Orders of the Day

Hon. M. Farnworth: In this chamber, I call Committee of the Whole, Bill 15, Energy, Mines and Petroleum Resources Statutes Amendment Act. In Committee A, I call continued debate on the estimates for child care, minister of state.

Petitions

B. Stewart: I rise today to present a petition. This petition is called “scrap the speculation tax” and has, to date, acquired and assembled over 17,000 signatures on it, and more are signing each and every day. My constituency office alone has received over 749 emails as of this morning protesting this tax, along with copies of another 250 letters submitted to the city of West Kelowna. My constituents and everyone who has signed this petition are urging the government to rethink their controversial speculation tax.

[2:45 p.m.]

Committee of the Whole House

BILL 15 — ENERGY, MINES
AND PETROLEUM RESOURCES STATUTES
AMENDMENT ACT, 2018

The House in Committee of the Whole (Section B) on Bill 15; R. Chouhan in the chair.

The committee met at 2:46 p.m.

On section 1.

Hon. M. Mungall: Before we get started, I just wanted to introduce my staff. We have Ines Piccinino, who is the associate deputy minister for the oil and gas division of the ministry. We have Richard Grieve here, who is the executive director of regulatory and infrastructure branch. And we have Sara Gregory, who is vice-president, legal services and regulatory affairs, with the B.C. Oil and Gas Commission.

The Chair: The member for Peace River South.

M. Bernier: Thank you, Chair, and thank you to the minister and the staff as well.

As we move through this bill, we have some important questions or clarifications on certain areas that we want to be able to bring forward. It will give the minister an opportunity to give some explanation of certain aspects of the bill as well, and give her an opportunity to clarify some areas.

As was mentioned in our discussions earlier yesterday, of course, this is not something that we see as a bill that we are going to be opposing, necessarily, but there are some clarifications that we need to make sure that we get on the record from the minister. I know that she’ll indulge me as we move forward through this.

In section 1, specifically, if the minister can start by explaining…. Under the act, section 12 — under the permits, I believe — was already in there, and now we’ve added the heritage conservation portion to it. Can the minister maybe explain a little bit more about why that’s being added into the Oil and Gas Activities Act?

Hon. M. Mungall: If I understand the member’s question correctly, he’s wondering why we would have eliminated a reference to section 12 of the Heritage Conservation Act but then kind of put it back in.

It’s just in terms of making sure that we’re grammatically correct, as we include a reference to section 14 of the heritage act — specifically wanting to include the investigation component of that — so that we’re not just doing inspections but also doing heritage investigations under the OGC.

M. Bernier: The minister doesn’t have to worry. We’ll have lots of time, as we go through this, to allow some flexibility. Hopefully, if there’s clarification on any questions that I ask, she can just ask that of me.

[2:50 p.m.]

When we talk about the Heritage Conservation Act, then, can the minister confirm whether or not…? If I remember correctly, before this, especially around permits…. Is this going to allow more opportunity or more oversight, I guess, from the Oil and Gas Commission by adding these components within the act?

Hon. M. Mungall: As the member may know, prior to this act — I guess currently, today — FLNRO does the investigations and the inspections under the Heritage Conservation Act. But our Oil and Gas Commission is the concept of a one-stop shop for the industry. What we want to do is maintain that one-stop shop and move those activities over from FLNRO to the Oil and Gas Commission so that they’re able to do the investigations and the inspections, as well as issue the permits.

M. Bernier: Section 12 — just back to that one for a second — of the Heritage Conservation Act, I believe, gives more authority to the minister, or she can actually designate authority under section 12 of that act. Is the intention, then…? Is the minister going to have oversight herself, through her ministry? Or is she going to actually be allowing that oversight specifically to the Oil and Gas Commission under section 12?

Hon. M. Mungall: It will be the Oil and Gas Commission.

M. Bernier: Then, if we jump to section 14 — I’m trying to jump around in my head here too — of the Heritage Conservation Act, we’re going to give more authority, it sounds like, to the Oil and Gas Commission for the work that they need to do. I understand how — as the minister stated, through FLNRO, prior — we want to have that one-stop shop. That is important, not only for business but, I would say, maybe for affected landowners and others as well.

I’m just trying to understand. Under those authorities, is it going to give them more opportunity, then — I’m thinking, again, that most of this activity is up in my part of the province — to do more research before permits are handed out, to do more consultation under that? If we’re dealing with the Heritage Conservation Act, is it going to be consultation now with communities, First Nations, affected landowners? I’m just wondering if this is going to be taken into effect now and how that will either expedite or maybe slow down the process for permits being lent out.

Hon. M. Mungall: The intention is to actually expedite the process that the member is asking about. The reason is that right now the OGC does a lot of the actual on-the-ground work. Then they have to feed it back to FLNRO, and you have this administrative back-and-forth.

To expedite, we would be reducing that administrative back-and-forth so that OGC is not only doing the work but they’re responsible for the compliance as well, and for ultimately making the decisions and so on. We would imagine that when you keep everything in one agency, rather than having an agency in another ministry having to oversee everything, we’re actually reducing some of that red tape and, therefore, expediting the type of work that’s being done.

[2:55 p.m.]

M. Bernier: Can the minister maybe give some examples, then, of how, by adding section 14 in, that will broaden the OGC’s mandate of what they can actually review and discuss prior to permits going out? I think we’re very clear on the fact that section 14, now being added in, will allow that one-stop shop, but I’m just wanting to get on the record, then, some examples from the minister of what she’s heard or what she thinks the OGC will now be looking at before decisions are made.

Hon. M. Mungall: I don’t have a specific example that would walk the member through the steps, but I think that on the level of a specific example, as we’re discovering more and more fossils in the northeast, for example, this is exactly where this type of work will come into play.

What the OGC will be doing is that they’ll be the ones receiving the application, as opposed to FLNRORD, they will be the ones doing the consultations and the engagement with First Nations, they’ll be evaluating the plan and issuing the permit, or not, and then they will be responsible for the enforcement. So for every step that occurs right now, the OGC will just have 100 percent administrative responsibility for it.

M. Bernier: First of all, thank you for that answer and for the highlight of the paleontological finds that we have up in my area. Of course, that’s quite important. We want to be able to work with those finds, with industry, with communities and all that. That’s really important. If that helps expedite and give certainty, I would say, to companies when they’re applying for permits in their roles, that’s obviously a good thing.

[3:00 p.m.]

Can the minister let the House know — as this bill was being drafted up and presented before it came here — whether it received green, yellow or red legal advice before it came to the floor?

Just to clarify, usually before a bill is presented, it has gone through legal scrutiny within the Legislature here, with advice given back: green, yellow or red. Green being, obviously, that there are no issues the Ministry of Justice sees with this. Yellow means there are warnings that there could be some legal challenges. Red is an advice saying: “Please don’t put this bill forward.” It’s up to the minister and cabinet whether they do anyway. I’m just curious what advice she was given.

Hon. M. Mungall: I was a little bit confused there, because that process is used for the orders-in-council, as opposed to legislation. But if this was an OIC, rather than legislation, it would get a green tag.

M. Bernier: Thank you to the minister. A lot of times — in my past life, of course — before legislation was brought forward, a similar process went through. So I appreciate that. Now, before we move on…. I know there’ll be some other questions too.

Under section 1, I think, will be the most appropriate place to ask this. The Oil and Gas Commission has put out a document — and I know I’m not allowed to use props — a comprehensive liability management plan, that I know the minister’s staff around here is aware of. We’ve had some discussions. I just want to bring this forward and have a few questions.

The reason why I believe it’s relevant is because in this letter that they’re putting forward, they quite explicitly reference this proposed bill in legislation on some of the changes or ideas that they might be bringing forward.

I’m not sure if they have it in front of them. It looks like they do. So they should be able to follow my questions.

Again, at the very beginning of the second chapter, they’re looking at doing a comprehensive liability management plan, which is really supporting this legislation — some of the changes. I’m just curious. When they look at the principles that they’re going to put out in this management plan, one of the things they want to look for, one of the principles — and I’ll probably canvass this as we go through the bill a little later on as well — is having timely reclamation and restoration of inactive oil and gas sites.

I’m just curious, from the minister’s thoughts — and what kinds of discussions, maybe, with the OGC — what the ideas of “timely” mean. Of course, this bill is being brought forward, I’m told, because it’s timely, in the sense that we have quite a few orphan wells that we want to be able to look at. Is there going to be discussion and has there been direction or has the Oil and Gas Commission maybe discussed what their thoughts are around bringing forward timely reclamation and what that would mean?

Hon. M. Mungall: The timeline, in terms of what defines “timely,” isn’t in this section of the bill. It’s in another section. I would recommend that when we get there, we talk about it then. Right now, the information bulletin…. As the member knows, we’re talking about legislation, so we might want to keep following section by section. We’ll be able to address that in greater detail when we get to the section that actually looks at time frames and how regulation will be involved in deciding those time frames.

[3:05 p.m.]

M. Bernier: Well, thanks to the minister. That’s fair enough. We’re continuing with section 1, of course.

We’re giving more flexibility and more authority to the Oil and Gas Commission in many aspects of this bill. One of the ones, then, maybe I’ll ask — it is also referenced in this letter, but it could be also considered when we look at sections 12 and 14, under the Heritage Conservation Act component — is the relationship that the Oil and Gas Commission, then, will have as they’re going through their process and using this with respect to local First Nations.

I don’t see that addressed anywhere within the actual bill or the changes that the minister has put forward within Bill 15. But within this letter, it is quite explicit. It says that now all decision-making will be considered around UNDRIP. I know it’s something that her government has made sure that they’ve talked about — almost every aspect that they’ve brought forward in this House. I guess how I’ll tie that into section 1 is around the heritage and conservation portion of it.

What is the Oil and Gas Commission’s role now in dealing with local First Nations, encompassing the government’s ideals around their commitments to UNDRIP, before, after and during permits and applications?

Hon. M. Mungall: Government’s obligations to work with First Nations and the relationship with First Nations are not governed by any legislation. They’re governed, ultimately, by constitutional relationships that are defined in written constitution, as well as conventions and decisions, often, by the Supreme Court of Canada. Ultimately, that’s how those relationships are defined. That flows throughout all government agencies, as well as ministries.

In relation, though, to the Heritage Conservation Act and how the OGC will be conducting its requirement to consult with First Nations, again, it follows those directives that come from a broader constitutionality. But it is required for the OGC to consult with First Nations any time they’re issuing a permit that’s respective of the Heritage Conservation Act. That work has already been taking place and will continue to.

S. Furstenau: I just want to ask a few more questions about the increase in authority to the Oil and Gas Commission and it becoming a one-stop shop. Given some of the challenges we’ve seen with the Oil and Gas Commission in its capacity to regulate — for example, the several dozen illegal dams that have been discovered up in the northeast — does the minister not have some hesitation around this and also recognize that government ultimately does have a regulatory and oversight role that should be played in this?

Hon. M. Mungall: The short answer is: no, there is not a hesitation. The Oil and Gas Commission has a very strong record of operations. Have there been some problems in the past? Yes. Are they correcting them right now? Yes, they are as well. So in terms of a hesitation in their ability to fulfil their duties under this particular section of the act, there is not one.

S. Furstenau: I actually find it a little ironic, given that there is a review of professional reliance underway in this province because of a recognition that industry and self-regulation have actually resulted in some pretty worrying outcomes. The Oil and Gas Commission has a dual role of both promoting the industry and — now an increased role — in regulation and oversight.

[3:10 p.m.]

I think that there should be some hesitation around this and that the track record is not one that shouldn’t be raising concerns. Being a one-stop shop, I think, is going to raise a lot of alarm bells for people that have been monitoring the Oil and Gas Commission’s activities.

I guess I ask again, just in terms of the minister’s view: what role does she think her own ministry and the Ministry of Forests, Lands and Natural Resources should be playing in this, then?

Hon. M. Mungall: I’ve already communicated that I have confidence in the OGC to manage the appropriate oversight that’s been given to them under this act. If there’s further commentary or concern about the OGC in reference to other parts of its activity, I’m happy to address those in estimates.

Just so that the member knows, her comment around the OGC’s dual role of also being a promoter of the industry as well as regulator is not correct whatsoever. The OGC’s purposes are to be a regulatory body. I would refer her to the act governing the Oil and Gas Commission where it lists its purposes, and promoting the industry is not on that list.

S. Furstenau: Can the minister give some clarification around the OGC’s capacity to pass regulations without bringing them forward to cabinet? Will this expand that capacity?

Hon. M. Mungall: No, it will not expand any capacity whatsoever in terms of making regulations without review by cabinet.

Section 1 approved.

On section 2.

M. Bernier: I appreciate the minister’s flexibility as we go through this. Obviously, there are questions that can also sound like we’re in estimates, which we are not. I appreciate the fact that she’s indulging in answering those questions to the best of her ability, which obviously can be canvassed more later on, during estimates, as well.

Under section 2, we’re talking about the crux of this whole bill in front of us, which is changing from a tax to a levy. There are obviously other things we’ll talk about. Can the minister start, first of all, by explaining why we want to move from a tax to a levy system?

Hon. M. Mungall: As I was mentioning in second reading debate, the reason why we’re moving from a tax to a levy…. I appreciate the member actually asking this question, because for a lot of people in the public they’re like: “Any time the government asks for money, it’s got to be a tax, right?” There are actually different legal mechanisms that define whether it’s a tax or whether it’s a levy.

[3:15 p.m.]

For something to be a tax, it is in legislation. The rate is defined in legislation and so on. What we have found is that going that route has disallowed government and the OGC to be responsive to what might be happening, in terms of industry conditions — how it impacts industry — but also how it impacts the public interest and how our land is ultimately managed.

A better approach that we identified would be a levy. How a levy works, legally, which makes it different than a tax, is that it’s not defined within legislation but rather in regulation. So as things change — and therefore change on the land base — we are able to respond more quickly and in a way that ensures that the public interest is being protected.

In this particular case, moving from a tax that’s defined within the legislation to a levy that we can deal with in regulation, we’ll be able to address the situation that we find ourselves in right now, which is that industry had a major shift. That was a downturn. It caused increased orphaned wells. We just don’t have enough money from industry in the orphan site reclamation fund to actually be reclaiming the increased number of orphan wells.

If we don’t change this, the result will be that taxpayers, through other means than the industry tax that funds this particular fund, would be on the hook for paying for the reclamation and doing the environmental work of those orphan sites. The concept of fairness is not being met there. Industry should be paying for these types of things, so we want to use a levy, which would allow government, through the OGC, to be more actively responsive to situations like we find ourselves in.

M. Bernier: Maybe I’ll give the minister an opportunity here. We both know the answer. Just so we can, through this process, also share that information with the public, can she please explain, then, or tell the House how many orphan wells there are, how that increase has changed over the last couple of years and why we’re looking at this bill?

[3:20 p.m.]

Hon. M. Mungall: I appreciate the member asking questions that we may have already discussed in second reading. It’s because this committee stage addresses a lot of the interpretation and the motivation for legislation, if legal issues ever come up.

For the member’s information, in 2016 we had 45 orphaned wells; a year later, 220. Right now, we’re sitting at 307. So they’re growing quite substantially. We have $3 million in the fund. I can tell the member that that does not cover the need to reclaim 307 orphaned wells. In terms of how much our current liability is at, we’re just calculating. I will get it to the member in one second. Hold on.

Pardon me. There’s $13 million in the fund at the end of the fiscal, not $3 million. It’s still staggeringly low from where the current liability is. If we were going to reclaim all 307 orphan sites today, it’d be $62 million.

M. Bernier: Thank you to the minister for that. I know approximately what it costs to reclaim a well. So when I heard $3 million, I was a little nervous there.

Again, I know that the minister and I talked about this in second reading, but I want to make sure that we get some of this stuff out there as well during this process. We’ll probably canvass some of this deeper, maybe, in estimates. This is not the time. The minister can appreciate that this is not a gotcha moment. This is more of just trying to make sure that we get this information so that it’s factual and that it helps people out.

I just want to also say, if I can make a comment without sounding condescending, that if the minister ever needs a break, let us know. We are going to go for a little while, I believe, on this.

The minister did say, then…. Obviously, $13 million is a drop in the bucket to what we need because of the increase. There have been a lot of reasons why we’ve had this increase. Can she just confirm for me, or her staff…? That 307 amount — are any of those just inactive or dormant? Or are those all classified now as orphan?

Hon. M. Mungall: They are all orphaned. The inactive number is substantially larger.

M. Bernier: I know we have quite a few inactive. There are different reasons for that, and some of them actually could have the opportunity of becoming active in future years. I just wanted to make sure they weren’t captured in that process.

When we’re talking about changing it from a tax to a levy…. In light of the fact that we only have $13 million, and we have to put in this change or, at least, try to have a system in here to help, it looks like — and I’ll canvass this more as we go along — a lot of this is being changed through regulation now, going forward. What kind of timeline does the minister see on trying to have the regulations changed, specifically on this tax, to a levy? What kind of impact will that have, short term or long term, for companies?

The reason why I, obviously, bring this one up is that I believe not only everybody in this House but the companies would agree that we want to have proper systems in place to ensure that we don’t, first of all, get to orphan well situations but that if we do, for whatever reason, we have the financial means to make sure that the government or, even worse, landowners are not negatively affected.

At the same time, we want to ensure that around a competitiveness level, we’re not going to be going and changing this overnight. I’m assuming that there’s been added discussion with companies. Maybe this will give the minister an opportunity to highlight that a bit.

Hon. M. Mungall: I completely appreciate everything that the member opposite was saying about competitiveness and making sure that we’re doing things in a timely way. We’re starting tomorrow with our consultation.

[3:25 p.m.]

We hope that we get through committee stage and it passes snuff and everything, because we want to get on this right away. It’s a problem that exists right now. We want to fix it. We want to make sure that we find that sweet spot so that we’re not reducing competitiveness for industry at the same time we’re ensuring that the public interest is being met. That’s why we have our consultations with the industry started for tomorrow and with communities shortly thereafter.

M. Bernier: Hopefully, the minister can appreciate my somewhat tongue-in-cheek comment in this situation. I appreciate the fact that she’s bringing forward a bill and then doing consultation, unlike a lot of other things the government has been doing. It’s usually consultation with no decisions. This is something a little bit different, which is actually appreciated.

I know the big issue here that we do need to address, obviously. I think that consultation will be very important. Again, back to the competitiveness, is the minister, through those discussions, then, going to be looking at what is happening in neighbouring jurisdictions such as Alberta and Saskatchewan that have similar issues? That will really set the stage for what the companies cap, etc. We’ll talk about landowners afterwards, but we really do need to make sure that we’re setting up a fair playing field on how the system is. Maybe the minister can acknowledge that.

Hon. M. Mungall: Absolutely. We’re going to be looking at what other jurisdictions are doing. We want to make sure that B.C.’s industry remains competitive, not just within Canada but internationally as well, within the context of being a Canadian jurisdiction. So, absolutely, we’re going to be doing that analysis, as well as consulting with both industry and the public.

M. Bernier: Maybe just one final question on this section that I can think of. When the minister highlighted how much money is needed, what’s the thought, then, that’s been put in by herself, cabinet ministry, even talking with OGC, probably, on this, on a timeline that’s appropriate? How much money are they looking to generate? Has that discussion taken place yet?

Hon. M. Mungall: I don’t want to pre-empt what those consultations are going to result in, but our overarching approach is that we want to see the new system come into play by the next fiscal year so that we start to see that fund, the orphan site reclamation fund, starting to grow by next fiscal year. But it’s not going to be looking for another $62 million within one year. I think the member appreciates the negative impact it would have in his community, specifically, in terms of potential job loss.

What we’re doing is looking at a graduated approach and looking at different classes of wells in terms of how the levy would function. So class A might have a little bit more than class B or so on — but, again, a graduated approach over time to ultimately reach our goal of having all orphan wells cleaned up within a ten-year time frame.

[3:30 p.m.]

M. Bernier: The minister kind of answered…. Where my head was going next on this was around different classes. Obviously, as the minister knows, up in British Columbia we have different types of wells. We have different types of companies, different exploratory opportunities that take place — exploratory wells right down to producing wells to what have you.

Is the minister, then, saying that the flexibility is going to be there as a levy is being levied to a company and that there will be discussions that take place, then, with the companies as permits are being let out, not just a cookie-cutter approach for every single piece of drilling activity that would take place, then?

[L. Reid in the chair.]

Hon. M. Mungall: That would be correct.

Section 2 approved.

On section 3.

M. Bernier: Although there are other people opposite that are eager to have section 3 pass, I do have a couple of questions first that I’ll bring forward. First of all, on section 3, there’s a bunch of amendments and additions here. Can, maybe, the minister start off, then, on the additions — if she can explain why this is being added in this part?

Hon. M. Mungall: The ultimate purpose of section 3 here is part of the preventative measures. As I mentioned, we have a substantial increase in orphaned well sites, but we also don’t want to just be cleaning up after them. We want to prevent them as much as possible.

Unfortunately, what has happened in the past is that we see directors and people who are associated with a company that went bankrupt, come back — same activities, same approach in their new business. It goes bankrupt. They come back — same activity, same approach, new business. It goes bankrupt.

At some point, the cycle has to come to an end. It’s been shown that that particular individual or that particular company or individuals involved with that company are not operating as best they can for the people of B.C., and so maybe they should move on. But we definitely can’t take their risk and liability anymore.

That’s the purpose, in a nutshell, of this particular section.

M. Bernier: I’m just curious, then, if the minister can explain in a little bit more detail one aspect of this. When I’m reading through some of the additions here…. I’m just looking for some clarification. It says that a person who, in the opinion of the commission, may be able to affect the activities permitted by the permit or may influence the applicant or the permit-holder.

When we discussed and canvassed earlier…. I just see that as very broad, and I don’t know if that’s the intent here. Who can actually influence a permit, and who’s going to be part of those discussions? Is that everything from an affected landowner to a First Nations community to local government? I’m just kind of curious on what the intent was there. I might be misinterpreting this section on that, but to me it just seems very broad, and I’m just wondering what the intent was to leave it that way.

[3:35 p.m.]

Hon. M. Mungall: I appreciate the member’s point that it seems quite broad. The intention is that we’re looking at people who are similar to investors, creditors, financers, stakeholders — anybody who might have a financial gain in dumping liability onto the people of B.C.

I know it reads quite broad, but it’s actually not as broad as your local councillor or your local MLA. It is specifically those who have a financial relationship with that company.

M. Bernier: Therein lies the question, then. A financial relationship with the company can be the affected landowner or impact-and-benefit agreements that have happened with local First Nations. At what point do they have a role or a play, then, through this?

Again, those same people I just referenced are the same ones that don’t want to see orphan wells. They don’t want to see a company do exactly what the minister suggested earlier. But I also question: where are their rights through this process to influence how the Oil and Gas Commission, through letting permits, can try to deal with that issue? Do they have a say at all, under this section, when they’re talking about the permits themselves?

Hon. M. Mungall: I think what the member is trying to get at — and he can correct me if I’m wrong — is to ensure that this broad language isn’t scooping up a bunch of people it shouldn’t be scooping up.

I feel that we have reached the point where we’re not doing that at the same time as ensuring that we don’t have any loopholes — or any other ways in which somebody who has negatively impacted their company in the past and who is now trying to apply to do the same things they’ve done in the past, to find a way that they can do it. Say if we only list investors or people with a financial relationship, that they can’t somehow come at it from a different perspective.

[3:40 p.m.]

That’s why the advice in terms of drafting this legislation was to keep it broad. It’s so that we can make sure that we are prohibiting those very people from finding some type of backdoor approach to doing the things that they have done that had a negative impact on the British Columbian land base and communities in the past.

M. Bernier: The minister did kind of understand where I was coming from. I’ll try to be more succinct in my commentary and questions.

My concern is that when we talk about the one-stop shop aspect, especially with the Oil and Gas Commission, if there are other agencies or affected people when permits are coming, or when companies are looking at changing to avoid — I guess, for lack of better words — their responsibility, we don’t have it so broad that it muddies the water of decision-making. It could take a long time to get through a process if we start having the local governments and landowners and First Nations all having….

There’s a place and a time and an opportunity for that. I just want to make sure that this isn’t it, because we need to make sure that the government, the ministry and the Oil and Gas Commission, specifically, have the opportunity to do their due diligence and also have the hammer, I guess, that’s needed, at the right time, to ensure that everybody’s well-being is taken care of. And when I say well-being, obviously I mean the government, in this case, and the taxpayers of the province.

I think we can move on to the next section, but I just wanted to make sure that I got that on there. The minister was on the right track with what I was saying.

Section 3 approved.

On section 4.

M. Bernier: Just maybe to start with, the minister…. I think there are only actually a few sections I won’t have a question on.

In section 29…. Well, we’re talking about section 4, but section 29 here is being amended. This is all around the transfer of permits, again, and liabilities, authorizations — similar to what we were just talking about.

I’m just curious. In sections (a) and (b) here, when we’re changing some of the wording…. A person who wants to acquire a permit. Now, that’s a little bit of a change from what I understand under the act. Can the minister explain why we’ve added that specific word? Because I know there’s….

When we talk about this specific act, of course, and we’re looking at some of the transfers, people and permit holders…. Maybe she can have an opportunity here to explain, when people are applying for the permits, etc., and in this specific case, why we’re acquiring a permit.

Hon. M. Mungall: My staff pointed out that this is basically about somebody who wants to adopt an orphaned well. That’s why we’re saying a “person who wants to acquire the permit.” That’s our best way to describe that individual and what they want to be doing in relationship to everything. We had to make this change, because sometimes the original permit holder cannot be found whatsoever. We have somebody who wants to acquire, or adopt, the well, and so that’s how we named the person. Rather than using the word “adopt,” we went with acquire.

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

Motion approved.

The committee rose at 3:45 p.m.

The House resumed; Mr. Speaker in the chair.

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

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

Hon. M. Mungall: I call the estimates debate for Social Development and Poverty Reduction in the Douglas Fir Committee Room, and I call the committee stage of Bill 15 here in this chamber.

Committee of the Whole House

BILL 15 — ENERGY, MINES
AND PETROLEUM RESOURCES STATUTES
AMENDMENT ACT, 2018

(continued)

The House in Committee of the Whole (Section B) on Bill 15; L. Reid in the chair.

The committee met at 3:46 p.m.

On section 4 (continued).

M. Bernier: Just following up with the minister’s last answer to my question. I guess another tongue-in-cheek comment, based on her answer, was that I didn’t realize the Ministry of Children and Families were involved in orphan wells and on this bill, but I do know that we have to utilize terminology that somewhat makes sense.

While we’re moving further down in this…. On section 29, one of the areas, of course, that I have a question about — and it’s more around how often it happens, etc. — is: “the commission is satisfied that the permit holder no longer exists or cannot be located.” The minister just highlighted that a second ago.

I’ll give her some time with this, because I see that staff are still working their way in. We’ll maybe take a quick break for a minute after my question. It’s more along the lines of if the minister can give me information on how often this truly happens, because of course we’re trying to, as the minister said, fix an issue that’s really exploded over the last year or two.

I guess my question — and I’ll canvass it a little bit more afterwards too — is: when we are talking about companies that cannot be located, what would lead to that? Is this to the minister’s points earlier on companies who are dissolving and reappearing under different names? I guess the whole point would be that we have to make sure that we have policies in place so this doesn’t happen to begin with. Maybe she can explain why this is in there and what we’re going to do to stop it.

[3:50 p.m.]

Hon. M. Mungall: To answer the member’s question, if there’s a corporate reorganization, that wouldn’t qualify under this particular section, right? That is all registered. We would be able to find them.

In this day and age, the likelihood of us not being able to find a permit holder, in the sense that we can’t locate them at all, is very, very low. It can possibly happen. But we will go to great lengths to find the permit holders, the former permit holders that now have an insolvent company as well, to make sure that they are meeting their liabilities. Again, that’s why I say it’s very low.

What this particular section is mostly about, though, is…. There is the case where a well might have been drilled in 1910, for example, a very long time ago. Records were not very well kept at that time, or they have been lost between then and now. The likelihood of us finding the original permit holder from that time is very, very low. That is what’s driving this particular section of the bill.

M. Bernier: I think the minister would acknowledge, even with her last comment, that the amount of wells we had drilled in British Columbia in 1910 was, thankfully, not very many. But we have found some where we have no idea when they were drilled. A farmer is working on his field. We’re building a dam, whatever might happen, and we locate some of these. I appreciate the fact it’s a maybe in the past. The whole point now is to make sure that we have processes in place to make sure it’s never a maybe in the future.

Can the minister maybe explain, also, then, at this point, under this section here…? It’s really around section 29, around the transfer of permits. When there’s a transfer of permits, there’s also the expectation around the liability that transfers with that permit, or there’s even the discussion of liability that stays with the original permit holder.

Maybe the minister can highlight or explain for me, then, when those transfers take place, what the obligations are of the original tenure permit holder. Does all of that transfer now to the new person or company?

[3:55 p.m.]

Hon. M. Mungall: If I understand the member’s question correctly, it’s about continuing liability, which is what section 6 in this act is all about. So maybe he’d like to address it further, then.

Section 4 approved.

On section 5.

M. Bernier: I just have a quick question under this one. It’s more for my morbid curiosity. I don’t know if the minister can answer it. It’s just more on the technical aspect of section 5 here.

We’re adding 43.3 into section 29. If we were redrafting and adding that whole subsection in, why did we actually have to even have section 5? Maybe she can explain that to me, if she understands what I’m talking about.

We just finished discussing section 29. Subsection (c)(1.2) is all being added. Why didn’t they just do it at that point? Why do we need to really have this in the bill?

Hon. M. Mungall: Far be it for me to question too much how the legislative writers have to do everything. They know the ins and outs of making sure that the laws are written in an appropriate way and so on. What I’m being told is that the reason why we have section 5 and section 4 is that section 5 of the bill, which amends 29 of the OGAA, actually refers back to what we will ultimately get to in section 7.

I’m sure there’s a Monty Python writer right now repeating all of that.

Section 5 approved.

On section 6.

M. Bernier: I appreciate that I gave the minister an opportunity for some amazing words of wisdom there on legislation drafting.

On section 6. We are getting into, I guess, my earlier question. We’re now on section 42 in the actual act. Can the minister, then, go back to my original question and just explain…? In here is where we’re adding the word “transfer,” I believe, into what’s going on as well….

[4:00 p.m.]

Can the minister explain, then, the process, which I asked earlier, around when a permit is being transferred, purchased or moved from company to company — what the liabilities and obligations are to the original or future permit holder?

Hon. M. Mungall: The intention of this is that if a new permit holder who is receiving the transfer, however which way, only wants to accept a certain percentage of the liability from the former permit holder, they would only accept that percentage. They wouldn’t have to take it all or nothing, right? They’d actually be able to take a portion that they want to take on.

At the same time, we want to ensure that it doesn’t prevent government, through the OGC, to go after that permit holder who has the liability — the remainder of the liability or the original liability. It doesn’t prevent us from doing that. We are still able to seek out the full scope of the liability. One is through transferring it to somebody else who might be interested in that particular asset. The other one is that we seek a remedy, maybe through the courts, if necessary.

M. Bernier: I’m just curious. Under this section 42, one of the big changes is, instead of just “cancellation,” we’re adding the word “transfer.” What has happened to date? It was my understanding that we already could have allowed for a transfer of permits. An easy question: is this change, reflective in this bill, for the act to highlight what needs to take and has been taking place?

Hon. M. Mungall: The concern was there was a gap in government’s ability to go after the former permit holder, once we are transferring a permit — again, just perhaps a portion of that permit. This closes that gap so that we can continue to seek a remedy for the liability on behalf of the people of British Columbia.

Section 6 approved.

On section 7.

M. Bernier: Again, I appreciate the minister’s indulgence. Some of the questions I’ll ask are more just to get certain things on the record that probably the minister herself would want to highlight. Can the minister start in this section, maybe? Since we’re adding a whole section around definitions and dormant sites, etc., could she maybe, for the House, explain the difference between “dormant” and “orphan” and what we’re trying to solve here through this?

Hon. M. Mungall: I’m very happy to explain the difference between a dormant and an orphan site. Often in the industry, we’ll also hear the term “inactive site” — which, I would say, is akin to what we’re calling here a dormant site.

An orphan site is a well whose parent company — I’m putting the word “parent” in here because this is the best way I can possibly explain it — has become insolvent. For all intents and purposes, in terms of its existence, it has died, leaving that well without a parent company. It exists in the world. It is an orphan. It has nobody looking after it, unfortunately.

With a dormant site or an inactive site, what we have is that the well exists, and its parent company also still exists but is not actively drilling or using that well site.

[4:05 p.m.]

What has happened over time is that dormant sites that remain in that category often don’t get reclaimed. That’s not at all how we want to be managing our land base. We’ve identified the need to have better and more timely reclamation of dormant sites to prevent the orphaning of those sites, potentially, in the future.

M. Bernier: I’m just looking around. I don’t see anybody in the House that would wonder what we’re talking about right now, but it is actually Bill 15, around oil and gas and orphan wells.

One of the things the minister just mentioned, looking at the bill that we have in front of us: under 43.3, for the cancellation of permits, it talks about the “prescribed period of time.” We just talked about, and the minister has highlighted, dormant wells. I’m just curious, then, what the thought process is. Is that going to be something in regulation? Is it going to be open-ended? The last thing we want to do…. I know the ministry would agree that it’s through consultation with the company permit holders, etc. We don’t just absolutely declare something.

Even though we talk about “dormant” or “inactive,” there are many different ways that companies look at the wells and the well sites, what their assets could be presently or down the road. Is there a thought…? When we say “prescribed period of time,” as the minister is thinking, what does that mean?

Hon. M. Mungall: The prescribed period of time will be ultimately dealt with in regulation. Some of the things that will be considered as we consult with stakeholders are, for example, if the site is of a certain age or it’s of a particular activity. It’ll be dependent on age and type of activity, as well as geographical area. There are a variety of things that will determine at what time the permit in relation to a dormant site is cancelled, what the time frame will be that would trigger that cancellation.

M. Bernier: What I’m hearing from the minister, then, is that, obviously, as regulation goes on, consultation will take place. I know we’re seeing that throughout the bill in a lot of places.

Will there be flexibility, then, working with the companies? Of course, companies’ decisions around a lot of what they do are based on commodity price. We want to ensure that we don’t restrict a company to make decisions when they might have to hold out. I’m just wondering if the minister can comment on that.

Hon. M. Mungall: In one word: absolutely.

M. Bernier: In 43.4, the liability reduction plan under this bill, I’m just curious. “The commission may approve a liability reduction plan.” What does this plan look like? Can the minister explain what a liability reduction plan, the concept, is and what issue we’re trying to resolve with that?

[4:10 p.m.]

Hon. M. Mungall: Ultimately, we don’t want to be responsible for triggering more bankruptcies that result in more orphaned wells. If we have a company that has quite a few dormant wells, for whatever reason, we want to be able to work with them in terms of identifying how they’re going to deal with that liability of the dormant sites.

Why do they have so many dormant sites? Commodity prices might be one issue, but there might be a variety of others as well. We want to make sure that we’re working with industry to ensure that they are indeed managing their liabilities and, if they’re struggling to do so, that they actually start putting together a plan to do that. We’re making sure that that plan does have some enforcement and oversight by the OGC.

M. Bernier: The minister kind of highlighted them a little bit, but there are some benefits, I guess, to the permit holder. They won’t be completely mandated. There’ll be some flexibility there.

One of the concerns I guess I have as we go through this is that it sounds like a lot of this stuff is going through regulation. What is the minister’s plan to ensure that there’s some sense of security within these companies, I guess, going forward — rather than consultation? We talked about…. Later on this year, they’re going to be taking place.

Of course, some of the companies that have reached out to me, first of all, are all wanting to make sure that they do their due diligence, but there’s some nervousness around what this all means. So maybe they give the minister an opportunity to actually make sure that they feel comfortable with what’s being discussed here, on dormant wells.

Hon. M. Mungall: I know the member opposite appreciates how much work is always involved with legislation. Not everything, therefore, is legislation a practical way to deal with…. Sorry, I don’t know if that sentence made total grammatical sense. Maybe we’ll have a recess after this answer.

The point is that in terms of industry and any concern, absolutely, any time there’s a change that’s going to impact an individual’s, a family’s, a group of people’s or an industry’s day-to-day lives, there’s going to be a bit of nervousness, and there’s going to be some apprehension in terms of how that change will impact them over the long term.

That’s precisely why we’re going to be engaging with them — very, very detailed, in terms of what the regulations would look like. We want to be consulting with industry. We want to be consulting with impacted parties to make sure that, as I said earlier, we get this right, so that we’re not putting anybody at risk of insolvency. We certainly don’t want to be a part of that. And we’re making sure that we’re meeting the test of the public interest as well.

The reason why we’re leaving quite a few things to regulation — for example, that “prescribed period of time” — is that as technology changes, as we learn more about managing the land base, we don’t want to have to come back over and over again, using miscellaneous statutes amendment acts over and over again to amend legislation. We want to be able to be quickly responsive to things that fluctuate over time — some of those things that are maybe, perhaps, more minor than legislation but still very important to industry and to the people who rely on that industry for their well-being.

With that, I ask for a five- to ten-minute recess.

The Chair: This House will recess till 4:25.

The committee recessed from 4:14 p.m. to 4:26 p.m.

[L. Reid in the chair.]

S. Furstenau: I just had a question about determining…. If a permit holder is determined to have a dormant well, what would be the steps to take for that well to be restored and activated again, and would there be any kind of security involved in that?

[R. Chouhan in the chair.]

[4:30 p.m.]

Hon. M. Mungall: Our ultimate goal with this legislation is to reduce, as much as possible, liability on the land base. In terms of the dormant sites, we’d want to ensure that companies are doing…. As the member pointed out, sometimes companies might choose to leave a site dormant, and as another member pointed out, due to, perhaps, commodity prices or so on.

What’s then required of them if they are going to have this dormant site? Well, we want them to deactivate the sites. This sounds like a bit of a campaign slogan, but it’s not. It’s actually a three-step process. First, they’d have to purge, they’d have to drain, and then they’d have to contain the site. They would have to decommission to a certain level that would categorize it as dormant — decommission it and decommission the subsurface as well as the surface equipment. That would, then, leave the site technically dormant. So it’s not like they can just walk away and not do anything. There’s actually a process that they must follow.

In terms of any security, there’s no change in the security legislation. That remains the same.

S. Furstenau: A little bit more on the liability reduction plan. It says: “…a permit holder may submit to the commission a plan to reduce the permit holder’s shutdown obligations….” Could you provide a bit more clarity on what shutdown obligations would be and how they could be different from one site to another?

Hon. M. Mungall: This is recognizing a situation that could arise where a permit holder, for whatever reason, perhaps due to financial causes, is not able to do any of the liability reduction plan. We want to make sure that they do as much as they possibly can, so rather than having an all-or-nothing approach, we want to make sure that we’re able to get whatever we possibly can out of the permit holder.

[4:35 p.m.]

S. Furstenau: Just to clarify. Then in that case, the levy would come in, and this is where the costs of that kind of shutdown would then fall to the fund created by the levy?

Hon. M. Mungall: No, because the orphan site reclamation fund only applies to orphan sites. Because the parent company still exists, if they’re not able to finish that work immediately, then we’d be looking at a later time frame for them to complete it. They would still be responsible for completing all of the work. But we’d be looking at a way to make sure that if they can’t do it all right now, well, let’s get what they can do right now done.

Sections 7 and 8 approved.

On section 9.

M. Bernier: I know that the minister can appreciate, too, a lot of these questions. We’ll try to keep them appropriate within the section we’re talking about. I know a lot of the questions we, maybe, both know the answers to, but again, it’s really important that these things get discussed.

In section 45, under section 9, subsection (b), it talks about “a person the commission has not been able to identify or is satisfied no longer exists” — kind of like we talked about earlier. The reason why I just want to highlight this one for a minute is this is back into the reclamation part of the orphan wells and how this is a huge issue for local landowners, local affected people, to make sure that we have these safeguards that are put in place to make sure that people are protected and government’s protected.

When we get into that reclamation portion of the orphan sites, can the minister maybe explain, then, what, from a consultation aspect with a local affected landowner…? What I hear is that they’re left out of the equation. It’s truly their land. A good portion of the drilling activity is not on Crown land. A lot of it’s on private land, First Nations land. What I hear from them is: a huge struggle when it comes to the orphan wells — specifically what we’re talking about — not dormant. The feeling, and I know what we’re trying to accomplish here with this bill, is they’ve been left out — the fact that government, companies, have let them down.

I know we are trying to resolve some of that through this bill, and I know it will take a little bit of time. But as we go through the reclamation process, are we going to be allowing — through the Oil and Gas Commission, probably, or whatever steps will be in place — for those affected landowners to have a seat at the table or at least some kind of arbitrary opportunity for them to have a say in the reclamation? They witnessed, in many cases, what the land looked like prior to the activity and should have a say in what it looks like afterwards.

Hon. M. Mungall: In terms of developing the regulations for this legislation, absolutely the Oil and Gas Commission will be consulting with landowners. They already have a process where they do that, and so they will be absolutely following that process and engaging actively with landowners.

[4:40 p.m.]

In terms of how they would enter onto someone’s private property to deal with an orphaned well, nothing is changing there. That process is outlined and will continue. However, I don’t want to suggest that the OGC is not going to be open to hearing what landowners might have to say in terms of improving that process. It might not be directly related to the regulations pertinent to this act, but if that comes up, I’m sure that the OGC would take that into consideration and start looking at ways they could do things better. But absolutely, landowners will be engaged in this process.

Section 9 approved.

On section 10.

M. Bernier: Thanks for the last answer from the minister. Of course, again, it brings us back to the whole point of this bill and this section 10, here, around making sure that there’s enough money in and the use of that security. I think we both acknowledge that the whole point is never to have to use a security. If companies do their due diligence, we don’t have these orphan wells to begin with.

When we’re doing the reclamation of orphan sites…. I’m just curious, again, if the minister can explain…. We’re doing these orphan sites because there’s no company to go after, so we’re now having to look at using money out of the orphan well fund. Again, it brings me back to a question that I just talked about.

Is there going to be, possibly, an arbitration process or something in place for local landowners if they feel that government now has not done a suitable job on the reclamation, and maybe a chance for them to apply to the fund if there is, maybe, loss of revenue of the land or a cost to the affected landowner? Is there a way that it’s not just the government using this money but, again — if the minister understands where I’m going — the landowner themselves, or somebody being able to apply externally to use that fund, during the reclamation process?

Hon. M. Mungall: The first thing is that landowners do have access to a landowner compensation fund for loss of use of their land due to an orphan site. They would not be able to apply, however, to the reclamation fund to potentially do some of the work themselves. Only the OGC is able to do that work. The OGC has to meet standards under legislation, under the Ministry of Environment. Once they do complete reclamation, they would then get a certificate that the standards have been met.

If there’s any concern about whether or not the standards have been met, my understanding is that the landowners could advocate in terms of their concerns. But ultimately, the decision for those standards being met rests with the Ministry of Environment.

M. Bernier: This is a whole new section that’s being added to the act, under this bill, in 45.1. I’m just curious on one here. In subsection 45.1(c)(ii), it talks about “the costs, estimated by the commission, of continuing to manage the orphan site.”

[4:45 p.m.]

Can the minister explain what the explanation around that is? Of course, if we’re talking about the reclamation of the orphan site, we’re hoping that it’s reclaimed appropriately, and then the certificates are lent out, so why would we need to have additional costs held back to manage the orphan site if it’s actually been reclaimed properly?

Hon. M. Mungall: Well, after we get a certificate that the reclamation has been done up to standard and that things should be going along smoothly into the future, we don’t just hope and cross our fingers that it will be actually monitored. So that’s what that particular clause is talking about: the costs to monitor that the reclamation was, in fact, successful.

M. Bernier: Okay. I appreciate that, but just knowing how reclamations work…. If a reclamation is done properly, the proper due diligence is done, the inspection is done and the investigation work is done…. Usually, prior to reclamation, you do exploratory work on the site to know what you’re reclaiming. This isn’t just topographical. We’re talking about subsurface as well, usually, during reclamation.

I guess I’m just trying to understand. What kind of monitoring would we do? I understand that in dormant wells and active sites, there’s ongoing monitoring, because we just never know. This is not just for my curiosity, I guess, but for people to know. Do we not have proper safeguards in place where we can do the investigation prior to a reclamation to ensure that it’s done properly the first time? I’m just trying to understand that.

Hon. M. Mungall: This particular clause is about that risk management, looking at the worst-possible-case scenario and how we could possibly manage for that worst-case scenario. A certificate from the Ministry of Environment would not be issued unless there was full confidence that we had done everything right the first time. I just want to make sure that that’s clear, that the goal is always to ensure that our reclamation is meeting a very high standard and that we’re doing it the first time.

However, that being said, we don’t want to assume that nothing can possibly go wrong multiple years down the road. For example, if it was a private company, they would have to be responsible for — maybe 20, 25, 30 years from now — making sure that the cement that was used in the reclamation process doesn’t degrade.

When it’s an orphan site, we now, as government, have the responsibility to make sure, for example, that the cement that was used in capping the well does not degrade, and so that’s the type of monitoring that would continue on. It wouldn’t necessarily be a day-to-day activity, but we want to make sure that 30 years from now, future generations are not taking on undue liability.

M. Bernier: Although I understand where the minister is coming from, I’m just trying to understand, if she could explain to me…. When we look at a specific site, a specific orphan well, do we, under the orphan well fund, designate, as the minister is talking about now, a certain amount of money to each orphan well site? It’s all in one pot of money, the way I understand it, for an orphan well. So why do we have to…? I’m just curious when we say that we’re leaving money for that specific site just in case, but it’s all coming out of the same pot of money.

[4:50 p.m.]

If I’m making myself clear on this, when we look at a specific site that we’re reclaiming, then, and it is reclaimed and we think it’s done properly, but under that we’re making sure that the cost estimated for a commission down the road to manage the site…. How do we determine how much to leave in the fund, then, when it’s already all in the same…? Unless I misunderstand the use of the orphan well fund, how do we determine, then, to each specific site, how much to leave?

Hon. M. Mungall: This particular section isn’t about the fund as a whole; it’s about the securities that we’re able to obtain from a company, once they’ve gone insolvent, to address their orphaned wells. So what this is, specifically, is that after we’ve been able to reclaim the site, and if there’s money left over within that security, this is what it’s going to be used for. It’s going to be used for that monitoring activity. It is tied to the site and to the security, in that sense.

I think that’s the best way I can answer that question. It’s not about how we’re using the fund as a whole, but rather how we’re using the security attached to a site.

M. Bernier: The question that I have, then, on that is…. Recognizing we’ve put an orphan well fund together, the money that’s going into that fund is based on a site by site, when a permit is applied for, for whatever activity, to ensure that we have that whole discussion of this act around changing from a tax to a levy system.

If we’re trying to build up the site in case we have these orphaned wells — and to the minister’s point, it almost sounds in perpetuity, in some ways, if there’s no end date around monitoring after a reclamation — how do we know how much to charge for a levy to begin with? What kinds of discussions does the minister see taking place then?

A concern a company might have…. First of all, they’ll do the reclamation themselves, and it’ll never happen. But we obviously have to have the proper levy put in to begin with to deal with the issue that the minister rightfully just addressed. How do you set the levy on that without knowing what an end date is?

Hon. M. Mungall: Section 12 is going to…. We’re going to be able to get into exactly how we’re going to figure out this levy and what it’s going to be. This section, as the member noted, is about how we’re going to be able to use securities. I think we’ll be able to answer his question in section 12.

Section 10 approved.

On section 11.

M. Bernier: Just a very quick question to the minister. Maybe it’s because it’s redundant, but why are we removing section 46 from the act?

[4:55 p.m.]

Hon. M. Mungall: This is kind of one of those housekeeping items that takes place when we start to jump into an act and look at how…. When we’re going to make the changes for the broader issue, this section became redundant.

Section 11 approved.

On section 12.

M. Bernier: In 47(2), it says: “If a levy is imposed….” Can the minister explain why it would be an “if”? I’m just trying to understand this section of the act. I’m assuming we’re charging levies all the time and just wondering why we would have an “if” there and the reasoning for that.

Hon. M. Mungall: Well, this goes back to what kind of legislation this is. Then, from there, it flows in terms of what kind of language is required from a legislative drafter’s and legalese perspective.

This is permissive legislation. We are creating legislation that will permit the OGC to undertake these activities. So from there, we don’t use the words “must” and so on. They’re words like “may.” We have to put “if” in front of a levy because of its permissive nature.

This is, again, maybe some fodder for a Monty Python sketch. I’m not too sure. But that’s the reason why that language is used.

M. Bernier: Well, first, I want to acknowledge and thank the minister for using Monty Python, because it’s one of my favourites. I feel like we’re actually going down that road right now in some ways.

Maybe first, before we get into a similar question I had earlier in this section…. Under this, can the minister maybe explain somewhat — I know it’s not simplistic — in layman’s terms? When we’re looking at the additions here around the levy and how it’s going to be imposed underneath section 2…. We just talked about the liability, divided by total liability, times the amount to be raised by the levy.

Can the minister explain, maybe in layman’s terms so people would know what we’re actually trying to accomplish here and how we think we would actually distinguish? On a permit that’s being applied, how would we reach an applicable levy to that?

[5:00 p.m.]

Hon. M. Mungall: I will do my very best to explain this in a way that my mom, who does not work in the oil and gas sector, could understand what’s going on, because she actually might be watching at home.

The OGC will first determine the levy based on the amount of work that they anticipate to do that year and then what the cost of that work will be. So they’ll say: “Okay, this year we’re going to clean up 65 of these orphaned sites. This is how much that cost to do so is going to be.” The total amount that needs to be acquired from the industry will be determined based on that. Then they will go back and say, “Okay, who pays what?” in a way that is fair, based on the liability that the companies within the industry hold.

As I mentioned earlier, that’ll be based on various classes of activity, geography and the type of well they have. Also, it’ll be…. Sorry, I’m just trying to remember everything we said and trying to put it into a way that is tangible. It’ll be distributed fairly in a graduated approach so that, again, we’re not creating insolvencies and bankruptcies right out of the gate.

That’s the overall approach as best as I think I can possibly explain it — how we’re going to achieve that levy total.

M. Bernier: The reason why I just wanted to try to get a sense of that is that section 47, which is being repealed and replaced because of the levy, was quite prescriptive. It was based on production more than it was a levy system of cost of restoration, etc., that the minister just highlighted.

Of course, this completely changes, in some ways, who and how much a company will pay. It brings me back to the original question I had earlier on in this — that consultation is going to be very important, going forward, because we’re not going to be basing this levy now on ability to pay as easily as when it was before in the act. When you’re talking about production, it allows companies that are doing well and producing more to obviously have the financial means, you would assume or hope, to be able to pay for that.

Maybe this section might be the best one to ask this question, though. When levies are collected, does the minister ever see a time when a company, through a process of doing reclamation at the end before becoming orphan…? How does that work? They apply back to the fund to recoup moneys that they’ve put in? Or what is the longevity of that money? What’s that process? If the minister could explain for me.

If we’re going to try to raise, presumably, tens of millions of dollars, a company who does their due diligence and does not become an orphan well, who’s put money in…. How do they apply to get their money back?

Hon. M. Mungall: Just as companies wouldn’t get their taxes back that currently fund the fund, they wouldn’t get their levy back.

This is part of a broader concept, where industry is taking responsibility for their industrial activity as a whole. Rather than just, as individual companies, taking responsibility, in fact, they’re all pooling together to take responsibility for industrial activity as a group. So recognizing that while some are doing a fantastic job and meeting all the standards — they don’t have any orphaned sites and so on — that’s not everybody in their industry, and that they want to be part of making sure that their overall industry has a good reputation and they are doing their due diligence to ensure that the land base is maintained.

[5:05 p.m.]

M. Bernier: Well, thanks for that. I understand, under the old fund, that the companies don’t get that back. My thought was — because I didn’t see it in here and the minister just acknowledged — that we’re going to be going after, I would argue, very socially conscious, good companies who are contributing to this orphan well fund with the understanding that they will hopefully never have an orphan well. I just think that it’s important to acknowledge that, interestingly, through this process, the good companies are going to keep contributing. They’re actually doing the good work of reclaiming their sites, and they’re actually paying for the ones that don’t.

I know the minister is nodding and we both acknowledge that. That’s why I just wanted that, knowing the answer, to be on the record — not just for the House but for, I think, the people in my region to understand that the good companies that are doing the work in the area are also trying to be responsible.

This fund will, hopefully — again, in a perfect world — never be used. Interestingly, that means that it would just continue to grow, if that was the case. I just wanted to make sure that we were both clear on that.

Under this addition, too…. This one I don’t understand. I’m hoping the minister can explain it to me. Under subsection (5), at the end of this addition here, it says: “…the board may impose more than one levy under this section in a calendar year.” Maybe I could please get an explanation of what that means. My understanding is we do one levy per site, I thought. But maybe somebody could explain that to me.

Hon. M. Mungall: This covers the fact that the OGC may find they can do more work in a year or that the work they identified was much more expensive than they originally anticipated. So rather than just issuing a levy at the beginning of the year and then be done with it, if they find that circumstances require them to require a greater amount of money in that fund, they’re able to issue a second levy later on in the year, if that’s the case.

I appreciate very much what the member was saying in terms of how we have good companies who rarely have any orphan sites, or almost never, picking up the tab for those who didn’t. That just goes to show that we have a lot of really amazing operators here in British Columbia who have that social responsibility for their industry as a whole.

We don’t just see that in oil and gas, but I can speak for this ministry. We see that in mining and in energy, so we’re very fortunate on that front. It’s precisely why we are looking at a variety of preventative measures with this act as well, because an ounce of prevention is always worth a pound of cure. Those companies who are having to pick up the costs for others orphaning their sites get that more than anybody.

M. Bernier: Thank you to the minister for that comment as well. The question I have, then, on this specific one I just had prior to of an additional levy, is: what’s the process? Again, I know there’s going to be regulation that’s going to be put in around this, but what’s the process going to be, then, around a communication channel to companies?

Of course, as the minister can appreciate, companies try to allot their budgets on a calendar year on what their capital investment will be and what their operational costs will be within their fiscal plan. So how do they budget not knowing if an additional levy might come later on in the year, if needed?

[5:10 p.m.]

Hon. M. Mungall: We anticipate that this section would be used very, very rarely. It would be a very unusual situation. That’s just important to note — that this is not something that we see as being regularly implemented. But industry would absolutely be consulted prior to. That is our intention, and that has been the long-standing practice of the OGC. There would be ample communication and ample advance notification of industry prior to any further levy than the first one being issued.

S. Furstenau: I was just curious. In order to ensure really accurate levy calculations, is the ministry considering an audit of the current conditions, practices and standards that are operating right now?

Hon. M. Mungall: If I understand the member’s question correctly, she’s wondering if we would do an audit of the reclamation fund before implementing the new levy. It was a few years ago that the Auditor General did do an audit of the reclamation fund and found that it was actually running well as a fund — not necessarily whether the taxation was the right way to continue on. At the time, of course, we had not seen this spike in orphan sites when the Auditor General did do that audit.

How the fund is run overall met the sniff test for the Auditor General in the past. In terms of going forward with an audit, I would leave that up to the Auditor General, if they wanted to take this on.

Section 12 approved.

On section 13.

M. Bernier: Just very quickly, then, there’s another one of these. There’s, I know, some housekeeping when we do a repeal. Can the minister just quickly explain, then, why there is reference to section 118 of the Petroleum and Natural Gas Act — why that needed to be added into the section — the meaning of that?

[5:15 p.m.]

Hon. M. Mungall: What this section, section 13 of Bill 15, does is to allow us to use the strength of the legislation found in the Oil and Gas Activities Act and apply it to section 118 of the Petroleum and Natural Gas Act.

The reason why that’s valuable is that if a company has become insolvent but they’ve left all their equipment on one of their sites, we can access that equipment and hold it from them taking it and selling it off. We can hold it as security towards their liability, potentially, depending on what happens down the road. That’s why that’s important, and OGAA allows us to do that, for this section of the PNGA.

It’s just because I know the member wanted to hear more acronyms today.

Sections 13 and 14 approved.

On section 15.

M. Bernier: Thank you again to the minister. I try not to use acronyms because, even though she and I know what they are, others maybe do not. It’s a strange world we live in some days.

In section 15, I know we’ve talked about this a little bit. We talked about some of the additions here, around protecting public safety, and how that’s been added in this section 52. This is around “Emergency measures regarding spillage,” the actual section of the act.

My question would be: as important as that is to allow this flexibility of this addition, what safeguards are there around privacy, I guess, to affected landowners? I don’t know of a situation, but you never know when a landowner might be quite distraught by people entering their private property without communication, even if a communication prior to it were sought after but they weren’t home, for instance.

As the minister can appreciate, maybe, in the winter months I have a lot of people who try to take the opportunity to leave the weather and go down south and who might be quite disappointed if they find that people have been on their property, regardless of the situation.

The minister can just maybe highlight what safeguards there are — although we’re talking about protecting public safety — around the communication aspect.

Hon. M. Mungall: When public safety is at risk, government has a variety of tools, in terms of how to ensure that public safety is restored. If it means entering private property, that is what government or the appropriate agency will do. The question here isn’t whether or not government does that. The question here is which body of government does that.

[5:20 p.m.]

What we’re doing here is allowing the OGC to conduct that work. If the OGC didn’t do it, rest assured that somebody else in government would, because at the end of the day, we hold the responsibility for protecting public safety. That is paramount and, in law, as has been clear over and over again, trumps somebody’s concern with their property being entered, for that very reason.

M. Bernier: In this specific situation, since we’re giving the opportunities now for the Oil and Gas Commission, is there a specific fund — and maybe there already is — set up that the affected landowner can apply to if there has been additional damage done to their property because of this access?

Hon. M. Mungall: This act does not address any type of fund that any private landowner anywhere in B.C. would be able to access if they felt that government had damaged their property in the course of addressing public safety or doing some type of cleanup. In fact, my understanding is that no fund exists. But if a private landowner felt that government was liable for further harm to their property, they would have to seek restitution through the courts.

M. Bernier: I just want to stress the challenge, the issue with that. Again, most landowners won’t argue the fact that somebody has had to enter for the reason of public safety, etc., or in the case of a spill or anything else.

Going through the courts, though, makes me a little worried because as the minister, I hope, can appreciate, most affected landowners are farmers up in my area. When you access their fields, which we hope never happens, there can be contamination or destruction of the existing crop. To go through a court could take years and years, if there was ever not a settlement that took place at the time. Of course, most landowners would stand up and say that they would expect to be compensated.

If there’s no specific fund and the minister is saying go to court, is that going after the government? Or is that going after the people who spilled or their company? What was the thought there?

Hon. M. Mungall: Government will take on the reclamation activity at government’s expense, not at the landowner’s expense. If there is further damage for some reason that comes up later in time, again, it would be up to the landowner if they wanted to take both government and the person or company liable for the emergency…. If they wanted to do one or the other or so on, they would have to make that choice based on legal advice.

The reason why the courts are the appropriate place…. I appreciate the member speaking for his constituents in terms of their concern and the amount of time and so on. When you’re a farmer — I have many farmers in my riding as well — your annual cycle is what determines your income and so on. However, there are often at least two sides to these types of stories. The best venue for that adjudication would be in a court of law before a judge.

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

The committee recessed from 5:24 p.m. to 5:28 p.m.

[R. Chouhan in the chair.]

Section 15 approved.

On section 16.

M. Bernier: Could the minister just quickly…? Again, I know this goes earlier on. We’ve added the word “amend” in amending this section. I’m just curious what the thought process was — why we needed to do that. Instead of just cancelling or suspending, we’re now amending?

Hon. M. Mungall: With special projects, perhaps we don’t want to just cancel or suspend it to another time. Perhaps we want to make an amendment to the designation so that it reflects alternatives to just ending the project altogether — so keeping it going but maybe in a different way than was the original agreement yet still achieving the ultimate goal.

[5:30 p.m.]

M. Bernier: I didn’t see it within the definitions within this act. Can the minister explain what a special project is, how that’s different in the terms of this act? That’s one of the things. I just didn’t understand what the definition was.

[L. Reid in the chair.]

Hon. M. Mungall: Thank you to the House for the indulgence that I can answer questions while seated. Being 6½ months pregnant, my muscles get tired after a while. I have to say, this is very awkward. This is weird, to have to stay seated in the chamber. I’ve never done this before.

The definition of a special project is outlined in section 75(1) of the act. An example would be water disposition — an example of what would be defined as a special project. Also, in 75(1), it says: “…an innovative method of carrying out oil and gas activities and related activities.” For example, as technology changes, using lidar to seek out fugitive methane emissions. That would be, perhaps, considered a special project.

Section 16 approved.

On section 17.

M. Bernier: Contrary to my physique, I don’t have a reason, like the minister, so I will stand to ask questions.

In section 17, I’m just a little worried about maybe watering this down a little bit. Can the minister explain why we’re removing some of the wording around “permit…producer or another person,” and we’re just putting in the word “a person.” I know there’s probably a perfectly logical reason for that, but to me, that sounds pretty darned vague about what we mean. Maybe the minister can explain why we’ve done that.

Hon. M. Mungall: Broadly speaking, under the law, a corporation or a company is a person, and so “a person” would refer to a company as well here. Just the way it was worded previously, where it’s “a permit holder, producer or another person….” Whether it’s a permit holder or a producer, they are legally, for all intents and purposes, considered a person. So it was actually quite redundant language and one of those cleanup items.

Section 17 approved.

On section 18.

M. Bernier: Section 18 is referencing a whole new addition under part 8, I believe, in the act. One of my questions I’d almost highlight as a concern here. Maybe the minister can explain this.

[5:35 p.m.]

Under subsection 93.1(2), it says: “If a person fails to pay an amount owing to the government under this Act, the minister may issue,” and it goes on. Can the minister explain to me what this addition to the act means? There might be future regulation, I’ve heard, in other areas that this might talk about. But can the minister explain this section? Of course, we have the boards. We have the Oil and Gas Commission. We have others. When does the minister see herself interjecting into some of this decision-making?

Hon. M. Mungall: Just in terms of who “the minister” is, it’s not necessarily the minister — me, specifically, or whoever would hold the ministerial position. It’s the ministry as a whole, and this is just how the language would refer to that.

What this new section does is it’s looking…. It’s similar to what’s in the Forest Act. It’s to expedite the recovery of debt. So rather than having to go through a full-blown trial every time we file a certificate with the court, it allows, if the court decides that our filing is fair, for us to move forward with the recovery of the debt. Ultimately, this also reduces court costs, as well, for all parties involved.

M. Bernier: Does the minister actually see…? Reading other acts, sometimes when the act says “the minister,” it actually means the minister. I appreciate the answer I just got, saying it’s going to be broader, but does the minister ever see a time when the minister can actually look at issuing a certificate for the courts for making sure that the debts due are reclaimed?

The only reason why I bring that up is that that could raise some real concerns for the minister, really, around some of the bias that we’d have to be concerned about. I think it would be fair to say that even though it says “the minister,” the minister herself or whoever would be in that role shouldn’t actually be the person doing this.

The minister has a very close relationship, usually, with the companies, with the different stakeholders. We would hate to be in a situation where we set up an opportunity where there could be a conflict of interest on that decision-making — of whether to or not, when we’re talking about the recovery of debts due.

Does the minister actually ever see a time when the minister will be involved?

Hon. M. Mungall: If I understand the member correctly, he’s looking for an example of when the minister might intervene. It’s hard to find one, because the likelihood of this happening is quite low. But if it did happen, it would be the result of a company not paying any of its liability to government whatsoever, and so court action would be required.

[5:40 p.m.]

The minister is mentioned in here as that’s the person who holds the legal responsibility to make that filing. They would have a fiduciary responsibility to act on behalf of the public regardless of any of their potential friendships. If there is any concern that there’s a conflict of interest and that the minister is not acting appropriately, of course, there’s a process where members of the public would be able to file some complaints on that.

Coming to this kind of stage, where we have to go to court to recoup liabilities, is extremely, extremely rare.

Section 18 approved.

On section 19.

M. Bernier: Really quickly here, section 19 is removing in the act, under 100, from what I can see, most of the references where it says “tax.” My question would be: why was the word “levy” not used in the elimination of all the sections where it says “tax”?

The reason why, again, I raise that is it appears that what it’s done is pushed even more into regulation, allowing Lieutenant-Governor-in-Council through OIC to be doing a lot more decision-making outside of the act. I’m just curious about all of the removals in the section, again around the tax — if there’s a legitimate, easy answer the minister can give me, other than just allowing cabinet more opportunity to set regulation.

Hon. M. Mungall: What this section does is define what the Lieutenant-Governor-in-Council, cabinet, is able to make regulations on in reference to the tax that we are now eliminating. The things that have been nullified in this, in Bill 15, are items that are specific to a tax, and they would not necessarily apply to a levy. So if we left them in or said that it applied to a levy, it would just not be correct.

Sections 19 and 20 approved.

On section 21.

M. Bernier: Section 21, which we’ll be discussing here, is, just quickly, the collector of levies. I see we’re adding in this section “the commission.” This is another example of where we’re giving more authority now to the OGC, if I understand this correctly.

My quick question to the minister on that one, then, is…. Throughout this bill, we’ve added a lot more authority, a lot more jurisdiction, such as this now, to the commission, which — my assumption is — is going to be increasing the workload in departments. Is there going to be a whole different department now set up within the Oil and Gas Commission around collection? Is this a little bit more outside of what they have normally done? Was it something they were always doing?

In addition to that — and I know I’ll cover this off more in estimates, possibly, depending on what I hear here — was there an addition, then, to the Oil and Gas Commission around their budget to help pay for all of this extra workload that’s been added to them?

[5:45 p.m.]

Hon. M. Mungall: This section gives us the option to designate the OGC as the collector in a situation around liability. Presently it’s the Ministry of Finance. We’ll see what our consultation results in. It may stay with the Ministry of Finance, or it may move over to the commission, and then we’d have to address any budgetary concerns, for them to do that work.

Sections 21 and 22 approved.

On section 23.

M. Bernier: Now we’re talking about the recovery of expenses, in this one. My question, in light of what I just heard as well…. We’re just talking about approvals in this section, and a lot of it goes through Treasury Board.

I guess my quick question is: does the minister see, through this process, Treasury Board inserting themselves into the board’s suggestions? Because we’re talking about how the board has some jurisdiction here but has to have approvals through Treasury Board. It gets a little convoluted, and I know how this can happen sometimes.

We want to ensure, obviously, through the recovery, whether it’s going to be Finance or the commission, through the board. You know, this can be quite convoluted, quite difficult to manage. Where does the minister see…? Or what discussions has she had with Finance or the Treasury Board to date, if any, then, on how this might work?

Hon. M. Mungall: This act doesn’t change any of the types of financial oversight that already exist for the OCG by the Treasury Board. What it specifically does is allows the OGC, if they…. Right now they have a certain limit that they can seek — $15 million a year — for the orphan site reclamation fund. If they want to increase that limit, they would have to go to Treasury Board. So this is what this is stating — that process. Yeah, that’s about it.

Section 23 approved.

On section 24.

M. Bernier: I want to just highlight here more. Because of the dormant sites, again, it’s a full addition here. I just want to acknowledge — and I know the minister has already mentioned it a few times — that this is going to be another area that’s very important around consultation and communication with all of our different persons — since we’ve acknowledged that we should be talking about persons as companies. Again, I just want to acknowledge and highlight that no decision should be made before all of that extensive consultation, hopefully, takes place.

In the final section here, in subsection 111.1(2), can the minister give an example? It’s talking here about: “…the board may make different regulations for different classes of permit….” Maybe just give me an example again on that. I know we covered this off a little bit earlier, but I just want to make sure I’m on the right track there.

[5:50 p.m.]

Hon. M. Mungall: Earlier I was speaking of how the levy would be applied. It would be in a graduated process, as well as different classes acknowledging different types of activity, different geography and so on. This section is exactly what allows us to do that.

That’s what that means in terms of it “may make different regulations for different classes of permit, permit holder” and so on. For example, we don’t want to be treating a large site the same way we’d be treating a smaller site. If you’ve got one small well pad, you don’t want to be treated as somebody who’s got a major site with compression and so on all on it as well.

Section 24 approved.

On section 25.

M. Bernier: In section 25, we’re now actually starting to refer to the Petroleum and Natural Gas Act. We’re changing gears slightly. I’ll maybe just say to the minister that we’re almost done.

I guess one of the quick questions here is: can the minister explain…? Under this section, it talks about prescribed penalties. What kinds of penalties do we see that could be applied? Do we know if this year we have actually levied any penalties? Is this something that happens regularly? Hopefully not, but what kind of work gets done around that?

Hon. M. Mungall: In 2014, there were changes to this legislation. The intention was to ensure that both drilling licences and leases were treated the same. But that goal was not quite achieved due to some legalese and the way things were drafted at the time.

[5:55 p.m.]

We’re trying to correct that and have the appropriate language in place. For example, if somebody wasn’t paying their rent in this situation, for their licence or lease, we would have a penalty.

The penalty amount currently is in section 7 of the Petroleum and Natural Gas Drilling Licence and Lease Regulation under the Petroleum and Natural Gas Act. The amount is either $15 for the first year, multiplied by the number of hectares in the location — I hope I’m reading this right — or $25 for the second and third years, if applicable. So not a lot, but we want to make sure that those penalties exist and that people will be paying them.

Sections 25 and 26 approved.

On section 27.

M. Bernier: Just to lighten it up a little bit, since we’re almost done — and I appreciate the minister’s stamina — this might give her an opportunity to recognize that we’ve come to an end of an era. I guess my tongue-in-cheek comment is that when we talk about whether it’s going to be through the heritage act again, is this going to be somewhere brought back into that…. Removing the Gazette is what I’m referring to.

In all seriousness, even though that looks like it’s going by the wayside, if and when this bill passes, does the minister see, then, as we acknowledged earlier yesterday, with these changes, that there will be more on line? I think it will be also important that there’s an educational component that gets added too for the general public and companies, etc., about where to find this information. Is there going to be either a change in regulation or, I guess probably more simplistically, a process then of communication to let people know what’s happening?

Hon. M. Mungall: The OGC and government have been using the Internet for quite some time to advertise the disposition of petroleum and natural gas rights. The Gazette, obviously, was how it was used for many, many years until the dawn of the Internet. When government started to use the Internet because that’s just where everybody was, nobody was seeking out the B.C. Gazette anymore, much to the disappointment of, I know, the member opposite. I know he still does enjoy that publication, but he’s among a very small group.

For that decreasing number who use the B.C. Gazette, they will certainly be informed that the Internet is going to be the formal way of informing the public of disposition of these rights.

One of the ways that we’ll be doing that is with a bidding guide that is put out every year. It will now be formally stated in the bidding guide that this information about disposition of rights will only be available on line, and that is the place to go get it. But I’m sorry to the member that the B.C. Gazette will not have this information for him anymore.

M. Bernier: It’s a touching moment here, obviously, Madame Chair, in the House, and I look forward to the personal email letting me know that I will no longer be able to read that.

I have no further questions, but I just want to thank the minister for her stamina through this process and the staff surrounding her who have helped for the last couple of hours explaining sections of the bill.

Sections 27 to 31 inclusive approved.

Title approved.

Hon. M. Mungall: Before the committee rises, I first just want to thank very much my staff for all their hard work in bringing us this bill in the first place and everything that’s led up to this, as well as their hard work in helping me answer questions today, very good questions from members opposite.

I want to thank, also, the members in the opposition for their thoughtful and insightful questions. I’m sure that we got a lot of clarification on the record so that the public is better informed of the intention behind much of this bill.

With that, I move that the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 6 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

BILL 15 — ENERGY, MINES
AND PETROLEUM RESOURCES STATUTES
AMENDMENT ACT, 2018

Bill 15, Energy, Mines and Petroleum Resources Statutes Amendment Act, 2018, reported complete without amendment, read a third time and passed.

Hon. D. Eby: I call second reading of Bill 21, the Class Proceedings Amendment Act.

[L. Reid in the chair.]

Second Reading of Bills

BILL 21 — CLASS PROCEEDINGS
AMENDMENT ACT, 2018

Hon. D. Eby: I move the bill be now read a second time.

This bill makes amendments to the Class Proceedings Act. Class proceeding is a lawsuit that’s brought against a defendant by a number, or class, of plaintiffs. These amendments to the Class Proceedings Act expressly provide for multi-jurisdictional class proceedings, which are class proceedings that involve both residents and non-residents of British Columbia. The amendments are based on the Uniform Law Conference of Canada’s Uniform Class Proceedings Amendment Act of 2006.

The amendments change the legislative framework as it relates to non-residents of British Columbia, moving from an opt-in to an opt-out model. Currently, residents of British Columbia are included as class members unless they choose to opt out of the class proceeding. However, non-residents are not included as members of a class unless they take steps to opt-in. The result of the changes made by this bill will be that all members of a class, whether or not they reside in British Columbia, will be included in the proceeding unless they choose to opt out.

Consistent with access-to-justice principles, this approach will provide a more effective way to ensure that as many potential claimants as possible are included as class members. The amendments will also create consistency and clarity with respect to the certification of multi-jurisdictional class proceedings.

The amendments require notice of an application for certification to be given to the representative plaintiffs in class proceedings that have been commenced elsewhere in Canada involving the same or similar subject matter and allow those representative plaintiffs to make submissions at the certification hearing.

The bill provides for a court, in considering whether to certify a class proceeding, to determine whether it would be preferable for some or all of the claims, or some or all of the common issues raised by those claims, to result in a proceeding that has already been commenced elsewhere in Canada.

[6:05 p.m.]

In making that determination, the court must be guided by the objectives set out in the bill and also must consider relevant factors, such as the alleged basis of liability and the location of class members and witnesses.

The bill sets out the authority of the court to make any order it considers appropriate in an application to certify a multi-jurisdictional class proceeding, including an order certifying the proceeding, refusing to certify the proceeding or refusing to certify a portion of a proposed class.

Finally, the bill includes transitional provisions to clarify how the new opt-out approach for non-residents will apply with respect to class proceedings that have been commenced prior to the changes coming into effect.

M. Lee: I’m pleased to speak in support of Bill 21, the Class Proceedings Amendment Act, 2018. As the Attorney General noted in first reading and just now, this bill amends the Class Proceedings Act to especially provide for multi-jurisdictional class proceedings.

I agree that the bill includes amendments that will provide consistency. Of course, as the Attorney General just outlined, instead of non-residents having to opt in to class proceedings in British Columbia, which they may or may not even know about, they will be included as a class member unless they choose to opt out. It’s an effective update that will be addressing legislation addressing class action lawsuits in British Columbia.

There’s been a lot of reform dealing with class action proceedings over the last number of decades, dating back to the days where there have been reports and reviews, including at Oxford University, as to the nature and the opposition of the use of class actions as being something that would be harmful to the essentials of traditional function and would be a concern, led by a shift in power change, which could undermine some of the judicial proceedings.

As the Attorney General just mentioned, this bill largely mirrors the Uniform Law Commission of Canada’s proposals on multi-jurisdictional class action proceedings, which were made in an attempt to provide for greater coordination and better management of class action litigation that involved plaintiffs across the country.

When the ULCC was founded, the Canadian Bar Association recommended that each provincial government provide for the appointment of commissioners to attend conferences organized for the purpose of providing for a greater uniformity of legislation among the provinces, to harmonize the laws of the provinces and territories of Canada — as well as, where appropriate, the federal laws. The Uniform Law Conference of Canada has made recommendations to identify and bring about changes where they see gaps in our federal criminal legislation as well.

This proposal, of course, provides for greater coordination and better management of class litigation. The ULCC’s proposal in respect of class litigation would involve plaintiffs across the country by defining multi-jurisdictional proceedings and enlarging how a class action proceeding may commence, to allow residents of a jurisdiction to commence a proceeding on behalf of a general class of persons, rather than only allowing a person to commence a proceeding on behalf of those who are residents of the jurisdiction.

The proposals would add a requirement that the court must determine whether it would be preferable for some or all of the common issues raised by such claims to be resolved in a proceeding commenced elsewhere, and provides criteria for determining that. Finally, the ULCC proposals enable or provide that jurisdictions allow a court to consider a range of orders besides simply certifying, or not, a multi-jurisdictional class. This bill would adopt all of those proposals.

I understand that the ULCC’s proposals are seen, largely, favourably by Canada’s legal community and as an important basis for addressing the kinds of issues a court should decide upon, in terms of what the appropriate forum for a class action should be and how the class action should be managed in terms of the motion for certification.

According to civil litigation experts and practitioners who prepared a previous report for ULCC:

“Potential class members may find themselves presumptively included in more than one class action and may be subject to conflicting determinations.

[6:10 p.m.]

“Defendants and class counsel may be plagued by uncertainty as to the size and composition of the class, and it will be difficult to determine with certainty which class members will be bound by which decision.”

The Canadian Class Action Review states:

“Faced with numerous instances of overlapping national class actions, Canadian superior courts have adopted what has been called” — or referred to as — “a ‘subclass deference model’ in response to disputes regarding the choice of forum. Thus any court in which a national class action is brought will generally refuse to engage in a true forum selection. Instead, the court will generally ‘defer’ to the superior court of another province in respect of the subclass of persons residing in that other province.”

The Canadian Class Action Review further states:

“By treating judicial comity as an end in itself, Canadian courts have begun to undermine the values that comity is intended to serve. Instead of order and fairness, the ‘subclass deference model’ has produced disorder and unfairness. It has also resulted in inefficiency, confusion and uncertainty for defendants and class members alike.”

While enacting similar legislation in Alberta in 2010, the current member for Grand Prairie said of class action lawsuits: “Efficiency is gained by joining together a number of lawsuits that might otherwise be brought separately. Access to justice is created by grouping together many small claims in a larger proceeding in which the legal costs will be shared. Also, behavioural modification is obtained, as claims that might otherwise go unprosecuted will be brought forward. The prospect is that these class actions remove the comfort zone for those who might assume that minor wrongs would not result in litigation.”

It is important to remember that while accomplishing these purposes, the Class Proceedings Act does not create any new cause of action. It will be interesting to see if this proposed legislation will lead to more court action or less here in British Columbia. As we work in this House to ensure that we lessen the burden on our court rooms, I would hope that this would work well to do this as well. Still, I intend to support the bill regardless. Much of the work remains to be done, beyond this bill, to strengthen B.C.’s legal system, but I consider this bill a step in the right direction.

I will have questions at the committee stage, including, for example: what level of success have the other provinces had, in adopting similar multi-jurisdictional class action laws, in reducing the problem of duplicative class actions? What are the jurisdictions beyond Canada that were considered when drafting the bill, particularly national jurisdictions with their own sub-jurisdictions similar to Canada where duplicative class actions may arise, such as Switzerland and Germany?

Does the Attorney General believe that enlarging how a class action proceeding may commence will lead to more litigation? If so, are more resources planned to provide to the courts to address this increase so that the changes in this bill will not damage or undermine access to justice for all British Columbians?

As I just mentioned, we will have more questions at committee stage, but we will be supporting this bill.

A. Olsen: I appreciate the opportunity to stand today and speak at second reading to Bill 21, the Class Proceedings Amendment Act, 2018.

I’d like to thank the Attorney General for bringing this act forward and also would like to thank the member for Vancouver-Langara for his comments on this. Certainly as somebody who’s not trained as a lawyer, I appreciate the perspective of those who work in the field to be able to inform. I certainly do look forward to the questions that the member for Vancouver-Langara raised, and I think that the answers to them, should they be forthcoming, will help us better understand the impact that this has.

I certainly do appreciate, as I mentioned, that the Attorney General is bringing this bill forward. From our look at this, from our view on this, aligning with other jurisdictions in the country to ensure that we are clearing up confusion and lessening the chance of multiple rulings and, as was brought up, creating efficiency and not undermining each other within our country, I think are good things for us to be working towards.

Certainly, as our caucus has taken a look at Bill 21, we also are inclined to support it. I’ll be tracking and following and being a part of the conversation at the committee stage as we work through it to ensure that it does achieve what it’s intended to achieve and that we are providing benefit to the people of British Columbia as we work to clean up some of these things.

[6:15 p.m.]

Thank you to the minister for bringing it forward, and thank you to the member from the official opposition, from Vancouver-Langara, for raising those comments. It will be a learning experience for me as we work through it. HÍSW̱ḴE. Thank you.

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

Hon. D. Eby: Thank you to the members for their thoughtful comments. I look forward to the committee stage to address some of the questions that the member for Vancouver-Langara raised.

With that, I move second reading.

Motion approved.

Hon. D. Eby: I move the bill be referred to a Committee of the Whole House to be considered at the next sitting after today.

Bill 21, Class Proceedings Amendment Act, 2018, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. D. Eby: I call second reading, Bill 24, Miscellaneous Statutes Amendment Act (No. 2).

BILL 24 — MISCELLANEOUS STATUTES
AMENDMENT ACT (No. 2), 2018

Hon. D. Eby: I move the bill be now read a second time.

Bill 24 amends a number of statutes. The amendment to the College and Institute Act will remove the requirement for approval of land transactions by the Minister of Finance, and the requirement for approval from the Minister of Advanced Education, Skills and Training will remain.

Currently when a college or institute enters into a land transaction, it must obtain the approval of both the Minister of Advanced Education, Skills and Training and the Minister of Finance. This requirement creates a redundancy in government’s administrative processes, delays decision-making and creates a delay for post-secondary institutions’ business. This amendment will result in a streamlined administrative process for government approval of college and institute land transactions.

Amendments to the Infants Act and the Public Guardian and Trustee Act will facilitate the Public Guardian and Trustee in providing transition services for youth for whom the Public Guardian and Trustee was acting as property guardian and who are leaving provincial care or for whom the Public Guardian and Trustee was acting as default property guardian when they reach the age of 19.

The amendments will allow the Public Guardian and Trustee to continue to hold and manage the youth’s funds if the youth agrees to the Public Guardian and Trustee doing so rather than paying out the funds when the youth turns 19. Instead, the Public Guardian and Trustee will be required to pay out the funds to the youth when the youth turns 27 years of age or an earlier date if the youth terminates the arrangement.

Amendments to the Public Guardian and Trustee Act will provide the Public Guardian and Trustee with the same authority to use the trust money for the youth client’s maintenance, education or benefit that the Public Guardian and Trustee had when acting as the property guardian for the client as a minor.

The amendments to the Liquor Control and Licensing Act are minor and resolve omissions, inconsistencies and ambiguities that have come to light since the new act was passed in 2015. These changes are necessary to enable the proper administration of the act.

The amendment to the Property Law Act will modernize certain outdated terms in section 34. Section 34 provides that the court, upon an application, may permit the owner of a dwelling house to enter onto adjoining property when to do so is necessary in order to make repairs, subject to the terms set by the court. This section also provides that the entering power is responsible for any damage caused by the owner or “the owner’s servants, agents and contractors.”

Section 34 is very useful in those rare instances when adjoining property owners are unable to come to an agreement. This amendment will ensure that this provision is available when needed by removing the outdated, unnecessarily restrictive reference to “dwelling house” and by replacing the reference to “servants, agents and contractors” with more modern and inclusive language referring to persons employed or engaged by the owner.

The proposed amendment to the Procurement Services Act will allow the minister to delegate the authority to conduct procurements on behalf of B.C. to persons other than those employed in the B.C. government or in a B.C. government organization. The extended delegation authority will allow B.C. to participate in procurements conducted by persons such as the federal government and other provinces and territories under the Canadian free trade agreement. The proposed amendment does not create any new commitments or obligations for B.C.

The amendment to the Business Corporations Act will eliminate the Auditor Certification Board. The board, which has been virtually inactive for more than ten years, no longer serves a necessary function.

Prior to the enactment of the Chartered Professional Accountants Act in 2015, the board was used to enable certified management accountants to be authorized to perform audits. Since B.C. has moved to a unified accounting designation, there is no longer a need for a separate authorization process as all chartered professional accountants, including former CMAs, may perform audits if they meet the same professional standards.

[6:20 p.m.]

The amendments to the Societies Act are of two types. First, they re-enact, in the statute itself, several important provisions currently found in an interim transitional regulation that is subject to automatic repeal. These provisions clarify certain voting processes, for example, by requiring that societies clearly set out in their bylaws any unusual voting thresholds. Placing these provisions into an appropriate location in the act will make their existence more transparent to society members and will ensure that they continue to apply on an ongoing basis.

The second type of Societies Act amendment is of a housekeeping nature. These amendments clarify a society’s minute-keeping obligations, refine a remedy for members who are denied access to a society’s records and eliminate a waiting period respecting restoration of a dissolved society.

Amendments to the Riparian Areas Protection Act will authorize the minister responsible for that act to publish manuals outlining the technical criteria and methods for studies, assessments, reports and opinions prepared by qualified professionals under the riparian areas regulation. This is necessary to facilitate regulatory amendments that respond to a 2014 report by the Ombudsperson which recommended changes to improve the administration of the regulation.

Finally, Bill 24 also makes a number of minor amendments to update and clarify local government legislation and to streamline local processes. Amendments to the Capital Region Water Supply and Sooke Hills Protection Act and the Library Act will streamline approval and appointment processes. Amendments to the Cultus Lake Park Act enhance democratic participation for all Cultus Park residents by allowing non-resident leaseholders within the park to vote in general local elections and other elector approval processes.

Amendments to the Local Government Act and Islands Trust Act correct errors, update name references to Metro Vancouver, rename the Island’s Trust “trust fund board” and restore an inadvertently removed ministerial regulation-making power. Minor amendments to the Vancouver Charter remove an obsolete reference in regard to the former Board of Police Commissioners and an inconsistency with provincial pension legislation. Together, these changes will assist local government operations by addressing some outstanding gaps, errors and redundancies.

M. Lee: I rise today to speak to Bill 24. We see, yet again, another miscellaneous statutes bill from this government. We’re down to about a dozen sitting days, and we have seen only in the past few days any legislation of significance, although I do have to give the Attorney General credit, as many of them are from his ministry.

As this miscellaneous statutes act proposes amendments related to other ministries, I expect that colleagues of mine will seek to raise those questions at committee stage. Having said that, there are a few sections relating to the Ministry of the Attorney General that I would like to raise.

Regarding the alterations to sections 2 and 11 related to the Infants Act and the Public Guardian and Trustee Act…. The Infants Act was first enacted in 1979 and explains the legal position of children under the age of 19. As the world has changed a great deal since that time — I’m not entirely sure that all members elected to this chamber were actually born at that point — it is necessary to revisit it often. It contains many important statutes and clear delineations of the rights of children and adults which, I’m glad to be seeing, are all being upheld here.

Similarly, the Public Guardian and Trustee Act was first enacted in 1996 and by necessity must also be revisited often. I understand that this bill amends the current act so that, subject to the new provisions, on termination of his or her guardianship and benefit because of the ward reaching 19 years of age, the Public Guardian and Trustee must pay or transfer the property of the ward to him or her on receiving his or her release as part of the ward’s accounts as a guardian under the Supreme Court civil rules.

These new provisions make this subject to the requirement that, if a ward was there until 19 — either in the continuing custody of the director under the Child, Family and Community Service Act and had the Public Guardian and Trustee acting as property guardian, or under the property guardianship of the Public Guardian and Trustee under section 51 of the Infants Act — and then reaches the age of 19 and enters into an agreement with the Public Guardian and Trustee under the relevant act, then the requirement to transfer the property would not apply until the ward either terminates the agreement or reaches 27 years of age.

The question that we can discuss more at committee stage — which will arise, I think, and is worth considering — is whether such wards would automatically be entered into these agreements with the Public Guardian and Trustee under the Public Guardian and Trustee Act upon reaching 19, or whether they must sign or accede in any way to entering such an agreement, and what notice is being, or required to be, provided of the guardianship ending.

[6:25 p.m.]

The next amendment that I would like to mention here, but discuss more at the committee stage, is the changes to the Liquor Control and Licensing Act. While I expect that we’ll be debating the licensing and control of certain other substances in this House before next week’s constituency break, this act is one also frequently revisited in this chamber, as it should be.

Section 8 of the bill amends the Liquor Control and Licensing Act by expanding the due diligence defence set out in the act to include situations where minors are in an establishment or employed in an establishment. This proposed amendment would provide that a person does not contravene section 79(1) or (2) of the act, which prohibits allowing minors in an establishment or working in an establishment if prohibited by the terms and conditions of a licence, authorization, permit or regulation, if he or she has required the minor to produce prescribed identification and upon examination has reason to believe that the identification is authentic.

This due diligence defence is, of course, already in the act related for serving a minor, and it’s been there for decades. The question that we will want to discuss is: what threshold will be significant to give a person the reason to believe that the identification is authentic so that minors can remain protected and establishment operators are also protected from prosecution when having done and met the requirements of the act.

Lastly, section 10 of the bill proposes amendments to the Property Law Act. These amendments, as the Attorney General outlined, update situations where it permits an owner who may need to enter into the adjoining land of the property to carry out repair work on an adjoining property that’s close to the owner’s parcel and that owner cannot repair or work on his or her own property without entering the adjoining land, and where, under those circumstances, consent of the owner of the adjoining land is refused or cannot reasonably be obtained, this bill would make a change such that there’d be an update from the definition of owner’s “dwelling house” to where a situation that’s involved or impacted is an owner’s “parcel of land on which there is a building, structure, improvement or work.”

The question, again, that I think we’ll want to consider at committee stage is: what standard will be applied to determine when something is a building, structure, improvement or work so that we can ensure that this provision is not subject to abuse and that private property and privacy rights remain protected?

As I mentioned, there will be other questions that I expect will be raised by colleagues of mine at the committee stage on other amendments that are being proposed that relate to statutes for other ministries. We will have those questions at that committee stage.

S. Furstenau: Bill 24, Miscellaneous Statutes Amendment Act, 2018. The fundamental purpose of this miscellaneous statutes amendment act is to update provincial legislation for a variety of acts in order to maintain consistency and increase clarity and efficiency.

The provincial statutes affected include the Business Corporations Act, College and Institute Act, the Infants Act, Public Guardian and Trustee Act and several others. In other words, the amendment act does a great deal to bring several of B.C.’s laws up to date.

Highlights from the act include the amendments to the Infants Act and Public Guardian and Trustee Act, which improve financial decision-making supports for youth transitioning out of care by allowing them to choose to maintain an ongoing agreement of trusteeship until the age 27. In this way, B.C.’s most vulnerable young people will be better equipped to manage their finances.

Sections of note are 31 and 32, as they relate to the Riparian Areas Protection Act. These changes give the minister authority to publish manuals for qualified environmental professionals to follow during habitat assessments in riparian areas. This also means that the government can reject an assessment report that is incomplete or does not comply with manual regulations.

In the context of the 2014 B.C. Ombudsperson report on riparian areas regulations, however, I’d like to note that there were 25 recommendations made and that this bill only addresses a small area within that.

[6:30 p.m.]

To quote from a 2017 publication by the water sustainability project:

“Healthy, functioning watersheds build resilient communities, accommodate a changing climate and support vibrant, local economies. To address its pressing freshwater challenges, build resilience to a changing climate and respond to local needs, B.C. must change both water management — on-the-ground activities — and water governance — process of decision-making and holding those making decisions to account. Doing so will position the province as a freshwater leader in Canada and beyond.”

With this in context, I’d like to see the government pay greater attention to an issue that is of the utmost importance to our province’s health. This government can and should address this issue within the scope it deserves by addressing it beyond the single amendment included in this act.

The extent to which B.C. legislation has grown outdated is significant. Although we support the amendment act, we hope that updating some of the acts discussed by this bill continue to remain at the forefront of the province’s legislative agenda. I look forward to hearing the discussion during committee stage.

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

Hon. D. Eby: Thank you to the members for their comments. This is a miscellaneous statutes amendment act where minor amendments to acts are implemented. I do appreciate the attention to detail that the members have paid to the specific provisions. I look forward to canvassing their questions in estimates. I do appreciate the additional comments about riparian areas from the member for the Third Party. We’ll certainly take those comments back into consideration.

With that, I move second reading.

Motion approved.

Hon. D. Eby: I move the bill be referred to a Committee of the Whole House to be considered at the next sitting after today.

Bill 24, Miscellaneous Statutes Amendment Act (No. 2), 2018, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. D. Eby: I call second reading of Bill 22, the Civil Resolution Tribunal Amendment Act.

BILL 22 — CIVIL RESOLUTION
TRIBUNAL AMENDMENT ACT, 2018

Hon. D. Eby: I move the bill be now read a second time.

The main feature of this bill is to grant the civil resolution tribunal jurisdiction over certain claims arising out of the use and operation of a vehicle. The maximum monetary jurisdiction over accident claim liability and damages will be a prescribed amount, which is anticipated to be $50,000.

The bill will give the tribunal exclusive jurisdiction over disputes about whether a plaintiff has a minor injury, as defined in the Insurance (Vehicle) Act and over accident benefit entitlements. If the tribunal determines that the plaintiff has a minor injury, the legislation includes a rebuttable presumption that the claim is within the monetary jurisdictional limit of the tribunal.

Giving the tribunal jurisdiction over accident claims of a minor nature, under $50,000, will necessitate some additional amendments to the Civil Resolution Tribunal Act. First, while the general rule is that parties in the tribunal are to be self-represented, lawyers will be allowed to represent parties in accident claims, as ICBC will be represented by experienced adjusters.

Second, if an accident claim is litigated in the Supreme Court and a claim is resolved for an amount within the jurisdiction of the tribunal, the plaintiff will only be entitled to certain costs and disbursements. Specifically, the plaintiff will only be able to recover the fees and expenses that would have been recoverable in the tribunal.

Third, while government is generally not allowed to be a party to tribunal proceedings, accident claims involving government will be allowed. Fourth, the bill contains regulation-making and rule-making powers to limit experts, including the power to require a single joint expert. The bill makes further amendments to the Civil Resolution Tribunal Act in order to improve on the processes in place since the tribunal began resolving strata property disputes in June of 2016.

The improvements will clarify and simplify the time limits for filing matters in court and in the tribunal, prohibit a party from obtaining a new trial in provincial court after a tribunal decision if the party defaults it in the tribunal, set time limits in the standard of review for judicial review of tribunal decisions and apply acts that affect litigation in court to resolution processes in the tribunal, such as, for example, the Negligence Act.

We expect these amendments to result in significant reduction of costs, complexity and delay associated with the resolution of vehicle accident cases.

In addition, upon the recommendations of the Ministry of Finance, we propose to amend the Civil Resolution Tribunal Act to permit societies and housing and community service cooperatives to bring their disputes to the civil resolution tribunal. Cooperative associations and non-profit societies, which typically operate with limited budgets, will gain better access to justice through this new approach.

Currently they have to resolve all of their disputes, even minor, routine matters, in the B.C. Supreme Court, which can be expensive and time-consuming. The amendments would allow the tribunal to deal with routine disputes between members and their societies and cooperative associations respecting day-to-day matters such as access to records, the holding of meetings and the interpretation of bylaws.

Complex matters, such as amalgamation and dissolution and disputes involving business cooperatives, will continue to remain within the sole jurisdiction of the B.C. Supreme Court.

[6:35 p.m.]

As with other disputes dealt with by the tribunal, cooperative associations and societies will be able to utilize the tribunal’s on-line Solutions Explorer and mediation processes for routine disputes, as well as to obtain a binding tribunal decision, if required. Based on our consultations, we are confident that these amendments will be well received by these organizations and their members.

M. Lee: It’s a pleasure to speak to this bill, but I certainly have concerns about it. I’m looking forward to canvassing this bill more in detail with the Attorney General and his staff in the committee stage.

Before I outline some of my concerns here today, I want to preface my remarks by recognizing the good work and the important role played by the civil resolution tribunal. Judging by the heavier workload and expansion of the authority that government is proposing for the tribunal, I think all members of this House owe thanks to the member for Prince George–Valemount. Under her leadership, the civil resolution tribunal became a crucial component of our justice system, resolving small claims and disputes without getting the courts involved.

The tribunal has been effective in dealing with things like strata disputes. But here we are talking about a significant expansion in scope and authority. The tribunal will have not only a much-increased workload, but a much greater diversity and breadth of cases with a greater complexity. There isn’t an obvious overlap in expertise between resolving strata disputes and those involving cooperative societies, much less personal injuries. In other words, the tribunal currently focuses on disputes over whether actions are allowed and will also need to deal with monetary claims and assessing injury under the proposed bill and the amendments.

I accept that mediation dispute resolution skills will be largely transferrable, and again, we all recognize how effective the tribunal has been. But I am curious if the ministry has examined whether the tribunal has the resources or expertise it will need. For example, as I understand it, the tribunal currently shares space with the offices of the Labour Relations Board in Vancouver. Is this space adequate? Will there be greater resources needed as the work of the CRT expands?

This bill also means a substantial increase in workload. I have concerns that this will also mean changes in the fee structure, which is also not directly addressed in this bill but perhaps will be addressed in the regs. I think most of the attention will be focused on ICBC and accident claims, and rightfully so.

I want to address those concerns, but we should also acknowledge that the bill doesn’t stop there. Under the bill, of course, the jurisdiction of the tribunal will be expanded to settle disputes under the Cooperative Association Act and the Societies Act. We will want to review, in the committee stage, the various sections of these acts, over which it has been determined that the tribunal does not have jurisdiction. And, of course, the companion consideration to this is: which types of strata property claims and cooperative association claims under these acts will the tribunal have jurisdiction over?

My most significant concerns about this bill involve the accident claims as set out in the proposed part 10, division 7, of the bill. Unfortunately, crashes, injury and vehicle damage claims are all increasing. These trends are not unique to British Columbia.

As a province with a public insurer, we have a different responsibility than other jurisdictions in this country. We have to ensure that changes we make to ICBC or the dispute resolution process are fair, easy to navigate and don’t leave anyone behind. The bottom line is this: British Columbians deserve fair compensation if they are injured in a traffic collision. That’s what they’re paying for.

The tribunal is also being given much wider jurisdiction on aspects like determining the entitlement of benefits as to what is paid or payable under the Insurance (Vehicle) Act and determination of whether an injury is a minor injury for the purposes of that act. Although we are discussing today this bill, we will have the opportunity, of course, to discuss Bill 20 that proposes amendments to the Insurance (Vehicle) Act. I think it’s going to be important for us to consider at the committee stages for both bills the interactions between these two bills.

[6:40 p.m.]

For example, there is an onus placed on the claimant, under Bill 20, where the claimant must demonstrate or establish that an injury — which, at the time of the accident, is viewed to be a minor injury — would not have been different if the claimant is able to establish that the claimant had sought the right level of medical diagnosis and treatment plan. That puts an onus on the claimant him- or herself.

With the complexity involved in medical conditions and personal injury, this will strain, I believe, the ability of a claimant to appear before a tribunal and deal with issues which are medical in nature and forecasting when a minor issue might become a serious impairment under the proposed act, the Insurance (Vehicle) Amendment Act. These are significant challenges.

It is easy to come up with examples of easily classified injuries — some, like bruises or abrasions and, of course, broken bones — that are not viewed to be minor. In between, there’s a whole spectrum of possibility as to the types of injuries and impacts on individuals.

This bill, of course, enables the tribunal to continue to determine and assess what a minor injury is. It also, potentially, muddies the water when it comes to what representation might mean.

Claimants may, if they choose, be represented by a lawyer in front of the tribunal, but they may or may not be necessarily aware that ICBC will be on the other side of this with an adjuster. I don’t think anyone in this House wants to see situations where accident victims feel ambushed or unprepared.

This is a challenge, of course, as I just mentioned, when we’re dealing with potentially complex medical conditions. To go unrepresented doesn’t seem prudent for the claimant. The question will become whether dispute resolution of issues of this nature in front of the tribunal will work. With the limit on minor injury claims being set at $5,500, it may prove challenging for a claimant to get the kind of legal representation needed to go through this process, keeping in mind the top limit of $50,000 as well.

Under this bill, the tribunal is considered to have “specialized expertise” in respect of a claim and how that will work. What does it mean to have specialized expertise? Will it mean that the tribunal will need to change in composition in terms of its members? How many more members will be added with that expertise?

The bill, as the Attorney General mentioned, has the goal of reducing the amount of experts in the process. I expect and accept that it’s probably the government’s intention here to increase simplicity, but it appears that the tribunal will be able to regulate the definition of an expert and perhaps take this first step towards a shared-expert model.

Currently both sides in a dispute are free and able to select and defer certain issues to subject-matter experts, not unlike seeking separate legal counsel. But under a shared-expert model, claimants must rely on the wisdom of that single expert, who the claimant won’t be able to question or have any role in selecting.

There are considerations around justice and fairness here dealt with in the bill. As the CRT currently operates, I understand that most of the operations are on line and through electronic communication. The question will become: that might work as a format for strata-related disputes, but how fair and effective will that be in personal injury cases?

We will also want to review, in committee stage, the sections providing for what is referred to as “a non-binding neutral evaluation of the likely amount of damages.” This is when there has been some determination that damages in an accident claim would likely exceed the tribunal limit amount of $50,000.

Given the nature of this tribunal and the limit that’s there in the first place, I think it’s going to be important that we explore how the tribunal is capable of making determination of amounts above this limit. Even though there will be no disclosure to the court, another aspect of concern will be what the impact is of such a non-binding determination and whether it may be, in effect, prejudicial to the claimant, with this kind of assessment being made.

[6:45 p.m.]

Similarly, this bill may have the effect of shortening the limitation period for victims or claimants without adequately informing or preparing them for that possibility. Near the end of this, if this proves to be the case — where it’s determined that the dispute at hand needs to go to a higher court, the Provincial Court or Supreme Court here in British Columbia — there’s a short, 28-day period for the claimant to make that determination. Again, without the level of sophistication and perhaps the legal assistance they might need through this process, one wonders how challenging that may be for the claimant.

Finally, this bill leaves a lot to regulation. This seems to be a trend this session. When members on the opposite side of the House were on this side of the House, they probably would have objected — and they did — to concentrating so much authority in the hands of cabinet and out of this chamber. With some of the concerns that I have commented on here in second reading, there is much that will need to be addressed, and should be addressed, in this House, where it can be opened up for review and not by cabinet alone.

The transitional regulations provide for a broader regulation-making authority as well, extending to any matter that the Lieutenant-Governor-in-Council considers is not provided for in the act.

We all recognize the important role that the CRT has played, how effective it has been at expanding access to justice and freeing up time for our judges and courts. But the questions remain about this bill, about the sudden and comprehensive expansion of its jurisdiction, caseload and authority — whether this expansion will be workable and advisable.

This bill clearly has many gaps that need to be addressed and leaves much to regulation. I look forward to discussing these concerns at the committee stage.

A. Weaver: I stand and take my place in second reading of Bill 22, Civil Resolution Tribunal Amendment Act, 2018.

As has been mentioned, this bill implements changes that were previously announced by government on February 6. The major change in this bill, of course, is expanding the scope of the civil resolution tribunal to adjudicate disputes over certain motor vehicle injury claims. Such additions are not without their controversy but are profoundly needed in the province of British Columbia. We’ve watched, year after year, the financial issues within ICBC escalate to the point where ICBC now is literally well over $1 billion in debt.

If we look in specific detail at some of the facts with respect to ICBC right now, we know that injury claims totalled $2.7 billion in 2016, which was an 80 percent increase in the last seven years. We know that the average claim paid out for minor injuries has risen from $8,200, in the year 2000, to $30,038 in 2016. That’s an increase of a whopping 265 percent. At the same time, we also know that the average pain and suffering awards paid out for minor injuries have risen from $5,004, in the year 2000, to more than $16,499 in 2016. Vehicle damage costs have increased 30 percent in just two years, to a total of $1.5 billion in 2016 alone.

The use of the civil resolution tribunal for minor injury dispute resolutions means that claimants who don’t use a lawyer will actually be able to keep their entire settlement rather than paying a portion of their fees. Actually doing so means that the province of British Columbia is the last province in Canada to abandon a system which is essentially known as a full tort system — one where anyone can sue anyone with respect to motor vehicle accidents.

I do commend the Attorney General and his office for bringing such legislation forward in a timely fashion to get a handle on the escalating costs within ICBC. As was mentioned, this is not without its controversy. There will be, of course, trial lawyers who are concerned about what this means in terms of their livelihood. There’s nothing in this legislation that says: “You can’t hire a lawyer.” In fact, section 16, I believe it is, specifically says that lawyers will be allowed to represent parties in motor vehicle claims, as ICBC will be represented by experienced adjusters.

[6:50 p.m.]

I recognize that there may be some concern within trial lawyers. Again, I come back to the point that British Columbia is the last province in Canada that still has a full tort system here, where everybody can sue anybody whenever they want.

The civil resolution tribunal’s scope is not only expanded profoundly in the area of motor vehicle injury claims, but also there’s some tightening and expansion and identification of rules and regulations where the civil resolution tribunal can also be used — or Strata Property Act disputes, things like condominiums or bare land stratas — as well as some small adjustments to small claims in here. There are also some adjustments to the area of cooperatives, which are modified slightly in this act.

Overall, I recognize that a lot is left to regulation. But in this particular case, while more generally I get concerned when a lot is left in regulation…. I understand in this case that we’re talking about a rather fundamental shift in the way motor vehicle claims are dealt with in the province of British Columbia.

There’s a danger that if too much is done in legislation, government could not respond nimbly to changes that might be required — particularly, as has been identified by some pundits, when lawyers are able to find ways around the intent of the legislation, to find other additional means of still engaging claims in the Supreme Court, by finding various loopholes in the means and ways claims should be processed.

Overall, this is a piece of legislation we’re proud to support. We look forward to exploring some of the details in committee stage, and also the concomitant legislation which makes a cap on claims, which I believe will be forthcoming at a later date.

J. Yap: I rise today to speak to Bill 22. I know we will explore the bill in more detail in committee stage, but I will say that at this point, there are a number of concerns that I have. I’ll try to outline them in the time remaining.

These concerns relate to the way ICBC cases, in particular, will be handled by the tribunal. The tribunal would be dealing with matters of injury, which would be quite different from the types of cases that they’ve been doing a great job at — resolving issues involving, for example, strata disputes.

Injuries come in many forms. Sometimes the severity of an injury isn’t clear-cut. There’s quite a wide range of symptoms that the victim may be suffering from. I think there are still question marks that remain about how the severity of injuries will be defined.

We also have concerns around how the victims might be made to feel as their claims are addressed through the tribunal process. As my colleague the member for Vancouver-Langara had noted, claimants may choose to be represented by a lawyer or not, but ICBC could have an adjuster and a lawyer there. He had referred to the fact that with the limitation of up to $50,000, it might be an issue in regards to a claimant being able to secure legal counsel. So there’s the potential for the accident victim to feel underprepared or outnumbered.

There’s also the prospect of an imbalance of power there. We need to consider what that might feel like to a person who’s already in the midst of pain or suffering due to the injury incurred in the car accident. They already are vulnerable, and this may exacerbate the situation for them.

We also have additional concerns around experts. The goal is to cut down on experts and appears to be moving toward a single expert to settle cases. But this may not work. The tribunal would be given powers to make regulations on the number of experts, but agreement on experts may not always be possible, which could lead to greater problems down the road.

[6:55 p.m.]

There will be a large increase in those appearing before the tribunal, and ICBC cases will likely take up a large volume of the increase in cases. It’s unclear as to where the increase in capacity will be handled. Will it be higher fees or handled from general revenue?

Those are some of the questions that we have. Will the government be hiring more people with additional expertise on auto accidents to work on the tribunal? Questions clearly remain.

These are just some of the many concerns that I know we will be bringing forward during committee stage, as we work to try to close some of these gaps that we’ve identified.

I will leave my remarks there for the time being.

Deputy Speaker: And move adjournment of the debate.

Hon. D. Eby: The member was the last speaker, Hon. Speaker. We’ve closed it off.

With that, I move second reading of the bill.

Deputy Speaker: Division has been called.

[7:00 p.m. - 7:05 p.m.]

[Mr. Speaker in the chair.]

Second reading of Bill 22 approved unanimously on a division. [See Votes and Proceedings.]

Hon. D. Eby: I move the bill be referred to a Committee of the Whole House to be considered at the next sitting after today.

Bill 22, Civil Resolution Tribunal Amendment Act, 2018, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

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

Hon. M. Farnworth moved adjournment of the House.

Motion approved.

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

The House adjourned at 7:06 p.m.