Orders of the Day

Hon. M. Farnworth: In this chamber, I call committee stage on Bill 10. In section A, the Douglas Fir Room, I call continued estimates debate on the Ministry of Forests, Lands, Natural Resource Operations and Rural Development.

[2:50 p.m.]

Committee of the Whole House

BILL 10 — INCOME TAX
AMENDMENT ACT, 2019

The House in Committee of the Whole (Section B) on Bill 10; R. Chouhan in the chair.

The committee met at 2:51 p.m.

On section 1.

Hon. C. James: By agreement, we have agreed with the opposition that there can be discussion on the agreement which is outside the boundaries of the legislation. The suggestion was that we begin with some of the discussion on the agreement, so I’ll leave it to the opposition.

M. de Jong: Just for clarification, then, we’ve got a five-section bill before us in Bill 10, the bulk of which is dedicated to the establishment of a part 13 for the Income Tax Act. There will be some particular exploration and discussion around that, but all of it relates to an overall agreement that the government has arrived at, which has, happily, led to a final investment decision by one of the agencies exploring liquefied natural gas opportunities in British Columbia. I think it is appropriate that we would have an opportunity to put the legislation in the context of that agreement and, therefore, examine the agreement itself.

We’ve had another experience with this in the House two and a half years ago with respect to another agreement. I’ve just got a series of general questions about how we’ve arrived at this point, with respect to what I’ll call the operating performance payment agreement.

First of all, the government has posted that agreement. I’m not sure it has been formally tabled in the assembly. We are going to be spending a little bit of time discussing its terms. Was there any particular reason that the…? In our previous discussion around an agreement, the government of the day had legislation, income tax legislation, but made a specific point of formally tabling the agreements that it related to. I don’t think that’s happened here, and I wonder if there’s a particular reason for that.

[2:55 p.m.]

Hon. C. James: Thank you to the member for the question.

The existing act, as the member talked about, which defines a particular project agreement, is not the kind of payment agreement that we have put in place with LNG Canada. The project agreements that the member talks about from the previous act — or the existing act, I guess, until we go through this legislative debate — include an indemnification. That’s really the biggest difference between the agreement that we have in place. So therefore, it didn’t fit to bring it forward as part of that act because it doesn’t have an indemnification.

Nevertheless, we certainly feel that transparency is critical. That’s why, the day that the legislation was tabled, we also made public our agreement that was in place with LNG Canada.

M. de Jong: We’ll get to the part of the discussion that distinguishes some of the features of what are the subject of the conversation, the agreement, and agreements that the House has considered in the past. I don’t want to get bogged down on that now. I think my question is fairly straightforward.

Insofar as we are now going to have a specific conversation about a document called the operating performance payment agreement, does the minister think it would be a good idea…? She chose not to attach it as a schedule to the legislation. She chose not to do that. But at a minimum, my strong suggestion is that it would be appropriate for her to formally table the document in the House so that when the record shows we are referring to it, it is a document that has been formally before the House.

Hon. C. James: I think the key is to come back to the first answer I gave, which was related to the project agreements act that was in place under the previous government. This agreement that we have in place around performance payments does not, in fact, fit with the previous act. It is not an appendix to the Income Tax Act, which is what we’re bringing in. We’re bringing in the Income Tax Act.

It’s a public document that now is available to everyone. We tabled it, as I said, on the day that the legislation was introduced, and it’s available to everyone. Hence, we’re having that discussion here in the Legislature around a document that’s readily available.

M. de Jong: All right. Well, I’m not going to belabour the point. I suppose I could table the document as well. It just strikes me that an agreement of this magnitude…. We’ll come back to this in terms of the term, the order of magnitude of the revenues, the potential revenues and the concessions that were made to secure the agreement.

It would warrant the government of the day formally presenting the agreement to the House. The member, and certainly some of her colleagues, had very specific things to say. This is not about whether it is captured by the provisions of the project development agreement act. This agreement will have to stand or fall on its own. I would have thought that the government would simply want to present it to the House in that context. But as I say, I suppose it is available to me to table the agreement. I’m surprised that the opposition would need to do so.

[3:00 p.m.]

I wonder if the minister can talk a little bit about the process that led to the signing off of the operating performance agreement and how the government organized itself around the negotiations — if, indeed, negotiation is the right term. I think it is. I don’t think anyone has been shy about indicating that there were discussions with proponents. But if I’m misusing that term, the minister can tell me.

Which ministry, which minister, had and has political responsibility and jurisdiction to guide those negotiations? Was there a subcommittee of the cabinet that was responsible for providing direction? How did the government organize itself around moving through this particular negotiation that gave rise to this agreement?

[3:05 p.m.]

Hon. C. James: I wanted to make sure that I took the time, so I could kind of outline from now until we get here, because I think that’s where the member will go if I give pieces of it — just to kind of run through the timelines for the member. This approach has been a team approach but began with the Premier himself. This approach began with the Premier’s request for a competitive review to go on. There was previous work, as the member will know well, done by the previous government around competitiveness when it came to LNG.

The Premier requested that the three ministers — of Environment, Oil and Gas, and Finance — work together with their staff. That’s where the core started off. You could call that a subgroup, I guess, from the Premier. But this basically was the core group of people to do that competitiveness review — to take a look at the previous information and work that had been done by the previous government and to take a look at the current situation in the province and the current situation internationally and nationally — to make sure that that work was done.

As that work went on, that group was expanded to include Hydro and to include the government of Canada in gathering information and getting information. Then that process continued and led to the Premier’s letter that spoke to our conditions, which came in March. The Premier’s letter, as the member knows well, is attached as an appendix to the agreement. As we reach March, and you saw the Premier’s letter, that work continued.

Then the framework went to cabinet and Treasury Board, as would be expected, for their discussion. That continued on until we got to the final investment decision in October. Then from October on, again, utilizing those three ministers and those three ministry staff, the modelling was worked on to bring us to the agreement that we have in the legislation and that’s here today in the House.

M. de Jong: So we’ve got a subgroup, a subcommittee of cabinet, it sounds like. Who’s the chair? Is the Premier the chair?

Hon. C. James: Ultimately, the Premier is the chair. He gave the direction to the three ministers and their staff to do the work. So yes, ultimately, the Premier is the chair.

M. de Jong: Does it follow, therefore, that as the government moved beyond the internal determination of frameworks and policy choices that would guide its engagement with the proponent…? Which ministry took the lead in engaging with the proponent to negotiate the actual terms that we see in the agreement?

[3:10 p.m.]

Hon. C. James: As I mentioned, it was a team approach as we continued to work as a subgroup, but Finance led the negotiations.

M. de Jong: The minister has referred to Treasury Board involvement. I’m not sure if she was referring to Treasury Board involvement in the internal development of a framework negotiating mandate or she was referring to treasury review and approval of the agreement, or both. I guess that’s my question — if the minister can describe the nature of the Treasury Board involvement in this matter.

Hon. C. James: That’s correct. It was approval — review and approval, after the agreement was put in place, went to Treasury Board.

M. de Jong: Sorry. I don’t think I understood the minister. I thought I heard her say: “After the agreement was put in place, Treasury Board approval.” I’m not sure I understand which agreement the minister is referring to.

I’m not meaning to stretch this out needlessly. My thought would have been, or my suspicion would have been that, in developing an internal negotiating mandate, the minister, as the minister responsible for the ministry leading the engagement with the proponent, would have secured from Treasury Board and, ultimately, cabinet, a mandate for engagement. And then, when the result of that work was completed and a draft operating performance payment agreement had been arrived at, at the table, that she would have returned to Treasury Board and cabinet for sign-off prior to the parties signing the agreement.

If that is not the sequencing of events, I’m interested to hear what they are.

[3:15 p.m.]

Hon. C. James: I think it’s important, again, just to go back to the timeline that I started with, which was kind of leading to the Premier’s letter in March 2018, which, again, is part of the agreement, and then leading forward to the FID, the final investment decision, that occurred in October.

As I mentioned, the Premier kicked this off with the request to look at a competitive review process. It was then determined that the three ministries and their staff would get that done. Finance led, as I discussed. So all along the way, from the time the Premier gave that direction through to the Premier’s March letter, the briefing was occurring as we were going on.

This wasn’t a “let’s wait until something is done” or “let’s wait until we’ve got a final piece in place.” I received, in my role as chair of Treasury Board, ongoing briefings sometimes every couple weeks, sometimes monthly, depending where the discussions were going. That was then reported out, obviously, to Treasury Board as part of my role but also reported out to cabinet. Cabinet also had updates as we were going along through this process, which then led, as I said, to the letter that the Premier released in March of 2018.

So processes along the way — for myself as chair of Treasury Board, obviously the three ministers who were involved and obviously the ministers of cabinet as we went along.

M. de Jong: I think I appreciate that there would have been ongoing engagement. I also think my question is more specific, and I have expressed it clumsily.

The agreement — operating performance payment agreement — that contains a variety of aspects and covers a variety of topics was, as I understand it, the final piece of the puzzle, as it were. My question is whether, prior to execution, that document was presented to and approved by Treasury Board and cabinet.

Hon. C. James: Yes, the contents of the agreement were discussed with both cabinet and myself, as TB chair, as we went along the process.

M. de Jong: I don’t mean to quibble, but I thought I detected the minister perhaps choosing her words carefully, or perhaps not — not that she wouldn’t choose her words carefully and be entitled to. But she has advised the committee that the contents of the agreement were presented to those two bodies.

[3:20 p.m.]

My question is a very specific one. Was the draft agreement — in the form that we now have, now that it has been executed and made public — in its entirety, prior to execution, considered and approved by Treasury Board and cabinet?

Hon. C. James: Yes, before the agreement was signed off, the entire agreement was reviewed in detail by priorities and accountability, a committee of cabinet. It was then taken and briefed to cabinet, discussed to cabinet and, obviously, also discussed and gone through in detail with myself as Treasury Board chair.

M. de Jong: Thanks. That’s helpful. It sounds, therefore, though, that Treasury Board itself did not consider the final draft agreement prior to execution. The chair of Treasury Board clearly did, but from the minister’s answer, it appears that Treasury Board itself did not consider or discuss and provide a recommendation around the final draft agreement. Is that correct?

Hon. C. James: As Treasury Board chair, I received the briefings, received the updates and certainly reported to Treasury Board. And as the member knows well, the members from cabinet who sit on Treasury Board are also part of cabinet. So that’s correct. The member is correct. It did not go directly to the full Treasury Board. It came through myself as chair, and it came through cabinet as well.

M. de Jong: I’m recalling my time in the hot seat that the member now occupies.

[3:25 p.m.]

Is that because it was deemed a minor item? I’m trying to recall. Agreements of a certain magnitude that involved longer-term obligations for government and for which there were fiscal consequences and revenue implications, positive — we hope mostly positive here — but at some times negative, would generally have received consideration by the full Treasury Board, except in instances where something was deemed a minor item. I’d find it hard to believe that that would be the case here, but was this deemed a minor item?

Hon. C. James: As the member knows well — he has spent more time in this position — the issues that come to the chair of Treasury Board are often ongoing issues, issues that aren’t brand-new, that have continued to be discussed. This certainly, from the time we came into government and the time the Premier gave the direction to take a look at the competitiveness, was an issue that was constantly discussed, reported at Treasury Board, reported to cabinet, discussed at cabinet.

This did come forward to me as chair of Treasury Board because of that, because it was one of those issues that was ongoing and because it was also, as I said, a discussion and a direction given at cabinet.

M. de Jong: Again, my purpose is not to unnecessarily delay the examination. I’m a little bit surprised, though, again based on my own recollection of procedures.

In circumstances where significant revenues are at stake, the deferral of tax in excess of a half-billion dollars and a unique arrangement for the collection of that revenue, coupled with all of the other implications that we will get to — again, we hope more positive than negative — I guess it begs asking the question: what is the criteria? Or is there criteria?

Or have the government and the minister, in concert with the Premier, determined that it will be for the Minister of Finance to determine on her own which items must be scrutinized by the full Treasury Board and which items she can deal with individually and unilaterally as the chair of the Treasury Board?

To be clear, there are certainly instances that I am aware of in the past where the Treasury Board has not been obliged or the full Treasury Board has not been asked to review an agreement or an approach in its entirety. I must confess I’m a little taken aback that on what the government itself has described as the single most significant private sector investment and agreement with the Crown, in this instance, the agreement did not receive consideration by the full Treasury Board.

[3:30 p.m.]

Hon. C. James: I’ll again remind the member that, as chair of Treasury Board, it is my responsibility to ensure that the issues that I’m dealing with have a clear mandate. I had a clear mandate from both the Premier and from cabinet — and from my colleagues at Treasury Board — in continuing those discussions.

[J. Isaacs in the chair.]

The members of Treasury Board — as you will talk to our members of Treasury Board — meet frequently. This is not an issue of anybody acting unilaterally. This is an issue of bringing forward things, as the member knows well, that had gone through the Premier, had gone through cabinet and had been reported out.

We had a very clear mandate. We went off, as we needed to, to begin those discussions. We reported back on a regular basis, as I mentioned — weekly, sometimes biweekly, monthly — depending on how the discussions were going, which came to the public documents we see.

M. de Jong: When was the agreement signed?

Hon. C. James: March 25.

M. de Jong: I saw the date on the agreement. The signature blocks were not dated, so I wasn’t sure if the date on the agreement was different. The minister is saying that the date of the agreement reflects the date that the signatures were affixed to it.

On that point, I noticed that the contracting party in the operating payments agreement, LNG Canada, is the agent for Shell Canada, North Montney LNG Limited Partnership, PetroChina Kitimat LNG Partnership, Diamond LNG Canada Partnership and KOGAS Canada Ltd. At page 20, there is a single signature attached, one Mr. Calitz, CEO of LNG Canada. There are three signatures representing the Crown. Why is that?

Hon. C. James: The three ministers signed off, as all three ministers have responsibilities for different parts of this agreement. Obviously, the PST fits with Finance, the hydro rates and the issues fit with the Ministry of Energy, and the environmental program that’s coming in place fits with the Ministry of Environment. So all three ministers who have responsibility for pieces of this agreement signed on. For LNG Canada, they act as the agent, so they have the authority to sign one signature.

[3:35 p.m.]

M. de Jong: Is it the minister’s advice to the committee that there is, therefore, a legal requirement that the Crown be represented by all three ministries? Or, for the purpose of concluding a binding and enforceable agreement, could a single minister have bound the Crown?

Hon. C. James: Yes, it is a legal requirement, because those ministers have the legal responsibility to carry out the issues that are identified in this agreement. Therefore, it’s a legal requirement to have the three ministers responsible for those pieces sign the agreement.

M. de Jong: To be clear, there are components of the agree­ment we’re considering for which each of the three ministers — the Minister of Finance, the Minister of Environment and Climate Change Strategy and the Minister of Energy, Mines and Petroleum Resources — all have specific responsibilities, and the advice the minister received is that it was, therefore, a legal requirement that they be signatories to the agreement.

Hon. C. James: Yes. The advice we got was that the re­quire­ment for each individual minister was to be responsible for their acts and the actions that they could take under their acts. That’s why you see three signatures here, because those relate to the three areas. As I mentioned earlier, the PST, the Hydro changes and the CleanBC program around energy-intensive industries require three signatures.

M. de Jong: That’s helpful. I guess the obvious question is: having regard, then, for what the minister has advised the committee, will the Minister of Environment and the Minister of Energy and Mines be available to answer questions relating to the agreement during these proceedings?

Hon. C. James: No, I’ll be discussing it, because this is a piece of legislation which is, obviously, Finance. It’s a tax piece of legislation. We’ve agreed, during this discussion, to open it up to discussions around the agreement, but I’ll be taking those questions.

M. de Jong: Well, the minister is experienced enough to know that I wouldn’t want to take a moment to pause and reflect upon what she has just said. The committee has just been advised that there is a particular legal requirement that flows from specific ministerial responsibilities and that led to her two colleagues signing on to this agreement.

[3:40 p.m.]

She was very specific. There are specific ministerial and statutory responsibilities that drew them in as signatories on behalf of the Crown. The agreement is now before the House, and the minister has pointed out her consent to that, for which I am grateful. I must say I am of the view that it should not have been necessary to rely on procedural benevolence — that the magnitude of importance attached to this…. But the minister has….

I just want to be clear. Having told the committee that there are ministers of the Crown who have signed on to the agreement because they are legally obliged to do so and because they have specific legal responsibilities, she has said that the committee will not have an opportunity to question those ministers about the discharge of those responsibilities. I cannot believe that the minister is comfortable with that position, but I will give her an opportunity to consider it, reconsider it or restate it.

Hon. C. James: I certainly expect that the members will have many questions as they go through estimates and individual ministers, including the ministers who are signatory here — many questions for ministers on all of their duties, including the duties on this agreement. The agreement is here for information, for questions, for discussion, but the agreement is signed and final. As lead of the ministries that were involved, I have been assigned to do the questions and to be able to respond to the questions on the agreement.

Because this is linked, again, to the legislation, which is what we’re here to debate, as Minister of Finance responsible for the legislation, I’ll be answering the questions. But as the member knows well, and as I certainly expect, there will be many questions about the specific programs that may be listed here under each of the ministers’ responsibilities, many opportunities and many chances for the member and for other members to ask those questions.

M. de Jong: I’m going to press the point just a little bit and, in so doing, am cognizant of the fact that the minister is a senior minister within the cabinet. In fact, she is the Deputy Premier.

What I think she has just told the committee is the equivalent of providing an undertaking that…. Despite the fact that the Minister of Environment and the Minister of Energy will not be made available to answer questions about their involvement in the agreement we are discussing, she has undertaken to ensure that when the opportunity presents itself in the ministerial estimates, members will have an opportunity to pose questions, and those questions will be answered to the best of the ministers’ ability. The Committee of Supply will not be told by either of those two ministers that that was a matter considered at another time and answered by the Finance Minister.

I am asking the minister to be very specific and provide the House that assurance that her colleagues will answer the questions that, quite frankly, they should be prepared to answer as part of this proceeding but have been directed or are choosing not to.

[3:45 p.m.]

Hon. C. James: The member has been in this place longer than I have and knows well that ministers have areas of responsibility, and when it’s estimates, it’s an opportunity to ask questions. CleanBC is one of the Minister of Environment’s main program areas. He will be answering questions during estimates on CleanBC. The Minister of Energy and Mines has responsibility for Hydro. The minister will answer questions on B.C. Hydro during the estimates. That is an expectation for, I’m sure, members of the opposition, but members here on the government side as well — that you will speak to issues that are related to your portfolio.

M. de Jong: I’m not sure that’s quite good enough. The assurance I am seeking from the Minister of Finance is that her colleagues, the Minister of Environment and the Minister of Energy, will answer questions pertaining to their areas of responsibility with respect to this operating agreement.

Yes, we all know what their general areas of responsibility are, but I am seeking, on behalf of the committee, assurance that they will be answering questions. Apparently, they are declining to do so now, when we consider the agreement. Will they be answering questions about their areas of responsibility in this agreement during their ministerial estimates?

Hon. C. James: No one is declining questions, just to be clear with the member. We are discussing a finance bill, a piece of legislation here in the Legislature. We have agreed with the member to bring forward the agreement, to ask some questions on the agreement, even though it’s outside the legislation — to be able to ask some questions around the agreement. I am Minister of Finance, and I’m here with my legislation. That’s why I’m here dealing with these questions.

Again, I will say to the member that B.C. Hydro is the responsibility of the Minister of Energy and Mines, and obviously, PST issues related to BC Hydro will be discussed, I’m sure. If questions are raised, I’m certain that the CleanBC program, which obviously includes the energy intensive program that is being developed by the Ministry of Environment…. I’m certain there will be questions coming forward from the members. I am certain there will be a good discussion and good debate.

M. de Jong: What I’m hearing from the minister is that, if members of the House and the committee wish to pose questions to the Ministers of Environment and Energy on the agreement, they should do so during the estimates process. If I am correct, we can move on.

Hon. C. James: Correct.

M. de Jong: This is perhaps a bit of a technical thing. I wonder if I could send a document over to the minister. It’s included as one of the schedules in the agreement. It’s schedule C. It’s the OIC. Does the minister have it? Yeah. I wasn’t sure the minister would have it. It’s part of the agreement, so I’m sure she had it, anyway, so she can compare it.

I notice that there’s a fourth signature attached, which isn’t necessarily unusual, because, of course, any member of the executive council can sign OICs. But my recollection is that it was necessary to correctly identify the signatory. When I compare the signature on OIC 512, dated October 2, 2018, purporting to be of the Minister of Energy, Mines and Petroleum Resources, with the signature on the actual agreement, they look very different.

Did the Minister of Energy and Mines actually sign OIC 512?

[3:50 p.m.]

Hon. C. James: I think the minister whose signature is on the OIC is the backup minister for the Ministry of Energy and Mines and was filling in, obviously, that day when this was signed.

M. de Jong: The Minister of Jobs, the minister is advising the committee, is the designated secondary minister for the Minister of Mines? I think the minister is indicating that’s so.

Hon. C. James: During that time period, yes. Correct.

M. de Jong: Let’s go to one of the themes that we were hoping to canvass during the course of this conversation and this discussion. In doing so, I’ll send another document, so we don’t have to waste a lot of time, over to the Finance Minister. This relates to some discussions that took place with respect to another LNG agreement.

They’re comments from the now Minister of Finance. She wasn’t the Minister of Finance at the time. She said this. This is from July 13, 2015: “…it seems to me that it would be even more important for a Premier, if they were really looking out for British Columbia, to make sure that there were jobs for British Columbians written into this agreement. But no. There are no apprenticeship quotas, there are no training quotas, and there are no job numbers that are in there.”

Then a little bit further down, she talks about the Australian project development agreements: “…specifically require the use of local labour — very specific — they also actually require the use of professional services and local materials. Australia actually includes a buy-local policy in their project development agreements. They say: ‘If you’re going to come in and utilize a resource that belongs to all of British Columbia, you better make sure that British Columbians are the ones who benefit from it.’”

Does the minister agree that those are comments that she made during the course of that debate?

Hon. C. James: The member knows; he’s reading Hansard. So that’s very clear from the record. I think making sure that there are jobs for British Columbians is critical. Certainly, in the previous agreement that came forward, there was a lot of discussion about the use of temporary foreign workers. There was a lot of discussion about that concern, and yes, I think that’s critical and important.

It’s part of the reason that I’m so pleased at the work we did with LNG Canada around looking at jobs, around making sure that there was a locals-first agreement, making sure that there were agreements signed with First Nations and making sure that, in fact, there have been commitments already occurred around support for individuals going through the training that will be necessary for these projects. I think that’s critical.

A commitment of apprentices on site, again, is a piece that is not only in place with LNG Canada, but they’ve also required it contractually of one of their contractors, which, again, I think is a very important signal. They’ve started a trades-training fund, which, again, will provide support.

Do I believe that jobs are critical and important? Yes, and I believe that the work was an important part of our four conditions that we put in place around moving ahead with any kind of project on LNG.

[3:55 p.m.]

M. de Jong: Well, let’s just pause for a moment. The criticism the then member, now minister, had was a little more specific than that. It strikes me that the relevant portion of her criticism was her demand and her critique — wanting to see guarantees around jobs for British Columbians “written into this agreement.” What did she mean by that, when she said “written into this agreement”?

Hon. C. James: I think I’ve answered the member’s question. I felt it was important to look at the kinds of supports for local jobs, and I feel that the work we’ve done with LNG Canada has shown that — through their locals-first policy, through their requirement that a contractor will also look at local first, through their commitment to apprentices. Those commitments are critical to the agreement that we have in place.

M. de Jong: Let me suggest that what the minister was demanding previously — and I’ll come to her colleagues in a moment because she was by no means alone in laying out this prerequisite for support — was a demand that there be specific guarantees around hiring and procurement in the agreement between the proponent and the Crown. Let me start there.

Was the minister, two and a half years ago…? Am I correct in saying that the minister, two and a half years ago, was demanding the presence of those provisions, those guarantees, in the agreement between the Crown and the project proponent?

Hon. C. James: Again, I can read again from the specifics that LNG Canada has put together, but yes, I believe it’s critical and important that we have a recognition of the jobs that need to be provided, certainly jobs for British Columbia.

The local-first provision that is there, including with the contractor, is critical, from my perspective. The agreements around apprenticeship targets is critical from my perspective. I certainly feel more comfortable with this agreement than I did with the discussion we were having in 2015 — and the fact that there are commitments in place with the training fund, to already people through that process, including the example of the people that have already been to work in Kitimat in the month of December alone has shown that that provision has been carried out.

M. de Jong: I must confess that I’m a little bit confused, because the minister continuously refers to the agreement, and maybe I’ve missed something. Can the minister point the committee to the provisions of an agreement between the Crown and LNG Canada that speaks to guarantees around local hiring and procurement? I’ll say that again. Can the minister point the committee to specific provisions in the agreement, any agreement, between the Crown and LNG Canada that relate to specific hiring and local procurement requirements?

Hon. C. James: I think, as the member knows, this is not a project development agreement. That’s not the process we used. We sat down. We had negotiations with LNG Canada. We put on the table our four conditions, and we looked at how we could best meet those four conditions.

[4:00 p.m.]

With the employment plan — outlined, as the member knows, in the letter from LNG Canada, which is public, again — it’s very clear. They have a locals-first hiring policy. They have an apprenticeship percentage policy. They have a training program in place, and they have contracts in place with existing First Nations as well. Certainly, from my perspective, it was the goal that we went to negotiations with and a goal that I am very pleased with.

M. de Jong: A couple seats down from the minister sits the now Minister of Jobs, the then member for Surrey-Whalley — he’s still the member for Surrey-Whalley, but he’s also the Minister of Jobs — who spent considerable time critiquing the previous arrangement, particularly the government of the day’s willingness to “simply just trust the proponent and take them at their word. That’s, I suppose, an interesting point of view” but certainly not what others have done.

Look, let’s not be cute about this. The minister and her colleagues went to great pains to criticize an arrangement, an agreement that, on the one hand, provided access to a British Columbia resource and in the body of that agreement was silent on the issue of local hiring and procurement, notwithstanding the fact that there were other ancillary documents of the sort that the minister has referred to.

Surely she’s not going to stand in the House today and suggest that the test she laid out 2½ years ago has been met. The test she laid out, her and her colleagues, 2½ years ago was that there must be, in exchange for coming to an agreement that granted access to and concessions around the development of an LNG sector…. If the minister wants to take me to task for using the word “concessions,” we’ll have a lengthy conversation. The previous agreement contained concessions, and so does this one — in fact, arguably, slightly more.

She was very specific, as were her colleagues and the now Premier. They expected, at that time, to see ironclad guarantees written into a bilateral agreement with the proponent. I’m simply asking the minister to confirm today that that does not exist. Whatever she wants to call the agreement, the government did not secure that.

She’s smart enough to know that my criticism in that regard will be tempered by the fact that I have some appreciation for the difficulties associated with securing those kinds of commitments. But that’s not the standard she set 2½ years ago.

I would like her to be forthright with the committee and acknowledge that the kinds of guarantees around jobs and local procurement that she demanded when she was a member of the opposition do not exist with respect to this agreement with LNG Canada.

Hon. C. James: I believe I’ve answered this question, but once again, these were negotiations. We did not, in fact, go down the road, as the previous government did, to look at a project development agreement. We looked at a very different process, a very different kind of agreement, including negotiating our four conditions and ensuring that those pieces were in place.

From the discussions and the negotiations that occurred with LNG Canada, yes, I feel that the important role that the company will play in making sure that we look at local hire, that we provide support for Indigenous workers, that we ensure that there are apprentices on the job and that we provide those supports in place…. Yes, I am comfortable with the assurances that have been given to us by LNG Canada in their employment plan.

M. de Jong: I celebrate the minister’s comfort. What happens if they don’t?

Hon. C. James: I am an optimist, and I believe that the company is going to continue to carry that out. If you look at the existing agreements that are in place, I believe that there are opportunities here for people in British Columbia. In fact, I believe that’s part of the reason we put the four conditions in place — to be very clear about the important role that local companies would provide when it came to local jobs.

[4:05 p.m.]

The fact is that we have seen that occur already in the number of people working in Kitimat, that we have seen that occur in their commitment to both the number of apprentices on the job and a local-hire-first policy. That’s in place.

I expect if the four conditions need to be met, that’s our requirement as government.

M. de Jong: To be fair to the minister, I just want to make sure that…. I think what I heard her say is that there is no remedial action if, for whatever reason, the proponent…. And who knows? There are assignment rights in this agreement. It might not be LNG Canada. I’m pleased, truly pleased, that the minister has established a rapport and a level of confidence with those who are presently in charge of LNG Canada. I suppose we have to acknowledge that two or three or five or ten years down the road, it may be a very different group of people or a different corporate presence.

The minister has said to the committee…. In response to the invitation to provide specific contractual evidence, her response is: “I don’t have that, but I think they’re good people, and I trust them.” I mean, I don’t want to make light of it or misstate it, but that’s essentially what I heard. Is that the argument the minister is bringing to the committee today?

Hon. C. James: I think the member knows the response. I’ve been very clear about the response. I’ve been very clear about the four conditions and the need for the company to meet those four conditions. I think the fact that we brought those four conditions to the table…. We had very good debate. We had very good discussion. We had some tough negotiations.

Those four conditions led to a final investment decision, which will bring jobs to British Columbia; which will provide jobs for British Columbians; which will, in the employment plan that’s laid out from LNG, provide local first; which will provide First Nations hiring; which will provide apprenticeship and trades. From my perspective, the benefits to British Columbians are very clear in a final investment decision made because of the conditions that we put forward.

M. de Jong: I think what I’m asking the minister to do is enunciate in greater detail, then, the enforcement mechanism that the government is relying upon to ensure that its conditions — and that’s the word that she uses — are abided by. I’m still unclear on specifically what those conditions are.

The minister and her colleagues were demanding, as recently as 2½ years ago in this chamber, specific guarantees around local hire, specific guarantees around the use of local professional services, contractual guarantees around local procurement.

I have asked her to convey to the committee and point us to those contractual guarantees. She has not done so. I think she’s not done so because they don’t exist. Instead, she has referred back to conditions. But I’m asking…. They’re hardly conditions of note if there is no enforcement mechanism available of the sort that generally exists in contractual instruments.

[4:10 p.m.]

The minister can curtail this, truncate this part of the conversation with the committee simply by saying: “Well, here are the remedial steps that are available to the government if these fine folks at LNG Canada don’t fulfil the conditions or don’t fulfil the obligations or what they’ve told us they would like to do or intend to do.” I’m all ears if the minister can point to those remedial steps.

Hon. C. James: The member talks about negotiations. I think it’s important to recognize that we are talking about a final investment decision that has already been made and, in fact, provides us with an opportunity to take a look at the track record that is there from companies, many of them that have been involved in working in British Columbia.

In fact, if we take a look at the contracts that are in place already before we look at the further building or the running of the plant, you’re looking at $600 million in contracts already along the pipeline route with First Nations. You are looking at over $500 million in place already invested in B.C. businesses.

The member used my language. But do I feel confident about the agreement that has been put in place with LNG Canada? Yes, I do. I wouldn’t be standing here otherwise if I didn’t feel that it was going to contribute to British Columbia and to meet our four conditions. The member brushes the conditions aside. But in fact, as the member will know, these were conditions we had in place.

Clearly, as we ran in the election, we brought them to the public of British Columbia. We presented them to the public of British Columbia during that election process to look at how we could ensure, for British Columbians, a fair share; how we could ensure jobs for people in B.C.; how we could ensure true partnerships for First Nations; and how we could protect our air, land and water. In fact, that is the agreement that we see in front of us — an agreement to, in fact, meet those conditions.

I talked about the employment plan that’s in place for LNG Canada, a Fair Share. We will get into the legislation as we go on. A partnership for First Nations — the vast majority of elected bands along the route have already signed on and are prepared and eager and already taking part in contracts with LNG Canada.

Again, CleanBC requires that the greenhouse gas emissions from this LNG project have to be part of our reduction. That will require some hard work on all our behalves. We recognize that. Do I feel confident about this, and have I seen on a track record that this work is already being carried out? Yes, I have.

M. de Jong: All gratifying and, to a certain extent, reassuring, I suppose. But the question was: what mechanism, if any, exists for the government to ensure that the government’s expectations around local hiring and procurement are adhered to?

[4:15 p.m.]

Hon. C. James: It’s the ongoing relationship that we have with LNG Canada around the commitment here. LNG Canada knows very well that in order to be successful in this project, they will be required to have a good partnership with the local communities, a good partnership with workers. They will need the people to be able to build this plant, and that’s the kind of commitment that they’ve made.

M. de Jong: What are the government’s and the minister’s expectations around the labour component of this project, the B.C. versus non-B.C. labour component of this particular project?

Hon. C. James: As I talked about earlier, the discussions, the negotiations, the tough conversations — the tough negotiations, in many cases — occurred. As I think the member knows, and as I’ve talked about over this last while, the letter outlines, in fact, the expectations that we have.

M. de Jong: Perhaps more important than the expectations that the government has, though, is what, if anything, they have received from the proponent confirming their intention to meet those expectations. Do they have a…? Apparently there is nothing contractual.

I think we’ve established that the minister is relying on the good intentions of the proponent. There is no enforcement mechanism that has been included in any form of agreement. She has pointed, to be fair, to unilateral declarations by LNG Canada around their intentions, but has she secured from LNG Canada a specific letter of commitment, perhaps, on these matters?

Hon. C. James: This was made public. It’s up on the website, a letter from LNG Canada which states the kind of discussion that I’ve already talked about, which was around the local-first hiring, around the commitment to also hold their contractors to that, the commitment around apprenticeships and the commitments around investments they’ve already made.

M. de Jong: Again, to be clear, no enforcement mechanism is available to the minister if the corporate approach to any of those questions were to change.

Hon. C. James: I believe the enforcement is a successful project, and I believe the commitment is there for a successful project from the communities and from the company. In order to have a successful project, we’re going to need to ensure that we have the local community engaged, involved and working in this company.

M. de Jong: Well, that’s a nice segue into something I touched on a moment ago. That is that I think British Columbians, and certainly the committee, will be interested to know whether or not, as part of the forecasting exercise that undoubtedly has been undertaken by the minister and by the government, they have made any determinations around their expectations on the use of B.C. versus non-B.C. labour. Has any forecasting taken place, and is the minister prepared to share that forecasting now?

[4:20 p.m.]

Hon. C. James: I think the first piece that’s important, again, in the employment plan from LNG Canada is the “local first.” As I said, that’s not simply a local first hiring policy for LNG Canada; it’s also their contractor, who is bound, and includes…. As they say in their plan, qualified Indigenous, local community and British Columbia workers will be employed first. Certainly, our assumptions are very consistent with the numbers that LNG has put forward around thousands of jobs for British Columbians. We certainly, as I said, believe, when we look at those assumptions, that they are consistent.

M. de Jong: Just to put on the record, then…. During the construction phase, would the minister restate her government’s assumptions about the employment, the number of jobs being created.

Hon. C. James: The numbers that have been released are 10,000 jobs during the construction phase and 1,000 permanent jobs.

M. de Jong: Going back, then, to the answer just previous, which was delightful and helpful, but singularly unassociated with the question I asked. The question I asked was whether or not the government has prepared and has forecasts and assumptions around…. If we take that 10,000 job figure, how many represent jobs for British Columbia workers versus jobs for non–British Columbia residents? Has the government endeavoured to forecast, and does it have forecasts around that?

[4:25 p.m.]

Hon. C. James: I think the important piece to remember — and I know the member will know this — is that the 10,000 jobs during construction don’t come all at once. They obviously phase in as the project ramps up, and 2021 is peak construction time for the project.

Again, as the company has said and as we’ve said as British Columbians, if the people are there, they will be hired. These will be individuals in jobs that they need to fill. We believe that that will create thousands of jobs for British Columbians, and we are committed to also doing our part in providing support to ensure that the training and the opportunities are there, in partnership, as I said, with LNG Canada, which has already put in their training fund to get people working and to get people ready for the job. I think, again, if you take a look at the employees who’ve been in place in Kitimat in the month of December, it shows that there are good opportunities for B.C.

M. de Jong: Does the minister, the ministry or the government have a forecast or an assumption around the percentage of employment that will accrue to British Columbians versus non–British Columbians over the course of the construction of this project?

[4:30 p.m.]

Hon. C. James: Yes, there is forecasting done, obviously, as the member knows well. Forecasting is done for all economic activity that occurs in British Columbia. This is obviously one project. There are a number of projects, as the member will know — a number of our large transit projects that are going to occur in the Lower Mainland as well.

[R. Chouhan in the chair.]

There is a great deal of economic activity going on in the province right now. So yes, we have done our forecasting, taking a look at all economic activity in British Columbia and taking a look at our workforce. We certainly believe that this project is going to bring thousands of jobs to British Columbians.

M. de Jong: The minister seems hesitant to actually answer the question. She will not encounter a dispute from this side of the House that this project, a project of this magnitude, is going to generate thousands of jobs and opportunity. I hope she understands that and realizes that.

She and her colleagues have had some very specific things to say in the past about how those employment opportunities will accrue to British Columbians. We’ve already established that some of the mechanisms that, in a previous role, she would have insisted upon do not, today, exist.

What I have asked her, and what I think it is legitimate to ask, having identified the estimate of 10,000 jobs during the construction phase, is whether or not she and the government have forecasted what percentage of those jobs will be filled by British Columbians versus non–British Columbians. I think she’s done the work. In fact, I know she has. This is her chance to stand up and candidly say to the House: “We’ve done that forecasting work, and we believe the jobs will be…. It is a forecast. It is an estimate. It’s not a science. I understand that. But here’s what we think it is.”

I don’t know why she is reluctant to do that, but if she doesn’t, I’ll do it for her. But here’s her opportunity to lay out the information and the work that she and the government and the ministry have done.

[4:35 p.m.]

Hon. C. James: Again, as I talked about, it’s certainly not an exact science when we take a look at forecasting and when we take a look at assumptions. But there is an assumption, obviously, on LNG projects. This has been something that’s been discussed for a number of years — I think, as the Premier says, going back to the ’80s — when we take a look at LNG projects.

The assumption for LNG projects, not for this specific project but for LNG projects, is that well over half of the jobs that are being proposed would be British Columbia jobs. So that would be, if you’re taking a look at the numbers, well over half of those numbers. But I think, as LNG Canada has said and as we have certainly committed to, local first is the critical piece, and that means making sure that people are trained and that we have the workers here in British Columbia. And that’s what we believe will occur through this project.

M. de Jong: So that the minister and I are both referring to the same thing, I’m going to send over a document that we received earlier today from the ministry entitled “Key Assumptions — Generic LNG Projects.” I apologize. It’s a bit marked up, because I photocopied it after I did some work.

The second line from the bottom refers to employment assumptions. I should maybe, perhaps, set the document, to the best I can, in some kind of context. It’s from the ministry, so probably the minister can do a better job than I. But it’s the assumptions that have given rise, I take it, to all of the statements the government has made about anticipated revenues and anticipated…. Everything is a product of these assumptions in terms of capital, planned capital and availability and cost of natural gas.

The one I’m asking about is the second from the bottom, where it talks about B.C. employment assumptions. Could the minister relate to the committee what her ministry’s assumptions are about B.C. employment?

[4:40 p.m.]

Hon. C. James: What the member is referring to, just for those people who are listening and may want to know the information that’s here…. As I talked about in the last question, these are looking at assumptions for generic LNG projects — so the kinds of revenue expectations that government can be looking at, the kinds of areas that government may get revenue from when it comes to LNG.

The member is referring to the second-to-last line, which talks about the employment and references, as I just talked about, the 55 percent. Forty-five percent is low end, but 55 percent is the end, on average, that is the assumption for a generic project.

I think the member is also going to refer, I expect, to a revenue number which looks at a lower end of 35 percent. The reason you’re looking at a lower end is to ensure that we are very conservative when we build the budget. I think we had this discussion with the critics during the estimates debate last year, when we talked about what you build into the budget and what you don’t build into the budget when it comes to projects coming forward.

We are very, and I am very, conservative when it comes to what gets built into the project. We want to ensure that those conservative numbers are included when it comes to revenue, because as I mentioned to the member, this is a ramp-up process. This isn’t jobs that are there all at once, and you need to make sure that our estimates that we build into the budget are recognizing that and acknowledging that.

M. de Jong: Well, then, to review and to be clear, the minister has referred to the employment-related assumption. To be clear, the government is operating on the assumption that, with respect to a generic LNG project, which presumably includes the type that we are looking at now, 55 percent of the labour related to that project will be from British Columbians and 45 percent will be from non–British Columbians. Is that correct?

[4:45 p.m.]

Hon. C. James: Just as I said in the couple of previous questions, the expectation for a generic LNG project is 55 percent. But, again, if we’re taking a look at training, at the support that’s being put in place, at the local-first, at the conditions that have been agreed to by LNG, I certainly expect that you’re looking at very strong numbers and thousands of jobs for British Columbians.

M. de Jong: I’m a bit confused. Is the minister saying that she believes, for this project, that the government assumption is not applicable and that the number of British Columbians employed will be higher?

Hon. C. James: As the member knows well, having been in this position, I think it is important to ensure, when you’re taking a look at revenue, in particular, for the budget, that you are cautious in putting in estimates and that you strive and encourage those numbers to grow. That’s certainly, from my perspective, the expectation that I have, that we have put in an average, generic LNG project. But I believe that with the work that LNG Canada is doing, with the work we’ll do as government, you will, in fact, see a larger number than that.

M. de Jong: That may be so, and one hopes, but I’m advised that the number that the minister and the government received from LNG Canada is, in fact, lower. Can the minister confirm that?

Hon. C. James: The estimate that is listed here is the estimate that we expect for our numbers and our assumptions.

M. de Jong: That’s understood. My question, though, relates to the…. This is all, apparently, built around a remarkably happy, trusting relationship. My question is specific, and I won’t be cute about it.

The government is projecting, the minister is projecting, 55 percent of the labour to be British Columbians and 45 to be non–British Columbians on an average, generic project. My information and advice is that LNG Canada provided different numbers and that those numbers are 35 percent British Columbia labour and 65 percent. The minister has got a photocopy of my notes, so she can see where I’ve made the scrawl. Is that correct?

Hon. C. James: I think what the member is referring to is the number that I talked about a couple of questions ago, which was an estimate for revenues. So in discussions and in our estimating revenues and the revenues that would be coming into government, we worked with LNG around that. We were very specific, as I mentioned earlier, and very conservative — specifically conservative — in estimating revenues. So that’s the number that the member, I’m guessing, is referring to.

[4:50 p.m.]

M. de Jong: Well, I said the number I’m referring to, and it’s 35 percent British Columbians versus 65 percent non–British Columbians.

Two things flow from what the minister has said. The first is that she appears now to be saying that for the purpose of estimating revenues, she is not relying on the 55-45 forecast; she is relying upon 35-65 and describes that as prudence. But I go one step further. I say that that number is not simply the product of ministerial prudence, with which I am somewhat acquainted, but also the product of advice that she and the government have received from LNG Canada. Am I correct?

Hon. C. James: Again, I’ll come back to the discussion that we’ve already had, which was…. In taking a look at revenues, in taking a look at the work we were doing together with LNG — the member is quite right that these are numbers that we worked on together with LNG — and in looking at our assumptions, we were very conservative in our estimates. I think that’s important.

As this project gets off the ground, as we continue to see economic indicators each year…. You obviously continue to look at the indicators that are there. LNG Canada’s letter makes it very clear in their employment plan that their strategy — a strategy that we negotiated with them and that we agree with, which is local first, which is ensuring that there’s support for Indigenous workers, to ensure that there are apprenticeships….

For the estimates around looking at what would be built into the budget for the project, yes, we were conservative, because we want to ensure that we are cautious as we go ahead in the budget. As I said, with the letter that’s there and the work that we’re doing as government, I am certain that we will see the kinds of expectations that you can see and that we have outlined in the generic project around the 55-plus percentage.

M. de Jong: Just a quick thing. The minister has done this a couple of times, where she has referred to LNG. Just to be clear, I think she means to refer to LNG Canada.

Hon. C. James: In some circumstances, I’m talking about generic LNG projects, and in some circumstances, I’m talking about LNG Canada.

M. de Jong: In this case — and something does turn on this — where she refers to these numbers and working with LNG, may I confirm that she is referring to LNG Canada?

Hon. C. James: Yes, you can.

M. de Jong: Well, we’ll maybe begin a bit of an interim recap here. It appears that what we have learned is that for the purpose of budgeting and anticipating revenues, the minister and the government are operating on the assumption that 35 percent of the employment generated through this project will be British Columbians. I presume that is partially significant because of where British Columbians pay their income tax — in B.C.

[4:55 p.m.]

And 65 percent will be non–British Columbians and pay their income tax somewhere else in Canada or somewhere else in the world. The minister points out that that is conservative, to use her term, and that the government actually thinks the number will be closer to 55 percent. Is it fair to describe 55 percent as the best-case scenario?

Hon. C. James: I think the important piece in all of this, and the minister is talking about assumptions, is that — and the member mentioned it — yes, we are being conservative in our estimates. Yes, this is the beginning of a very large project in British Columbia. Yes, we are going to be conservative in our estimates. I think that’s important. I think that’s prudent. I think that’s important budgeting. I think it’s important to be fiscally responsible, to make sure that we watch as this goes along, as the project goes along, as the training is put in place, as the jobs begin to be put in place, that we make sure that we use prudent estimates.

Again, I refer back to the employment strategy of LNG Canada that talks about the local hire first, that talks about the contractors being held to that same local hire first, that talks about targets for apprenticeships on site and how critical that is.

They have already invested $1.5 million in a training fund to be administered through B.C. construction companies to be able to provide for apprenticeship and apprenticeship trades training across the province — the thousandth recipient, for example, who just went through the fund, the 500th business that just participated. So I would suggest that proof is in the examples that we’ve already seen with the work that’s being done in the preliminary.

Do I believe that we will surpass these numbers? Yes, I do. I believe that LNG Canada has shown their commitment in the work that they’re doing, and I believe that that is to occur. But I also believe that when it comes to budgeting and comes to estimating the kinds of dollars that are going to be built into the budget, it is prudent to ensure that we are conservative in our numbers, and that’s what we’ve done.

M. de Jong: Okay. The minister is budgeting on the basis that 35 percent of the employment will accrue to British Columbians. She has made that clear. Documents are vicious things, because they are here for us to read. There are two columns. One is identified as the low-case scenario; the second is identified as the high-case scenario. In the instance of employment projections, the high-case scenario says 55 percent of the employment will accrue to British Columbians.

Does the minister agree with her own ministry’s forecast, recognizing that she’s budgeting on the basis of lower numbers? If she doesn’t, will she tell us the figure that she purports to substitute?

[5:00 p.m.]

Hon. C. James: As the member knows well, these estimates…. As the project will begin to expand, as we start to see the plant built, as I’ve talked about, the ramping up of jobs that will occur, there will be new numbers coming in. The forecast council will get together. They’ll take a look at growth projections. We’ll take a look at their assumptions. They’ll take a look at our assumptions.

You know, I find it a bit ironic that the member would challenge conservative budgeting around numbers. I think it’s an interesting debate and an interesting discussion. But I believe that being prudent is important. I believe that that is critical. Do I believe that this will provide thousands of jobs to British Columbians and that we have the opportunity to do that? Yes, I do. I wouldn’t be standing here otherwise. I wouldn’t be standing here otherwise talking about the opportunities that are here and the conditions that are in place around LNG Canada and the project that’s coming ahead.

Will there be new numbers? Will we continue to have this discussion next year at the budget time and the year after at the budget time? Yes, we will, because that’s exactly what economic assumptions do. They estimate, each year, what your revenues will look like. They use indicators, including our own assumptions and our own work. Certainly, the member knows well the experience and depth of individuals who work in our Finance Ministry, who provide that support and who provide that kind of support to whoever is in government and whoever is in place.

We are very fortunate, and the public is very fortunate, to have that kind of experience base in our ministry. They provide those kinds of estimates each year as we take a look at revenues. I think that, as I said, the public is well served in that regard. Then, as Finance Minister, to take a look and say: “Yes, we need to be prudent in the budget. We need to see how the plant moves along. We need to ensure that the work is being done….”

As I said earlier, the examples are already there with the work that LNG Canada is doing to show that they are serious about their employment plan, and we are, as well, as government.

M. de Jong: Well, I haven’t challenged anything. I’m all ears. I mean, truly.

Here is what we know. We know that not so long ago, the minister and her colleagues had very different expectations about what an agreement should include with respect to employment and procurement. They have come to a different conclusion through a different set of negotiations and believe that the objectives that they’ve laid out can be achieved through an understanding that the proponent here is trustworthy and good folks and that more, dare I say, formalized instruments of enforcement are not necessary.

We have also learned about what the government’s best guess is — best guess — at this stage of the game around employment with respect to this project. I don’t think I’m exaggerating to say that the minister was remarkably reticent to provide numbers that she has had. I guess the question, the obvious question that follows is: when was the minister intending to get around to share this, or was she?

I mean, I remember a day when the minister stood there — or stood here, actually — and said that the public deserves to know. The public deserves to know because we are granting someone access over a long period of time to a resource owned by British Columbians, and there are benefits. We actually agree with the government that there are some significant benefits that will accrue to British Columbians. Others have a different view of that, or may believe that the negatives outweigh the positives. We happen to think that, by and large, the positives outweigh the negatives. But I remember when the minister and her colleagues would demand…. The public has a right to know. I agree with that.

[5:05 p.m.]

Surely it is a legitimate part of the disclosure exercise for the minister and the government to say: “We think there are going to be 10,000 jobs generated through the construction phase. As a result of what we have negotiated, and our relationship with the proponent, we think somewhere between 35 percent and 55 percent of those jobs will go to British Columbians.”

If I have misstated that, then I invite the minister to stand up and say so. But I don’t think I have. I think that’s the upshot of what we’ve learned here today — that the government believes, with a number as low as 35 percent, informed by prudent budgeting and information they received from LNG Canada and their own number of 55 percent, that somewhere between 35 percent and 55 percent of the employment will accrue to British Columbians.

Maybe I’m wrong. Maybe I missed it. Has the minister shared that with anyone? Has anyone else been made aware of that? If I haven’t noticed it, then I apologize. But I wonder when the minister was going to get around to sharing that information.

Hon. C. James: I’ll just restate again, because I think that’s really the exercise that we’re going through here.

As the member knows, the numbers that have been public are 10,000 jobs during the construction phase, a thousand jobs permanent. There is a job strategy in place, agreed to by ourselves and LNG Canada, that speaks to local hire first, that speaks to a number of apprentices in each of those positions, that speaks to partnerships with First Nations and that speaks to investments on partnerships already made with First Nations and other businesses.

Do I believe that this will provide jobs for British Columbians? Yes, I do. Do I believe that this will provide quality jobs for people who want to work in our province? Yes, I do.

M. de Jong: I was going to suggest that it might be an appropriate time for a brief recess, but there may be a member with a single question relevant to this.

A. Weaver: I’ve been listening quite attentively, trying to get some information with respect to the jobs, because I have clearly witnessed the same language that has emanated from government, as well as LNG Canada. “We’re going to be hiring British Columbians.”

I know for a fact that right now Boskalis is dredging in Kitimat, and I know for a fact that Boskalis uses a Newfoundland company to bring in employees. That is a distance from LNG Canada, and I know for a fact that those employees are not from British Columbia. I know for a fact that those employees that were from British Columbia did not last very long on the Boskalis dredge because they were summarily fired for raising safety issues.

I come back to what the member for Abbotsford West was suggesting. Is the minister saying that she has no mechanism at all to ensure that any of these jobs are actually for British Columbia citizens other than the goodwill of LNG Canada because they said they’re going to try?

Hon. C. James: Thank you for the question. I think we’ve spoken about a great deal of this over the last few hours but happy to run through it again.

We have, as I said, a job strategy with LNG Canada, a commitment around the support that will be there for local hire first, including apprentices on this project. The job numbers, as I said, we have built in when it comes to assumptions around revenue — very conservative numbers. But we certainly expect thousands of jobs for British Columbians.

[5:10 p.m.]

I can’t speak to the specifics that the member raises. I’m happy to take that information and have that conversation. But as I said, the local hire first, including the requirements around contractors using local hire first, is a very important piece that is in place. The contractor is bound by that local hire first, which I think, again, is a very important factor in making a decision around whether local jobs are going to be in place.

Then, again, there’s the work that’s already been done in Kitimat and the number of locals — 600 people already working since December. Over 45 percent of those were from Kitimat alone, in that area. That’s, again, showing the support that needs to be in place for these jobs.

A. Weaver: I recognize that that’s been read in a couple of times to the record. My very specific question is this: is there a single mechanism that the government has to ensure that the jobs will be from B.C., yes or no?

Hon. C. James: The answer is the jobs strategy, put together and negotiated with LNG Canada and negotiated together, which requires local first, which requires the contractors to also be utilizing the local first, which requires apprentices and makes a commitment around the dollars that have already been put in place by LNG Canada.

A. Weaver: So we now have an LNG jobs plan. What are the ramifications for LNG Canada if that document is ignored? Does the government have any teeth to that document, yes or no?

Hon. C. James: I think the biggest strategy is making sure that this project is successful. That is a commitment that not only we have as government but obviously LNG Canada has when it comes to their investment. The fact that they have a number of contracts with communities across the pipeline strengthens that kind of commitment as well.

A. Weaver: Again, coming back to the question. The question was: does government have a single measure to actually ensure that British Columbians are hired, yes or no?

Hon. C. James: I think I’ve answered that question. Again, the commitment is the four conditions that we put in place. The commitment is the agreement by LNG Canada to meet those four conditions and the commitment to the people of British Columbia to follow through on that.

A. Weaver: With respect, there is a duty in committee stage to get answers, to get answers to questions. The question was very simple. There is a jobs plan. I understand that. Let us suppose LNG Canada ignores that. What avenues, what teeth, does government have that will ensure that LNG Canada does make sure they hire British Columbians first?

The reason why I raise that is that the minister said that what’s critical is the success of this project. How do you define success? Well, success involves triple bottom line. There’s a social aspect to that, and one of those is hiring British Columbians. Because both the minister and the Premier, and several others, were very proud about this — that it was going to bring 10,000 jobs.

Yet I come back to the question, and I think we are owed an answer to this: does government have any mechanism, yes or no, to ensure that LNG Canada actually hires local? This is not a difficult question, and in this chamber, it is a duty and a responsibility of government to provide a yes-or-no answer to this question. I’m afraid it is not acceptable to pivot off to some kind of loosely worded commitment letter, which has no legal standing. I would like to know what legal tools this government has to ensure that British Columbians are hired first, because they said they would.

I’ve offered you one specific example, the example of Boskalis, a dredger up there that uses a contractor to get labour in Newfoundland. That labour is coming from all across Canada and elsewhere. It is not coming from British Columbia, and I know that for a fact, because I know people who were fired for raising safety issues.

What metrics does government have to ensure that LNG Canada is hiring British Columbians?

[5:15 p.m.]

Hon. C. James: I know the member wants a simple yes-or-no answer, and I’m not being obstructionist. I’m being upfront with the member about the process that was utilized to come to our four conditions that had to be met by LNG Canada.

This was a back-and-forth process. This was a discussion around how important it was to meet the commitments, how important it was to reach these four conditions, how critical they were to us as a government and critical to British Columbians, we feel. I talked about the four conditions. One of those are jobs for British Columbians.

We did go back and forth around the letter. We did go back and forth around a strategy on jobs. We did go back and forth around the climate action and the importance of making sure that we address that in part of our CleanBC. We did go back and forth around First Nations and a real partnership with First Nations.

Again, on the jobs piece, the member has the copy of the letter. He will make his determination about whether that, from his perspective, holds LNG Canada to meet these commitments or not. But certainly, from our perspective as government, when you are taking a look at a project this large, when you are taking a look at the kind of investment that’s there, when you are taking a look at the reputation of the company coming in to do a long-term project in British Columbia, and when you’re taking a look at the fact that this project will not be successful unless the communities are engaged and taking part….

I think it’s part of the example that we’ve seen with the work that they did with First Nations along the pipeline. Again, we’ve seen many projects that have not come forward in British Columbia because they did not build that community partnership. They did not, in fact, engage the communities.

This is a very different project from that perspective. They have engaged the communities, and those communities will be critical for them to be able to be successful in this project. Therefore, as I said, we feel that the jobs strategy provides that support.

A. Weaver: Hon. Chair, I’m getting a little frustrated. I’ve asked a very simple question. What tools does government have at its disposal to ensure that the company follows through with its intention to actually hire British Columbians? I’m not asking for all the rhetoric around “my four conditions.” I’m asking for the specific tools that the government can use.

I’m asking the same question, and I recognize I’ve asked it several times. I have not got an answer to this question. I have got rhetoric about other stuff. The question is very direct and very simple. What tools does a government have at its disposal to ensure that the letter that they’re trusting LNG Canada to do is used to ensure that British Columbians are hired?

The minister can just say: “We don’t have any.” That’s fine. But I think she owes it to this chamber here to say what those tools are. Failing to do so, I think, frankly, is not what we’re meant to do at committee stage. We need answers to provide further guidance to the people of British Columbia.

Hon. C. James: I think that the biggest tool that government has is the success or non-success of the project. From my perspective, that is the biggest tool that is in place. In order to have the success or non-success of the project, it requires a relationship. It requires negotiations. It requires building that between the partners.

In fact, if you will speak to the Premier, I know he’ll also make those kind of comments around the work that that took to get to this place. The success of the project, from my perspective, and those relationships and the negotiations are the critical tools that government continues to have in this project.

A. Weaver: This is very frustrating, because now we have a circular argument. The success of the project is defined by bringing jobs to British Columbians, and the tools that the government has available to it are the success of the project. That’s a classic chicken and the egg. What is it? Is the project successful, by definition, because they’re bringing it in? Therefore, it must have people in B.C.? It just doesn’t make sense. Clearly, the only take-home message I can have from this exchange is government has no tools.

[5:20 p.m.]

What the statements are about hiring British Columbians is nothing short of unsubstantiated political rhetoric that, frankly, British Columbians should have cleared up. It’s quite embarrassing that this government would suggest to British Columbians that they’re going to be hiring British Columbians.

I’ve given you one example. The only example that I know of that is actually ongoing now, the dredging, where that company, Boskalis, is hiring a contractor in Newfoundland, the employees up there are not from B.C. Some of them are from Newfoundland, some from the oil patch, some temporary foreign from the Netherlands. And government has yet to provide any information as to how they’re going to ensure B.C. jobs.

But it gets worse than this. My final question on this: has the minister actually suggested that their four criteria were met? They never actually once, since prior to the 2017 election campaign, defined what those criteria were. What does it mean to say that it fits within our climate targets? What does it mean to say that truth and reconciliation has been looked at? What does it mean to say that it’s a good deal for British Columbia?

In essence, the question is, then, this. Why has the minister not, at any point in the last two years, at any time, ever once put up metrics that would say: “These are how we’re defining success, and these are what we’re looking for to ensure that our four conditions are met”?

Frankly, all we’ve been told is: “Trust us.” That is clearly what government’s wanting, for us to trust them. But it’s very difficult to do so when I look in this document here, which I won’t use as a prop. I’ll just read the title, operating performance payment agreement. I don’t see any requirement in there. When I look at some of this other stuff, LNG investment fiscal framework, I don’t see a requirement there. I see a lot of rhetoric.

The question, coming back to it: what are the metrics? What metrics did government use to actually determine that their four criteria were met? Simple.

Hon. C. James: Thank you very much to the member. The member talks about what success will be. From my perspec­tive, yes, success is meeting the four conditions. The Pre­mier laid them out and talked about the four conditions. We will be held, as a government, accountable for meeting those commitments to British Columbians, as we should be — as we should be and as the company should be. That’s going to be critical.

I know the member was directly involved in the discussion around LNG emissions and including LNG emissions in our CleanBC program. Again, I expect the member to hold us accountable for that. I expect him to ensure that that occurs and that the discussion occurs.

Fair return. Again, I expect members to ask questions about whether we believe that’s a fair return or if they have other ideas or other approaches.

Partnerships with First Nations. Certainly the expectation around the elected bands along the route that have signed on to the LNG agreement and the work that continues to be done, I think, again, talks about how we will be successful.

I think it is important to come back to those four conditions. I know the member felt that that didn’t provide him with an answer, but I think it’s critical and important, and I think we will be held accountable as to whether we’ve met those conditions or not.

A. Weaver: Well, this is the problem I’m having. It is impossible to hold government to account when they’re not forthcoming with the answers to very simple questions that I’ve articulated.

The four criteria, which, frankly, are nothing more than an election slogan, are this:

(1) Proposals must include express guarantees of jobs and training opportunities for British Columbians. Well, we’ve heard today, from very extensive questioning from opposition and my further attempts to get something, that the government has no ability — clearly, no ability at all — to guarantee any British Columbians any jobs. That clearly was never met. You could not have met criterion No. 1, because you’ve got no requirement of any jobs.

(2) Proposals must provide a fair return for our resource. Well, given that government has never once articulated since two years now what a “fair return” is, how do we know that we’ve got a fair return? I’ve suggested, through the analysis of the deep-well credits in second reading and elsewhere and through what I’ve described as a generational sellout and the giving away of this, that and the other in a desperate attempt to land what Christy Clark couldn’t, that, in fact, you’re not getting a fair return, because not once has government articulated what that return will be.

[5:25 p.m.]

We haven’t seen the numbers, and it’s worse than that. We can’t even get information on simple questions like: “What is that $23 billion going to…? Where is it coming from?” We get rhetoric. We get no substance. So, clearly, criterion No. 2 was never met, because government actually hasn’t articulated what a fair return is.

(3) Proposals must respect and make partners of First Nations. Well, we know that there are some, quite a lot, that have partnerships. Wet’suwet’en — still some issues. But government there abdicated its responsibility and essentially left it up to LNG Canada to deal with the Wet’suwet’en Unist’ot’en Camp. And what can they do? The only thing they can do is seek injunctive relief and get the police in there to move them. The government clearly did not do what you would expect, on a leader-to-leader, government-to-government negotiation point of view, so I’m not so sure that No. 3 is being met.

(4) Proposals must protect air, land and water, including living up to our climate commitments. Well, I’ve seen no analysis from government as to the air quality within the Terrace-Kitimat valley. As you know, Rio Tinto Alcan just did a substantive upgrade to their resource facility — increase sulphate emissions, reduce greenhouse gas emissions. There’s a very real problem in terms of the air quality in that watershed. I’ve heard no discussion. I’ve heard no criteria, no check. “We can do it.”

I do recall a report that was written a number of years ago where the Liberals explored what the consequence to the air quality in the valley would be, and it was very troubling. It was very, very troubling — a number of years back. It was, actually, in terms of…. It was. You probably don’t remember it. I looked at it very well. I know the author of it.

And living up to our climate commitments — well, that has yet to be seen. Certainly we know that we can only get, with all of the policies that have been identified, just 75 percent of the way there. So how can you say it’s fitting into living up to our climate commitments when we still haven’t articulated the other 25 percent of getting to those climate commitments? That was the basis of my reasoned amendment.

What’s happening here today is a charade. It’s literally just a charade. We have no substantive, quantitative analysis of any of these criteria. We’re told: “Trust us. We’ve met it.” We’ve clearly tried to find what metrics government is using. They haven’t. It’s embarrassing.

I go back to my original second reading speech, and I think what happened is that LNG Canada walked in to the new government and said: “We’re out of here unless you do this.” They said: “What do you want us to do?” They said: “This, this, this, this, this.” Out of their depth in negotiations, completely out of their depth, they said yes.

LNG Canada has got a good deal here. I’m not so sure you can actually articulate how British Columbia has, and we haven’t heard a single answer to any of the questions that I’ve raised. This is very troubling.

With that, I’ll leave it. I know that the member for Abbotsford West was suggesting a break, and I’m perfectly open to such a break now as well, if the Chair believes we should do so.

Hon. C. James: I’ll just respond to the question, and then…. I know that the members want to take a break.

I respect the member in bringing forward the issues. I respect the member. We know that our Green partners are against LNG development. We understand that, and I think the member is very articulate in raising his issues and concerns. But when we take a look at the success in meeting the four conditions and meeting our commitments to British Columbia as a government that looks at how we balance our promises, economically, socially, and environmentally, and our commitments to reconciliation, I in fact am very proud of the four conditions that we’ve put in place and the work that we’ve done to be able to address those.

Jobs for British Columbia. Again, I come back to the jobs strategy around, around “locals first,” around the support for apprentices on the project. When it comes to partnerships with First Nations — 20 bands, all of the bands, elected bands, along the route that have signed on, that have partnerships, that see this as an opportunity for economic development and for growth for their communities and opportunities for their members to be able to be working.

The fair return for British Columbians — $23 billion when it comes to support for programs and services here in British Columbia, including action around climate. I think it’s critical. And I know we’ll get a chance to talk about those, as well, as we go through this process and other processes through the budget.

[5:30 p.m.]

Protection for our air, land and water. The fact that we required LNG emissions to be included as part of CleanBC and brought forward a commitment around CleanBC — over $900 million in the budget to commit to environmental protections — I think speaks to our commitment as a government around addressing environmental issues and the fact that we’ve been able to sit down with a company, a large company, and get to a final investment decision that recognizes how important that is and requires us to live up to this.

Do I expect the member to continue to raise concerns and continue to hold us accountable for this? Yes, I do. I expect that that’s exactly what the member will do and what other members will do and what the people of British Columbia should do as well.

With that, Chair, will we take a ten-minute break?

The Chair: The member has a question. Then we’ll have a break.

A. Weaver: A brief follow-up because the issue of $23 billion was raised again. Could the minister please articulate how that $23 billion is calculated and not just generally but actually specifically? That number has been batted around a lot. It used to be $40 billion; now it’s $23 billion. Despite asking a multitude of times, not once have I got an answer as to what makes up the $23 billion and where that number came from.

[J. Isaacs in the chair.]

Hon. C. James: I’m happy to answer that question when we come back from recess.

The Chair: The House is recessed for ten minutes.

The committee recessed from 5:31 p.m. to 5:44 p.m.

[J. Isaacs in the chair.]

Hon. C. James: The member asked a question around the $23 billion and where the $23 billion came from. We did offer a briefing, an opportunity to go through that, but I know the member wasn’t able to make it. I just wanted to let the member know we can provide that opportunity, the documents around the generic LNG project and the highs and lows that we’ve been talking about. That information will be public. It’s going to go up on the site, so we can provide an opportunity for the member to get the materials and then ask questions as we go on. I expect committee stage will continue, and there will be an opportunity for the member to ask questions, if that works for the member.

[5:45 p.m.]

M. Bernier: Thanks to the minister. As we continue on through some of this questioning here for the committee, I just want to recap a little bit from before the break. Obviously, a little troubled by the fact…. We’re hearing that, from a jobs perspective, possibly less than half of the jobs will be for people here in British Columbia, which is completely contrary to the comments that were made by the minister and the now Premier when they were on this side of the House, making sure that they would have contractual obligations binding a government and a party to making sure those jobs were all here in B.C. or as many as possible.

That obviously raises some flags that we have to not only explore, but I think it’s important that this House, and people, understand that as we’re moving forward. I guess my cynical comment would be that that’s why the Minister of Jobs was not one of the signatories on this agreement, because, obviously, it wasn’t something that was needed.

One of the questions, I guess…. As we’re going through the forecasting around the revenues — first of all, whether it’s jobs or royalties, etc…. Can the minister, again for the House — and my apologies if she’s already done this — remind us if this is, on these initial projections for this project, for two trains, or is it for four?

Hon. C. James: Two.

M. Bernier: If it’s two trains…. When we talk about the jobs…. Before I get to a few other things, then, when we look at the downstream or the operational jobs, I guess we could say, specific to a project…. Can the minister maybe share with this House, when they’re looking at projections after a completed project, again, what those operational jobs would look like under a two-train system?

Hon. C. James: As we talked about earlier, 10,000 jobs during the construction phase and 1,000 jobs permanent, after the facility.

M. Bernier: As the minister has done, I assume, the forecasting projections around those 1,000 jobs, are those B.C. jobs, those 1,000 jobs, in operations? Or are those using the same percentage, possibly anywhere around the 35 to 55 percent on an average LNG facility, that we’re talking about? Is that what the minister is thinking will be the same for the operational jobs?

Hon. C. James: I just wanted to correct the member. When the member was talking about the job numbers, we were talking earlier and having the discussion around the numbers. Remember, we were talking about assumptions that were built in around revenue that was going to be built into the budget, not the jobs. The job numbers, as the member knows, are much higher. So I just wanted to correct the member there.

Then again, on the 1,000 jobs in permanent…. After the facility is permanent and in place, after construction, certainly, I think LNG Canada, based on the job strategy that they’ve worked out and negotiated with us, presumes that those jobs will be British Columbians’, as we do.

M. Bernier: Thank you, again, to the minister for that. As the minister knows, I have a little bit of understanding on this file, after working on it for years.

[5:50 p.m.]

One of the questions, I guess, I have around that is when we look at a projection built in of 1,000 possible jobs. The minister is saying that those are hopefully all here in British Columbia. What determination can she share with this House — maybe shared with her that she’d be allowed to share — that would be broken down between upstream and downstream? I know how many people on average it takes to run a plant, and it’s not 1,000. So I’m trying to figure out where these numbers come from.

Hon. C. James: I certainly know that the member has spent a lot of his time and energy on this project — on these projects, on LNG — and certainly on oil and gas in his region. I know he has represented his community well.

The 1,000 jobs is an estimate. It’s an estimate including upstream, downstream and pipe.

M. Bernier: I guess I should have actually started off, first of all, with the caveat of…. The minister can acknowledge and appreciate how important this is — for this project or any project like this — for not only my region but across the north. It stretches on. Myself and the member for Peace River North, of course, hear loud and clear from people in our region the concern that we have for jobs.

I just want to dive a little bit further into what the minister just said, though, because we already have thousands of people working in the upstream. So the numbers aren’t quite matching up. Because if we’re saying there are going to be 1,000 operational jobs on average, afterwards, when we already of thousands of people working, does that mean there’s going to be a loss of jobs? That wouldn’t make sense. I’m trying to kind of compute that in my little head.

Hon. C. James: I just want to confirm, again, that we’re talking about this project. These are estimates worked on, again, with LNG Canada, with our generic LNG projects, taking a look at the projects. For this project, the estimate is 1,000 jobs. Certainly, we know right now there are a number of people working on upstream. Capital construction is going on. That kind of work has already begun. But certainly, that’s the estimate, from the work that we’ve done, for this project.

M. Bernier: Okay. I can appreciate that, depending on how, I guess, the companies involved would be booking out employees on a specific project to upstream — how they would be doing that. Of course, it still goes back to the same crux of the issue of…. There’s nothing in here binding the company to use — whether it’s upstream, downstream, during the pipeline — through any contractual obligation….

I appreciate, and I’m glad to hear that the minister trusts and has got a good working relationship with the company.

[5:55 p.m.]

It is a little disappointing, on the flip side, to think that when she sat on this side of the House, she didn’t trust the company, by the comments that she was making. It’s great to know that once you’re a minister, you have an epiphany, and trust comes at that point.

I’m not trying to discredit the comments too much, of what the minister’s saying, but just want to acknowledge the fact that it is troubling, obviously, for someone like myself and people before me, who are working in that industry, represent ridings that are really founded…. A lot of the jobs right now are because of this industry. I appreciate we’re in a position now that looks like we have a government that wants to see this move forward, even though that’s not the position they were in before.

Now, I do want to just, then, maybe move off of jobs a little bit. I’m just wanting to know from the minister, from an upstream royalties perspective…. We already heard the minister say that on the forecasting that’s built in onto a two-train…. We assume that’s for the 40 years, but we know that that could change, and we’ll probably have further questions about that after. On the royalties, can the minister share with the House their assumptions, as they’re doing the forecasting on a project like this, on what the royalties would be, built in over this project time period that the minister’s talked about?

Hon. C. James: The member asked about royalties. Again, this is based on our estimates around a generic two-train plant. I think that’s important to just state. The low is 5.77, and the high would be 7.21, just to give you a rough range that you could be looking at for royalties.

I think the other important piece, and I mentioned this in part of our debate and discussion, is that these numbers…. Obviously, the royalties come after the plant is in place, so these are not revenues that have been built into the budget at this point.

M. Bernier: I mean, the minister knows there are obviously some royalties that flow right now on existing infrastructure, so obviously, we can use some of those numbers when we’re looking at forecasting for generic, if or when a plant happens.

[6:00 p.m.]

Thinking of that, though, as we’re going forward…. Obviously, the minister and government has touted that there’s going to be quite a few billions of dollars of benefit flowing to the province, and a big portion of that, as the minister just said, is part of the royalties.

Can the minister explain, maybe as they’re doing that forecasting, what the projections are for the natural gas itself? Either an MMBtu or a gigajoule, whichever terminology she wants to use, for what we know it’s at right now and what the projections…. Obviously, there must be something built into projections — that it’s going to either go down or up.

Hon. C. James: I’ll give you the Budget 2019 estimate, because I think that’s probably the place to start. For ’19-20, it was 72 cents per gigajoule, and the 2021-22 price — so if you look at the completion of the plant — was 99 cents per gigajoule.

M. Bernier: Just a question as we move forward, specifically, with any LNG project…. Let’s talk about, I guess, where we can on this specific one. As we’re going through assumptions on gas usage, gas supply, where…? Obviously, there’s a difference, as the minister would know, when you’re looking at royalties of gas coming out of the ground compared to what gas is used from an LNG plant. So from a specific facility, when we’re looking at some of the revenues through the charge-out accounts on gas usage, where would the metering station…? I know where it will be, but can the minister acknowledge where a metering station will be for an LNG plant?

[6:05 p.m.]

Hon. C. James: The inlet meter is just a few kilometres outside the fence of the plant. That’s the only meter.

M. Bernier: The whole thought process, then, when we’re looking at this, is that we’re going to be metering the gas going through the plant, not necessarily the gas that’s coming out of the ground and going into a pipeline from British Columbia. Is that what the minister is saying?

Hon. C. James: Certainly, the member asked about our royalties. We’ll be charging our royalties when the gas first changes hands in the upstream.

For LNG Canada, they’re still working through what that looks like, what the specifics look like. They’re working through their upstream arrangement, so details to come. But from our perspective, when the gas first changes hands in the upstream, that’s where we’re charging our royalties.

M. Bernier: Can the minister acknowledge for this House, then…? I guess when we’re talking about the specific agreement we have here in front of us, which hasn’t been tabled….

[6:10 p.m.]

Obviously, there was modelling done, forecasting as well, on where that gas was coming from. Is the assumption, when the modelling was taking place, that this gas was coming from British Columbia?

Hon. C. James: Thanks for the question. You talk about estimates and the assumptions that are used. It’s estimated 60 percent of the needs will come from, in fact, new development from B.C. So 60 percent is expected to be B.C. new development.

It’s also expected a shift that we’re starting to see…. I’m sure the member knows this well. It’s expected that some of that 40 percent, in fact, could be exported gas right now that will actually come back to B.C. to fill the needs of this new project. You could, in fact, see that some of the existing B.C. gas that’s being exported could actually come back to B.C. and be utilized in B.C. as part of this project as well, of that remaining 40 percent.

M. Bernier: We did find earlier, as we were exploring around the jobs, there was nothing contractually obligating the company to use B.C. hire. The minister said she trusted them. Are we using the same mechanisms, I guess, of trust that the company will be using B.C. Gas? Or is there something that the minister can table that’s contractually obligating them, as the project goes forward, that they must use this 60 percent that she refers to or more?

[6:15 p.m.]

Hon. C. James: Again, I know the member will know this from his community and the area he lives in. But if you, in fact, take a look at the partners…. I think the biggest plus in all of this is that if you take a look at partners in LNG Canada, they’ve already made major investments in our province. These are partners who are here, who are working, who’ve made commitments — made commitments with dollars, with purchases, with projects — so are certainly looking to maximize that opportunity for themselves as well as for British Columbia.

I think 60 percent, again, is an estimate. But we expect it’s a reasonable estimate when you take a look at the development that’s already occurred with these partners in our province.

M. Bernier: If we’re only talking about 60 percent…. Of course, we thought we would be trying to shoot a lot higher, considering we have more than enough gas within our reserves within either the Montney or the Horn, as they’re developed out, or the lower Montney, which hasn’t even started yet.

When you look at five of the six partners part of LNG Canada, all but one, I think, have their Canadian headquarters based in Alberta, in Calgary. Is there anything stopping these companies from using Alberta gas and inter-tying it in to B.C. and sending it off to Kitimat?

Hon. C. James: Again, I know the member knows this. But head offices don’t determine where the work occurs. Most of these partners, as the member knows, in fact, have projects here, already, in British Columbia, already have the work going on. From their perspective, it wouldn’t make economic sense to be able to look at moving all of those investments and all of the work they’ve already put into British Columbia into Alberta.

From the track record and from the existing investments that have been made, it certainly points to utilizing B.C. gas. The member talks about the 60 percent and hoping we strive for more than 60 percent. That certainly would be the expectation. That’s why I mentioned the other 40 percent. We’re seeing exports right now. We’re seeing a shift of those exports back to British Columbia, which, in fact, I think, will provide more opportunity, as well.

M. Bernier: The reason why I’m, obviously, exploring this…. I don’t critique, too much, the minister’s points of these companies already operating in my area. But in representing my area, I also have to, hopefully, get on the record for the minister to acknowledge that they bring a lot of Alberta workers into my area — those people who are not paying taxes in British Columbia, who are part of a future, probably, LNG expansion in the province or any upstream development that takes place.

[6:20 p.m.]

When you look at the amount of money that’s being generated or, I guess, jobs being generated…. I look at the numbers that we heard earlier, of only half in B.C. Obviously, quite a few will be coming in from Alberta or other places. I think it’s also important to highlight, from the minister’s answer, that there’s nothing, I assume, stopping these companies from also, if the price is better for whatever reason, using Alberta molecules, using Alberta gas.

If there’s some kind of incentive that a new government…. If there’s a change in government in the next couple of weeks in Alberta, what’s stopping them from incentivizing more drilling activity with better royalties through Alberta, even though that could be similar companies drilling and putting that gas into pipelines into British Columbia? How do we keep track of that? Is it built in within the plans here to have provincial border metering, which some organizations do already? Is that something that will take place?

I’m curious on how this is going to build into all the forecasting and revenue projections if something changes. Again, what’s stopping a company from doing this?

Hon. C. James: I think the member certainly knows that we have trade agreements in place. I think that the member lives close to the border. He would know that very well — that we have trade agreements in place and can’t track molecules when it comes to natural gas.

The entire reason that we’ve been working on this agreement, the entire reason that we put the four conditions forward and that we looked at competitiveness of British Columbia and did the work…. As I said at the beginning of our debate, there was work that was done by the previous government. That’s work that obviously informed. We took a look at today’s reality and looked at the competitiveness in today’s reality and then looked at our other conditions and looked at what would attract an investment to British Columbia, what needed to be put in place. That has to do with the credit that’s in place. It has to do with the PST measures that we talked about.

The fact that we have a final investment decision shows that that kind of work and those kinds of negotiations and the competitive agreements that we put in place had success. We do have a final investment decision here in British Columbia, which will be a benefit to all British Columbians. From my perspective, I think the major investments that the companies already have here in the province and the fact that they’ve done a final investment decision speaks for the work that was necessary and needed and done and successful to bring this project to British Columbia.

M. Bernier: I think, as the minister knows and it’s important to highlight again, obviously, the hope is that we achieve those goals and do even better.

This is not an exercise to point out completely what the options are to the company but more to highlight the fact of the position that we’re at here in the House right now, through committee stage. Because if you look at when the now Minister of Finance, the now Premier and others were on this side of the House, they were very, very specific on the fact that we should be looking at contractual obligations to bind companies to ensure that these kind of things did not take place.

[6:25 p.m.]

One of the concerns that I have, specifically to the upstream…. When the minister is talking about 60 percent, it leads me to thinking of some of the quotes. The now Minister of Environment is on record saying how fracking is dangerous and needs to be stopped here in British Columbia. He’s now the Minister of Environment and one of the signatories to this.

Obviously, that is one of the concerns that we have to acknowledge in this House. We have people that when they were on this side of the House have made very pointed comments on their thoughts of LNG. The now Minister of Agriculture saying that the human race is going to become extinct — it’s one of her quotes — because of LNG…. And now these are ministers of the Crown that are going to be decision-makers, some of them signatories, moving forward.

Obviously, this is a situation that needs to be talked about, because the opinion of natural gas and LNG on this side of the House has not changed. Our drive to try to see successful LNG projects in the province of British Columbia has not changed. But it’s a little concerning when we hear from the government that the things they’ve said on this side are no longer binding, that it’s all in good faith and they want to trust the company.

I’ll probably just end and stop there, noting the time. But I’m assuming the minister might want to get up and say a few things before that.

Hon. C. James: You know, I appreciate the member’s role. I appreciate the member is going to bring those forward, as he should. He’s a member of the opposition. It’s his right to bring forward those issues and to raise the concerns and the issues on behalf of his constituents as well. That is his job, and I expect that he’ll do his job well.

I also think it’s important to recognize that — as I said at the very start of our debate today, at the very start of committee stage — we ran…. Through an election, we presented to the public our four conditions for LNG: to ensure that we provided for addressing climate action — and we’ve done that; to ensure there was a fair return for British Columbians; to ensure there were jobs for the people of this province; and to ensure that we had those pieces in place and a true partnership for First Nations. That’s exactly the work that we’ve done.

While I appreciate the member is going to do his role, I think it’s important to acknowledge that we in fact ran on that very clear framework. We brought that framework forward. We’ve negotiated with LNG Canada, which brings us to the debate today. I know we’ll have further questions. I’ll look forward to it.

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

Motion approved.

The committee rose at 6:28 p.m.

The House resumed; Mr. Speaker in the chair.

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

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

Hon. M. Farnworth moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:29 p.m.