cost of residential building in British Columbia.

Has the minister considered what the impacts of the layered-on levels of taxation for builders in British Columbia will do? How will it impact British Columbians directly?

Hon. C. James: I know we had this discussion yesterday, but I’m happy to have it again. That’s part of the reason we put the comprehensive plan together.

Yes, we have been listening to developers. Yes, we have been listening to co-op housing. Yes, we have been listening to faith groups and communities. Yes, we’ve been listening to individuals and organizations that work with homeless people. Yes, we’ve been listening to people who are struggling to find housing.

We, in fact, have been spending the fall consulting with all of those individuals, which is why we came up with the 30-point plan that looks at addressing supply and demand. Yes, we factored in the impact of all of the 30 points in our plan and the impact that they will have. We believe that a comprehensive approach is actually going to address supply and demand, which is going to address affordability in our province.

Whether we’re talking about the housing hub and the partnerships that we’re looking at; whether we’re talking about the revitalization areas and the opportunity to waive the school tax in those areas for developments, for rental-built housing; whether we’re talking about the money that we’re putting in for purpose-built rental housing — all of these measures are measures that, again, we have been having in discussion with housing groups, faith groups, developers and the private sector about how we can make sure that affordability is addressed.

T. Redies: Minister, I’m sure, with all these conversations that you’ve been having, that none of the residential developers said: “Please tax us more so we can help you.” I’m sure that’s the case. I’m pretty sure they wouldn’t appreciate the employers health tax, either, as a way of making it easier for them to put more supply out there in the marketplace.

In fact, actually looking at some of the statistics that UDI has given us, on a $30 million property with about 80 units…. I think everybody in this chamber knows how long it’s taking to get residential property permits through the various municipalities — anywhere from a year to five years.

[2:25 p.m.]

Looking at the costs of the additional school tax and the property transfer tax, which my colleague has already noted gets applied three times in that process, it would add close to $2 million onto a project — the school taxes and the property transfer tax — which, if divided by 80 units, is about $25,000 per unit. That is before the employer health tax and the doubling up of the MSP in the one year are applied on these residential properties.

How is increasing the end-unit prices of condos and townhouses by $25,000 or more a unit going to make things more affordable for British Columbians?

Hon. C. James: We’ve had this conversation. We can continue to have this conversation. I will continue to raise the 30-point plan that we have. That is a comprehensive plan that approaches a number of different areas that we have looked at: increasing development, purpose-built rental housing to provide affordability. We have talked about the work we’re going to do through the housing hub with developers, with the private sector. We believe this is action that is necessary, that is needed and that will begin to address the crisis.

It’s certainly not going to address it overnight. There is no question about that. But we are going to continue to act in a way that British Columbians expect us to and, in fact, elected us to.

S. Bond: The people of British Columbia also elected this government to lay out a budget and be able to explain how the targeted revenue numbers are in the budget. Over the last number of days and weeks, we continue to hear that, yes, there are revenue targets, but by the way, we’re going to look at exemptions. We have room for this. We have room for that.

The questions we are asking today as Finance critics for the opposition are simply to have the minister explain the metrics with good solid budget planning. We are presented with a budget document that has revenue targets in it, yet the minister has been unable to explain, other than pointing to a 30-point plan, exactly how that revenue target was generated.

Subsequent to that, we hear this afternoon that apparently, at some point during the day, the Premier has made it clear that oh, yes, there’s room to fix all kinds of issues. In fact, some of the taxes might get fixed before the end of session.

I think British Columbians also want to know how this budget was put together.

Once again to the minister: when we look at the assumptions and the layering on of taxes and the cost to British Columbians about multilevels of taxation that will be applied to building units…. We now have the school tax increasing on those properties. We have the property transfer tax. We have all of these taxes. What numbers can the minister provide to us that would explain how the revenue targets were generated and how on earth there is now any sort of credibility with the numbers that have been presented?

Hon. C. James: I’ll say again to the member across the way that the member has the budget. The member has the numbers, as all British Columbians do, on the revenue that we expect to come in on the taxes and the various measures in the budget. They are listed in the budget document. They are done.

As I talked about, the analysis has been done on each of those tax measures, taking a look at the number of dwellings or the number of houses or the land that’s going to be impacted; taking a look at the ability for those developments; taking a look at the ability for their homeowners or vehicles, if we’re talking about vehicles. If you look at the range of tax measures in here, the ability for those individuals to be able to contribute towards affordable housing for the people in British Columbia….

I would correct the member, again, when it comes to the speculation tax. The member knows that I said on budget day that details would be coming, that we would be finalizing the details, that we would take our time to finalize those details, that we would take a look at the issues that have been raised and that we would bring forward the specifics.

[2:30 p.m.]

The legislation will come in the fall. The specifics, as I’ve said, will come later in the spring. Those details will be coming. I’ve mentioned that. I can say it in a different way for the member, but that’s the answer that is there, because that’s the fact.

T. Redies: If the goal is to try and create more supply and more affordable housing — I’ve just mentioned that on a $30 million, 80-unit project, you’re going to add at least $2 million in costs on school tax and the property transfer tax alone — why not grandfather the existing residential developments underway in Vancouver?

Hon. C. James: I appreciate the member looking at what she believes would be a way to address some of these issues, but I think grandfathering, or grandparenting, would create a two-tier development situation. I can think of all kinds of complications that would be addressed there.

We believe that the comprehensive approach — all of the measures, when taken together — will address supply and demand. Both of those pieces need to be addressed, we believe. We don’t believe there’s going to be one measure that’s going to make or break it. We believe the changes we’re making on the school tax and the changes we’re making on the property tax are going to bring in revenue that will assist with affordability and spur on further developments. And we believe that that’s going to assist the market.

S. Bond: To pursue my colleague’s line of questioning, which I very much appreciate…. While the minister assumes, hopes and is crossing her fingers that it will actually do what is being suggested it would do, people who have expertise in residential building in Metro Vancouver have expressed significant concerns. In fact, the minister would be well aware of the concerns that have been sent to her which suggest that tax increases that are significant, which they note, will have the unintended consequence of further undermining housing affordability.

We have experts who build in Metro Vancouver, we have projections of additional costs that work their way down to the purchaser, and the very people who the minister is expecting to assist on the supply side have expressed significant concerns. Did the minister and her staff look at the impacts of tax increases, particularly on development sites in Metro Vancouver, and consider the unintended consequences of the impacts on housing affordability?

The Chair: The Minister of Finance.

Hon. C. James: Well, thank you very much, Chair, while you change shifts.

[R. Chouhan in the chair.]

Yes, I’ve been hearing the concerns, and I’ve been hearing the praise. I’ve been hearing the issues that have been raised, and I’ve been hearing the encouragement for the direction that we’re taking. Whenever you make change, there are people who are going to agree; there are people who are going to disagree.

The important factor here is looking at affordable housing and making sure that we’re doing the analysis that needs to occur, making sure that we are continuing to take a look at the market, continuing to look at affordability for families. That’s the key here, and I will agree to disagree with the member.

T. Redies: I’m just looking at page 89 of your budget book. Your ministry is actually expecting residential housing starts to fall over the next three years, from 32,000 units in 2018 to 29,500 units, in the medium term. What about this strategy is increasing supply? It certainly doesn’t look like it.

[2:35 p.m.]

Hon. C. James: The member is correct. We do expect a moderation from the extremely high levels that we saw the previous year that in fact did not address affordability. That was the challenge. If you saw the extreme housing numbers that were being built, it was not addressing affordability. Those were not affordable houses. So, yes, we expect a slight moderation, still well above the historical average, continuing to be above the historical average.

Included, as well, in that section of the budget, as the member knows, is the fact that we expect the average house price to moderate. We believe those measures, again, are addressing supply and demand, are addressing the more affordable demand and supply that are needed and, taken together, will make sure, as I said earlier, of moderating the market, providing affordability for people.

S. Bond: I want to go back to the question and the discussion around modelling. Often when governments are looking at their budgets, they contemplate the cumulative effect of impacts on families and individuals. In fact, I know certainly we would take the opportunity to look at a person with a particular income. It might be a single senior. It might be a couple that were seniors. There is a lot of modelling, and assumptions, in terms of how you put the budget together.

When it comes to the school tax, I would like to ask the minister if, in the analysis…. Although I get the distinct impression this is tax first; analyze later.

We’re certainly seeing adjustments. There’s going to be tweaking taking place all over in the next little while, as British Columbians have spoken out, especially about taxes that were not supposed to apply to them. “No British Columbians,” we were told, but lo and behold, there are British Columbians.

Let’s look at extra school taxes. Let’s look at the fact that there are people who live in Vancouver — and elsewhere in the province, but particularly in Vancouver — who happen to own a home, a Vancouver home that was purchased decades ago. Through no fault of their own, the value has gone up. That person, that family, those individuals, may be living on a fixed income. So they might be described as asset rich. They have a very valuable asset.

Did the minister do modelling when she made an assumption about them being able to handle additional school taxes when they live on a fixed income? Was that type of modelling done?

[2:40 p.m.]

Hon. C. James: Certainly, consideration was given to people who may be living in homes that they bought a long period of time ago. Those are problems now. Those are issues now for individuals.

That’s why — I know the previous government looked at this as well — you have the ability for people to look at deferring their taxes. If they are in years where they have low income or years where they have small children, dependent children, they have the option of deferring their taxes when they have an asset that may be worth more than $3 million, as we’re talking about in this section.

Those supports are available. But we felt, overall, that bringing in the additional dollars for people who own homes worth $3 million or $4 million or $5 million, when they’re sitting on that kind of asset, was reasonable with the supports in place, as I said, for individuals, for seniors — individuals with dependent children and seniors — to be able to look at the deferment, if they hit years where they’re not able to pay their taxes.

S. Bond: Well, I think that this afternoon we’ve just walked through what is a significant difference with the way that we believe that budgets need to be built. I think what is becoming abundantly clear, not just in this Legislature but in our province, is the fact that there has been a lack of modelling.

I mean, I’ve been here a long time, and I can tell you there are processes, there are models, and there are assumptions that need to be checked and made. In fact, the minister has talked about how this is a bold plan. This is a plan that potentially lowers the value of equity that people have earned in their most valuable asset, their home.

From that, the minister has extrapolated that by doing that, somehow, by layering on taxes to those very people who she will be expecting to help build on the supply side — layered on level after level of taxation and the concerns that have been expressed by builders in British Columbia….

We cannot make our case any more clear. We believe that there has been a lack of modelling looking at the assumptions. In fact, the very plan that was tabled in this Legislature has the very real possibility of actually — hopefully, they were unintended consequences — enhancing the affordability crisis.

While we’ve appreciated the collegial discussion here, this is about numbers; it’s about facts. But it’s about families in British Columbia.

[2:45 p.m.]

First we heard British Columbians were out of the tax. Now they’re in the tax. Now we’re going to fix the tax. We have no idea what the basic assumptions that have generated specific revenue targets in this budget are. In fact, we’re hearing now that they could well be changed.

We just wanted to clearly be on the record that when you look at the combination of taxes, including the school tax, on people who may well have significant asset value, who may well have limited incomes, there will be an impact on British Columbians.

We’ll leave it there. If the minister wants to lay out any more numbers or facts or details, that would be helpful to demonstrate that there has been the kind of modelling that British Columbians expect before those costs are passed on to them.

It’s one thing to deal with taxation when it comes to people’s earnings, but we’re now taking a run at their assets. We’re now taking a run at their property. The whole hope, cross our fingers, is that somehow it’s going to help the affordability issue and the availability of housing in British Columbia. We respectfully disagree with that.

I think that the discussion over the last couple of days has made it very clear that there is very little specific detail available to be able to assure British Columbians that the budget that was tabled here and that this bill brings to life has the kind of metrics and modelling and assumptions that should be made when bringing a budget forward for British Columbians.

Hon. C. James: We will respectfully disagree, Member, particularly around the analysis that continues to be done. What is clear, I would say to the member, is that, yes, we have different priorities. There is no question about that. We, on this side of the House, in government, believe in addressing affordability in housing. We believe in taking some bold measures to do just that.

We continue to analyze the information that is there. We continue with the rigour that has always been there with the staff in the Ministry of Finance, who continue their fine work. I will take umbrage with the member’s comments around the lack of rigour that has been done. The rigour has been done. We have done the kind of analysis that needs to be there. It is fact based, as it always has been and always will be with the fine people who work in the ministry.

I recognize, from the member’s discussion that we’ve had, that the member does not agree. That is the member’s prerogative — to disagree with the actions we take on housing. That’s why we have a legislature, why we have democracy, why we have an opportunity to debate this. The members will disagree on action around housing.

We believe that’s an important priority, and we will continue to move ahead on affordability on housing. We will continue to analyze the work that’s been done. We will continue to listen to British Columbians. When they believe that there are areas that need to be adjusted or need to be addressed, we will continue to do that, because that’s what the public expects.

The public expects their government to listen to them. The public expects their government to act on the things and the commitments that they had made. We committed to acting on affordable housing. We are following through on that commitment. Will there be changes that will be needed over the next year, in two years? Yes, I expect so.

Housing is an issue, as I said, that deals with supply and demand, that deals with the issue of outside factors. I am certain that there will be changes that need to be made. That’s part of our job — to make sure we do that analysis and we make the changes as they’re necessary.

Section 92 approved.

S. Bond: We’ll give notice to the Chair that we have no further questions to the end of the bill.

I do want to reflect on the minister’s final and closing comments. She would very well know that my comments or any of our comments were not at all related to the public service in British Columbia. Having spent 16 years in various cabinet positions, I fully understand how this process works and the exceptional nature of the public service that works in this province.

On that note, we want to extend our thanks to the staff for the briefings that were provided. Though short and complex, the time was very much appreciated, as was the time here in the Legislature.

Sections 93 to 117 inclusive approved.

Title approved.

[2:50 p.m.]

Hon. C. James: Thank you to the critics for their very good questions. Part of the real strength of democracy, as I said, is having an opportunity to have good, strong debate, agreement and disagreement, on these taxes.

I thank the members for their questions. I particularly thank the staff in the Ministry of Finance for their incredible work. This is a very large bill, as we’ve talked about, and I want to express my appreciation.

With that, I move that the committee rise and report the bill complete with amendments.

Motion approved on the following division:

[2:55 p.m.]

YEAS — 43
Kahlon	Begg	Brar
Heyman	Donaldson	Mungall
Bains	Beare	Chen
Popham	Trevena	Sims
Chow	Kang	Simons
D’Eith	Routley	Ma
Elmore	Dean	Routledge
Singh	Leonard	Darcy
Simpson	Robinson	Farnworth
Horgan	James	Eby
Dix	Ralston	Mark
Fleming	Conroy	Fraser
Chandra Herbert	Rice	Krog
Furstenau	Weaver	Olsen
	Glumac
NAYS — 40
Cadieux	de Jong	Bond
Polak	Wilkinson	Lee
Stone	Coleman	Wat
Bernier	Thornthwaite	Paton
Ashton	Barnett	Yap
Martin	Davies	Kyllo
Sullivan	Isaacs	Morris
Stilwell	Ross	Oakes
Johal	Redies	Rustad
Milobar	Clovechok	Shypitka
Hunt	Throness	Tegart
Stewart	Sultan	Gibson
Reid	Letnick	Larson
	Foster

The committee rose at 2:58 p.m.

The House resumed; Mr. Speaker in the chair.

Reporting of Bills

BILL 2 — BUDGET MEASURES
IMPLEMENTATION ACT, 2018

Mr. Speaker: When shall the bill be considered as reported?

Hon. C. James: Mr. Speaker, with leave, now.

Leave not granted.

Bill 2, Budget Measures Implementation Act, 2018, reported complete with amendments, to be considered at the next sitting of the House after today.

[3:00 p.m.]

Hon. M. Farnworth: I call, in this chamber, the estimates of the Ministry of Forests, Lands, Natural Resource Operations and Rural Development.

Committee of Supply

ESTIMATES: MINISTRY OF FORESTS,
LANDS, NATURAL RESOURCE OPERATIONS
AND RURAL DEVELOPMENT

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

The committee met at 3:05 p.m.

On Vote 28: ministry operations, $473,452,000.

Hon. D. Donaldson: I’ll just start off with a few brief comments. We have lots to cover. It’s a big, big ministry, and we want to get all of the questions that members want to ask on behalf of their constituents and on behalf of everyone in the province.

I’d just like to introduce the people who are assisting today and throughout the next number of days: Tim Sheldan, deputy minister with the ministry; Trish Dohan, ADM of corporate services; Sarah Fraser, the executive director of rural development; Dave Peterson, ADM with rural development, lands and innovation; Rick Manwaring, ADM, south area. Given the size of the ministry, we’ll have a lot of staff over the course of this estimates debate.

I just want to say a couple of brief comments to start off. We became government just ten days after a state of emergency was declared around the wildfires. The enormity of the wildfire event is still settling in to government and to the MLAs in this room who represent areas impacted by that. Those impacts will go on for a number of years.

It was the longest state of provincial emergency on record, more than 65,000 people displaced and 1.2 million hectares burned. There was a lot of direct wildfire cost — $548 million spent. However — we’ve said this before, and I know members in this House always want to recognize this — not one life was lost as a direct result of the wildfires. I think that’s a tribute to the Wildfire Service personnel, communities, non-profits and volunteers.

I’m not going to go into details of Budget 2018 because I know we’ll be going through that in the budget questions, just three or four highlights. So $72 million is additional funding, committed over three years for wildfire recovery and to build communities’ resilience to wildfires, in this budget. An additional $16 million over three years has been committed in this budget to land use planning, $14 million over the next three years to improve wildlife management. And in rural development, the rural dividend funding of $25 million per year has been extended to 2020-2021 in this budget.

I know that the critic and the members will have a number of questions around those uplifts to the budget. So with those opening comments, I’ll let the questions proceed.

J. Rustad: To the staff, I just want to recognize the staff and thank them for their work and their dedication to the work that’s done around the province. I know this past year has been a very challenging year, especially with the wildfires and the floods and all the challenges — the switching over of governments, all the issues that come with that. I know the ministry has done a professional job, as it always does through these sorts of challenges and work.

I look forward to the next few days that we have in terms of going through the estimates process. There’s a lot of material that we need to cover over the course of this period of time. I understand that there may be some change of staff.

[3:10 p.m.]

What we’ll try to do as best we can is to structure this as we go so that we can group questions, although there will be a number of questions that will come in from my colleagues — perhaps some later today, certainly some on Thursday and maybe even some on Wednesday — which may require some challenges as we go. I’ll do my best to try to coordinate through the various topics that we’ll go through.

Just as a note. Because of the Minister of Agriculture recusing herself for the issue of marijuana, for the questions that were asked in the Ministry of Agriculture, we’re hoping that we’ll have an opportunity to ask those questions, potentially today, if you have the staff available. If not, those are things that we could move into a discussion tomorrow with the appropriate staff.

To start with, as we work through today, the intent is to work on rural development first. We have a number of questions, and my colleague from Cariboo-Chilcotin will lead those discussions around rural development and the questions that’ll come. There will be a few others that will come in to have questions around that as well. There will likely be some overlap between those questions and other functions within the ministry, but it’s in the context of rural development through that.

We’ll then move on. Hopefully, we’ll be able to canvass and spend a short bit of time, I suspect, on the issue of marijuana, and then go into fish farm tenures and perhaps a few other topics if we get time to today, before focusing on the meat of the estimates, on forestry and other issues going into tomorrow. I’m sure there’ll be a number of other questions that will come with regards to the budget and canvassing the amounts that the minister had mentioned, as well as the amounts from the budget.

At this time, I will take my place and turn it over to my colleague from Cariboo-Chilcotin to start off with the budget debate on rural development.

D. Barnett: I’d just like to say a few words about the rural strategy that was put together by the previous government and the work that was done to create a rural strategy, which I believe was the first time in British Columbia. I’d like to recognize the staff that is here with you today. Many of them participated in the strategy that was put together, worked very hard and understood what rural economic development really and truly is.

The strategy that was put together was built on work that began in 2014 with the release of Supporting Rural Development from UBCM. The pine beetle coalitions put a document together called A Voice for Rural British Columbia . It was a great document. It took them a couple of years to put it together, all working, the coalitions, throughout — SIBAC, which is the Southern Interior Beetle Coalition, the Cariboo-Chilcotin Beetle Coalition and the Omineca Beetle Coalition.

It created a voice for rural British Columbia. It articulated government’s promises to rural B.C., including a commitment to give rural communities a stronger voice and opportunities to develop local solutions to meet their specific needs.

Many of the actions in the strategy that we put together are based on advice and feedback from the rural advisory council, which was 13 citizens from across this province, some in local government, some in economic development, some in industry and some citizens. Government built on the success of the council, which brought forward new ideas to support business owners, leaders, workers and families. It continued, day in and day out, to come forward with new ideas that we could create jobs, not just build things but keep people working after what they were doing was built.

Now I see the minister is putting together a new strategy. The strategy was on line for 28 days. There were meetings held in a few communities of the province, and by invitation only to attend these meetings. I find this is not very collaborative. I find it is not open. In the on-line comments, I see there were 351 hits only.

The 13 members of the past advisory council spent many, many hours in their communities bringing forward suggestions and solutions.

[3:15 p.m.]

It frustrates me, and it frustrates many people to see a program — and a document called building on our rural strategies — that took time, energy and many, many dollars of staff and others now going to be put on the shelf. I understand that the new rural strategy is going to be based more on social programs than economic development.

My first question to the minister is: could you please explain to me what the new strategy is going to look like, what the new strategy will entail, who is going to put together the strategy and how it will become a strategy that really and truly has economic development first and jobs for families, not just social programs?

Hon. D. Donaldson: Well, we want to thank the work that the rural advisory council completed under the previous government, and we want to build on that work. We have been visiting communities with our engagement process over 16 face-to-face sessions that have been held across the province. Over 400 people have attended those sessions. We’ve also had over 3,000 visits to the engagement website around rural development.

We’re a new government looking at a new strategy. We look at it in a holistic fashion, both social and economic factors driving the economy of small, rural communities. That’s the way it should be. We’re basing it on principles of community economic development and those five principles of self-reliance, asset-based, sustainability, community-based and participatory. I especially want to emphasize the participatory element, especially when it comes to the focus of this government on Indigenous inputs early in a process, which is being accomplished through our engagement process.

As far as what the strategy will entail, well, we’re just wrapping up the engagement process. We’ll be putting together a report that will be available publicly as far as what was heard at the engagement sessions, what the themes are. That’s what we do. We listen to what the people have to say.

I’m not going to presuppose what that report will say, because it’s coming directly from the people most impacted, from people in rural communities. We’ll be seeing that report very soon.

D. Barnett: I thank you, Minister, for your answer, but I will make another comment, Minister.

When we did our rural strategy, it was done by many, many, many people throughout the province of British Columbia. It was certainly done with the interests of economic development. Some of our best proposals, if you look through the files and if you look through those that were awarded rural dividend funds, came from our First Nations communities. They were such good proposals. The amount of jobs and innovation that have been created in our First Nations communities because of the past rural dividend is amazing. They are carrying forward with this.

I take a look at some of the new announcements that have been made recently for rural development, and I would ask: are you using the same criteria that was put there by the previous government, or have you changed some of the benchmarks?

Hon. D. Donaldson: I just want to say that I agree with the comments around the focus and the need for attention to rural development that the member has laid out. Just as a little bit more information, one of the themes that is arising from the engagement processes is the need for those living in rural communities to access investment dollars, access capital dollars. That’s something that has come up again and again in our engagement sessions.

Also, an overriding theme that’s come up is the need for our government to continue on our journey with implementing the United Nations declaration on the rights of Indigenous people. This is seen as a rural development issue, and the themes are coming up. Of course, support by government for rural development is a theme that’s come up on the ground and in communities. Those are the kinds of themes that we’re looking at that this report will outline.

[3:20 p.m.]

As far as the reinvesting in rural communities, we are definitely reinvesting in rural communities. I gather the member’s question is around the criteria for the rural dividend fund — the $25 million per year that this budget allocates for the next three years, so $75 million. The criteria have not changed.

D. Barnett: Thank you for that answer.

Back to rural development. Will there be a new advisory council? If there will be, how will the council be chosen?

Hon. D. Donaldson: Again, I’m not going to speculate. The report will be out soon. The people who participated in the extensive engagement sessions have made recommendations around how they would like to see rural development input organized in relation to advice and strategies and co-development of policies with the government.

D. Barnett: Maybe it’s not true, but we have heard that the new rural strategy will be one that will only be including local governments and First Nations, that communities outside of local governments — independent people who have societies, who have organizations that create many jobs in rural British Columbia — will not be included in the new rural strategy. Is this going to be the case or not, Minister?

Hon. D. Donaldson: That will not be the case. There have been key informant interviews conducted, as well, with over 50 key informants and key stakeholders interviewed for their knowledge, expertise and experience in rural development. Some of the organizations that the member is alluding to, ones that don’t include local government or First Nations, have been key informants in the process so far.

D. Barnett: Thank you, Minister.

You’ve put out the fourth phase of rural development projects. Have they all been announced? When we did the rural development program on this side of the House, it was one of our objectives to make sure that the opposition MLAs knew when projects were coming to their communities. Will your ministry keep the opposition MLAs informed as to which projects will be delivered to their communities? As of today, for the last round, we have been told nothing.

Hon. D. Donaldson: I’m very happy to discuss the results of the fourth intake so far. The fourth intake for the rural dividend fund closed December 15, 2017: 71 applications from the project development funding stream were announced, for a funding total of $693,678, and 28 project awards for wildfire-impacted communities, including special circumstance requests, for a funding total of $3,809,518.

[3:25 p.m.]

The rest of the projects that will be allocated funding under this fourth intake will be forthcoming quite soon. Definitely, we will endeavour to ensure that MLAs in whose constituencies these funding awards have been allocated will get a heads-up.

D. Barnett: Thank you, Minister. So far that has not happened. We have found out by going to the media for what is happening in our communities. We certainly would appreciate a heads-up, as our communities also are very engaged with us on this side of the House.

My colleague from Cariboo North has a question, so I’ll turn it over to my colleague.

C. Oakes: To the minister, first, I did read the press release today around rural dividend funds that were distributed. Thank you. We do certainly appreciate the announcement, and the support is appreciated.

A few questions, if I may canvass, are just follow-up questions from estimates raised around this in the fall. For many of the communities or individuals that were affected, specifically guide-outfitters and trappers, they were looking…. The only opportunity for a funding source, really, for these specific sectors was through the rural economic development funding pot. We had canvassed the opportunity, perhaps, to have small businesses being able to access funds as it correlates to FLNRO files, such as guide-outfitting territory.

Again, I reviewed the update this morning. It looks like it’s all local governments and First Nations communities. I didn’t see any individual announced through economic development. Could the minister perhaps update us on what individuals, for example…?

I’ll start with guide-outfitters. Specifically, Stewart Fraser has raised on multiple occasions that he is still waiting to hear back from the FLNRO office. The conversation started in December. The request is a continued, “We’ll get back to you. We’ll get back to you,” and we haven’t still heard. Can Stewart Fraser and guide-outfitters expect any funds through the rural economic development strategy?

Hon. D. Donaldson: Thank you for the question. It’s an important part of what government is there for — to assist people after, really, a natural disaster. Many guide-outfitter territories were impacted, some more severely than others.

Under the criteria that the previous member just questioned on around the rural dividend, you’re right. Individuals don’t qualify currently under the criteria around rural dividend. We do have, under our socioeconomic recovery line within the ministry, our agreements with the Canadian Red Cross, which has funding available for small businesses. They’ve handed out a substantial amount of money under that category. They’re still able to consider further applications under the small business part of the Canadian Red Cross.

We’re also working with guide-outfitters on options around permitting and fees and those kinds of things. So we’re open to creative thinking around this.

[3:30 p.m.]

C. Oakes: One of the elements around the rural dividend was special circumstances, and one of the things that we had canvassed in the fall was looking at how individuals may work with organizations around special circumstances.

As it pertains, again, to guide and outfitters, where tenure is purchased through the province, does the minister have funds to, in fact, support purchasing back the tenures of guide and outfitters? In particular, one of the guide and outfitters in our area lost their ranch, lost their property, lost their guide-and-outfitting territory and had to return the $80,000 worth of hunts that they had already presold. Now they are supposed to be doing trade shows in April.

They’re waiting to hear back from FLNRO on what to expect this season. They had the significant hit from last year. They’re faced with significant challenges heading in, April 1. Is there clarity? Is there support? Is there something that individuals can expect through the rural dividend?

Hon. D. Donaldson: Thank you for the specific case you’re talking about and the applicability it might have to other cases as well. Of course, on this specific case, if you would like to encourage the individual to get in touch with the ministry, we’d be happy to meet with them about the challenges they’re facing.

Some of the questions raised deal with things like: was insurance available for some of the losses? That’s one of the first things that’s looked at when claims are made — were they insurable items? Again, with the Canadian Red Cross support to small business — they have an allocation of $29.1 million, and $6.8 million has been spent and committed so far. So there’s still availability through that line. We’re also looking at, with some affected guides, for them to be able to provide hunts outside their guiding area.

I would encourage the member to ask the individual to get in touch with us directly, and we can explore options. The option of purchasing back guiding territories has not been put on the table, as an option, to Treasury Board at this point.

C. Oakes: Thank you very much, Minister. The particular case that I did identify had reached out in December to FLNRO and were asked to wait until February for a follow-up and are still waiting.

Where they want to sell the hunt is clearly in the FLNRO jurisdiction, and they are trying to figure out what they’re going to do as of April 1. If we could expedite that — and I know our office has sent a letter — that would be appreciated.

[3:35 p.m.]

Moving now to trappers, are trappers available through the rural dividend? Again, when we canvassed in November, many of the files that we brought forward we were directed to put in the community’s wildfire response to communities. Are there going to be extra funds announced? Looking in the budget, obviously we did not see that, so I assume that’s coming through the rural dividend. Is there funding allocation or opportunities for trappers through the rural dividend?

[L. Reid in the chair.]

Hon. D. Donaldson: The same criteria apply that have been in place for the rural dividend fund, so individuals are not eligible at this point. But trappers are small businesses. Again, I direct the member to the fact that we’re addressing small businesses. One of the tools is through the Canadian Red Cross and the support to small business program of $21.9 million.

We are definitely exploring other opportunities, as well, with those trappers who have seen significant damage to their traplines through the wildfire season. That’s something we’re doing in the short term.

In the longer term, of course, recovery and resilience initiatives will ensure that the land is rehabilitated to the state that enables trappers to undertake what they’ve done as their livelihoods. But I fully recognize that that’s a long-term view. In the short term, trappers can seek assistance through the Canadian Red Cross small business program as well as directly with our ministry, in specific cases, to explore some other creative opportunities.

C. Oakes: In the previous answer, the minister opened up the opportunity for guide and outfitters to look at other areas, perhaps — where guides and outfitters who may have lost significant territory might be offered hunts in other areas. Could the minister provide more detail?

Hon. D. Donaldson: I just want to say that we’re working hard as a ministry to accommodate the impacts of the wildfires on guide-outfitters and trappers.

[3:40 p.m.]

As far as the guide-outfitters go, and looking at hunts in other areas, that would obviously be something that has to be coordinated with people who already have guiding tenures proximate to other areas, as well as in consultation with First Nations, and it would be species-specific. We don’t have a policy framework for that yet. We’re trying to deal with it and trying to assist people on a case-by-case basis.

C. Oakes: One of the challenges, or the opportunities, around economic development in rural communities is significantly impacted by transportation corridors or forest service roads. A significant amount of damage did happen due to the wildfire seasons. We had the opportunity to canvass, through the Ministry of Transportation, funds for damaged road networks, due to the wildfires, that lead to key economic development opportunities in our region.

Are there funds through the rural dividend or through the rural strategy, specifically, to invest in those forest service roads or transportation connections to key economic drivers?

Hon. D. Donaldson: Again, rural dividend criteria…. If a transportation element is part of an application by an eligible applicant, then that can be considered. It does not include the maintenance for service roads in the rural dividend fund right now.

Having said that, transportation has been an element of some of the projects in the past in the rural dividend fund that have been approved. As well, we have a modest budget within our ministry for capital projects on forest service roads and replacement of structures and maintenance.

C. Oakes: How much of the small amount of money in the budget do you have for the rural roads that you just mentioned?

[3:45 p.m.]

Hon. D. Donaldson: I suppose “modest” is always a relative term when it comes to dollars, but in the bigger picture, it is a modest amount. It’s $13 million per year, our engineering program, that we have for capital funding. It’s deemed as sufficient to date. To date, we’ve expended less than $500,000 to repair and replace bridge structures. That’s the overall capsule that we have for the engineering and capital funding work.

C. Oakes: The experience in Slave Lake, what they found after the significant fire…. Because the forest service roads use plastic culverts, one of the challenges that we had on a lot of the side road issues was that the culverts had melted. Come spring, we are going to be faced with a significant challenge to a road network.

While $13 million may seem like a considerable amount of money, what I can say is that one bridge is $500,000. So when we’re looking at the context of $13 million and a significant amount of hectares that were affected by the wildfires…. These road networks are critical. This capital asset is critical to economic development, through tourism, mining, placer, ranching, forestry. What is the plan?

Hon. D. Donaldson: Post-wildfire risk assessment has been done throughout the area that the member represents, as well as throughout the Cariboo. All of those risk assessments are complete, including road and drainage assessments. Priority areas have been identified around the freshet risk — in other words, the risk of erosion impacts from the spring melt. Those risks are able to be addressed under the current budget the ministry has.

However, we do share the concerns that if there are unforeseen circumstances — due to weather issues, for instance — we will ensure that we make submissions to Treasury Board to address those.

C. Oakes: Then this risk assessment and the drainage piece — would that come under the $13 million, or would that be a separate line item in the budget? If so, what is that amount?

Perhaps a secondary question that ties in with that. Slope stabilization is going to be a critical component, as well, to the road networks. Would that fall under your ministry or the Ministry of Environment? Are there allocated funds for that?

[3:50 p.m.]

Hon. D. Donaldson: The impacts from this wildfire are considered unforeseen events as far as the core work of the ministry goes, budget-wise. Where it is addressed, the assessing ongoing risk and rehabilitation, is under the next vote, under the B.C. Wildfire vote. Therefore, the work that has been done in this past fiscal year was under that — over $600 million in direct costs of addressing the wildfire situation. That’s where the risk assessment dollars came from as well as some of the rehabilitation work. Similarly, as we go forward into this coming fiscal year, that’s where the funds will be allocated from.

Hon. M. Farnworth: I don’t do this very often, but I ask leave to make an introduction.

Leave granted.

Introductions by Members

Hon. M. Farnworth: In the gallery and in the precinct today are four classes from one of the best elementary schools in Port Coquitlam, Cedar Drive. I had the pleasure of meeting the students and their teacher. They asked some amazing questions, including, “You guys aren’t fighting in there? I thought you guys fought,” as one little kid asked me. I said: “No, no, no. There’s a lot of good debate.” They were great students with great questions.

I’d ask the House to please make the kids from Cedar Drive Elementary most welcome.

Debate Continued

C. Oakes: The reason I’ve been canvassing the question around side roads or transportation corridors as they lead to economic development is I noticed in the press release today that through the rural dividend, a significant amount of funds was given to promote or educate people on the…. There is a road that’s being….

Work is being done in the city of Quesnel on our main street. We have an economic development rural dividend fund, I think to the tune of $68,000 or $63,000 — excuse that I don’t have the exact amount — that we are providing funds to local governments or to organizations to talk about roads that work is going to be done on. Could the minister provide more detail or clarity on how roads get through the rural dividend program?

[3:55 p.m.]

Hon. D. Donaldson: I want to thank my assistant deputy minister, Dave Peterson, because there were a lot of projects approved.

The specific one that the member is referring to, one of the ones that was approved for Quesnel, was through Quesnel and the downtown business association. That money was targeted for ensuring that an advertising campaign went out to make people aware that the downtown businesses were open for business while road construction work was undertaken. That was the aspect of that application.

C. Oakes: In estimates in November, we canvassed the critical need for emergency roads — again, both from an economic development perspective but as an emergency…. We talked about the work that Lhoosk’uz Dené, Nazko and Lhtako have put forward for the Blackwater Road connection.

Can the minister please update us on when that project will be starting?

Hon. D. Donaldson: Well, I’m happy to report that $7 million in capital funding is now in place to support their two connector projects, which the member is referring to, with the Lhoosk’uz Dené.

What we’re embarking on right now is an engagement with the First Nations communities around route selection. We’re engaged on a planning phase on engineering for design options. Of course, much of this engagement work with the communities also relates to the issue of caribou habitat.

Happy to report that the $7 million is in place now. We’re going to be starting the engagement work with the communities, looking at commissioning design options and route selection.

C. Oakes: Is that part of the $13 million, or is the $7 million in addition?

Hon. D. Donaldson: It’s in addition to the $13 million.

[4:00 p.m.]

C. Oakes: I know that this is a long-awaited project. We really look forward to that moving forward, so thank you very much on behalf of the First Nations communities that live out there.

Another emergency access point that is of critical concern and that has been brought forward is the Purden connector. The Purden connector is for folks who live out in Bowron Lake and Wells. When we saw significant fire activity, one of the challenges that we have out in that area is that there is no other emergency exit point. I am wondering if the Purden connector would be available to apply for any of the programs that the minister has discussed today.

Hon. D. Donaldson: I recall this topic well. I remember meeting with the regional district representative, having maps laid out and having a look at the Purden connector. This is a separate topic from the last one we talked about, which was capital funding. I believe that that $7 million came through the Ministry of Transportation.

We well understand the concerns, and if that project were packaged as part of a tourism initiative, an economic initiative through Tourism, then it could conceivably be submitted under the rural dividend fund. But the rural dividend fund generally is up to $500,000. Road work takes a lot of money, and it’s something that we’re well aware of the concerns on.

C. Oakes: It’s a less expensive project, where I think there’s only seven kilometres left to connect on the road, and I think it’s $3 million. So I’m putting that out there as a really good, important economic generator for the region. I will provide that advice to the district of Wells, about the opportunity for putting that in through the rural dividend program.

My final question. It could be just the challenge on the rural strategy or the rural dividend application. I think what I heard earlier was that December 15, 2017 was the deadline of the applications that were announced this morning, and I think the wildfire community consultations have just wrapped up. Maybe that’s where the disconnect is, but our volunteer fire departments — critically important for the safety of our communities — really needed support in this budget with equipment caches or some really basic supplies.

We’d canvassed that through all of the ministries back in November. Really, the rural dividend is probably our only option to support these volunteer fire departments with accessing capital to support things like general capital purchases.

Was it just a disconnect on the timeline of December 15 — that we didn’t see any volunteer fire departments, as non-profits, receive any rural dividend funds? Can they still apply for the next phase, and when would that deadline be?

[4:05 p.m.]

Hon. D. Donaldson: To our knowledge, we didn’t receive, in this last call that finished December 15, any applications from volunteer fire departments, from non-profits. The ability for those organizations, which…. The member has done well to highlight the challenges faced by those volunteer fire departments when it came to the wildfire season, and the equipment needs and some of the equipment that got consumed during that.

There’s still the ability for them to apply under special circumstances. I have the ability outside of the actual, general period, which is often a month, to receive applications. That regular opening call for applications will be conducted again in the spring, after this budget has been presented.

There is also the ability, under gaming grants, which should be examined by volunteer fire departments. Funding through the Ministry of Municipal Affairs, gaming grants, is a source as well. I don’t know if this was canvassed under the minister responsible for emergency management B.C., but that was another possibility. Those are some options.

I just want to say thanks to the volunteer fire departments, because they keep my community safe as well.

C. Oakes: Thank you to the minister. I know that you recognize how important our volunteer fire departments are. We need to get all of our communities safe. We need to be prepared, and we’ve got a really short window. Community gaming grants for public safety — that next intake is actually August. By the time that intake happens, we’re already into another wildfire season.

I will report back, during our constituent week, that volunteer fire departments can put in the special circumstance. I think it’s critical. It’s in all of our best interests, both from a safety perspective and from an economic perspective, to ensure that our communities are ready and prepared for this upcoming fire season. So any work that the ministry can do in partnership to support that, I think, is critically important.

That ends my questions around rural economic development. Thank you very much.

D. Barnett: Economic development is not just putting new projects out. Economic development is existing and retention. With this new budget that has come out — and you are, of course, putting together a new economic strategy — I sincerely hope that in your work, there will be policies put in place that are going to protect some of our existing industries.

An example I will give to you of economic development in rural British Columbia, of course, is forestry, which is a huge part of the Cariboo-Chilcotin. With the new health care tax and the new carbon tax, I have had many phone calls from logging contractors who, through the past wildfires, did not work for 3½ months. Some of them went out and fought fires, but the rate they are paid was enough, basically, to pay for their help, pay for their fuel and their equipment.

[4:10 p.m.]

With these new taxes coming in, many of them will not make it very long in the future, and many of them are thinking that if there is not some assistance and some changes for these businesses, which are rural economic development, they will not be there. They will be at the auction sale.

Through your new economic strategy, are you looking at policies for retention of existing businesses?

Hon. D. Donaldson: I just want to thank the 800-plus contractors that assisted with the wildfire efforts, many of them in the member’s constituency.

Also, to talk about the forestry business, we have many tools within the ministry to ensure that local contractors and local businesses that depend on forestry are supported in that. The main tool is the management of the forests. We expedited 1.3 million hectares of fire-impacted wood, got them under cutting permits, since the wildfires happened last season. I think that’s an incredible amount of wood. Of course, if you’re an associated business, with hauling wood or harvesting wood, then that means certainty around work and getting a paycheque.

So, yes, under the rural development strategy, one of the top things on my mind is ensuring that the existing small businesses we have related to forestry are able to continue. Specifically from my ministry, that means managing the resource in a sustainable manner.

D. Barnett: That does not answer my question. This is an economic question. This is rural development retention for existing businesses that through no fault of their own and no fault of anybody, need assistance with policies, because of the new health care tax and the carbon tax. Otherwise their equipment will be going to auction.

Is there going to be something new in your rural development portfolio to assist these existing businesses?

Hon. D. Donaldson: The member can refer questions that are associated with the health tax and small business taxes to the Minister of Finance during her budget estimates.

We’re very concerned around contractors. We are awaiting the review of the contractors’ sustainability report from George Abbott. As I said, the best way, from my ministry and what’s under the jurisdiction of my ministry, to ensure the viability of contractors is to ensure the viability of the forest sector. That’s what we’re doing, as far as replanting areas that have been impacted by forest fires, addressing forest health issues and ensuring that cutting permits for fire-damaged timber are expedited.

D. Barnett: I would like to really congratulate your staff in the Cariboo-Chilcotin forestry regions. They’ve done an amazing job of getting permits out and doing the great work they do.

Still, under rural development, if we can’t keep existing businesses and retention, then we really are failing with rural economic development. I will ask the minister one more time: will there be policies within your new strategy to help retain existing businesses in rural British Columbia, such as logging contractors, etc.?

Hon. D. Donaldson: The rural development strategy is being created from the ground up through the engagement process I outlined earlier in the discussions.

[4:15 p.m.]

Key informants have been interviewed. People in communities have been engaged. There have been over 3,000 site visits to the engagement website. So I’m not going to presuppose what’s coming out of that engagement. That will be a publicly available document, and we can go from there.

Contractor sustainability is an issue throughout the province. It’s on my mind, and that’s why we’re currently reviewing — the contractor sustainability review that George Abbott is conducting. There likely could be policy recommendations that come out of that — in fact, I hope there are — to address contractor sustainability. Once those are reviewed, then I will be able to discuss them publicly.

D. Barnett: I understand that Mr. Abbott has signed off on that review. Could you please tell us when that review will be publicly released?

Hon. D. Donaldson: The report, the review by George Abbott, is being analyzed within my ministry. I haven’t seen it yet. When I do see it, then I’ll be able to give direction about public policy initiatives that will arise out of it. I’m anxious to get it out the door.

I know, having met with the Truck Loggers Association, for instance, on numerous occasions, and knowing from the local contractors in my area, that there are some major concerns about survival within the industry. It goes to the point that the member is raising about retaining existing businesses, which is essential.

There are areas of the province where, for example, the timber profile that’s already allocated has not been able to be harvested and brought to mills as soon as what we would like because of a lack of contractors. I know that’s been happening in the area that the member represents. So I’m anxious to get the review out as soon as possible.

D. Barnett: Will that report be released publicly?

Hon. D. Donaldson: Thank you for the interest in the report. Generally, any recommendations that are approved out of my office that are based on the report will be made public.

I just want to give the caution around release of the full report, because there might be some legal implications around the softwood lumber agreement. We want to be careful with that part, because we don’t want to damage our case in front of NAFTA and some of the appeals we’ve launched.

I want to assure the member that I believe in transparency and that the recommendations that stem from the report that I’m going to put forward will definitely be publicly available.

D. Barnett: Back on October 16, 2017, when we were doing estimates, I asked you a question about the rural dividend fund: would it become a fund for floods and wildfire issues? You commented: “The remaining rural dividend funds that will be distributed are not a disaster fund. I want to assure the member that that’s not how we’re going to typify it. It is not directly associated as a disaster fund or a recovery fund.”

[4:20 p.m.]

One of the concerns I have, Minister, is that all our areas — our communities; our rural areas; our citizens, of course — are concerned about wildfire mitigation. I see the announcements which came out from the government through the fourth intake of the rural dividend fund did include some wildfire mitigation in a particular community.

My question to you, Minister: now that the gates have been opened on the rural dividend fund to do wildfire mitigation, will it be one that is going to continue on? Can every area and society that is concerned about wildfire mitigation use this fund as that?

Hon. D. Donaldson: I stand by the fact that the rural dividend is not a wildfire recovery fund. Having said that, there are special circumstance applications that are special circumstances. I’m happy that $3,809,518 was awarded to wildfire-impacted communities.

Some of the proposals might have been funded even if there hadn’t been wildfire situations. It’s impossible to artificially separate out the situations related to wildfire and not wildfire. I want to make sure that the member knows that $693,678 was awarded during the project development funding stream. The other $3,809,518 was under special circumstance requests. In this budget, there is an uplift of $72 million targeted at wildfire recovery and wildfire resilience activities.

D. Barnett: Minister, I appreciate the assistance that our communities are getting. My question was not about projects that are being funded in communities with wildfire. My question was about the wildfire mitigation on a corridor, which means wildfire mitigation to protect the community against other fires. The rural dividend fund is there to create jobs, and the wildfire mitigation is there to protect communities.

My question to the minister is: is this fund going to be utilized for wildfire mitigation to protect communities, or is it going to be used for rural economic development?

Hon. D. Donaldson: The $72 million that I highlighted already — which I’m sure we’ll get some further questions about, because it’s a good-news story — is associated with one aspect, wildfire resilience. The rural development fund is not specifically targeted for wildfire resilience. That’s not the specific purpose of the fund. However, sometimes there is some overlap. Some of the projects that have been approved might have offshoots that mean employment in those kinds of activities, but it’s not the target of the rural development fund. The target for wildfire resilience is the $72 million in uplift of the budget that I alluded to previously.

S. Bond: Good afternoon, Minister. I have a number of questions. I want to build on some of the questions that my colleagues have asked, and there may be a bit of repetition, but that never hurts.

[4:25 p.m.]

I might as well just start where we left off with the member’s questions. The issue of the rural dividend and the fund that’s available is certainly not about being critical of supporting wildfire recovery in British Columbia. Our community, as a recipient of thousands of evacuees and stepping up on a daily basis, certainly understands that.

The concern — or, at least, the clarity we’d like — is the size of the pie. There are a lot of rural communities that require assistance in terms of rural economic development. If there is a blurring of the line, where we’re suggesting now that: “Yes, there may be overlap. And we’re going to put a few other here. And yes, there is special circumstance funding….” The point is that there has always been far more demand in that fund than there has been an ability to fund those projects.

Is there a cap on the special circumstances fund to ensure that as…? I can’t imagine, I’m hopeful, that the entire size of the fund will grow. We have increasing demand in rural communities. This fund plays a critical role in communities that I represent. So is there a cap on special circumstances? Is the minister advocating on behalf of wildfire recovery to receive additional funding rather than taking it out of the rural dividend fund?

Hon. D. Donaldson: Thank you for the question. I acknowledge, as well, the citizens of Prince George who reached out, above and beyond, to host — I think at one point it was 9,000 — visitors from fire-impacted zones. I know the member was volunteering at some of the evacuation centres as well. I just want to make sure that people know how welcoming Prince George citizens were for the people in the province that were in need.

There is additional funding addressing wildfire recovery and wildfire resilience that I advocated for. That resulted in a $72 million uplift to the budget for those two particular areas.

I fully agree with the member that there is way more demand in rural areas than what’s available within the rural dividend budget — and an increasing demand. The rural dividend fund is not being used as an alternative to address wildfire recovery. However, if a community makes an application for a legitimate project and there’s job creation involved from that, then it’s something that we want to consider in a balanced approach.

I didn’t get to the cap on special circumstances. I understand where the member may be going. You have a rural dividend with certain criteria, and you want it to be used for those criteria. You don’t want it overly allocated for special circumstances that are a result of an emergency situation.

There is no cap on special circumstances funding within the rural dividend envelope, but we make those balanced decisions.

[4:30 p.m.]

S. Bond: Thank you to the minister for his response. It is appreciated.

I think the fact that the rural dividend is continuing is incredibly important. I think that unless you are an MLA — and I certainly know the minister is — that represents regions of the province that utilize this fund, I’m not sure people understand the impacts of having a fund where communities that are really struggling to try to sort out what they look like in the future need that kind of assistance.

I do appreciate the ongoing nature of the program. Certainly, I would agree with the minister. We know that there needs to be a particular emphasis when there are circumstances that warrant that, which are very extreme. I just want to make sure that the principle of the rural dividend fund remains intact, which is making sure that communities that are grappling with their rural economic issues have those kinds of funds available to them. You know, shrinking the pot.

I think the minister described it well. It’s not an alternative funding for wildfire recovery. That’s really important. It is an essential issue, but it needs to be paid for. And the investments that the government makes need to pay for wildfire recovery. So I appreciate those answers, and I’m sure that my constituents will feel more comforted by the fact that the program will be ongoing and there will be room for communities that haven’t faced catastrophic circumstances.

I want to pursue the rural development strategy. Kudos for continuing the rural dividend initiative. Not so many kudos for embarking on a whole new rural strategy. I know that a great deal of time and effort was taken by a lot of people to create a framework and a discussion around the rural strategy that was put in place by the previous government. Times change, and we’re going to see a new one, I guess.

The minister reflected on what might be public and what might not be public. This was a public consultation process in terms of the strategy that was going to be created. The input, as I understand it, closed on February 28, so can the minister be a bit more specific about the timeline within which we might see a public strategy?

Rural communities are challenged today, and they don’t have a lot of time to sit around and wait for governments to have conversations. They need strategies that are going to bring benefit. Could the minister be a bit more specific with what the next steps are, now that the information session gathering time has closed? What can we expect to see and when?

[R. Chouhan in the chair.]

Hon. D. Donaldson: The public consultation actually…. The public input is on the website. It was available till March 7, and the final face-to-face engagement session is in Prince Rupert this Friday. We haven’t quite wrapped up the final parts of the public consultation.

We want to make sure…. I fully understand the member’s perspective about rural communities facing a lot of challenges and not wanting to wait around for the government’s strategy. Having recently joined government, I understand things take longer to get moving than many people would like to see. However, we’ll have that public strategy available later this spring.

S. Bond: Again, a complete strategy will be laid out that will then be shared, I’m assuming, publicly. Will there be a feedback loop for communities and people who had input, provided suggestions? I’m assuming there will be some sort of communications plan where this strategy will go out and the minister will receive some direct feedback about how communities feel about whether they were heard or not.

[4:35 p.m.]

Hon. D. Donaldson: We are going to go back to the public with: “This is what we heard.” It won’t be, I think the member said, a complete strategy. We’re not going to go back with a complete strategy. We want to make sure that we let people know that this is what we heard so they have confidence and trust that this is the summary of what they provided as feedback. That will happen publicly in the spring.

S. Bond: Thank you to the minister for that response. I think people will be pleased that they’ll have an opportunity to see their comments or ideas reflected. I think that’s an important part of the process.

I want to ask a more broad question about economic development. I think one of the concerns that, certainly, I’ve had as a legislator, over my time here, is the whole concept of ministries that work in isolation from one another. It takes a great deal of effort to make sure that there are cross-ministry approaches.

I think that when it comes to rural development and rural economic development, it’s one of the critical areas, where it is not a stand-alone ministry — because transportation networks matter, all of those things that contribute to a community’s ability to grow and to develop an economy.

Does the ministry have a process where they work across ministries in government to be advocates, to be champions for looking at how communities can grow and develop?

Hon. D. Donaldson: Yeah, I mean, I agree with what the member has stated as far as the cross-ministry importance of rural development. It impacts from Health, from Education, from Transportation, from Jobs, Trade and Technology.

I believe the member, when she was a cabinet minister, used to have the regional economic officers under her ministry. That’s another way that we coordinate, through what they hear in the field. We have a deputies committee that is able to provide some coordination.

Also, what we’re hearing back from the engagement, some of the comments that I’ve seen, is that people in rural communities want to see that level of cooperation, and they want to see mechanisms around how that can happen. I’m confident that will be part of the public document that we file this spring in order to get feedback to make sure that people’s comments are heard. Then we can move on from there as far as, if we need new structures, developing that coordination.

I couldn’t agree more that rural development is not in a silo. It’s part of everything, yet you don’t want to say: put the rural development label on every single government announcement. That waters down what it actually means. So coordination is essential.

S. Bond: I think the minister has made my point for me. Our communities, where they are grappling with capacity issues…. For example, if you live in a community that has 600 people in it and you’re desperately trying to think about how you create an economy and grow the number of jobs, you don’t have time to be running to six different ministries.

There needs to be that overarching principle so that all of the component pieces lead to an economic development strategy for those communities. I’m glad to hear that there is at least that recognition — that it’s not just about me asking. It’s about communities where…. Grant writing — all of those kinds of things are very challenging for small communities that we represent. I know the minister would be well aware of that from his own circumstances.

[4:40 p.m.]

I look forward to seeing that reflected in some of the discussion that takes place. It is important to have a rural lens. There are lots of lenses that need to be applied, but obviously the one I care about very passionately is that there does need to be a rural lens. Things are done differently in different parts of British Columbia.

If I could get just a bit more specific about a couple of issues. The critic has been very generous with his time. So I don’t want to…. Many colleagues are waiting.

I wonder if the minister could give me an update on the McBride community transition process, from his perspective. Just a brief reminder that the major employer in our community of McBride burned to the ground, a mill. People have been resilient and working hard, led by the village council and others. But I want to be assured that there are still resources on the ground. Economic recovery doesn’t take place overnight or in two weeks or six weeks.

I’m wondering if the minister could just give me an update, from his perspective, about the resources on the ground and whether progress is being made.

Hon. D. Donaldson: There’s lots to say, and I’m aware of the time constraints as well. We did meet with members of McBride municipal council during UBCM, as well as those who were in charge of the community forest there. I’m happy to report that the mill that did burn down has recently reopened, the BKB mill, and our regional economic development officer had assistance in that happening and continues to work with McBride on that.

S. Bond: Yes, we are celebrating the mill reopening, and it’s mainly because of the incredible determination of the owner and the family that operates that mill. I’m extremely proud of them. I also want to express my gratitude to the people, the team. Our economic development officer on the ground is exceptional and loves the valley as much as I do. I think that’s a pretty important piece of making sure that progress is made.

I just wanted to bring it to the minister’s attention to make sure that we don’t assume that we can transition out of that kind of support quickly. It’s a matter of a longer-term process. And I do want to thank the team of people who have been very helpful and encourage them to stay connected to McBride to look for ways…. Tourism, all of those kinds of things are incredible opportunities in that valley. I appreciate that update.

The other update that I wouldn’t mind hearing a little bit about…. I know that in many ways, no news is good news, in the sense that we don’t want to have issues created. But I’m wondering if the minister is familiar with Valemount Glacier development. As he would know, we have a plan that’s been signed off. Have there been any other issues identified for the minister about that project moving forward? It’s exciting. It’s skiing on a glacier that would be unprecedented in the world, frankly. It has great potential.

Again, the whole economic development piece — it’s transportation, it’s communication, it’s making sure there are proper Internet connections, all of those kinds of things. I wanted to make sure it was on the minister’s radar screen and wanted to know if he was aware of any concerns or anything that might jeopardize that project moving forward.

[4:45 p.m.]

Hon. D. Donaldson: Yeah, that’s exciting — Valemount Glacier destination resort. I don’t know if I should really be too particularly biased, but as a skier, I’m pretty excited about that kind of development and also excited that it falls within the jurisdiction of my ministry.

The Simpcw First Nation in the area…. The member will probably be aware that that land transfer, as part of accommodation, just happened this past week. That was another step in the process, an important step, in order to gain First Nations’ support and recognize the interests of that First Nation.

We don’t see any other large impediments in place as far as government is concerned. The exact timing of the development is ultimately dependent on global economic conditions and the capital investment that the developer is trying to attract. That’s the update that I can provide. We hope that the global economic circumstances are going to lead to investment in the project.

S. Bond: I certainly recognize that, and we know that investors and the developers are doing their job. I’m very optimistic about the project and continue to be. I just wanted to make sure there are no government impediments. I know that previous FLNRO ministers have spent a lot of time with me on this file. I’m sure that many of the staff with the minister know how many times I visited that office to make sure that we move this project forward. I want to make sure it continues.

My last question I will just leave with the minister if he doesn’t have the answer at the moment, because I realize our theme is economic development. But rather than take up another section of time at some point….

I am very hopeful that the minister and his staff have been able to sort out the issue related to a lease for the Canadian Mental Health Association, which falls under FLNRO. I brought the issue to the minister’s attention on October 30. I was assured, in January, that it would be about a month, so I’ve held off until today, in estimates.

It seems like a simple transaction. This organization wants to make a significant investment in a property that they have actually leased for literally almost three decades. It is a matter of transferring and allowing an organization which is doing fantastic work in our community to secure the ownership of that house so that they can make an investment in incredible programs.

I know the minister is aware of it. He has written me several letters, which I’ve been appreciative of. I am just hoping that we could get a positive answer and allow this organization to move forward.

Hon. D. Donaldson: Thank you to the member, and yes, I recognize her as a great advocate on this particular issue because we’ve received her correspondence. I’ve read it and replied.

What I’m hearing from my staff now is that it’s been reviewed. It’s in process, and within the next week or two, there’ll be an answer.

S. Bond: Well, thank you. I will let the Canadian Mental Health Association in Prince George know that we are now to the runway of one to two weeks, and hopefully, we can get to this a yes. I can’t imagine how it would be a difficult issue.

With that, I want to thank the minister and, particularly, the staff for their assistance, particularly the economic development officers that are out in our regions. We appreciate them. We’re glad to see that there’s still an investment in supporting communities in that way. I appreciate the time of the minister and his staff this afternoon.

D. Barnett: One of the concerns I have is in your budget. Could you identify for me what travel amounts and what other amounts are going to be in, for three years, for your new advisory council and your staff?

[4:50 p.m.]

Hon. D. Donaldson: The structure of the next iteration of how we as government receive input from rural advisers within communities and co-develop policy with them has yet to be determined because that’s part of the public engagement process. As I said previously, those results will be made public this spring so that people who did participate can ensure that their submissions were recognized and heard.

I can’t determine what structure that’ll be at this point, and therefore, the travel amounts associated with that new body, however it’s configured, are theoretical at this point. I don’t understand particularly…. I need a little bit further clarification on the question around staff. If it was staff associated with supporting, if there is a need for that, again, that’s yet to be determined. If it’s staff associated with regional economic development operations, that’s within the core budget that exists right now.

D. Barnett: A question back to the minister regarding the budget. The question that I’m asking you, to have a budget and….

Allocations are allocations, but there’s been no particular allocation I can find to recognize what is going to be staff for rural economic development itself or for other pieces of your ministry. I would like you to identify what is actually going to be there in staffing and assistance for an advisory committee within rural economic development itself.

Hon. D. Donaldson: Within our rural development sector, or segment, within government, we have 19 regional economic development officers in that part of it, and we have nine rural policy staff. So there are 28 who are currently working within the ministry.

We’ve reorganized rural development into rural development, lands and innovation because it came over from another ministry. The overall budget for that part of the core business is $55,968,000.

Now, we don’t have the rural development, 19 people and nine people, broken out to a fine detail on that. But if the member would like that, we can ask staff to break that out for us, and I can bring it back before estimates are over.

[4:55 p.m.]

We also have an uplift, within this budget, of a new $500,000 addition to the ’18-19 fiscal year budget around our rural development initiatives. That will help support the structure and strategy that comes out of the engagement process that’s going to be initiated this spring — not the engagement process but the actual public document initiated this spring.

D. Barnett: Thank you, Minister. I would appreciate if the staff could break it out and give it to me at a later date.

I’d just like to say one more thing. Right now I am very pleased that we are carrying on with the rural strategy. I will be monitoring it very, very closely. We do have a great strategy now, with all ministries participating. Every ministry is part of rural economic development. You’re very fortunate to have such a great staff with such great experience and such great knowledge. I thank them. I look forward…. I will be on your case if rural economic development is not something that is a high priority with this government.

The Chair: All right. No questions there.

Member for Peace River North.

D. Davies: Thank you, Chair, and thank you, Minister. I know that we’ve talked a few times about the Northern Rockies, Fort Nelson — some of the issues, of course, that community is facing as one of the smaller rural communities in my area.

I just look at the B.C. government website. “The government of British Columbia is committed to working with our rural communities to strengthen their resilience, create jobs and build unmatched economic opportunities.” It goes on with that.

With that being said, there are so many opportunities right now, I think, that we can build on, that this government can build on, around forestry, tourism, agriculture — the potential of agriculture — tourism. But right now there are none of those things happening, and Fort Nelson is probably one of the most struggling communities, I think, in this province, as far as communities go.

To the minister, is there any plan right now, with the ministry, to be working with this community and to help follow some of the mandate — strengthen their resilience, create jobs? What is the ministry doing to help Fort Nelson right now?

Hon. D. Donaldson: Thanks for the focus on an area of the province that has definitely been hard hit. I’ve met with Mayor Streeper. I’ve met with the Fort Nelson First Nation. Even the property values, for instance, are…. I think the mayor told me it was down 40 percent. How can you survive that kind of a hit? It’s a pretty big challenge.

The highest priority that the community has identified, as far as resilience and building back the community, has been on the forestry front. We’ve been working with the Northern Rockies regional municipality and with the Fort Nelson First Nation to get a community forest tenure in place in support of….

[5:00 p.m.]

What they’re both trying to do is attract an investor to restart the OSB plant. That’s been the main focus of our work because that’s been the priority that they say is highest for that community.

We’re also aware that there’s been a submission to the rural dividend fund by Fort Nelson — by the Northern Rockies regional municipality as well. But we’re doing a lot of work on trying to facilitate the fibre supply for that OSB plant to restart. Of course, it’s going to take an external investor. We’ve had an on-the-table offer to meet with any investors that either Fort Nelson or the First Nations want to identify to us to discuss the potential tenure opportunities.

D. Davies: Thank you, Minister, for that. I know that you’re very aware of the situation up there. I certainly appreciate that.

I agree. Forestry is going to be, I think, the quickest and easiest way out, moving forward. But at the same time, I think this is what’s led Fort Nelson down this path of relying on one industry, and then it folds, and then…. That’s what happened. The forest industry was booming in Fort Nelson, and then the gas came along. Forestry ended — and heyday with the gas. Now it’s down again.

While it certainly is promising to see that the ministry is working on the forest sector, I would want to make sure that we do also keep in mind that these other opportunities need to not be forgotten about, whether it be natural gas…. I get the whole business plan for the dry gas. That’s the big issue that Fort Nelson has. But there are opportunities there moving forward.

Tourism. There are 300,000 vehicles a year that go up and down the Alaska Highway, through that community. Again, having your ministry reach out and work with some of the organizations there to help capture some of that into their communities….

Of course, the potential for agriculture, which I think is really something that has a lot of potential in Fort Nelson…. We have some ranchers up there already doing cattle successfully. Again, we don’t want to lose those pieces that are going to help diversify Fort Nelson’s economy.

Just to go back briefly, you had mentioned the community forest. I know this isn’t really the forestry section of this. The community forest, which is being worked with the ministry and Northern Rockies and Fort Nelson First Nation…. Again, there have been more delays in coming forward and getting this community forest going.

I’m just wondering if the ministry can give us an idea when this community forest, which I know the Fort Nelson First Nations and the municipality are anxiously waiting to get moving…. If you can give me some insight with that.

Hon. D. Donaldson: We’ve extended the deadline for the application by those interested in a community forest agreement to the fall, in order to work with them — “them” being the Northern Rockies regional municipality and the Fort Nelson First Nation — to actually land on the area that they want to apply for as a community forest.

We’re doing a lot of work in that regard. As I said, we extended it to the fall for the deadline for application. We’re hopeful and pretty confident we can get the land question settled by then.

[5:05 p.m.]

On the other part about the diversity, absolutely. I’ve visited Fort Nelson — not often, but three times, once driving. I did the circle route up 37 and then down the Alaska Highway. A beautiful area. Lots of potential in the areas that the member outlined. He knows it well.

I would just want to add that one of the priorities of rural development for me, and a strategy — and it will be dependent on what we hear from the engagement process — is levelling out those ups and downs. Rural communities become dependent on one source, overly dependent on one source for their economic survival. When that flips, it can cause some devastation. That’s what we’re seeing in Fort Nelson right now — so looking at a strategy that will add resilience.

J. Rustad: We’re coming to the close of rural development. I’ve got a couple of last questions to ask, and then we’ll move on to canvass marijuana issues at that point.

One question. Through all of this…. Often budgets are never really asked about in estimates, but I do have a budgetary question. The budget for rural development, lands and innovation declines each year over the next three years. I’m just curious as to what the rationale is for the declining budget on rural development.

Hon. D. Donaldson: Thank you for the first question from the critic after a couple of hours. I know we’re going to be talking a lot over the next few days. A budget question, no less — just what we’re here for.

The budget facts that the member outlined have nothing to do with a reduction in the rural development aspect of the budget. It’s really the reorganization, where we’ve put rural development, innovation, and lands — RDLI, we call it now — into a section on their own. The budget decrease that the member notes over the next three years is a matter of moving other non-rural-development responsibilities into other core sections of the ministry.

J. Rustad: Thank you for that. I assume, though, that the additional decline also isn’t reflective of salary increases and other types of costs that would be in there. In any case, I’ll leave that one, unless the minister wants to add any other comment.

I do have one other quick question, which is on the resource benefit alliance. The minister and I have met on a number of occasions. I know that the minister has met with the mayors and regional district reps up in the northwest. It was a commitment, I believe, from the Premier, in terms of an engagement with that group.

I’m wondering. I’m curious as to…. I’ll start off with one question on it — to the minister’s perspective, I guess — as to where things are at with the discussions with the folks from the northwest on the resource benefit alliance.

Hon. D. Donaldson: I know that we’ve attended meetings together with the Northwest B.C. Resource Benefits Alliance.

[5:10 p.m.]

I’m happy to report that that aspect of negotiations with that body — which, I believe, represents almost 30 different local governments in the northwest and puts in a lot of fine work on trying to move their agenda forward — lies now with the Minister of Finance. I think that’s an excellent place for that proposal to lie, because really, they’re most concerned about revenue-sharing. The current state of that proposal would be best canvassed with the Minister of Finance.

J. Rustad: Thank you to the minister for that. I look forward to asking the Minister of Finance the question when those estimates come up.

With that, I just want to thank the rural development staff for their prompt responses in the thorough discussion that we’ve had. Let’s move on now to the next topic.

I’m going to be sharing this with a number of colleagues, with regards to questions that’ll come up associated with marijuana. Perhaps one quick question just to start. I understand that the Minister of Agriculture has recused herself of this issue, which is appropriate for her to do, and the responsibility falls on you. I also understand that it’s outside of what would normally be within the ministry. My hope is that we will be able to canvass a number of questions with regards to this.

The first question, just a very broad question, is: what does the minister see as his role with regards to the issue of production of marijuana or other components associated with the legalization of marijuana in B.C.?

Hon. D. Donaldson: Maybe we need another nameplate for this ministry. It’s gotten awfully long already, but we could add “sometimes cannabis” to it, too, I suppose.

Thank you for acknowledging that I am the backup to the Minister of Agriculture because she’s recused herself during policy discussions. The role I will have is reviewing and analyzing the Agriculture Ministry’s agricultural land reserve revitalization committee’s recommendations when it comes to cannabis matters related to cannabis in the ALR. That’s the policy decision envelope I will be involved with.

As well, under the ministry that I represent in a full-time capacity, we do have Land Act and water transactions that will relate to potential cannabis production.

J. Rustad: With that, I’ll turn it over to my colleague from Prince George–Mackenzie.

M. Morris: Just a few questions to kind of straighten out in my mind where this is going. I know the federal legislation is before the Senate right now, and we haven’t seen any outcomes there.

I’m sure the minister has turned his mind to how we’re going to address the legalization when it occurs. Will recreational cannabis growers or producers in B.C. be classified as agriculture…? Will cannabis be classified as an agriculture product?

[5:15 p.m.]

Hon. D. Donaldson: As the member likely is aware, the production of medical cannabis was considered an agricultural product under the previous government. The decisions on whether recreational production will be considered an agricultural product are still outstanding. There are still some details from the federal licensing and production legislation that we need to get analyzed and get forthcoming.

I do want to add, though, that this issue is being represented to the agricultural land reserve revitalization committee. They’ll be having some discussions on that and potentially making policy recommendations to me as well.

M. Morris: Does the ministry have any involvement in current greenhouse production — greenhouses that are producing vegetables now, converting over to cannabis production? Has the ministry been involved in that process and been involved in the licensing with the federal government?

Hon. D. Donaldson: Just to clarify so we can answer the question as accurately as possible, when you say, “the ministry,” are you referring to the Ministry of Forests, Lands, Natural Resource Operations and Rural Development, or are you referring to the Ministry of Agriculture?

M. Morris: The Ministry of Agriculture.

Hon. D. Donaldson: I appreciate the member asking me these questions. I would also appreciate that he’s…. It’s going to take a little bit of time for me to answer some of them. It’s a new area of my ministry responsibility, obviously.

Are we involved with…? The question was about current greenhouse operations that are producing other products converting over to recreational cannabis. Are we involved in the licensing? No. That’s a licensing arrangement between the proponent and the federal government.

[5:20 p.m.]

However, the Ministry of Agriculture has an interest in the sector, so we keep engaged with individuals who are undertaking initiatives in this sector. But no, we don’t have licensing involvement in that particular line of business.

M. Morris: Let me get this straight in my mind here. Will prospective producers need to apply under the Agricultural Land Commission Act prior to applying to the federal government for a licence to produce marijuana or cannabis?

Hon. D. Donaldson: Right now the only ability to issue a licence is for medical marijuana, and that is with…. The member used the term “producers.” Proponents seek that licence from Canada. We’re still waiting for the framework from the federal government around recreational marijuana production. Under the last government, medical marijuana was considered an agricultural product, so there wasn’t any necessity for producers of that product to make any application to the Agricultural Land Commission.

M. Morris: So if I have this straight, then, anybody that wants to grow recreational marijuana in British Columbia can bypass the province completely, go straight to the federal government, and apply for a licence. If they receive the licence, then they just go ahead and start growing it without any input from the provincial government?

Hon. D. Donaldson: The scenario outlined by the member is the scenario that’s applicable right now to medical marijuana. Recreational marijuana, at this point, is not legal, so that framework has not been established.

[5:25 p.m.]

M. Morris: I understand that. I know it will be legal shortly. I’m just curious, with that statement, that surely there’s been some work that has already taken place that would prepare us for the legalization that’s in the Senate right now. It’s just a short few weeks away from coming into force.

What role does the province see itself playing in the licensing aspect, in assisting the government in having some role in and control over who produces marijuana in British Columbia?

Hon. D. Donaldson: I just want to refer to a term that the member used in the previous question: “bypassed.” Nothing has been bypassed at this point, because there is no licensing in place between proponents and the federal government on the production of recreational marijuana.

There has been a cross-government secretariat looking at the issues that the member is laying out. There’s been analysis. I understand the urgency, considering the timeline that we’ve got in place. But none of that has been set yet, because we haven’t gotten to the final framework. And it doesn’t preclude the fact that work is being done on exactly what the member is talking about.

M. Morris: I appreciate that. Does the ministry have any role to play in the licensing of the medical marijuana infrastructure that is showing up around the province here? There’s one in Nanaimo. There are a number of them around the province. What role is the ministry playing in that right now?

Hon. D. Donaldson: As far as the production of medicinal marijuana goes, that is, as the member rightly portrayed…. The licensing is a federal jurisdiction and federal responsibility.

[5:30 p.m.]

He asked about the role of the Ministry of Agriculture. The role of B.C. has been and is to produce guidelines to advise local governments on appropriate restrictions to those facilities. As an example, a local government might decide to enact a bylaw around the distance of those facilities from schools — those kinds of appropriate restrictions.

As far as the ministry I primarily represent, when the member was asking about the role of B.C…. We, under the Ministry of Forests, Lands, Natural Resource Operations and Rural Development, have responsibility under the Water Sustainability Act for issuing water usage permits to greenhouse operations.

[L. Reid in the chair.]

M. Morris: Thank you for that answer.

Does the minister see something similar taking place with the production of recreational marijuana in the province? Part of that, too, is: does the minister foresee any age restriction on people working in that industry within the recreational production side?

Hon. D. Donaldson: Age restrictions on those working in the industry — as the member, in his question, addressed — are not within the jurisdiction or purview of the Ministry of Agriculture or the ministry that I represent. That question would be best posed to the Minister of Public Safety.

M. Morris: What role, then, does the minister see the provincial government playing with respect to issuing production licences to recreational marijuana growers in the province? Has that been discussed with the federal government at all? Where do we sit with that particular point right now?

Hon. D. Donaldson: Those kinds of policy decisions, again, are not within the jurisdiction or purview of the two ministries that I’m now representing on this topic: the Ministry of Agriculture and Ministry of Forests, Lands, Natural Resource Operations and Rural Development.

The member might have canvassed the Minister of Public Safety around the Cannabis Secretariat, which that minister has under his purview. That’s leading discussions with the federal government on the kinds of issues that the member is raising. If he didn’t, then I would say that the Minister of Public Safety is the one to direct that question to, whether it’s in a letter or in any other means the member can.

[5:35 p.m.]

M. Morris: Just a clarification, and then I’ll turn it over to my friend from Delta South. Are you indicating that the Solicitor General and Public Safety Minister is the agency that will be looking after the licensing of recreational producers in the province, or hasn’t that been determined yet?

Hon. D. Donaldson: Thank you for persevering in trying to seek clarification on this, to the member.

Again, we’ve got some tight timelines, and we’re working towards them with the federal government. The lead to coordinate across government discussions and discussions within the provincial government’s ministries is the Minister of Public Safety. The final decision on the roles of the various ministries within the province when we get to this production of recreational marijuana in the province has not been finalized. That’s because there are still a lot of discussions to undertake on the framework with the federal government.

I. Paton: Having conducted Agriculture estimates just over a week ago, I was told by the Agriculture Minister that she is recusing herself from the marijuana discussions, and they have been put into your ministry for decision-making instead of the Ministry of Agriculture.

Have you made decisions to date on behalf of the Agriculture Minister related to marijuana, and if so, which sorts of decisions so far?

Hon. D. Donaldson: Well, I can give you a quick answer to that. Oftentimes you are asking for yes or no answers, I notice, in question period. I can say no.

I. Paton: Has the minister had any communications with stakeholders, people in the agriculture industry, B.C. Agriculture Council, Farmers Institutes, stakeholders such as farmers? Have you had any meetings or communications with stakeholders about the future of marijuana on our farmland in B.C.?

[5:40 p.m.]

Hon. D. Donaldson: The member is correct that the Agriculture Minister has recused herself from decision-making around policies, but she has been engaged in communication with stakeholders.

I just want to assure the member that I’ll be supported by staff within the Ministry of Agriculture, who have had communication with stakeholders, when it comes to making decisions that are now with me, on policy around this topic. As well, I will be given advice, after analysis by the agricultural land reserve revitalization committee.

I. Paton: That leads into my next question, which basically has been answered, I suppose. As we know, there is a committee that’s travelling the province right now looking at the potential revitalization of the ALR and the ALC. I’m just wondering: when they complete their findings in this committee, will the findings be implemented through the Ministry of Agriculture, or will these findings go through to your ministry for analysis and for input back to us as opposition?

Hon. D. Donaldson: Thank you for the clarification question.

The revitalization committee is going to be receiving submissions and making recommendations on a wide variety of ALR issues. The Ministry of Agriculture will provide analysis to the Minister of Agriculture, but anything specific around cannabis will come to me as a backup to the Minister of Agriculture, not as the Minister of Forests, Lands, Natural Resource Operations. In my backup role to the Minister of Agriculture, those kinds of decisions on policies specific to cannabis will lie within my decision-making.

I. Paton: This is a very blunt, out-there question. Will the minister be continuing the practice of allowing marijuana to grow in the ALR? The second part of that question is…. Municipalities have expressed their frustration about being unable to control the cultivation of marijuana on farmland. Will any changes to this be part of the government’s marijuana legislation?

[5:45 p.m.]

Hon. D. Donaldson: I just would like to emphasize that although there’s been a lot of analysis and work done, no final decisions have been made yet on legislation or our final policies around recreational cannabis production. The ALR revitalization committee is getting lots of submissions on this, so we want to make sure that their input and their analysis are allowed time to be completed. Overall, the coordinated approach around policy decisions across government is being coordinated through the Minister of Public Safety.

I. Paton: I’ll make a comment, first, and then I’ll move on to a question.

I’m from Delta South. In Delta South right now…. You know, many years ago, as we all know, greenhouses were a contentious issue, in the first place, on class 1 soil in Delta, but eventually, the decision was made that the greenhouses would be an allowable use on class 1 soil.

The farming population of Delta had to basically either get on board and support the greenhouse industry or say: “No, we don’t like greenhouses.” We chose to get on board, and we supported the greenhouse industry because we knew how much volume and quality of food they could grow in a 12-month period, as opposed to the rest of us, growing on the dirt for six months of the year — rather than 12 months of the year in a nice, warm, temperature-controlled greenhouse.

Right now we have three greenhouses currently converting in Delta, almost totalling 100 acres of greenhouse space: Village Farms, near the Boundary Bay Airport; SunSelect greenhouses on Hornby Drive; and one more on 104 Street. Converting the production of peppers, tomatoes and cucumbers to the production of cannabis doesn’t really sit too well with the farming population, I think, anywhere in British Columbia. This is all about food security, about producing food, as opposed to producing cannabis.

I guess my question, then, leads on to the value of farmland. Has your ministry done an assessment of the values of farmland? We all talk about the panic of perhaps foreign ownership of farmland in British Columbia. Nothing is going to drive up the price of farmland in British Columbia like corporations that are coming in and purchasing farmland because it’s big business now to be growing cannabis rather than growing food.

We’re seeing that already throughout the Fraser Valley, with companies that are offering to purchase. Farms that were normally for sale for $65,000 an acre are easily now bringing $120,000 to $150,000 an acre for land that’ll be used for cannabis production.

I’m wondering if there have been any assessments done on the value of farmland moving upwards.

[5:50 p.m.]

Hon. D. Donaldson: Thanks for the question and the situation, as portrayed. The value of farmland is something that is of interest to me, even though I’m not the Minister of Agriculture, because of where I live, as well, in an area of the province where part of the economic mix is agriculture — an important part and with a long history of it being a very important part.

The Minister of Agriculture recused herself on the cannabis policy decision-making issue. That’s where I will be making decisions and welcoming questions specifically on that. She did not recuse herself from the whole industry, and I encourage the member to ask the Minister of Agriculture about analysis on the value of farmland in the province.

I. Paton: In our municipalities…. For instance, in Delta we have created a bylaw, with the city of Delta, refusing any production, growth, sale of marijuana anywhere in the municipality, including farmland.

My question: Would the provincial legislation take precedence over any bylaw within a municipality, the city of Delta?

Hon. D. Donaldson: The situation described by the member relates to the production of medical marijuana, and that has been in place for a couple of years now. As I said before in a previous answer to another member, the Ministry of Agriculture issues guidelines that help municipalities make decisions in regards to those production facilities. In some instances, those are bylaws that municipalities decide to enact.

That’s the intersection in the current situation between local government and provincial statutes. At this point, there’s no framework. There are no provincial statutes associated with recreational marijuana because it’s not a legal product yet. So the question is theoretical.

[5:55 p.m.]

I. Paton: The news release for the ALR consultation says that legislative changes are “targeted for late 2018 or early 2019.” Wouldn’t this mean that changes are set to take place after the legalization date?

Hon. D. Donaldson: The timelines the member is referring to are the revitalization committee suggestions, broadly, with the ALR.

With cannabis, not any decision has been made yet, because we’re still waiting for finalization of the legal structure federally. Depending on what comes out of that, which should be relatively soon, then there’s a suite of options available around policy or legislative or regulatory decisions when it comes to recreational marijuana. That’s what will be considered by the Minister of Public Safety.

I. Paton: I think I only have two or three more questions. Hopefully, we can answer this, perhaps not. It may be the wrong ministry.

When it comes to taxation in municipalities, farming is taxed at a very low rate compared to commercial and industrial, so one of our concerns is that cannabis begins production on agricultural land in greenhouses. If it’s deemed a bona fide farm use crop, would it be subjected to farm tax rates — which would be outrageous, as far as I’m concerned? Would cannabis be taxed at a higher commercial-industrial rate than a normal farm growing potatoes or cauliflower or tomatoes or green peppers?

[6:00 p.m.]

Hon. D. Donaldson: Medical marijuana production is considered a farm use, as the member knows. That was in place from the last government. It’s not a qualifying agricultural use for tax purposes, however.

With recreational marijuana, no decisions have been made around that. Again, we’re waiting for the framework federally, for input from the revitalization committee, from staff and from the stakeholders.

Related to this topic, the designation of farm status is a responsibility of the Minister of Municipal Affairs and Housing and the responsibility of taxation policy is the Minister of Finance.

I. Paton: Thank you for the answers. Just a few more.

In agriculture in British Columbia now, there’s a 50 percent rule with value-added agricultural items, such as breweries, wineries — different things like that. In fact, in Delta, we have a craft brewery being built for the very first time because the farmers are actually growing more than 50 percent of what they need in the way of hops and malting barley, which is certainly good news.

It brings me to an interesting question. If we allow the 50 percent rule to be growing malting barley and hops on a farm to set up a craft brewery, would the production of cannabis on a farm, if they could prove that they’ve produced 50 percent of the cannabis, which is a no-brainer, would you be able to set up a little processing plant on your farm, a smoking room, a lounge, a little sales room to sell your marijuana on the farm as if it were a craft brewery?

Hon. D. Donaldson: As currently written, the regulations don’t allow for the situation that the member hypothetically described. Again, the policy framework, overall, is not set. So unfortunately, I’ll just have to typify that as a hypothetical question, and we’ll have to wait to see the overall framework from the federal government and suggestions from the revitalization committee before we could address that hypothetical.

I. Paton: Thank you to the minister for that answer to a hypothetical question. A couple more.

In the greenhouse industry — and I keep referring back to my community, because we have a lot of greenhouses in Delta that are producing food in the way of vegetables — they are entitled to an 80 percent exemption on their heating bill. They’re somewhat concerned, with the increase in carbon tax coming up, which is going to become much more expensive.

The food industry in British Columbia growing food products in a greenhouse are entitled to an 80 percent rebate on their heating costs, because there’s a lot of heat that obviously gets used in a greenhouse. Would the cannabis industry, growing in greenhouses, be entitled to the same 80 percent rebate?

[6:05 p.m.]

Hon. D. Donaldson: Policies like the one just outlined around the 80 percent exemption for heating have not yet been determined or concluded around cannabis production. This is exactly the kind of topic, as time progresses, that the Minister Responsible for Public Safety, through the cannabis secretariat, could potentially address.

I. Paton: My last question. I thank the minister in advance for being…. I think the word is tossed into this. Cannabis is probably something that you weren’t quite expecting. On what date was the minister informed that he would be the decision-maker for agriculture issues related to cannabis?

Hon. D. Donaldson: Thank you to the member for posing a number of questions and to the staff for assisting me in a great way in trying to provide at least a little bit of answers to what he’s interested in, and many people are interested in.

I was informed in a letter from the Minister of Agriculture around her decision to recuse herself and my role in this issue. There’s been a lot going on. I can’t remember the exact date, but I will get you the date of that letter.

Oh, sorry. Now I have it, by the miraculous ability of staff to get to work on these kinds of questions when they hear you ask one. It was December 21 that I received that letter.

A. Olsen: Thank you, Minister, for picking up this file at such a late date.

As you may know, my riding has a substantive amount of land within the agricultural land reserve. Perhaps you’ve been asked this question. I will ask it again. I haven’t heard an answer to it. I’ve been in and out, so I apologize if I’m covering ground you’ve already covered.

There’s a tremendous amount of concern in our riding around the production of recreational cannabis on the ALR and in ALC. Has the government considered placing a regulation on the production of cannabis on the ALR within the Agricultural Land Commission?

[6:10 p.m.]

Hon. D. Donaldson: For the continued questioning on this topic, a thank-you to the member. There were similar questions already canvassed from the aspect that there’s no regulatory framework for recreational cannabis at this point. The coordination of those efforts across our government and with the federal government — which has yet to lay out their legislation, their framework — lies with the minister responsible for Public Safety.

However, I am aware that this question was posed to the Agriculture Minister during her estimates. She provided the answer at that point, saying that the province at this point doesn’t have the legislative authority to do what the member is suggesting.

A. Olsen: I think one of the challenges that I recognize, as formerly part of a local government, is the huge amount of speculation that already exists on agricultural lands, specifically in the rurban area that I live in. The potential is actually causing further stress on the agricultural land reserve land and costs, and adding the speculative impact of it is quite damaging.

I’m wondering if the government, considering the unknowns — and I respect the fact that there are some challenges — would consider placing a moratorium in order to deal with the negative speculative impacts until the government can make decisions on exactly how it’s going to roll out.

Hon. D. Donaldson: Again, thanks to the member for canvassing this topic. I will just reiterate what the Agriculture Minister put on the record during her estimates. We lack the legislative authority to put in place a moratorium as described by the member.

J. Rustad: Noting the hour, we’ll try to wrap this up so that we can move on to something else tomorrow. Maybe we’ll get to forestry if we can tomorrow, but I suspect we’ll be starting with aquaculture tomorrow afternoon, when it sits.

I’ve got a couple other quick questions. One I’m asking in particular about, because this is actually under your ministry now, is the land and water component in terms of water licences for production as well as the potential for production on Crown land.

[6:15 p.m.]

To start with, will the minister be considering, or has the minister considered, policy associated with utilizing Crown land or applications for Crown land for the production of marijuana, or cannabis?

Hon. D. Donaldson: Again, thank you for a question that relates to the ministry that I’m the minister of. Thanks for bringing it back.

As the member may be aware, the ministry I represent is responsible for the management and leasing of the disposition of Crown land. Any decisions that we make along those lines have to dovetail with the broader government objectives. Again, the regulatory regime is not in place for the production of recreational marijuana. Once that regulatory regime is in place, then we’ll ensure that our management and leasing responsibilities regarding the disposition of Crown land dovetails with that broader regime.

J. Rustad: Thanks for that answer. The reason why I ask, of course, is because ag leases are a common occurrence around the province by many operations. Usually it’s for cattle and that type of thing, but you never know where there might be opportunities.

To the next question, though, with regards to water licensing. I’m sure we’ll get a chance to canvass this issue in a future year, once the legislation and components are in place, but my hope is, of course, through this, that the minister will have this in mind in terms of questions that he may be looking at as legislation comes forward.

To water licensing. Obviously, agriculture products of varying kind take a significant amount of water. Water can be a significant issue, certainly, in some areas of the province where there’s a shortage from time to time.

Is the minister contemplating any particular rules, regulations or restrictions associated with water licences for the production of cannabis?

[6:20 p.m.]

Hon. D. Donaldson: Similar to the last answer I gave around the Crown land aspect of the potential production of recreational cannabis on Crown land, as we discuss water in relation to that, there needs to be the regulatory regime in place overall. That’s still coming from the federal government, as far as the legislation goes, and being coordinated across government ministries within B.C. by the Minister of Public Safety.

As far as water licensing, specifically, goes for agricultural activities, if water is available and there is the right to use the land for an agricultural purpose, then we will issue those water licences based on the regulations and the standards that are in place.

J. Rustad: I just want to make a quick comment, and then I’ve got one more question, I think — perhaps only one more question on this topic. That is that earlier, my colleagues had mentioned about whether or not cannabis would be considered to be a farm product.

I just wanted to make a comment that that’ll be a very important question. I hope that the minister will take it forward both to the Minister of Agriculture as well as to the Minister of Finance, who ultimately is responsible for the list — for what is considered to be an agriculture product or not. Then that, of course, goes to the B.C. Assessment.

Without it being an agricultural product, if that’s all they’re producing, they wouldn’t necessarily be recognized as bona fide farmers and hence receive the farming tax credits that are available through the system. So it’s an important question associated with this as the time goes through. If you could pass that information on to your colleagues in the discussions as that goes, that would be helpful.

The question I have, specifically, around this is with production and, in particular, production limits. We know that the federal government is going to be licensing various opportunities, I suppose, around the province for production of this. The question will be whether it’s going to be left wide open for anybody to receive a licence and for anybody to be able to have production or whether there’ll be production limits and whether there’ll end up being some sort of supply management side or whether it’ll be wide open.

I don’t know if that’s going to fall under provincial jurisdiction, because licensing, obviously, comes forward. If the federal government issues a licence for production, does that licence include a limit on the amount of production? Or is that production limit something that would be under the provincial jurisdiction? I might have one follow-up to that before we wrap up.

Hon. D. Donaldson: I appreciate the member trying to get an understanding of some parameters around this subject. He references production limits.

I just want to re-emphasize that this is a federal government licensing issue and a federal government responsibility. So until the federal government comes down with those kinds of determinations, which we haven’t got to yet, it’s a hypothetical situation. I don’t think it’s correct for me to speculate on hypotheticals at this point.

J. Rustad: Just one more. I’d just like to move on and finish this topic so we don’t have to bring staff back tomorrow with regard to cannabis. If I understand the minister correctly, the province, then, will not have any jurisdiction or say around the production, the quantity of production or the types of production associated with a licence that might be issued by the federal government.

One of the reasons why I’m asking this question…. I know the minister may not be able to answer this question. But food security is obviously one of those things that many people are concerned about. With greenhouses being converted and agricultural land being converted to potentially growing a lucrative cash crop…. I’m not blaming the folks that are doing that, because they’re in the business to try to make a profit off of the land base.

[6:25 p.m.]

That is a question mark in terms of how we utilize our land and whether or not we are able to meet the food demands that we have as a society. That’s why I’m asking these questions around whether the province has a jurisdiction around the production, the quantity of production, the number of licences or any of that type of component that’ll be associated with marijuana production.

Hon. D. Donaldson: I’m glad we’re working till the end today. That’s a good thing, I think. Oftentimes we should be working to the end.

Just to correct or…. I know that the member has a certain perspective on these things, but it would be incorrect, and I would need to correct the record — his statement that our government has no role or B.C. has no role in the issue and concerns around recreational cannabis production in the province.

We’ve haven’t made any regulatory legislative or policy decisions yet because we’re still waiting on the federal government decisions in regards to those areas. Doesn’t mean we have not been doing working on it. It’s just that we haven’t made those decisions yet because the federal government has the jurisdiction and authority over the licensing.

As far as food security concerns, we’re very committed to ensuring that B.C. is a food-secure province. That’s why we’ve begun the work and the Minister of Agriculture has begun the work on the ALR revitalization committee.

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

Motion approved.

The committee rose at 6:27 p.m.

The House resumed; Mr. Speaker in the chair.

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

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

Hon. M. Farnworth moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 1:30 on Wednesday afternoon.

The House adjourned at 6:28 p.m.