Fourth Session, 41st Parliament (2019)
OFFICIAL REPORT
OF DEBATES
(HANSARD)
Tuesday, May 7, 2019
Afternoon Sitting
Issue No. 250
ISSN 1499-2175
The HTML transcript is provided for informational purposes only.
The PDF transcript remains the official digital version.
TUESDAY, MAY 7, 2019
The House met at 1:32 p.m.
[Mr. Speaker in the chair.]
Orders of the Day
Hon. M. Farnworth: In this chamber, I call continued debate on the estimates of the Ministry of Finance. In Committee A, I call continued debate on the Ministry of Education. And in the little House, Committee C, I call continued debate on the estimates of the Ministry of Agriculture.
Committee of Supply
ESTIMATES: MINISTRY OF FINANCE
(continued)
The House in Committee of Supply (Section B); J. Isaacs in the chair.
The committee met at 1:36 p.m.
On Vote 25: ministry operations, $265,327,000 (continued).
S. Bond: Good afternoon, Minister, and to the staff. We’re going to pick up sort of where we left off, because it’s a really critical point, from our perspective. As we were discussing the budget, one of the things that…. The minister — this is no surprise to her. We are very concerned about the sustainability of the budget when we look at spending patterns, the growth of debt, and we’re also concerned about risks. Certainly one of the significant risks is related to the financials at ICBC. That’s not a point of contention. It doesn’t matter where you sit in this House; people are worried about that.
What we know is that if you take the loss that was experienced in six months at ICBC and you extrapolate that over an entire year, ICBC, as late as November, was forecasting a loss of only $890 million, 85 percent of what they predicted in February that they would lose.
So we have ICBC basically saying to the Finance Minister: “Oh, guess what. We’ve lost 85 percent of what we said we were going to lose in an entire year, and we did that in six months.” Our question really gets to the heart of: how seriously did the ministry and the minister take this incredible change and the concerns that were being…? From our perspective, that would be something that would be pretty, pretty significant.
The question is a straightforward one. We’ll start with this one. Did the minister meet directly with the CEO, the president, with anybody at ICBC, to say: “I expect an explanation as to why this spending does not line up. And when I’m getting that explanation, I want to know what the reasons are for that differential”?
Hon. C. James: I’ll just reiterate again for the member. The member talks about concerns with ICBC. The member will know from the budget updates, from the budget that was tabled, that ICBC was a major risk, identified in the budget documents as a major risk. It continues to be a concern, as I’ve raised, and listed as a risk to our fiscal plan.
It was not a matter of myself as Minister of Finance going to tell the Attorney General what was going on. It was the Attorney General, myself, all of government, Treasury Board, our staff, who have been spending time doing the work that I identified before lunch — doing the work of taking a look at claims coming forward, taking a look at trends, taking a look at assumptions, stress-testing the assumptions coming from ICBC, working with their actuarial team and forecasters, reviewing line by line the budgets, taking a look at the challenges.
This was not a matter of the Finance Ministry or the Finance Minister coming in and saying to ICBC: “We need to get a handle on this” or “We need to take a look at the challenges.” This was, in fact, an issue that was raised by the Attorney, raised by government and worked on by everyone in all departments, to be able to address the challenges that we were left with.
S. Bond: Well, thank you. I certainly did not imply, and would not mean to, that I didn’t think work was not going on. I know firsthand that work was going on. It has been for a long time. To suggest otherwise would be inaccurate. My point is simply this: at the end of the day, I fully understand the jurisdictional responsibilities of ministers, and I understand what the Attorney General’s role is. But this minister booked a significant transition and transformation at ICBC in her budget, yet obviously, the answer is no. She didn’t meet directly with the CEO or with anyone else over there to basically say: “This number is unacceptable. How on earth are you assuring me that that number can be capped?”
In fact, it was a major problem — 85 percent of what they said they were going to experience, they managed to do that in six months. Yes, I understand work is being done — I’ve been on that side of the House — but I also know that for this minister, ultimately, the buck stops with her on the financial side.
I have two final questions before my colleague moves on to other issues with ICBC. The minister has said repeatedly that they meet with the executive at ICBC. The Finance staff — I know well — go over the forecasts. Were they comfortable in November when it was discovered that the year-end forecast was $890 million? Were they comfortable with ICBC’s explanation, first of all, of how that happened and of how on earth they were going to stop the continued growth of that number? Secondly, did the minister then go to the Attorney General and say: “We have a problem here that’s bigger than anticipated. What are we going to do about it?” Did that conversation take place directly?
Hon. C. James: The member asked whether I was comfortable, as Finance Minister, with the loss that we were seeing at ICBC. I can tell the member that there wasn’t anyone across government that was comfortable with the numbers we were seeing, including the Attorney General, including myself, including the Premier and including all of our government. No one was comfortable with the kinds of numbers we were seeing and the kinds of losses we were seeing.
That’s why ICBC has been included as a risk. That’s why we built prudence into the budget. That’s why, in fact, you see the forecast allowance increase between Q1 and Q2, from $350 million to $950 million. Again, knowing that there were continued challenges, that is one of the tools that I have as Finance Minister: to build in that kind of prudence and to make sure that we were doing that tracking.
I’ve already mentioned, but I’ll mention again for the member, that not only did I meet with the Attorney, not only did we meet with Treasury Board, including the president of ICBC, we continued those conversations — not simply at the staff level but at the political level — to ensure that we were having conversations about the work that needed to take place and the challenges that were coming in.
Not anyone across government was comfortable. We continue to do that prudence and that good work when it comes to monitoring the information on ICBC — working together. I think that’s the other piece. The member spoke about it: “Did you go and tell the Attorney General? Did you go and tell?” There was no need to. This was an issue across government. This was an issue for the Attorney General, for myself, for the Premier and for the government, as I said.
T. Redies: Minister, we’ve been talking about the November results and the forecasts for year-end from November. I’d now like to roll forward three months to February 2019, which was actually eerily similar to what happened in February 2018, with respect to ICBC results and the actual results being well beyond what was forecast. In fact, in February 2019, the ICBC announced it had lost $860 million for the first nine months, and now it’s forecasting a loss of $1.18 billion for fiscal 2018-19. Perhaps not so surprising, the new forecast is very similar to the extrapolated 12 months’ potential loss I spoke about earlier, based on the second-quarter losses of $584 million.
On this basis, Minister, it appears there was never any hope that the company could keep losses to $890 million for the fiscal year-end. Now, going back to the eerily similar way that this all rolled out in 2018 with fiscal 2017, in September 2017, the corporation forecast that it would lose $225 million. It was then increased to $364 million, as of November 2017. Then, lo and behold, two months later the company came clean and indicated it would lose $1.3 billion for fiscal 2017-2018. In February 2018, ICBC said it would lose $684 million for fiscal 2018-19, then $890 million in November. But now it’s going to lose $1.18 billion.
Over the last three years, the company has lost $3½ billion, and not one of the company’s forecasts have even come remotely close to actuals. Minister, on this basis, based on all these questions — you can see the concern on our side — does the minister have any confidence in the ability of ICBC and its management team to meet its forecasts?
Hon. C. James: I think there were a number of pieces that were in place. I guess I’ll start off with the review of ICBC when we came into government and the important review that was there.
It was very clear that ICBC was in a very vulnerable state, that there were challenges with that organization, that it was in need of change and that there was not a road map to be able to address that change — changes that probably should have happened years ago and hadn’t occurred.
As I said, and I know the Attorney has said as well, this is not a quick fix. As you know, there are past claims that come forward, so there are issues that have to be addressed from previous claims. It is going to take time to bring stability. But am I confident that there is a road map in place that will begin to address those challenges that were left us? Yes, I am.
When you take a look at accident claims flattening, when you take a look at the suite of measures in product reform, in addressing the increase in claims and the changes that we have made — yes, I believe those measures will begin to address the challenges that were left us.
T. Redies: I’m not sure if we’re talking at cross-purposes with the minister. I understand that there are changes going to be undertaken at ICBC, but one thing that for sure has been happening is that there has been a continuous failure of ICBC management to actually forecast even remotely close what was actually happening at that company. Well, not to belabour this…. As a former CEO who was responsible to a board, I can’t imagine going through almost eight quarters where I had continually missed forecasts and not anything happening with respect to that.
What we have here…. It’s the same process, it’s more or less the same people, and they’re delivering forecasts which, frankly, don’t seem to be worth the paper they’re written on. Again, I guess my question to the minister…. In a situation where ICBC is forecasting that they’re going to break even this year, more or less, after losing $2½ billion over the last two years when they said they were going to only lose $900 million — and I use “only” with some degree of trepidation — how can the minister be comfortable with the current management team, the forecasting process and whatever review process is going on with the Finance Ministry?
Hon. C. James: I think we’ve canvassed this, but just to reiterate again for the member. As the member knows and, certainly, as her colleague, I’m sure, is informing her, this is a complex organization and a complex process that has to do with both actual results as well as actuarial estimates. In doing so, there are issues that come forward when it comes to claims and claims being settled that bring volatility to the forecasting that comes in.
Our job at Finance is to ensure — as we do, as I’ve talked about — and to sit down, as the quarterly reports come in, and to take a look at the estimates that are coming forward, take a look at the suite of measures that have been brought in. As I said, one of the biggest volatilities are claims — claims that are settling — and the product reform that is being introduced to be able to address those increasing claims.
I certainly feel confident in the staff that we have and the work that they’ve been doing together and in the work that they are doing to make changes in the organization, which does impact volatility in the forecasting. I certainly feel, as I said, confident that the product reforms will make a change.
Does that mean that we need to continue to monitor it and it continues to be a risk? Yes, it does. That’s why, in fact, we have built in prudence. That’s why you saw the forecast allowance increased, because of the kind of volatility that we see there. But are there measures being taken to reduce that volatility? Yes, there are.
T. Redies: Just so you know, I actually understand how complex a business ICBC is. I actually was responsible for running an insurance business in part of my career — much smaller, obviously, than ICBC. But I do actually understand the business. I sympathize with you because this is a complex issue, and these are challenging times for ICBC.
However, I would say that I think one of the main responsibilities of the AG and the Minister of Finance would be to make sure that there are people in ICBC who can actually deliver the results. Right now, that doesn’t seem to be the case, and nothing seems to be changing on that front.
I guess my question to the minister is: are you confident…? You’re confident in your Finance staff, and that’s well understood. But are you confident in the ICBC staff and their ability to deliver the numbers that your budget is based on?
Hon. C. James: Yes, I’m confident in the professional team that is working at ICBC, that works in the Ministry of Finance and that is working together to be able to address those challenges.
T. Redies: What happens if they miss their targets this year?
Hon. C. James: We will continue, as we’ve done, to work closely as we come up to quarterly. But it is why we have built in, again, because of the risks, because of the volatility in the organization and because of the changes that should have happened years ago and didn’t that bring volatility into the organization. We will continue to watch that, but this is why you saw the forecast allowance increased — to be able to address any of the future risks that may still arise as we wait for the changes that should have been introduced a long time ago. We wait for those changes to make the difference.
T. Redies: Could the minister confirm whether or not the CFO is currently also the chief actuarial officer at ICBC?
Hon. C. James: No, the CFO is not the chief actuary.
S. Bond: Let’s just pursue this again for a moment. The minister just said, in her own words, that she and the Attorney General and others have had a discussion about there being no quick fix here. Well, that’s interesting, considering this minister’s budget looks pretty much like she’s expecting a quick fix.
This minister has not met directly with the CEO or with others who have botched forecasts. In fact, I’m surprised that she can have any confidence in the work that’s being done and the promise of what would be considered a miraculous turnaround by anyone. This is an organization that is going to attempt to be in a more or less break-even position in one budget cycle, after proving to British Columbians and two governments, at least, that they simply have not met those targets.
Once again, to the minister, can she tell us whether or not she discussed with the current management team at ICBC whether or not they have the competencies necessary to meet this commitment? The reason we’re going to pursue this is because we have looked at a series of risks to this budget, and every answer from this minister has been: “We’ve built in prudence.” There isn’t enough prudence for every issue that we have raised in this House that presents risk to the sustainability of this budget. So this is a very serious and important question.
This minister’s watch, in terms of ICBC…. This isn’t about ten years ago or even five years ago. This is about this minister taking responsibility for the fact that this organization botched their forecasts in a pretty enormous way. And now the expectation is that, miraculously, over the course of one budget cycle, we’re going to go from an enormous deficit position to basically being break-even.
How on earth can the minister stand in the House today and say she has confidence that that organization and that staff can do that?
Hon. C. James: The member has raised concerns around ICBC and the forecasting and the losses we’ve seen at ICBC. Those are in fact the very same concerns as I’ve been talking about while we’ve been discussing this issue — that I have as Finance Minister, that the government has, that the Attorney General has around ICBC and the losses. And ensuring that we get that organization back into the kind of shape it should be as a public insurer — those are exactly the kinds of issues and concerns.
As I’ve talked about, the job of the Finance Ministry is to ensure that we are doing the kind of due diligence that needs to be there, that we are working closely with a professional team at ICBC. Those questions the member raises are exactly the kinds of questions that have occurred around Treasury Board, with the CEO of ICBC, with the board chair of ICBC, with the minister and with all of government — to ensure that we are doing everything we can, as I said, to try and get the organization back on track. That work will continue. That is the due diligence that needs to be there.
Again, I echo the member’s concerns around the challenges at ICBC. I couldn’t agree more. Those are challenges that need to be addressed. We’re working on addressing them. I have confidence in the people who are doing the kinds of changes that need to occur, and we will continue our due diligence. That does not let up — the kind of work that we do at Finance and ensuring we are doing the due diligence that needs to be there.
S. Bond: Simple question. Is the minister confident that ICBC will be returned to an almost break-even position this fiscal year?
Hon. C. James: I think it’s important to note a couple of things. ICBC continues to be listed as a risk in our budget, which I think speaks for itself. I continue, as Finance Minister, as all of government does, to be concerned about ICBC and making sure that things get back on track. I think that speaks for itself.
I think the fact that there are resources built into the forecast allowance again shows that we’re being prudent in our estimates. If the assumptions that are built in are accurate, yes, I believe we’ll be in the kind of fiscal position…. But again, they are assumptions. That’s why prudence is built in, and that’s why it’s important to make sure that it’s there in the budget.
S. Bond: With all due respect to the minister, every time we’ve raised a risk, the minister says: “We’ve got prudence built in.” Prudence can only go so far. This is an enormous challenge.
The minister herself said that it’s not a quick fix. Yet we see a quick fix in this budget. We see this minister standing in the House and suggesting that ICBC, despite absolutely missing all of the targets, blowing those forecasts out of the water for all kinds of reasons…. This minister stands here and says she’s relatively confident or comfortable that somehow there is going to be a miraculous turnaround.
The minister will have to forgive this side of the House for being a little more skeptical than that. So here’s the next simple question. What happens if they do not meet the target the minister has attached to this budget?
Hon. C. James: I want just to remind the member that a number of changes have occurred over this last year and a half when it comes to ICBC — major changes taking place. I know the members are well aware of this. There have been legislation and discussion and debate on these issues of product reform, of major changes around claims. Those are taking place, and that is part of the action that has been put in place to be able to address the challenges that are here.
We will continue, as I said, doing our due diligence each quarterly, as the estimates come in, and we will address what needs to be addressed. But again, the major changes that should have taken place years ago are now taking place and are part of the work that needed to happen to be able to address the fiscal problems that were there at ICBC.
S. Bond: Thank you to the minister for that response. It leads to another question. The minister has referenced…. And I understand that the issue of how product reform will work will obviously be canvassed with the Attorney General, but there is a role for the Finance Minister here. The Attorney General has put a number of changes in place, and I’m assuming, knowing past practice as I do, that there would be price tags attached to those particular changes, transitions, reforms.
Has the minister analyzed the comments and the steps taken by the Attorney General from a fiscal perspective? Does she have confidence that all of the changes that have been suggested will actually generate the revenue that’s required to deliver this type of remarkable transformation in a year?
Again, there’s a great deal of skepticism about that. What work has the minister done, specifically, to line up the changes, what the fiscal results will be and whether or not there is even a hope of meeting the target attached to this budget?
Hon. C. James: Yes, of course there was financial analysis done on the product reform, as there is on other programs and services that come forward across government. There was work done by Finance, by ICBC and by the Attorney General Ministry to look at running all the various scenarios around product reform, around when changes could impact the fiscal picture. Those were all presented. There was an opportunity for discussion at cabinet and an opportunity for discussion at Treasury Board. So yes, that work was done.
T. Redies: It’s interesting for me to hear about all of this product reform and the taps and everything else that ICBC is apparently putting in place this year to turn around this company, but in fact, actually, over the last two years, basic rates have been raised 13 percent. And over the next three years, taking into consideration driver growth, ICBC rates are going to go up 24 percent. Even amongst all of this, if you look at the details on the forecast, ICBC is still showing an underwriting loss. So in its core business, it still doesn’t seem to be able to make a profit, even with all of those increases.
Tell me, Minister, again: are you confident in the ability of the ICBC management to deliver the results that your government is expecting? Because, based on the financials, it doesn’t look like they know the business that well.
Hon. C. James: We’ve had that discussion. I’ve answered that question.
T. Redies: Well, I guess we’ll be asking those questions of the AG in more detail, but if I was the Finance Minister — and I’m not — I would certainly not be sleeping well at night with this situation.
Here’s another situation that we’d like to canvass the minister. I’m not sure if the minister is aware that the salaries and bonuses of ICBC executives have dramatically increased since the current government took office.
In 2016, there were two people making more than $300,000. Today there are six. In 2016, there were nine people making between $200,000 and $300,000. Today there are 26, a 180 percent increase. In 2016, there were 359 people making between $100,000 and $200,000. Today there are 643 people making that amount of money, or a 79 percent increase. If I just take the low end of those salary ranges and multiply them by the increased number of people in those ranges, it works out that in the last two years, ICBC has increased the salary expense of the top three categories of earners from about $38 million to $71 million, an increase of $33 million or 86 percent.
Minister, why has the NDP, in the midst of this self-proclaimed financial dumpster fire, found it appropriate to astronomically allow the increase of salaries and bonuses of the ICBC executives and upper management that got ICBC into this mess in the first place?
Hon. C. James: I know the member, as she said, will have many questions for the Attorney General. That’s obviously part of the Attorney General’s budget, and I expect those questions will be asked in that estimate.
T. Redies: I’m actually quite disappointed in that. Because, as Finance Minister, with this size of a risk on your budget, I would’ve thought the minister would be all over this and would be able to answer these questions, because this is serious.
I mean, ICBC just increased its rate 6.3 percent. Meanwhile, ICBC executives are making at least $33 million more a year in pay. Does the minister think that’s an acceptable situation, where British Columbians are having to pay higher premiums in order to pay ICBC executives, who can’t seem to meet their forecasts, more money, while they are subject to increased rates?
Hon. C. James: The member knows they will have the opportunity to ask questions about salaries for various staff in various ministries’ budgets in those ministry estimates. So I’m certain the member will bring those questions forward.
S. Bond: This is the minister who booked in her budget, as we’ve talked about, a significant transformation at ICBC, taking them from a significant deficit position to, basically, virtually, back to even balance.
Maybe the minister could answer this question. Is she aware of the significant increase in the number of people earning additional salary benefits and costs? Because as far as I can tell, every single dollar should matter to this minister. This is a question that is rightly in this minister’s portfolio. She is making assumptions, as is her team, about this company’s ability to actually close that deficit gap. Is the minister aware of the cost of significant executive salaries — the significant increase — and did she ask the Attorney General or anyone at ICBC what on earth they were doing?
Hon. C. James: Very valid questions for the members to ask. The member should ask that for the minister responsible for the budget, and I’m certain that they will.
T. Redies: Minister, maybe I’ll ask it another way. In this robust process of going through all the forecasts that the minister said the Finance Ministry did, did anyone ask the question about what salary expenses were being paid to ICBC executives?
Hon. C. James: The budget and the operational budget for ICBC is the responsibility of the Attorney General, and I know the member will ask those questions of the Attorney General.
T. Redies: That’s really interesting. Okay, let’s try another tack, then.
Maybe the Finance Minister will be able to answer this. Could the minister please tell us how much ICBC is paying in EHT in 2018, ’19 and ’20? Is that factored into the ICBC premium of 6.4 percent in 2018 and beyond?
Hon. C. James: Certainly ICBC, as other employers do, as the member knows well, will be paying the employers health tax. That will be part of their budget — built into their budget.
T. Redies: Again, I’m just kind of astounded that…. The minister is responsible for the budget. ICBC is one of the biggest pieces of that budget — one of the largest Crown corporations. She is responsible for the EHT, and she and her staff are not able to tell us what the organization is paying in EHT in 2018, 2019, 2020? Is that not an area of her responsibility?
Hon. C. James: As the member knows, ministers are responsible for the operation of the areas that are their responsibility. ICBC is the Attorney General’s responsibility. The member has the ability, as all members do, to ask questions of the operational budget. That would include the cost of the employers health tax.
S. Bond: You know, I have a lot of regard for this minister and her experience, but these answers, frankly, just don’t add up. To stand in this legislative chamber and suggest that executive compensation is the Attorney General’s responsibility is simply not accurate.
I’ve never met a Finance Minister who actually didn’t care about monitoring and keeping an eye on executive compensation, especially at an organization like ICBC. This minister has booked a miraculous transformation at ICBC, going from significant blown forecasts…. And the minister stands and tells us we need to ask the Attorney General?
Well, I think the minister needs to think that question through again. Executive compensation — 86 percent, millions of dollars — and the minister can’t tell us that she actually asked a question about whether or not that was appropriate yet is relying on forecasts from ICBC, and now the same thing with EHT? All of these things add up to part of the reason why this minister needs to stand up and question whether or not what’s going on at ICBC is actually being managed appropriately.
Let’s go back to executive compensation. Did the minister ask any questions related to executive compensation that actually contribute to the challenges being faced at ICBC fiscally? That is this minister’s responsibility.
Hon. C. James: The member knows full well that the specifics around compensation are the responsibility of each minister in their ministry. I have talked about the fact that we did a thorough analysis and a review of the quarterly assumptions, as we do with ICBC, and we will continue to do that monitoring. But the member knows full well that the individual ministry operations fall within the responsibility of the minister.
S. Bond: Thank you to the minister for that answer. Is the minister, then, suggesting that individual ministers just run their ministries, and whether executive compensation is at an appropriate level or not, this minister is hands-off? There is no overall strategy in government to deal with the issue of executive compensation?
If she knew there were significant increases at ICBC, who…. This government trots that story out all the time, and now we hear that the minister says that’s over to the Attorney General to take care of those increases.
Is the minister, then, saying today that she has no overall provincial oversight, interest, strategy around executive compensation across ministries?
Hon. C. James: The member asked what responsibility there is through Finance, what responsibility there is through PSAC. As I know the member will know, government sets the maximum limit for total compensation. That’s their responsibility. Then, within that framework, it’s up to a board of directors, if there’s a board. It’s up to a minister, if it’s a minister. They negotiate, through the CEO or deputy or whoever is responsible, compensation plans to support the service delivery. They need to balance that with the resources that are available, and they are responsible for that.
Again, the members have an opportunity to ask specific questions about staff and compensation. The responsibility, through the Ministry of Finance, is to ensure that people are making sure that they only set those within the maximum limit for compensation that is there. The specifics…. Again, I know the members will ask those questions of the Attorney.
S. Bond: Thank you to the minister. But basically the minister is suggesting that individual ministries work within guidelines and, in the end of the day, that she as minister has no overarching responsibility to maintain and to look at the effective management of fiscal planning. Of course she does. All we need to do is look up the service plan of the Ministry of Finance, and it lays out exactly those responsibilities — that negotiating and looking at compensation planning.
Let’s put it this way. Did anyone — either the ministry or the Attorney General or anybody — raise a red flag for this minister, who is dealing with ICBC from a fiscal perspective and using their remarkable transformation to balance her budget, which is a huge risk from our perspective…? Did anyone raise a red flag at all about compensation to executives at ICBC?
Hon. C. James: I know we’ve canvassed this, but happy to canvass it again if the members want to review this. There was a thorough review — as there is with every Crown — of all Crown budgets through Treasury Board, through the Ministry of Finance. I’ve talked about the work that we do around the quarterly report. All issues are canvassed. Questions are asked on all issues, and the minister is then responsible for addressing the specifics. Is there a thorough review? Yes, there is. And there will continue to be an extra thoroughness, as I’ve talked about, at ICBC because of the risks and because of the challenges that were left.
[R. Chouhan in the chair.]
S. Bond: Well, I take it from that answer, then, that the minister is comfortable that executives at ICBC over the last number of years have seen a…. When you look at three categories of top earners, their compensation has increased by 86 percent. On top of that, this minister thinks that it’s acceptable that we add on the EHT and the MSP. The double-dip year applies to ICBC as well.
How does the minister think that there is one shred of credibility left with an assumption that ICBC is going to go from a significant deficit to a break-even position in one year? There is no possible credibility. This government is actually contributing to the challenge by not even being aware of the kind of wage increases that are taking place at ICBC, and they add on the double-dip of EHT and MSP.
Can the minister stand here today and tell us that she believes a proper analysis was done that included factors like the EHT, the MSP, staff compensation increases? And for the record, can the minister stand here and tell us that she is confident today that the number in her budget will actually be achievable by ICBC in this fiscal year?
Hon. C. James: We’ve canvassed this. The member has asked that question two or three times. I’m happy to respond again if the member feels the need. I’m happy to respond again.
We have continued and will continue our due diligence that needs to occur with all Crowns, with all budgets, across government, including ICBC. The member knows that we have included it in every budget as a risk, because we continue to believe it’s a risk. You don’t turn around overnight the mess that was left us with ICBC. It will take time to make those changes.
I’m very proud of the work that has been done by the Attorney, and across government, to be able to start turning that ship around, to be able to start addressing the things that should have been addressed years ago and the changes that should have occurred to try and get back to a strong fiscal position. That is going to take time. That is recognized in the budget. And we will continue our due diligence.
T. Stone: As thoroughly entertaining as this discussion has been to this point and as tempted as I am to weigh in, I’m going to resist for the time being, other than to say that it has been two years now. It is now this Finance Minister’s and her Attorney General colleague’s responsibility to address the financial challenges at ICBC.
It is beyond painful to hear this minister stand up…. When the going gets a little bit tough and there’s a little bit of heat directed towards her on questions that, as the Finance Minister, she ought to be able to answer in this House, the immediate deflection is to talk about the incredible mess that her government was left with.
It was a $225 million fiscal challenge which this minister, this government, and the Attorney General turned into a $1.3 billion loss in ’17-18 and followed by a $1.2 billion loss the following year. It’s under this government that they’ve lost $3 billion at ICBC. They’ve had two years to take action, and the actions they’ve taken haven’t made one iota of difference to this point.
With that, I’m going to move to a completely different topic, and that is real property contractor taxation issues. The minister and I canvassed this particular PST issue a couple of years ago. It was in, I believe, the interim estimates in the fall of 2017.
The purpose of the questions that I’m going to ask here — and I believe my colleague from North Vancouver–Seymour has some related questions in a moment — really, again, relates to hardship that has been experienced or has been faced by real property contractors, not just in my community, my hometown of Kamloops, but, indeed, in communities across the province. It’s really with respect to the consumer taxation branch’s audits related to the application of the provincial sales tax, the PST, insofar as real property contractors are concerned.
The issue began back when the former provincial government, which I was part of, transitioned back to the PST in 2013 and, in doing so, reverted back to the October 2008 method for real property contractors to pay PST on materials. Now, this is a complex issue, and the minister and I, as I said a moment ago, have canvassed this previously. But I would ask for her patience as I just sort of map out again the framework for the questions I’m going to ask, insofar as this issue is concerned.
As the minister knows full well, generally speaking, a real property contractor who is engaging in a supply and install contract, whether the contract is a time and materials contract or a lump sum contract, is required to do two things: (1) pay the PST on the goods and materials purchased from a supplier, which are the inputs to be used in the supply and install contract and (2) not to charge the PST on the inputs to the customer or the end-user.
There is of course an exception to the above rule. If the end-customer agrees both in writing and in advance of the inputs being obtained by the contractor to pay the PST on the inputs, then the contractor doesn’t pay the PST on the goods to the supplier. Rather, the contractor charges the PST to the customer and remits PST accordingly.
Now, as the minister, I’m certain, must know, many real property contractors across the province have been audited. The auditors, in some cases — I think quite a number of cases — have found that the contractor in question has charged the customer the PST without having the required advance written agreement in place stating that the customer agrees to pay the PST on the inputs. I would suggest that this view is somewhat dubious, since in most of these cases the customer, I would argue, has agreed to the pricing in advance by (1) providing a deposit in most cases and (2) by virtue of the fact that the customer did, indeed, actually pay the invoice.
The consumer taxation branch seems to have taken a fairly hard line in these cases and has stated that if the contractor fails to have the necessary written agreement in advance, then the contractor has charged the PST in error and must pay the PST on the inputs acquired to fulfil the contract.
In many cases — and we went over some of these examples a couple years ago — we’re talking about real property contractors, small businesses typically. Some of them are medium-sized businesses, like a Home Hardware–type operation. But many small businesses have been hit with liabilities in the tens of thousands and in some cases hundreds of thousands of dollars.
These liabilities have caused significant hardship. Again, my colleague from North Vancouver–Seymour, I think, will speak to a specific example in her community on that in a moment.
The end result of these assessments, to shine a bright light on kind of the insult to injury here, is that the treasury ends up collecting more than double the revenue in respect of each transaction. That happens for two reasons. First, the PST was collected from the customer on the retail price of the goods. Second, the PST was collected from the contractor on the wholesale price of the inputs. So in the view of the consumer taxation branch, the customer has been charged the PST in error and could, therefore, apply for a refund of the PST. In order to protect the treasury in the event that such refunds are applied for, the contractor must pay the PST on the inputs.
Our understanding is that application for refunds by the customers for PST charged in error is very low. We do, I think, all have examples of some contractors who have gone through that process. But the number of customers and users that actually apply for the refunds is a very small number. The customer only has, I believe, a four-year time frame to apply for such a refund, after which a statutory time limit kicks in.
The potential scope of this issue is massive. I think the minister knows that new home construction has materials making up an average of $175,000 of the cost of a home. With 30,000 new homes being built every year, that’s about $5.25 billion worth of materials. It means that the contractor is responsible for paying and/or collecting potential PST of up to about $350 million for renovations. Materials make up $2 billion, meaning contractors pay and/or collect another potential $140 million every year.
For these real property contractors, what, frankly, is in most of their cases an honest mistake…. Whether working on large contracts or multiple projects, this honest mistake could mean owing tens of thousands of dollars or more. All along, these contractors have thought they were doing the right thing. It turns out that wasn’t the case in some instances, and this honest mistake is costing them a lot of money, which comes right off of their bottom line.
The Kamloops Chamber of Commerce pointed out in its 2019 policy position on the issue: “This issue does raise the question as to what is the best, most efficient way for real property contractors to collect and remit PST…. With the introduction of the PST, it is vital that the provincial government work with real property contractors to find the right balance and fair approach that works for them to collect the PST and remit it to the government.”
I’ve mentioned a number of audits. I’ve given the minister some examples in the past. I’ve got a list here of about ten businesses in Kamloops that have been hit with fines and interest and tax owing as a result of this issue, with just these ten businesses totalling over $1 million. They’re all relatively smallish in size, employing a lot of people in Kamloops.
The minister did write back to me December 19, 2017, I think, acknowledging that this is an issue. Her letter, in part, reads: “It is true that unless the customer applies for a refund, the government will collect twice the amount of overall tax that is owed. I can appreciate that this has caused frustration on behalf of the contractors, as they feel government is receiving more tax than is legally required to be paid.”
It seems to be, to me, in that letter from the minister of December 19, 2017, that she, in her good wisdom and her experience, understands that there’s an issue here and understands why there would be frustration on the part of a lot of real property contractors around the province.
With that very lengthy introduction…. Again, I appreciate the minister’s patience in enabling me to kind of lay that out, because it is a complicated issue. I have a couple of questions.
The first one is this. Is the minister willing to ensure recovery of full payment back to the real property contractors who have been audited, in the cases of those contractors related to whom the provincial government admits to receiving all PST due? For the minister’s information, this particular question is focused on the Ministry of Finance reviewing all impacted audited contractors and ensuring that those contractors are reimbursed in full — the fines, the penalties, the interest and the audited assessments, as would only be considered fair and reasonable by all of these real property contractors in question.
Hon. C. James: I think the member has identified some of the background, but I think it’s important just to, again, set the context that these changes were made in 2008. Certainly, there has been some confusion around the specifics. Because of that, a great deal of work has occurred — I think we talked a little bit about this in the 2017 estimates — with associations, with the homebuilders, with the contractors, with public education that has been done.
We do believe that, in fact, now the vast majority of businesses do understand the rules, that the rules are simpler than they were previously. So we certainly don’t want to go back to the old rules. In fact, these rules are much simpler to be able to administer. This is the law. So people are expected, obviously, to follow the law, and audits have shown that. We believe that the public education work has occurred now.
It is important to note, as well, that this new change that was made in 2008, in fact, does protect the customer, because the customer ensures they don’t pay the PST unless they’ve agreed to. So it ensures that there aren’t markups that are in place where the customer ends up having to pay them, but they actually have acknowledged that they don’t pay the PST unless they’ve agreed to it. So that’s important.
There is an appeal process. On appeal, if a customer paid the PST and didn’t actually confirm that in writing, as is required, the contractor can appeal. And if they can show, as part of that evidence, that the customer did agree, they can submit that as part of the appeal, and that will be considered. That’s another protection that is in place for the contractors to be able to go through that process, if they didn’t get the customer to put in writing that they agreed to the PST.
I think it’s important to note that this was a change made in 2008. It has been in place since 2008. Public education has been done on this piece, and certainly, the vast majority of businesses, at this point, do understand the rules.
T. Stone: Well, I certainly agree with the minister insofar as, yes, there has been a tremendous amount of engagement on this particular file, this particular issue with respect to the homebuilders and chambers of commerce and other organizations, not to mention countless small businesses, themselves, coming forward and expressing the hardship that they’re experiencing. Again, I go back to my opening statement. These are real property contractors, in the vast majority of cases, who are simply trying to do the right thing.
The minister’s right. The rules that are wrapped around this particular PST issue were established in 2008. They went away when the HST was brought in. When the HST was eliminated and replaced with the PST once again in 2013, this PST rule came back in play. There’s no quibbling on the dates, in terms of when this issue first arose and where we are with it to this point. That being said….
The minister is correct. It is the law, but the reason we’re in this place is that this is where the law can change. This is where we’re supposed to come forward on behalf of our constituents and express concerns that they’re having and, hopefully, with a thoughtful policy lens, work with each other — work with government and opposition together — to resolve issues of, if nothing else, fairness and equity.
This is a complicated tax issue that…. While it is the law and while many contractors understand the provisions, there were many that didn’t several years ago and have been hit hard with assessments and fines and penalties.
The minister is correct that, yes, there is an appeal process. But I would point to one organization in…. A constituent of mine had assessments plus penalty and interest of $148,000 and change, and after two years of a heck of a lot of work and a lot of paperwork, back and forth between the auditors and this small business, this small business was able to recover about $35,000. They’re still out and have double-paid, essentially, to the tune of over $100,000. Now they’re thinking they might still be able to get another $10,000 or $12,000 back.
It’s wrong on several levels. It’s not wrong from the perspective of what the law says is correct today. It’s just from the perspective of fairness and the concept of taxing once and recognizing that the contractor and these contractors in question are trying to do the right thing. Remitting, collecting the tax, remitting it and then having to pay it again — that’s just not the right thing.
My second question to the minister would be this. Would the minister be willing to consider changes to this tax legislation to prevent further audits and issues to contractors on this subject? Specifically, this would involve removing the existing legislative requirements relating to real property contractors and the PST legislation and would mean contractors would subsequently purchase goods with a PST exemption number and charge customers PST on the retail amount of the product.
That change would ensure, on a go-forward basis, that no further contractors would be captured by this provision, which, frankly, is grossly unfair.
Hon. C. James: With all of these kinds of tax measures, I think it’s important to take a look at the principle and the rationale around why they were put in place in the first place. I think that the principle of this tax measure, to protect the customer, to ensure that they aren’t paying the PST unless they’ve agreed to it…. I would not expect that that’s something that we would disagree with. I think that’s something that I would expect most members in this House would agree with.
I think this rule has been in place now for 11 years. This law’s legislation has been in place now for 11 years. As the member recognized, a lot of public education has occurred. In fact, the vast majority of businesses know the rules. They know the rules, they follow the law, and they go through that process.
So if we changed it back now, you’d be again looking at another round of public education, another round for a vast majority of people who, in fact, do know the rules and do follow the law and do have their customers sign off on paying the PST. At this point, as I said, I don’t think the principle of the tax is something that most people would disagree with.
Are there opportunities to continue to look at efficiencies and to look at how to make the process easier or to ensure that the process is easier for businesses, for others who go through this process? Yes, always there are opportunities to do that. I would certainly welcome the member’s approaches around those areas where we could make it easier.
But to look at changing something that, as I said, has been in place for 11 years now, has had a great deal of public education around it and has the vast majority of people following the existing rules doesn’t make a lot of sense to me.
T. Stone: Well, let’s be really clear here. The rule has not been around for 11 years. The rule has been in place since the HST was replaced with the PST in 2013. The rule dates back to 2008, but the member knows that the HST came into place, and this became a non-issue when the HST was in place. It is only an issue because the HST was replaced with the PST back in 2013.
I would quibble with the minister’s suggestion that most businesses are good with this. I think there’s a tremendous amount of pain and hardship, financial hardship, still being experienced around the province. I listed ten companies, small businesses, in my riding, of $1 million. Other members have examples in their ridings.
The chamber of commerce provincially, not to mention all kinds of chapters, has raised this issue as one of their top priorities because of the financial hardship that is being realized by these small businesses. It’s about fairness. The minister acknowledged as much in her letter to me on December 19, 2017. She’s acknowledged that, you know, it is true that unless the customer applies for refund, the government will collect twice the amount of overall tax owed. That’s wrong.
I would ask the minister on that point: does she think it’s right or does she think it’s wrong that government could end up being the beneficiary of double taxation because of how a particular tax requirement is established?
Hon. C. James: I think that the important piece in this is that businesses should comply. A business should comply with the law that’s in place. Certainly, as I said earlier, refunds can be issued when the tax department is aware of it. Individuals have four years to apply for the refund. Again, it’s very fair in giving them an opportunity to do that.
We’ve had businesses that have been sharing the application with their customers to be able to apply for the refund. That’s certainly another tool that is available to them. But, again, when we talk about fairness, fairness is making sure that you comply with the law. As I said, refunds can be issued, so we can also deal with that end for up to four years.
T. Stone: Well, fairness, I would suggest, is also about making sure that the law in and of itself is inherently fair. What we’re suggesting here is that this requirement, which has resulted, in many cases, in double taxation — in double the amount of revenue being collected by government than should otherwise be collected — and the government keeping that revenue, making it, through the way this is structured and the way the rules provide for, very painful and difficult for small businesses to recoup some of that double taxation…. That is not fair.
I asked the minister if she thought it was fair for government to be collecting double the taxation revenue from real property contractors or not, and she refuses to answer. I’ll give her one more opportunity to make it very clear to British Columbians and very clear in this House that, frankly, any tax rule that enables the double collection of revenue is wrong. It’s not fair.
When we canvassed this two years ago, I suggested a number of potential solutions. One was, as I just asked again in a previous question, about just amending the legislation and changing the rule so that this doesn’t pertain to real property contractors any further. As part of that, do good by these real property contractors and go back and make it a priority in the ministry and accelerate the review of these assessments and ensure that every contractor in this province is reimbursed in full — the assessments, the fines and the penalties associated with this particular rule. The minister appears not to be willing to do that. Fine.
I have also suggested in previous interactions that, as more of an interim measure, she could look at one solution that would involve the contractor paying the full amount of the PST applicable on the goods acquired from the supplier. The contractor would then reimburse the treasury only for PST rebates charged by each customer. That way, the contractor would have a chance to remain in business, and the treasury wouldn’t end up collecting double the revenue.
I suggested previously, as another solution, that another solution could involve the amount of PST assessed on real property contractors due to recent audits by a consumer taxation branch. They could be held in trust by legal counsel. For those customers that do successfully apply for a refund of PST, the related funds, held in trust, could be remitted to the treasury. Again, this would ensure that the real property contractor would not be out of pocket, insofar as the government receiving double the amount of tax revenue.
So one last time, and I’m going to turn it over to my colleague from North Vancouver–Seymour. In light of everything that we’ve talked about here today, I’m imploring the minister to take another look at this. Considering the two years that have passed since we last discussed this, the two of us, this is still a huge issue for a lot of real property contractors around the province. It’s inherently unfair and wrong for these real property contractors to be hit twice, from a tax perspective.
Could the minister please take one more opportunity here to tell this House, tell British Columbians, whether or not she feels that this is fair — that double taxation is fair? If she doesn’t think it’s fair, is she prepared to change this rule or at least to provide some mitigation to accelerate the repayment of this double taxation of these real property contractors?
Hon. C. James: The most important piece to note here is, in fact, if businesses comply with the law, there is no double taxation. There is no double taxation. And if the business did not collect the information and didn’t collect the information from the customer to say they’ve agreed to pay the PST, refunds can be issued when we’re aware of it.
In fact, as the tax department for the Ministry of Finance, we — again, when we’re made aware of it and we have the opportunity — want to be able to refund those dollars. People have four years to be able to apply for the refund. So in fact, there isn’t double taxation here, if people comply with the law and if they gather the information. Even if they don’t gather the information, they still have the opportunity to be able to say that that didn’t occur, to ask for a refund, and the tax department is happy to provide that.
J. Thornthwaite: I’m going to be following up on the same vein as my colleague from Kamloops. I’m advocating for a constituent of mine who has been caught in this mess.
I’m just going to read you a part of his letter, and then I’ve got some questions that he’s asked me to ask the minister.
“I have been a small business owner for 28 years of a communication contracting company. We have eight employees, and if we survive, we will be hiring more. We are currently being audited by the Ministry of Finance, PST. The auditor is seeking to double-dip and assess us PST at the supplier as well. With interest. This would mean a tax bill over several hundred thousand dollars that would not be recoverable. This isn’t an expense we can afford and threatens the survival of our business.”
These are the questions that he has.
“Is the B.C. government okay with one of their branches actively putting small businesses out of business? If PST is a confusing mess with vague language, contradictory bulletins and the auditors can’t answer many questions, how is it reasonable to punish owners for making an error in the interpretation when good faith is being demonstrated?”
Then I have a question for the minister before he asks this question. Is the minister aware that the auditors get compensated relative to the dollar amount of the assessment?
Then this is my constituent’s question.
“How is it all ethical or even legal that auditors receive compensation tied directly to the dollar value of the assessment? Instead of ensuring businesses are informed and following the rules, they’re looking for bonuses on huge assessments in as little time as possible. Before the audit, without seeing a piece of paper and knowing little about our business, the auditor told me that she will assess PST on all our purchases.”
Then the fourth question:
“The PST has been collected and remitted. How is it reasonable to demand that it be paid a second time? The ministry knows full well only a handful of customers will potentially apply for refunds, yet they are happy to ignore that reality. Why can’t it be handled on a case-by-case basis?”
Then this is his last question:
“Why does the ministry not pick up the phone or email us if a customer is claiming we charged PST incorrectly? If contractors have perfectly legal ways to charge customers PST on real property or it’s possible we have already refunded the customer directly, then why are they not obligated to reach out to the contractor to verify if either of these conditions are in place? Privacy laws should not be relevant, as we are a party to the contract in question.
“Our customer the ministry refunded PST had no right to claim a refund, as we had a signed legal contract in place with the purchase order specifying the terms and conditions, one of which is PST on materials that would be paid by the customer.”
Then his last comment to me, pleading me to go to the minister:
“The prospect of the B.C. government taking hundreds of thousands of dollars from our business makes me question why I’m struggling so hard to run a business when it’s all for nothing in the end.”
I did have four questions from my constituent. One was from me.
Hon. C. James: I think, on the first question around auditors being compensated on the assessment that they bring in or the value, that’s not accurate. In fact, auditors are BCGEU government employees, and they’re paid a salary. So that’s not true. That’s the first, most important, piece, I think, to make sure we put out there.
The question around PST and the misunderstanding, the PST system being a mess…. In fact, as I mentioned to the previous member, we have done a great deal of work around public education, around ensuring that the bulletins are out and doing outreach with groups and organizations. I think the member acknowledged that himself — that, in fact, there has been a great deal of public education. But in the end, it is up to the individual to make sure they are following the law, as it is with other laws.
We are always available if there’s confusion. We’re always available, as a tax department, with bulletins and with phone help. If people aren’t aware of the rules to follow or if they feel there’s some confusion, they have the opportunity to be able to do that.
I think the other check and balance, of course, is that there’s an appeal process in place, and there’s always the opportunity to appeal again. If there are concerns about a specific auditor that the individuals raise, they can certainly call in. We will take that information, and we’ll look into it, if there are specific concerns.
Then on the specific contract issues that the member raised…. Again, the member is welcome to pass those along to us, and we’ll take a look at them. It’s hard to answer them here without having the contract in place that the member’s constituent refers to, where he says he has a contract in place with an individual. Hard to know that unless we see the contract. So I’m happy to take those issues and concerns and be able to review them.
J. Thornthwaite: I will take the minister up on her offer, then, to contact her office and hopefully get to the bottom of this.
S. Bond: Thank you to the minister for accommodating our colleagues. We will have a few others interspersed throughout the afternoon.
I want to change the topic slightly. I’m wondering if the minister can provide us with an updated list of concluded contract negotiations and updated cost increases, where applicable.
Hon. C. James: Budget 2019 allocates $180 million to line ministries — because, obviously, as the agreements are signed, that’s where the dollars go — over the three-year fiscal plan, to fund all ratified collective agreements that are ratified by December 31, 2018. Budget 2019 also includes contingencies to be able to assist with the costs of the remaining agreements that are not in place yet.
Just to just give the member an idea of the…. I mentioned the specific costs, but if the member was interested: an increase of 1 percent in total compensation for all employees in the public sector would be $304 million.
The member asked about numbers. Out of the 330,000 unionized employees working in the public sector right now, there are 217,000 who are covered by tentative and ratified agreements under this mandate. There’s also a list on the PSAC site of those specific agreements that are in place.
S. Bond: Well, thank you. Could the minister, then, provide us with a breakdown of the contracts that have been concluded and what the net increase is for those concluded contracts?
Hon. C. James: As I mentioned, we’ve allocated $180 million to line ministries over the next three years for the ratified agreements up to December 31, 2018. So that’s the $180 million.
The member will know that in Budget 2019, we also have contingencies built in for costs for the conclusion of the remaining agreements. That’s $553 million in ’19-20. For ’20-21, that cost is $1.183 billion for the concluded agreements, and for ’21-22, it’s $1.827 billion. So in fact, the costs for the agreements are built into the fiscal plan.
S. Bond: Thank you. I’m not sure why this is not a straightforward answer. Can the minister name which contracts have been concluded?
Hon. C. James: As I mentioned, these are up on the site, but if the member wants me to read them into the record, I’d be happy to.
Ratified: community social services, community living; community social services, general services; community social services, Indigenous services; the Crowns — B.C. Hydro, Allied Hydro Council; another Crown, WorkSafeBC, Compensation Employees Union; another Crown, B.C. Assessment, CUPE Local 1767.
In the area of health, we have community health. We have health nurses. Under health, again, we have the health science professionals. Under health, we have facilities, and we also have the Doctors of B.C. Under post-secondary, we have Northern Lights College faculty, which is BCGEU. We have Okanagan College faculty, which is BCGEU. We have Camosun College faculty, BCGEU Local 701. For the public service, we have BCGEU main. Under the public service, we also have the Professional Employees Association. Under universities, we have the UVic Professional Employees Association. In K to 12, we have school district 20, CUPE Local 1285, and under K to 12, we have support staff, school district 81, Fort Nelson, BCGEU Local 717.
[J. Isaacs in the chair.]
Tentative, ratification still to come: on May 8, resident doctors and universities, UBC, Local 115. Under post-secondary, again, BCGEU vocational faculty, common. These are five colleges that belong to the framework. Again, a tentative settlement on post-secondary education. Selkirk College faculty, BCGEU, and tentative post-secondary, Coast Mountain College faculty, BCGEU Local 712.
We have a monetary framework in place, K to 12, support staff, provincial framework agreement.
Then underway…. Does the member wish me to read the agreements that are underway as well? No, just the ones that have concluded.
S. Bond: Thank you to the minister for that.
Can the minister tell us what the time frame is expected to be for the completion of the rest of the contracts? I think it’s a fairly compressed period of time. What is the span that is left to finish negotiations for this bargaining round?
Hon. C. James: There’s about 33 percent left still to bargain. Again, we don’t set a timeline. Bargaining happens at the bargaining table, and that may take different amounts of time, based on the negotiations that occur. So we don’t set a timeline for that.
S. Bond: Can the minister confirm, then, that the contingencies that she has set aside over a three-year period are almost $3.5 billion?
Hon. C. James: The total amount is $3.563 billion.
S. Bond: Two questions. Can the minister explain how those contingencies are carried and who they will address in terms of those contingencies? I’m assuming it’s the overall wage compensation package once they’re all finalized. Can the minister also identify for us…? If that $3.5 billion is not required — it is contingencies — does she have a plan for what she will do with those funds?
Hon. C. James: These funds that were put into contingencies are funds based on the remaining groups still to bargain and based on the 2, 2 and 2 mandate, because that applies across the board to all employees. Those funds we expect to be allocated through the bargaining process.
T. Redies: We’re now going to turn to another area of the budget that we have some concerns about. We talked a little bit about it yesterday. It’s the real estate market.
Minister, as we know, in the Finance budget, housing starts are projected to drop 30 percent, from their height at 2017. By 2022, they’re expected to fall to around 30,500 units. As construction is a large sector of the economy and drives significant tax revenues for the province, what is also concerning is that the government is, again, projecting flat property transfer tax revenues and increasing other property revenues.
If I can quote Chris Gardner of the ICBA: “The single most troubling number in the budget was the projected 30 percent drop in housing starts. Given that construction accounts for nearly 10 percent of the B.C. economy, this contraction will be widely felt. It underscores the flaws in an NDP housing strategy that is based on higher taxes, with little regard for increasing supply, and casts further doubt on revenue projections.”
Minister, given the substantial contraction in housing starts, which represents, I think, about 50,000 units over the period that the NDP have been in government, is the minister sure that she can stand by her property tax projections?
Hon. C. James: Yes, the member is quite correct. The housing starts in B.C. have declined. They declined in units from 2017 to 2018. But I think the important piece to remember is that the level still remains above the historic average in British Columbia. The housing starts are forecasted to, in fact, exceed the historic average over the short term but also expected to trend along the historic average.
I think the other important piece, just to take a look at previous budgets and previous forecasts, is to recognize that, in fact, the predictions that we have in our budget are actually higher than the previous four budgets, going back to 2015, when it comes to construction — expected to be higher.
We have been prudent, based on the Economic Forecast Council’s projections. Again, as we do with our growth projections, we’ve been prudent in the housing starts piece as well. They’re expecting housing starts to trend, and we have, in fact, as I said, taken our estimates below the Economic Forecast Council.
Again, I think if you take a look at the risks that occur with speculation in the market, if you take a look at those challenges, the fact that although, yes, the numbers are down from those high years, they still are above the historic average of close to 30,000 units, which again shows strength. It shows a moderation in the market, which, again, is healthy for both housing as well as for people who need to be able to get into the market.
And yes, I feel comfortable with the numbers.
T. Redies: Thank you, Minister, for that answer. We already had a housing affordability problem when supply was up at the 45,000 mark. How does the minister think a falling supply, which, again, is above the ten-year average…? How does she think that a falling supply is actually going to help solve affordability in the province?
Hon. C. James: I think the important piece when it comes to housing and supply, as the member was talking about, is that housing starts in fact are expected to be higher than B.C. Stats estimate of housing formation over the next projected horizon. So they do expect the numbers to be higher than things like in-migration and population increases, etc.
That doesn’t take away the affordability challenges. As we know, there’s housing available that may not be affordable for people. So it reinforces the work we’re doing when it comes to being able to look at affordable housing through our 30-point plan and the number of measures we have in place there. But, in fact, housing starts are expected to actually be higher than the B.C. Stats estimate of housing formation over the horizon.
T. Redies: Thank you for your answer. But we know there is a lot of pent-up demand for affordable housing. I mean, that’s what we hear every day — that young people, young families can’t get into the market. So if there was…. Again, there’s the new family formation, etc., and there’s pent-up demand. One would think that the housing starts would actually be going up or at least maintaining their levels.
I guess my question to the minister is: why does she think that housing starts are actually coming down? Why are builders developing less condos and townhouses?
Hon. C. James: I think I’ll go back again just to reiterate the importance of taking a look not at the year-by-year but, in fact, the longer-term trends, because that’s critical when you’re looking. You expect the adjustments that occur year over year. But even if you looked at those and took out the spike that occurred in the years — I would certainly suggest 2017, in particular — where there was a lot of speculation going on in the market, we are still seeing housing starts above the historic averages. You are still seeing an increase in housing starts. In fact, our estimates, as I mentioned, show housing increases over the last five years of budget. So in fact, we have higher increases when it comes to five years of budgets.
Given all of that, I think the member knows the market is adjusting. We can have debates about whether that adjustment is a positive sign or a challenge, but we are seeing the market adjust. But even, as I said, given all that, we’re still seeing above historic averages when it comes to housing starts. I think, in the short term, you’ll see some variabilities as the market adjusts, but I think it’s the long-term trends, again, that we’re looking at.
T. Redies: Well, in 2018, the C.D. Howe came out with a study that indicated that $644,000 of a detached-home price was related to taxation. In fact, actually, it’s not just the provincial government, but municipal governments have successively increased taxes on property development in this province and, I would argue, are actually, probably, the main culprit in the affordability problem of B.C. That $644,000 represents about 26 percent of the cost of a detached house, and that percentage is about the same for a condo or a townhouse. That was before the employer health tax went in, the $3 million and up school tax and the other plethora of 19 increased or new taxes that this government has implemented that are affecting property developments.
The minister also noted that the housing prices are coming down, and they’re not coming down in a moderate way. They’re coming down very fast. So we have a situation for developers. You’ve got rising costs of developments, and you’ve got a market where the prices are coming down. So the risks for a developer make no sense whatsoever.
Based on this scenario, did the ministry think about this in terms of…? As they were designing their tax policy and looking to put this in place and their 30-point housing strategy, did they think about the impact on developers of these rising taxes in an already highly taxed situation, on the potential for it to actually result in lower construction starts? I would argue that’s what’s happening in this market, not that it’s coming down naturally. It’s coming down because the economics of development in this province don’t make any sense.
Hon. C. James: I think the first piece I’ll just touch on is the paying attention to the housing market. The member asked: do we pay attention? Are we forecasting? Are we taking a look at the trends and the changes? That’s certainly something…. I think the member has heard me say this often — how important it is to do that monitoring. Obviously, government doesn’t control all of the tools and the measures when it comes to the housing market. Everything from mortgage rates to the dollar to the economy all impact the housing market. So it’s critical.
I’ve said that from the very start, as we’ve introduced our measures and our 30-point plan. It needs to be a living document. The market is adjusting, and it is important for us to pay attention and to do that monitoring, and that’s exactly what we’re doing.
I think it’s also important to look at national trends and to take a look at what’s happening to housing across the country. In fact, you see housing starts in Canada down 16.3 percent compared to the first three months of the previous year. In B.C., we’re looking at a drop of 7.9 percent compared to the previous three months. Again, you’re seeing a large drop across the country when it comes to housing. So, yes, you are seeing the market adjust. There is no question about that.
I would suggest that that’s a healthy approach for building long-term, sustainable growth when it comes to housing affordability. But again, I think we are continuing to actively monitor it. We continue to pay attention to both outside factors as well as the tools that we have within our 30-point housing plan.
T. Redies: Clearly, again, the mortgage housing market, etc., is a complex business, and there are lots of factors involved. But when we’re talking about the supply, real estate supply and developments, it’s about the economics. The economics, clearly, in B.C. don’t make any sense. The costs are continuing to rise because of taxation, and prices are coming down also because of government policy at all levels of government, not just this government’s level but also at the municipal level and the federal level.
Again, speaking about the rest of the country is kind of interesting, because the minister lauds the fact that the B.C. economy is growing better than other parts of the country, that there’s job growth here, etc. So there is, obviously, demand for housing. In fact, the minister has made that clear many, many times — that one of the reasons why they’re doing this 30-point plan is because people want to be able to have homes. Businesses want to have employees who can work here.
However, if the ministry, or the government, puts in a policy that basically makes it more expensive for developers to build affordable housing, condos and townhouses at a time when prices are coming down, that’s what’s going to drive the supply down.
I guess what I’m asking the minister is: why do it this way? Is the thought process that you’re going to tax developers and you’re going to take that money, and then government in itself is going to build affordable housing? Why not reduce the taxation on developers and get them to build affordable housing? They’re in a much better position to be able to do that. Why increase taxes on developers? Why not help them solve this affordable housing crisis instead of what we’re seeing now? Supply is falling.
Hon. C. James: I think, again, it’s important to note that housing starts are still above the historic level. You’re still seeing housing starts above the historic level, which I think is just an important piece to emphasize.
I know the Minister of Housing, again, will talk a fair bit about the 30-point plan, but just the pieces that are related to developers. The member talked about working with developers. In fact, we are working with developers in a number of different ways, including the work we’re doing through the housing hub, in partnership with private developers and others, to look at how we expand the opportunity for the private sector to be able to get land to be able to build housing, because that’s often the challenge. That’s part of the work going on in the housing hub that is occurring that I think is critical to note.
Then the other challenge that often comes up from developers is the challenge of different municipalities and different processes they have to go through when it comes to developments. As we will all have heard from different municipalities and different developers, sometimes it can be a one-year process. Sometimes it can be a seven-year process. Different rules to follow. Different fees in place. The Minister of Housing has a committee, together with developers, with municipalities, looking at best practice, looking at how you can streamline those processes to assist with development.
So in fact, we are working with developers. We are working with the private sector. We’re working with everyone we can to be able to look at how we ensure affordable housing is available. We’re using a number of different tools, as the member knows, when it comes to building affordable housing, building purpose-built rental housing, as well, to, again, address some of the affordability issues in the housing market.
T. Redies: I again agree that the municipal issue and the length of time it’s taking to progress property developments are a real problem. So I’m glad to hear that that is happening. But I can tell you, with a bit of experience in this market, where the government could make real headway is to reduce the provincial taxation on developers to build affordable housing. If you keep increasing the taxation on developers, you’re going to keep seeing the development numbers come down.
There’s a tool here for the government to actually start driving affordability. I hope that the minister thinks about it, because I’m very concerned when I see those housing starts coming down at a time when we do have an affordability problem.
I think we’ve had discussions about this in the past, but I’ve never seen a price problem solved by not dealing with supply going down, unless we are in the midst of a housing crash, which I very much hope we’re not. But we are certainly seeing signs in a number of markets in Vancouver that prices are very, very vulnerable right now.
Minister, I’m going to move on. Again, it’s still within the real estate area, but it’s more about the property taxes that are being projected and that. The minister’s forecast is suggesting that other property taxes, which include the speculation tax, the $3 million, and up, additional school tax — the list goes on and on — are increasing from about $2.6 billion in fiscal 2019 to $3.25 billion by fiscal 2022, which is a $650 million increase in taxes paid over three years, or roughly a 25 percent increase.
Can the minister break down for us, please, how much revenue is coming from each new real estate tax? It’s become quite opaque in the budget. It was a little bit clearer last year when it was first announced, but now it’s being sort of all put into the big bucket.
We’d like to know how much is coming from each real estate tax on this revenue line, including things like the spec tax and the $3 million and up school tax.
Hon. C. James: While we gather that information, can I suggest we take a five-minute recess and then come back? It’ll give us a chance to be able to gather the information the member is asking for as well.
The Chair: The House is in recess for five minutes.
The committee recessed from 4:07 p.m. to 4:17 p.m.
[J. Isaacs in the chair.]
Hon. C. James: Thank you, Chair, for that quick break.
The member asked about the specifics around the property taxes. I’ve got the information — the member can let me know if there are other areas — on the property transfer tax, the speculation tax, the school tax above $3 million and the foreign buyers tax, which are the main pieces, I think. I think I’ve included everything the member was looking for.
Again, I’ll just do each of the three years, the ’19-20, ’20-21 and ’21-22. On property transfer tax, $1.9 billion in each of the years. We had that discussion yesterday, I think, that we have just basically flatlined that number. Speculation tax, $185 million — again, straight across ’19-20, ’20-21 and ’21-22. School tax above $3 million, $200 million. Again, that’s straight across for each of the three years. And then the foreign buyers tax. It’s important to note that this is actually also included in the property transfer tax. So I’ll give the breakout for the foreign buyers tax, but that’s actually included in the $1.9 billion in property transfer tax. That’s $190 million across the board on all those three years.
T. Redies: Okay. I’d like to now turn to — we talked a little bit about this — the housing sales and what’s happening in the market. Prices in the detached home market have fallen 25 to 30 percent, depending on the area. I’m speaking primarily about the Lower Mainland. I would say, too, having spoken to a number of realtors in my area, that if you want to sell your house, you have to drop your price by about 30 percent. But prices still remain well above what the average person could afford, at about $1.425 million. Meanwhile, condo and townhouse prices have remained relatively firm, but they’re also starting to see declines now.
The challenge, of course, is that, with the B-20 rules, it’s still making it very difficult, from the perspective of affordability, even with the price changes, for people to buy new homes. And actually, what we’re seeing now is also getting refinancing, because prices are dropping.
Given all this, Minister, is it fair to say that the provincial government and federal government are working at cross-purposes with one another, with your government trying to drop housing prices substantially and the federal government trying to prevent people from getting into the market?
Hon. C. James: It’s an interesting discussion around the outside tools that have an impact on the housing market. The first thing I’d suggest is that I don’t think there’s one tool that is having a bigger impact than others. I think, again, they work in concert with each other, whether it’s mortgage rules, whether it’s interest rates, whether it’s the economic situation, etc.
I don’t see the stress test as working in opposition to the work we’re doing. I think the stress test…. Again, I don’t want to speak for the federal government. They’d have to speak for themselves. But I think it has a lot to do with the debt issues and not having people take on more debt than they are able to manage. That’s, obviously, a concern that I think all of us have. That’s a different issue than housing affordability, but they are related, and they could, in fact, work together, not against each other, because housing affordability is also about people not taking on huge amounts of debt.
So I don’t see the stress test as working in opposition to the work that we’re doing around housing affordability. I think, in fact, there are some ties there as well.
T. Redies: Of course, the challenge is that if you want affordability in a market like Vancouver, where prices reached, I think, $1.8 million, for the average person, housing prices would have to fall a substantial amount. Of course, if they fall by the amount where everybody can get into the home that they want, we’re going to have a lot more problems than just housing affordability, as we know, in this province.
I just want to pursue this a little bit more. I’m sure the minister is familiar with what happened in the aftermath of the disastrous 2008 housing market crash in the United States and other parts of the world, where trillions of dollars basically were lost in terms of the value of housing markets.
Lenders dealing in the United States were forced, by regulation, to tighten mortgage lending rules, with good reason, frankly, because there had obviously been way too much predatory lending — and the worst type of lending, frankly. But in the aftermath, it also made it very difficult for low and average middle-income folks, even though housing prices had dropped, to actually get into the market, because the lenders became so conservative and so bound by their rules that it made it very, very difficult to even get a mortgage.
One of the concerns I have looking at this current market with prices dropping, which may be a boon to people who haven’t been in the market, is it’s not going to be very pretty for the people who are in the market right now, particularly those who’ve just got into the market over the last five, six years. Has the minister had any discussions with the federal government with respect to their lightening up on their practices? Because we could see a situation where prices deflate, but just because of B-20 rules and other restrictions, it still makes it very difficult for people to get into the market.
Again, what happened in the U.S. was it was the wealthy that came in and scooped up housing, because they had the financial means and the ability to get mortgages, or they didn’t even need mortgages. So it led to a much bigger inequality in the United States than what I think anybody would have expected coming out of that recession.
I guess my question to the minister — a long preamble — is: has she thought about this? Has she had any discussions with the federal government? Is she at all concerned that a similar situation could happen again here in B.C. where it’s really still just the wealthy who can pick up housing, and those in the low or middle income are still kept out of the market?
[R. Chouhan in the chair.]
Hon. C. James: I know I don’t need to say this to the member, because I know her background and the work that she did before she came into the Legislature, but we have a very different situation than the U.S., whether we’re talking about the banking system, the lending system, the regulations. We’re very fortunate to have a very well-regulated financial sector in British Columbia. So I think the situation in the U.S. is, obviously, very, very different than a situation we would face here.
The member asked whether we have conversations about the rules and discussion around the federal government’s involvement in the housing market. Every Finance ministers’ meeting that I’ve attended, certainly that issue comes up. We have a good discussion about the indicators that are out there. Usually, the Bank of Canada governor is there as well and has conversations about what he sees in the upcoming year. So that’s, in fact, a topic of conversation at every meeting I’ve attended.
Again, because we are in a very different situation, from my perspective, I am not as concerned about those rules related to the housing market, but it’s one more tool that we’ll watch. As I said, we’re monitoring all of the tools that are out there, and it’s one additional piece that we’ll watch for.
Another important factor. The member mentioned, obviously, affordability and housing starts, but I think another piece is mobility within the market. Certainly, anyone in the real estate field talks about the importance of having mobility in the market so that people who can afford a more expensive home have the ability to be able to do that, which provides the opportunity for others to move into their less expensive home. So it’s not getting rid of the expensive homes, for example; it’s, in fact, providing that mobility within the market.
That’s really what we’re looking for. You’re starting to see some signals, as the member knows. I always say “cautiously optimistic.” We’re seeing signals on condos. We’re seeing signals on townhomes. We’re seeing signals on single-family homes moderating, which I think is, again, a very important signal. We’ve put some of our pieces around the 30-point housing plan in place.
Again, things like student housing — allowing universities to be able to borrow for student housing — will make a huge difference. When that housing comes on line, that provides the opportunity, then, for all of those students to move out of those affordable units in communities up onto campus, up into student housing, and provides that back-into-the-pool for affordable housing.
I think those pieces are critical. I think CMHC’s last market analysis also supported that. They talked about overvaluation coming down, housing prices in Vancouver moving closer to levels supported by market fundamentals. So again, all positive signs that we’re taking a look at and that we’ll monitor very closely.
S. Bond: I have a couple of questions to ask the minister, and then I’m going to…. We let the minister know that there would be colleagues here throughout the afternoon. So one of my colleagues will take over after we go through these two questions.
The minister would know that, historically, many families use the equity in their homes to help their children get into the housing market. We now see that sales and prices are falling and fairly dramatically, particularly in the detached home market. With that circumstance, many families now find themselves unable to help their children get into that market. That is a significant concern.
I am sure every member of this House has heard about how important it is for families to ensure that their children are able to get into the housing market. So I’m wondering if the minister and her team have actually contemplated a potential consequence of wiping out significant equity in people’s homes.
That’s a concern that we are certainly hearing. With the prices falling, has the minister or her team done any work about the impact on families who are, frankly, losing equity in their homes?
Hon. C. James: The member asked about the ability for parents to be able to help their children buy a house. I think if the increase in the market caused all kinds of problems, that was certainly a large problem. There was no one who could afford to get into the market, never mind provide an opportunity for their children to be able to get into the market, when you saw the kinds of skyrocketing prices, the speculation in the market over the years.
For example, in Vancouver, prices went up in greater Vancouver 76.9 percent between 2013 and 2018. I mean, you are one of the very fortunate ones if you happened to have a house during that time period. But that certainly doesn’t provide the opportunity for the vast majority of people to be able to help their children or grandchildren or others get into the housing market, when you see those kind of prices. In fact, the kind of escalation in prices and the rise in prices did cause the exact challenges that the member is talking about.
Providing moderation in the market and providing an opportunity for people to get into the market provides more of an opportunity, whether we’re talking about families or otherwise. We are not there yet. We certainly know that the challenges exist in the market, but a 76 percent increase in housing prices does not help a family help their family get into the market.
S. Bond: Thank you for the answer. Having said that, that really wasn’t the question. The issue is that we now see housing sales and prices falling dramatically, and people are losing equity in their homes. That’s a pretty significant and substantive issue, which the minister skirted in her answer.
Let me bring forward another concern we have, then. We know that sales and prices are falling. People are losing equity in their homes. The minister is correct: there needed to be an adjustment in the system. But now we have other concerns, and that is the loss of equity.
Secondly, let’s look at young families who actually did manage to buy a house in the last five or six years. When we now see a 25 percent drop in housing prices in some markets, that would mean that one in four mortgages could potentially be underwater on their mortgage. We have families who are losing equity, can’t help their young people get into the marketplace.
We also have a consequence that looks at people who purchased five or six years ago. Now we see a 25 percent drop in housing prices. Well, guess what. These families are going to have a pretty significant challenge refinancing their mortgage when they come up for renewal, particularly under the B-20 guidelines.
Again, we’re talking about loss of equity to the minister. Now we’re talking about: what are we going to do — or what is the minister going to do, or what has she thought about? — when it comes to young people having purchased their home at a peak period in time, and now they see a 25 percent drop in those prices? Can the minister talk a little bit about what she and her team are doing to contemplate that situation for some young British Columbians?
Hon. C. James: The most recent numbers. Obviously, the greater Vancouver area…. I’ll use the greater Vancouver area because that’s the area, certainly, that was the most overheated. It’s not the only area. We’ve got, obviously, other urban settings in British Columbia that are facing that. But the kinds of prices you’re seeing in fact show a moderation in the market. They don’t show a huge drop. They don’t show a crash. They in fact show moderation.
You’re seeing about an 11 percent drop in greater Vancouver on average for single family homes. You’re seeing about a 7½ percent drop in townhomes and a 6.9 percent drop in condos. Again, when you take a look at the overheated market that we’ve seen, when you take a look at the kind of triple-bidding that you were seeing in the housing, the pace of growth, the kinds of challenges that that created in the market, seeing this kind of moderation, in fact, is a strength — a strength for our economy and a strength for employers who are looking at recruiting and retaining employees.
As we know, we have the best unemployment numbers in the country. That provides an opportunity, obviously, for the need to focus on recruitment and retention, and housing is one of those key pieces, as business has been telling us, that we need to address. So in fact, you are seeing a moderation, and that’s being reinforced, as I mentioned, by CMHC, by the Bank of Canada, by the rating agencies, when they all talk about a moderation in the housing market and the adjustment that is occurring. I think that, again, is good reinforcement for the work that’s going on.
M. de Jong: Thanks to the committee and the minister and my colleagues for the opportunity to interject. I wanted to canvass an issue I think is mostly a good-news story, and probably that’s why I wanted to introduce the notion and the questions — to hopefully ensure that it continues to be a good-news story.
The minister will know about the work that has taken place around the establishment of a cooperative capital markets regulator in Canada. She will know about the role that the government of British Columbia has played. It would be remiss of me not to observe that ably assisting the minister through this process are some people who worked very diligently to achieve, for British Columbia, a positive reputation, a tremendously positive reputation, in terms of helping this matter along and trying to achieve something that has eluded certainly the province but, I suppose more importantly, the nation for many, many years.
In November, the Supreme Court of Canada rendered a decision. I hope the minister will forgive me. I’m not usually a fan of big preambles to questions, but it might be worthwhile to set the context here a little bit. The Supreme Court of Canada rendered a decision on this matter that upheld arguments advanced by the government of British Columbia and the government of Canada. There were appeals on this matter from the government of Quebec. British Columbia, I should say, took the unusual position of not just being an intervenor but also actually launching an appeal of our own and responding directly as a litigant. All of which, I think, made sense and, ultimately, was helpful in the resolution of the matter.
Just to give some context to the issue before the court, it’s probably wise to consult what the court itself wrote. I’m looking at the decision. The court, at paragraph 8 in its decision, offered this background: “Canada is one of the only industrialized countries in the world that does not have a national securities regulator. This is largely attributable to the constitutional division of provincial and federal powers as set out in part VI of the Constitution Act, 1867.”
Further in that paragraph: “The result is a nationwide patchwork of provincial regulatory schemes and the absence of a truly national approach to regulating capital markets.” Later, at paragraph 9, the court observes: “In spite of this constitutional impediment, however, various attempts to centralize or standardize the regulation of securities in Canada have been made for over 80 years.” I guess what the court didn’t say was “unsuccessfully” over 80 years.
We seem on the verge of changing that. We seem on the verge of altering a record that has characterized attempts in this regard for, as the Supreme Court of Canada said, 80 years. The response to that was the cooperative capital markets initiative, as set out in a memorandum of understanding negotiated in, I recall, September of 2014. Again, I cannot understate the tremendous role that officials within British Columbia played, with counterparts in Ontario and Ottawa, to achieve that memorandum of understanding.
Here’s what the court, at paragraph 21 of their decision in November of last year, said:
“The framework of the cooperative system is set out in an agreement between the federal government and the governments of Ontario, British Columbia, Saskatchewan, New Brunswick, Prince Edward Island and Yukon, together the ‘participating jurisdictions,’ which is known as the ‘memorandum of agreement regarding the cooperative capital markets regulatory scheme,’ the ‘memorandum.’
“This system has four primary components, which are as follows: (1) Uniform provincial and territorial legislation. The cooperative system’s first component involves the standardization of provincial and territorial legislation respecting the day-to-day aspects of the securities trade. To this end, the memorandum provides that each participating province is to enact a statute that mirrors the model provincial act.”
I’ll stop there. My purpose was not to read 90 pages of Supreme Court of Canada decision, but I think the court accurately summarizes, there, both the achievement and some of the work that needs to be done.
I guess the first question for the minister — and I think I know the answer to this — is: does she and the government of British Columbia remain supportive of and committed to not just the concept of a national regulator but the specific model set out in the memorandum of understanding that was litigated and ruled upon by the Supreme Court of Canada in November of last year?
Hon. C. James: This is certainly something that I know the member had a passion about and has a passion about and did a great deal of work on. I don’t need to reiterate the court decision. As the member has said, it ruled that it was constitutional. Obviously, we’re in support of that direction, and we’re continuing to work around the table.
We do believe that there are opportunities, as the member pointed out, for Canada-wide approaches. That makes sense in many ways. So we are working around that table to look at the timelines.
One of the challenges that I have identified — and I think probably the member would agree — is that this has been a much slower process than I think anyone expected when the process was begun. That’s meant that some of our own regulatory work, which government had hoped would be able to be done through this process, has had to move ahead. In fact, because the process is taking longer, another province now has joined on. Again, that takes some time to have that structure occur. It just means that we are going to take our focus and make sure that we move ahead on those pieces while the work goes on.
So yes, we’re still at the table. Yes, we’re involved in the process. We’re looking at the positives that we believe will occur, but we’re not stopping our work that needs to be done around white-collar crime, around making sure that we have a very robust regulatory system and that that’s all in place. That’s work that we’re going to continue to do.
M. de Jong: Thanks. That’s helpful from the minister. I take it, then, from those comments, that the minister is confirming that she and the government remain committed to the establishment of the cooperative capital markets regulator in the way envisaged by the memorandum of understanding of September 2014.
Hon. C. James: Yes, we are still committed. We’re still around that table, as I said to the member. I think there are certainly some areas where, again, we want to make sure that the robust work that we’re doing is recognized around the work that happens at the Canadian level. But those are discussions that will be ongoing, obviously, as we look at the work that’s still ahead to develop the market.
M. de Jong: Again, in, I believe, the category of good news, the minister referred to another Canadian jurisdiction that has signed on. I understand, just for the record, that Nova Scotia became the sixth province to join the assembled provincial jurisdictions moving forward with this.
Hon. C. James: Yes, the member is correct.
M. de Jong: The minister may not be able to comment on this, but my information is that there may be yet a seventh jurisdiction from…. Well, if I said east of the Rockies, I’d be pointing at all the provinces that may yet be, in the foreseeable future, signing on. Is the minister able to offer a general observation in that regard?
Hon. C. James: No. No official word.
M. de Jong: Well, let’s, then, go back to the question of the timeline. I will acknowledge to the minister…. First of all, I’m very pleased to know that she and the government remain philosophically and conceptually disposed to advance this work.
The country has never been as close, if I can use that term, to actually realizing the objective of creating a national regulator, which, for a country of 35 million or 36 million people, would seem a logical thing to do. We heard, in the words of the Supreme Court of Canada, the acknowledgment that we’re the only industrialized country that doesn’t have such a regulatory creature.
It’s interesting. The minister was kind, a few moments ago, in suggesting a passion that I might have had. I’m not sure “passion” is the right term. It just seems like a logical thing for the country to do. The amount of time that has been devoted, over the past 80 or 90 years, in the futile effort to realize it…. Hopefully, this Minister of Finance for British Columbia and the Minister of Finance nationally and in other jurisdictions can oversee and actually breathe operational life into the regulator.
In that regard, maybe I can ask the minister…. And I do this all gently, simply wishing to derive some information.
Hopefully, the minister can use this as an opportunity to reinforce to the people who are interested…. Look, that’s not the vast majority of people watching. This is not necessarily the topic of choice for the great majority of the population. Yet it does, as the minister has pointed out, in terms of other aspects of securities regulation, have an impact on the lives of people and their retirement savings and how their assets are properly safeguarded and managed.
There was an objective at one point to operationalize, to fully launch, in the fall of last year. That didn’t happen. I’m not assigning any blame anywhere for that fact. It is a complicated endeavour. But I understand that the significant missing piece is the finalization of the model provincial act, the Capital Markets Act.
It’s really a two-part question. Where are we with the Capital Markets Act, and what is the target date? I’m not asking that question to trick anyone or to trick the minister. We didn’t get it done by November, and that’s fine. November has come and gone. What we got instead was validation from the highest court in the land, and that’s a good thing. But what is the target date now for the launch of Canada’s cooperative capital markets regulator?
Hon. C. James: I think one of the things that occurred over the last couple of years has been a number of changes — changes in government in particular — that have occurred, which have changed the priorities and the timeline around the work that’s happening through the cooperative capital market.
The officials involved right now are working on a new timeline. They’re recognizing that the timeline that was in place previously obviously has not been met for a variety of reasons in a variety of provinces. They’re looking at a new timeline, the resources necessary to be able to look at that timeline.
Once that comes out, our staff will be taking a look at that and looking at our obligation. That’ll obviously be a discussion for the ministers, as well, from those provinces. Then we’ll take a look at putting together our capital markets act.
The other piece that will be needed is the implementation legislation that will be required as well — again, a very complex piece of work that will need to occur. That will need to occur along with the capital markets act to make sure that they’re coordinating with each other and to make sure the implementation is done well. So there’s still a fair bit of work to do, and as I said, we’re waiting for the officials’ work around the timeline and the resources needed for this next stage, for all of the provinces.
M. de Jong: Again, that is helpful, and I’m obliged to the minister. Maybe my question, though, to be fair to everyone, is a little bit more about political timelines and political prioritization.
The minister I think fairly candidly acknowledged that, to a certain extent, what has influenced this is a change in governments. I think her words were “changing priorities.” So recognizing that there is complex work and drafting that needs to be done, what is her objective?
I think she has been on the job long enough now to know that on a project like this, none of this will get across the finish line unless there is a political imperative attached, where the minister and/or the government say: “Look, our objective is to have this operational by such and such a date.” I’m hoping…. Then those able staff members and officials that I have been talking about will say to the minister: “Well, that’s going to be a challenge for the following reasons.” Fair enough.
What can the minister say to the committee, looking at the months ahead, about what her objective is for having this work done and seeing the national regulator, the cooperative capital markets regulator up and running?
Hon. C. James: This does come back, as I talked about earlier to the member about the amount of time it’s taken to do this work. A lot of that related to changes in government, because, obviously, this is a cooperative. The name speaks for itself. It is a cooperative regulator. Therefore, as governments change, it’s important for each of the partners around the table to come and reinforce their support for the memorandum of understanding for the work that’s going ahead, for the resources that are needed.
I didn’t speak about the time challenges because of any negatives. It’s just a reality of having a cooperative and having everyone needing to be at the table and to be focused on the work that needs to happen ahead.
So with those delays, it meant that there is work that we believe needs to be done — and I’ve spoken about this before — updating our own securities legislation, ensuring that tools are available for enforcement of that legislation, ensuring that we have a robust regulatory system.
That’s the first priority of our government, and I think that’s clear. I’ve said that and certainly spoken to that publicly. That’s our first priority of work. But the timing is good because, again, the work being done by officials on resources, on new resources needed and timelines still needs to occur before we can move ahead on our legislation.
As I said, we’re still involved in the process. We’re still at the table. It continues to be something that we’re supporting. We’re moving ahead with our own work on our own legislation to ensure that our processes are strong. Then we’ll see the timelines. And then, as the member knows well, we’ll share and sit down with staff and look at setting the priorities that we need to, to move ahead on our timelines that will be agreed to by everyone around the table.
M. de Jong: Well, I hope what follows is a fair question. I think it is. Is it the minister’s objective — and I use the word “objective” because there can be any number of intervening forces that frustrate realizing the objective — to see the uniform capital markets legislation introduced and passed in British Columbia during the government’s present term in office?
Hon. C. James: I think I would say that my objective is to do it well. If we’re going to move ahead on it, we need to do it well. We need to ensure that it meets the needs, the goals as signed off in the memorandum but also the goals of British Columbia and British Columbians.
Without having a new timeline in place, would I hope that we’ll see it over the next couple of years? Yes. But given the work that has happened and given changes in government that may occur over that timeframe, which may have an impact, again, on the work that’s being done, I wouldn’t want to set timelines. I think if the government had set a timeline previously, it wouldn’t have been met, because the work wasn’t completed, and the provinces still had more work to do to get to an agreement.
I think the objective is to do it well, to do it right, to make sure that it does meet the benefits that are there. My hope, certainly, is that it would happen in the next couple of years, but I wouldn’t set a timeline. I think it’s important to recognize this is a cooperative, and it needs all the provinces together to be able to make a determination on the work that’s being done.
M. de Jong: I won’t belabour the point. I will offer this to the minister. On a matter of this sort, absent the creation of some timeline objectives at the political level, these things tend to drag on unresolved. Setting that timeline doesn’t always guarantee it’ll be met, but it does create a sense of urgency.
I’m hoping that, armed with further information from those who are working on the project — I’ll have a few questions about that here in a moment — at some point the minister will be in a position to say that she and the government have set as an objective having the cooperative capital markets regulator operational by such-and-such a date.
B.C. is a founding mother or a founding father — or whatever the appropriate term is — and I think the country is looking to British Columbia to maintain this as a priority. When the memorandum was signed, the one that the Supreme Court has now ruled very favourably upon, defying the odds, B.C. was the chair of the Council of Ministers. If one looks at where the capital markets tend to be headquartered in the country, that might have been a bit illogical, but it was the result of national recognition for the role British Columbia was playing. I hope we can continue to play that role.
I wonder if the minister can advise the committee with respect to the, perhaps, most important component of this, the capital markets legislation. British Columbia, as I understand it, was continuing to co-lead that drafting project with the province of Ontario. Is that still the case?
Hon. C. James: As the member knows, staff were engaged and involved in working on the cooperatives market, to be involved in that process. Because of the delay, again, as I mentioned when it came to priorities, we as a government…. Our priorities are to ensure, as I said earlier, that we have our Securities Act in a good place to ensure that the changes that we bring in, yes, will work with the cooperatives market but are also important for British Columbians.
When the delay occurred, when the timelines weren’t met and the staff had gone off to do that work, we pulled our staff back to focus on the work that needs to be done in British Columbia, the changes that have been made. And they will be engaging back with the process of staff resources in June of this year.
M. de Jong: I think the minister just answered the second part of the question I was going to ask: when did the disengagement occur? I believe the minister has just indicated to me and the committee that the team will be re-engaging on this project next month.
Hon. C. James: Just to make sure I’m clear with the member. Staff are still taking place calls. They’re still involved in that work to make sure we keep up to date with this. But we focused through the summer and fall on our own work that needed to be done around our securities legislation. And the member is quite correct. They will be engaged next month back in providing more resources and more time to work that needs to be done.
M. de Jong: Does that also include, specifically, work on the completion of the uniform capital markets act?
Hon. C. James: Certainly, it is one of the pieces that needs to be done. But again, that’ll be the work plan that’ll come forward from the staff who are working on that piece nationally — the new timeline, the work plan and the resources needed. But yes, that’s one piece of the work that they’ll be engaged in.
M. de Jong: Right. Again, not to belabour, but my recollection and the advice I’ve received is that over the intervening year and a half, the task of drafting a uniform provincial capital markets act was assumed or assigned specifically to British Columbia and Ontario to work on jointly.
In a moment, I’ll offer the minister an opinion on why that is important. I think my question is fairly specific. Is British Columbia at the table, or will they be again? Will British Columbia be again at the table to finalize work on the uniform provincial capital markets act that is a prerequisite to the cooperative capital markets regulator launching?
Hon. C. James: As I said, there is no question that a capital markets act has to be a part of the work. B.C. would certainly not only be at that table but be involved in that work. That’s critical.
We’re making changes to our own Securities Act. We’re looking at how we strengthen the tools that are available for our securities. And we would obviously want to ensure that any work that happened on a capital markets act would also include the kinds of strengths that we think are necessary and the work that we’ve already done in British Columbia.
So yes, that would be one of the areas that we’d be actively involved in. We expect there will be more as the timelines and the plan are developed.
M. de Jong: It’s probably rare for an opposition MLA to encourage a minister of the Crown not to be modest, but this is one of those times. The province and our able officials have played a leading role and in fact were assigned lead responsibility, or accepted lead responsibility. I’m hoping that the minister is being modest in responding to these questions, because I hope that she will give license to her officials to assert or reassert themselves in that lead role.
Here’s why. If we don’t, I can assure the minister that there are folks in Ontario that will, and having a national regulator, a cooperative national regulator, that takes into account some of the unique features of securities regulation and the securities world in other parts of Canada — in our case, on this side of the Rockies — is very, very important.
I will say to the minister that there have been people in the past who have shied away from wanting to go down this path because they were afraid that the voice of British Columbia or of smaller securities markets would be overwhelmed by Toronto and by the Ontario Securities Commission.
My response to that over the years has been: “Let us be in the room. We are capable. We can fend for ourselves and hold our own. We have that talent, and we have that ability.” I suppose this is my plea to the minister — that she unleash that talent, or re-unleash that talent, and not just occupy a seat at the table. British Columbia set the table, and we deserve a seat at the head of the table. I hope that she will give license to her team and her staff to claim or reclaim that seat at the head of the table and play a leading role in the work that remains to be done.
Hon. C. James: I think it’s important to note — and I know the member will know this as well — that not only do we have the expertise and the experience but in fact that is hugely valued around this table. Probably one of the first conversations that I had, getting involved in this file as Finance Minister, was a discussion with the chair, with people involved in the workplan that needed to be done — of how much they valued the work of the staff from British Columbia and of how much they needed that expertise around the table. That’s probably one of the first conversations we had in our update around the work that was going on.
There is no question, I think, as I said earlier, that B.C.’s views have to be represented around that table. Certainly, I have heard the issues the member raises around Ontario and the worry that Ontario will swallow up the direction that it needs to go. B.C. is going to be at the table. We are going to have staff there, and we are going to be engaged in this process, because we do have the expertise. We do have the experience, and we do have areas that we want to ensure are protected, as they are for British Columbians. So I can assure the member that that will occur.
M. de Jong: Then, finally, if I might, two points, I hope, will add further to and influence the minister when she does meet with her staff about setting some timeline objectives around this.
First of all, my recollection is that the initial board of directors…. This, by the way, was not a simple task to create in this instance. I think the first round of renewals — expirations, I guess, is the proper term — is coming up later this year, in August. The type of people that will want to be involved and provide their assistance will be influenced by signals that our Minister of Finance and our government can send around the level of importance that is attached to seeing this become a reality. The delay has been noted, not just in British Columbia; perhaps more acutely, it has been noted elsewhere, in that big place that doesn’t win Stanley Cups, called Toronto. I’m hopeful that the minister will take that into account.
One other feature of this equation that I hope the minister will discuss with her staff is the federal response. Without getting too far down the trail in the history of this, remember that there was federal legislation. In the aftermath of the crash of just over ten years ago, it was the federal government that said: “We are going to introduce legislation to manage systemic risk.” In the absence of a national regulator, that generated lots of work for lawyers, a trip to the Supreme Court of Canada and one of those many unsuccessful rounds of trying to resolve this.
I don’t think it’s an exaggeration for me to say to the minister that there is one of those moments in democracy coming up federally. I offer this gratuitous opinion: I don’t think much is going to happen in terms of changed circumstances, federally, before then. But in the aftermath of that election, in the absence of a clear sign that the cooperative capital markets regulator is moving forward and will become operational, whoever the federal minister is, whoever the federal government is, I believe, will receive strong advice from their officials that unless the cooperative capital markets regulator becomes operational, the federal government must or should move ahead unilaterally with their systemic-risk legislation.
One of the points of this exercise was to constrain the federal government from moving ahead unilaterally. In factoring all of these things, all of the other issues that a Minister of Finance in B.C. has to wrestle with, I hope the minister will also take into account not just the dangers of the lost opportunity but the dangers associated with the federal government and well-meaning officials, who will be saying to their political master — if you can still use that term in 2019, “Look, in the absence of this moving forward, we believe the federal government needs to proceed unilaterally with systemic-risk legislation” — which, the courts have now confirmed, they are in a position to do, in a certain way.
There’s much to consider. I think that the minister can be justifiably proud of the role her government played in arguing a case before the Supreme Court. It’s unusual, by the way — to be an active litigant against another province, be successful and have the Supreme Court of Canada endorse every argument that the province of British Columbia made with respect to the first question in that litigation.
I hope she will also see this as an opportunity to push forward and avoid the kind of scenario that will, undoubtedly, otherwise arise, with the federal government saying: “In the absence of this becoming a reality, we will press ahead unilaterally.” I don’t think that will serve the interests of British Columbia; I don’t think it’ll serve the interests of Canada. The minister is welcome to respond to that lengthy submission.
Hon. C. James: Again, thank you. I think the member said perhaps “passion” wasn’t a good description, but I think he’s shown that through the discussion that we’ve had on this issue. Certainly, another…. We talked about changes in provincial government, but an election coming up this fall is obviously going to have an impact on this issue.
[J. Isaacs in the chair.]
I appreciate him offering his views around the work that needs to occur to make sure that this doesn’t fall off the table and perhaps other issues get raised instead. Just, as I said, to emphasize the importance of British Columbia’s position being supported and the work that we’ve done in British Columbia being recognized — any kind of work that goes around this table. That certainly is a continued view of this government, a continued view that I’ll take forward as well.
M. Lee: I just want to join my colleague in having a brief discussion about this. Before coming to this House, I spent 20 years in the area of securities law, and I know the rules and regulations of this province well, at least from a practitioner point of view.
I just wanted to ask the minister, in terms of the focus of the government around white-collar crime — recognizing, in the context of capital markets regulation, the importance of this cooperative model that’s been, as my colleague has described, a long process which dates back years…. I remember, as a young lawyer, being invited to comment on some of the early work that was being done in, really, the early 2000 period.
I’ll ask the question to the Minister of Finance. In terms of the white-collar crime aspect, what are the areas that have been a focus for the government in terms of identifying how to improve the pursuit of white-collar crime in this province through the B.C. Securities Commission? I know that there have been some announcements regarding additional resources, but what is the plan of this government in terms of…? Whether it’s additional resources for enforcement or rule changes or otherwise, what is the general outline of the way that the government is approaching this focus around white-collar crime?
Hon. C. James: I think the best way to focus on the strategies and the direction of the work plan, basically, for B.C. Securities, when it comes to their work, is just to talk a little bit about the service plan and some of the areas that the securities commission is looking at in their service plan.
I know the member will have seen the service plan, I’m sure. They talk about ensuring that they act decisively against misconduct through early disruption and timely enforcement. Then there are a number of strategies to deal with that. I’ll speak about a few, and then the member can ask further questions.
One of the new strategies adopted for the service plan is how we improve our market intelligence to detect multi-jurisdictional schemes. The member will know very well that one of the greatest challenges, of course, is that criminal activity doesn’t look at borders. They don’t look at this province or that province or jurisdiction. They, in fact, look at how they can use multi-jurisdictions to be able to create difficulties and to act on crimes. So we want to make sure that we are staying nimble and up with the challenges that are faced there.
Often those promotional activities that are used as schemes to be able to create criminal activity are promotional activities that are on social media — again, a new direction. So that’s another piece that we’ve talked about making sure that we act on. Closer collaboration with other self-regulating organizations, with other security regulations — again, to close gaps. Often the gaps that are there provide opportunities for the kind of white-collar crime or crime to occur. So that’s a critical piece.
B.C. Securities Commission has also implemented a more robust collections process, making sure that we’re doing everything we can to identify and to preserve assets during the course of an investigation. Often, you will find, as I’m sure the member knows, that people will try to dump their assets. They’ll try to hide their assets when an investigation is going on, trying to ensure that we’re not able to collect. That’s a big challenge that is there. So identifying assets during investigations, freezing assets where it’s possible and looking at all of the opportunities that are there to be able to ensure that investors get their money back. That’s a critical piece.
Registering all decisions with monetary orders attached to the B.C. Supreme Court. Again, this allows the B.C. Securities Commission to use a variety of collection tools, which we think are critical to doing everything we can to be able to collect and bring dollars and resources back to support those investors. Investor education. The member may have seen some of the work that is being done around investor education. There is advertising, postings going on to remind people to report fraud and to raise awareness, which is a critical piece of work.
The member mentioned the dollars that were put into the budget on this piece. We’ve seen two new investigators hired for criminal investigations, which brings the numbers up to six. Another new investigator starts in August.
Again, we’re always looking to find experienced people who have criminal investigation knowledge as well as securities knowledge. It is a unique skill. It is a challenging skill to find people, but we think that that’s a critical piece.
That just gives the member a number of the activities that are being undertaken to address the issue of white-collar crime.
M. Lee: I appreciate that brief overview. It’s helpful for the purpose of the discussion. Certainly, even the first two points on that basic list of six, say, point towards a capital markets regulator that is national in scope. When there is recognition by the B.C. Securities Commission and, as evidenced by the Minister of Finance, a summary of the items in the service plan, it’s a recognition that market intelligence across capital markets in this province, in the country, is something that is multi-jurisdictional.
Certainly, the point being raised in the second area, closer cooperation, would suggest, of course, that there will be benefit in the area of dealing with white-collar crime by having a national securities regulation framework in place. What is the assessment in terms of these particular measures and initiatives? If this national securities regulatory framework is not brought into place, what is the assessment by the Ministry of Finance in terms of the risk that those goals will not be achieved?
Hon. C. James: I think it’s an important piece to take a look at — where this work is going — because as I mentioned and as the member referred to, criminals don’t stop at boundaries. This is something that happens across the country. It happens across provinces.
I think there is good work in place. There is good collaboration already in place, so I don’t see that shifting regardless of work that happens at the national level. In fact, I see that strengthening because I think all provinces are facing…. It’s often the same people and the same challenges that happen across the provinces.
I think that good, strong collaboration is already in place and, in fact, is growing. We’ve certainly seen the federal government engage in a way they hadn’t previously around some of the work that needs to occur, whether we’re talking about money laundering or other white-collar crimes.
Then the changes that we’re working on, that will come forward soon…. Those changes, again, will help move this work ahead and, hopefully, be a model. They could be a model for B.C. to be a leader in this work that could be shared by other provinces. The ultimate goal is not for this work to happen simply in British Columbia but for the work to happen across jurisdictions, as the member knows well, to truly be able to get at white-collar crime.
M. Lee: Well, that’s certainly the benefit of our great cooperative, federalist-type system and in the area of securities regulation as well.
I would expect that there will be efficiency gains. I recognize the current level of cooperation between the various securities commissions across this country. Presumably, with this model in place — what’s being reviewed and finalized — there will be efficiencies brought forward.
I would ask the Minister of Finance: has there been an assessment as to the expectation of what the cost savings might be to British Columbia, the B.C. Securities Commission, with the formation of this national securities regulatory body?
Hon. C. James: As we had in the discussion with the previous member, I think it’s too early to make those determinations. We certainly have to see, obviously, the legislation, see what the legislation brings forward, the implementation.
The approach that’s being taken is that it would be cost-neutral. That’s the approach taken by the cooperative capital market group — that it be cost-neutral. Again, we’ll want to do that analysis. And we will be doing that analysis once the workplan is developed, once the legislation is developed and once we have the chance to do that proper analysis, based on what it will actually look like and what duties will be covered off.
M. Lee: Thank you for that response.
On that workplan, I appreciate that that was canvassed at length with the member for Abbotsford West. If we could just ask, one level down from that initial line of discussion…. Could the Minister of Finance share with us, for example, the top three areas, let’s say, of legislation, rule-making, that need to be dealt with under the new uniform act?
Hon. C. James: I’ll focus on two areas, because those are really the main priorities right now. I think we talked a little bit about this in the timelines. I’ve kind of run through the priorities that we have in British Columbia and the work that’s being done by the Securities Commission.
At the cooperatives level, at the national level, the first priority, first top area, of course, is to develop the common act. That’s a critical piece, because if we don’t have the act in place, we can’t move ahead on the structure. Along with that act, developed simultaneously, is the implementation legislation. That really is the second priority, because without the implementation legislation, we won’t be able to ensure accountability in each province. Any inconsistencies that may occur within each province, obviously, have to be addressed if you’re developing a common act. So those two pieces, in tandem, really are the top priorities for the work that needs to be done.
M. Lee: I appreciate that. I did hear that response previously. I was really trying to go one level down from that. For example, under the common uniform act, my understanding is that there has been quite a bit of work done. So I was just trying to get at: what are the remaining areas that need to be dealt with in the drafting of that uniform act?
Hon. C. James: I appreciate the desire to get down into the nitty-gritty and the specifics going on at that table, but I think it is important to remember the context, which is that this is a cooperative and those are discussions still occurring between the provinces. This is still…. Obviously, it’s discussions, negotiations, work that has to happen between provinces and their priorities for this piece. There are new provinces, as the member will know, that are just coming on board, and they’re going to want to sit down and talk about their priorities as well.
Certainly, for British Columbia, as the member heard, through the review of the service plan for the B.C. Securities Commission, improving enforcement and collecting fines are our priorities. Obviously, we want to make sure, as we develop the common act, that our priorities and the priorities of British Columbians are represented through that common act.
That’s really the work that’s going on. It’s still going on around the table. Those are still negotiations and discussions between the provinces. We’ve had changes in government in some provinces. We’ve had a new province come on board. Those are still discussions that are ongoing.
M. Lee: I just have one or two more questions about enforcement, but I do want to just to close this part of the discussion off, then, to add my particular thoughts and comments — for the Minister of Finance, perhaps, to respond to — to, again, the comments that have already made from different perspectives, from the member for Abbotsford West.
I would say that, of course, one of the fundamental points is that B.C. is very much a driver of capital markets in this country. It’s a constant struggle, I would say, for people who are in the capital markets business here in this province to have a regulator that is well situated. So B.C. certainly needs to be at the head of the table, as was already said.
British Columbia has also demonstrated expertise, for example, in the area of securities regulation in the mining sector. That’s, we’re saying, not just mining companies that operate here in British Columbia, meaning mining properties in British Columbia, but mining globally. That’s just one example of the expertise of the B.C. Securities Commission, as generated in the course of its regulatory history.
It’s very important that in the area that deals with resource properties, technical reports, the regulations around offering memoranda — the usual ways by which investors are being asked to invest in public vehicles — that British Columbia, which has that extensive history and expertise, is very much at the centre of this process. So we certainly would not want to see the federal government step into this jurisdiction in a way that British Columbia would no longer be at the centre.
There is that dynamic with Ontario, which has been longstanding. So that joint leadership, ability and opportunity to complete the work that the minister has summarized, both the implementing of legislation as well as the act itself, will be important for British Columbia to be in that role. I certainly would urge the Minister of Finance to provide the necessary resources because in my view, if we’re able to complete this project — which has been for so many years and is near the finish line now — then the efficiencies will be able to be reallocated by the B.C. Securities Commission in what it does, in terms of a cooperative model that is going to come forward.
I’ll just leave that as a comment, and the Minister of Finance can certainly choose to comment further.
Let me flip now to enforcement, to say this. What is the plan to go forward in terms of the production, additional resources that the Ministry of Finance is understanding from the commission are going to be required in the area of enforcement? This is a longstanding issue, of course, that members of the public in British Columbia and members of the industry have been seeing as a real constraint in the area of enforcement.
What is the plan in terms of putting additional resources into the area of enforcement?
Hon. C. James: As we’ve talked about and the member acknowledged, there were additional resources, supports, put in place. The B.C. Securities Commission has recently hired two new investigators for criminal investigations, which brings the total number to six. Another new investigator will start in August. Again, I think this provides the opportunity to not only take on more cases but also to take on more complex cases. To have experienced people that both have securities knowledge, as I said earlier, and criminal investigative knowledge, will provide the opportunity to deal with some of those complexities. This comes to the number of investigations that have increased over the last two years.
The criminal investigations team has investigated over 100 matters and referred 49 cases to Crown counsel, resulting in 400 approved charges and convictions of 26 individuals. So you certainly see the team, in utilizing those resources and tools, to be more actively engaged in more referrals, more investigations and more prosecutions than we’ve seen in previous years.
T. Redies: We’re going to go back to a few real estate questions now. So I don’t know if you want to change your staff.
Minister, on the weekend I was made aware — by a director of a seniors residence in our community in South Surrey–White Rock — that some elderly people are actually putting off selling their homes to move into a retirement residence because of the drop in the value of their homes recently.
The one example he used was of a woman who was looking at moving into their residence, but whose home had fallen from about $1.5 million in value to $1.2 million. This elderly lady has now decided not to move into the retirement residence for a few years in the hopes that her equity recovers, because $300,000, of course, is a lot of money for somebody who is trying to manage their financial affairs for the rest of their life.
I guess my question to the minister: were any of these sorts of unintended consequences thought about when the minister and the Housing Minister developed the 30-point plan?
Hon. C. James: I think what’s important to remember…. I’ll go back to the discussion we had earlier about what you do when a market is overheated and inflated. There is no question that housing markets are cyclical and that, in British Columbia, when you look at a 76 percent increase, for example, in a short number of years, that’s going to have to change. That is going to have to change, and I think everyone acknowledged that — that there were going to be changes.
Again, there are a number of factors involved in that, in looking at moderation. Certainly, we, as a government, have looked at moderation not as a negative but, in fact, as a positive. I think the member herself had said that they recognized that some moderation would need to occur in the market.
I think that that’s the important piece to recognize. Yes, we are seeing adjustments. Certainly, with the kind of escalation, speculation, that was going on in the market, you are going to see those adjustments occur. It is expected in a housing market that you’re going to see that kind of cyclical approach.
T. Redies: Well, I’m not sure if people would agree that a 25 to 30 percent drop in the housing market is moderation. Some might consider that to be a real problem. I think that’s what a lot of homeowners are thinking right now, particularly those who just got into the market in the last five to six years. I will remind the minister that if the market falls 25 percent, one in four British Columbia mortgagees is underwater on their mortgage, which I don’t think is something that…. I can’t believe that the ministry would want to see that sort of thing happen, because these people will have trouble refinancing and keeping their homes.
Here’s another issue. New condo presale releases sold in the same month are falling. March saw an estimated 227 new presales sold, which represents, actually, a 75.92 percent decline, compared to the same month last year. This is on top of substantial declines in 2018 after the government introduced its new taxes. This is much faster than, I think, people expected the presale market to fall.
It’s of course extremely problematic in terms of, again, maintaining supply, because if you don’t have presales, you can’t get financing. Most banks require 65 to 70 percent presales. So now we’re seeing a dramatic drop. No presales; no financing. No financing; no condos. No condos; no supply of affordable housing.
Again, is the minister at all concerned about what we’re seeing in the presale market? And did her analysis with respect to the actions they wanted to take in the market take into consideration that her taxation policies could actually cause the presales to drop and then, ultimately, have an impact on supply?
Hon. C. James: Just a couple of facts that I think are important. We’re not seeing a 25 percent drop in prices. In fact, what you’re seeing is about a 5 to 11 percent drop in prices. We talked about the market adjustments that are occurring. This is happening Canada-wide, as we’ve already talked about.
On presales assignments, we now require people to record the assignments. There aren’t new taxes on assignments. I think that’s important to note as well: not new taxes on presales. But people are required to now register those assignments. So if there are people who don’t want to be transparent and don’t want to have their information out there, then those are people, from our perspective, that should be paying their fair share of taxes. If they’re trying to avoid that, then we want to ensure that we’re addressing that piece.
On the bigger piece around the market itself — and I think this is an important piece just to reiterate again — as we said when we brought out the 30-point plan, government doesn’t control all of the tools that are related to the housing market. There are a number of outside factors — obviously, interest rates, mortgage rules, the economy. So we will continue to monitor. That’s why it’s so critical to make sure that we’re monitoring what’s happening.
You are seeing an adjustment, a moderation in the market, which, again, I would suggest is a cautiously positive sign that we’re starting to see the kind of escalation, the 76 percent increase in housing prices, moderate. That’s a positive for British Columbia, both for our economy as well as the people who live and work in our communities, in our province.
T. Redies: Well, the minister is actually referring to the 7 to 11 percent. It’s an index. You need to look at what’s actually happening in terms of actual sales.
I can show you properties that have been listed at a certain price, Minister, and they’re down, the selling prices, around 20, 25, 30 percent in some cases. I’m talking to realtors on the ground.
Again, I appreciate the minister is taking the information from the real estate association, but that’s an index. It’s not necessarily a reflection of what’s happening on the ground in the market today.
In terms of the market and what’s happening there, one of the things…. It’s interesting because I think the minister was referring that the market was coming down across the country, yet we’ve just seen stats for Toronto where sales are up 19 percent. But for Vancouver, they’re down 25 percent. Of course, both markets are subject to the B-20 rules.
I wonder if the minister might comment on what she thinks happening is different in Vancouver to Toronto. Why are sales up in Toronto but down here?
Hon. C. James: I think, again, it’s important to just remind everyone that we’re still dealing with housing starts above historic levels. I think that’s critical to remind all of us of. That’s an important piece. We are coming off a very hot, cyclical — I would suggest speculative — market, as well, which of course has an impact on the numbers when you look at the levels coming down. We are starting to see that moderation.
I can’t speak to Toronto in the month that the member may be looking at. Again, there are month-to-month shifts that occur. Happy to review that, but again, it’s part of the reason that we look at the trends. It’s part of the reason that we monitor the market. It’s because there are outside factors that do have an impact.
I think it’s, again, just important to recognize the cyclical nature of the housing market, the shifts that are occurring and the trends that are occurring. Those are the kinds of things that we’ll continue to monitor.
T. Redies: I’m glad the minister raised the ten-year average, because we actually just checked the numbers. Of course, the ten-year average would include the 2008 drop. If you take that out and you look at the last five years, the housing starts are actually trending well below the five-year average. So again, I guess it remains to be seen whether or not the housing starts are going to meet the demands of British Columbians. I guess we’ll see how that transpires.
Perhaps what we’ll do is we’ll start again tomorrow, because we’re moving to another section. And given the time constraints of moving people in and out, we just thought it might be better to break here.
Hon. C. James: With that, I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 6:19 p.m.
The House resumed; Mr. Speaker in the chair.
Committee of Supply (Section B), having reported progress, was granted leave to sit again.
Committee of Supply (Section A), having reported progress, was granted leave to sit again.
Committee of Supply (Section C), having reported resolutions, was granted leave to sit again.
Hon. M. Farnworth moved adjournment of the House.
Motion approved.
Mr. Speaker: This House stands adjourned until 1:30 tomorrow afternoon.
The House adjourned at 6:23 p.m.
PROCEEDINGS IN THE
DOUGLAS FIR ROOM
Committee of Supply
ESTIMATES: MINISTRY OF EDUCATION
(continued)
The House in Committee of Supply (Section A); R. Kahlon in the chair.
The committee met at 1:36 p.m.
On Vote 21: ministry operations, $6,529,945,000 (continued).
D. Davies: Just before we did our break, we’d talked about schedules and budgets and such. Just kind of along the same idea, does the minister have targeted performance rates for capital projects to meet their approved schedule and budget through 2021, and what are those rates?
Interjection.
D. Davies: Targeted performance rates within your budget up to 2021.
Hon. R. Fleming: If I could maybe just ask for a little help from the member — if he could define targeted performance rates.
D. Davies: Basically what we’re looking for is some sort of a matrix for targeting achievables up to 2021, if there’s some sort of a matrix that you have to say that you’re on target, and so on and so forth. Looking at those targets that the ministry has on capital expenditures.
Hon. R. Fleming: What a wonderful afternoon in so many ways. Historical. It’s a sporting afternoon.
Just to remind the member, the main document or plan, I suppose, with the performance that the public and the school districts and our stakeholders are most interested in, is seeing how well the government utilizes the resources made available to it through our $2.7 billion three-year capital plan. Going into this year’s budget, we wanted to achieve a solid track record as a new government, spending what government allocated for us.
I mentioned this morning to the critic that we’re on track in Budget 2018 to utilize nearly 100 percent, as close as you can get, of what was in last year’s capital budget. Of course, we will give him information as we have it, once the number is confirmed, about overall capital spending in the 2018-19 year.
The target, as I said, is to fully utilize the funds we have available to us. The ministry’s primary function is really to fund projects, to review business cases, to approve them and, once we have the oversight and scrutiny from Treasury Board, to release an approval letter that details the conditions of approval, which are around risk management, typically, timelines, those sorts of things. When projects do get into unforeseen circumstances — for example, sometimes you get permitting delays from a local government — any unforeseen condition that may delay or alter the timeline, the ministry does play a role in assisting districts if and when we can play a role of assistance.
The ministry’s role is primarily, as I’ve just said, funding, granting approval and then providing oversight to the projects. Those are our main pieces of performance management that we have. The ultimate and overall responsibility for delivering projects on time and on budget rests with the school district.
D. Davies: To clarify, then, that there…. I get what you said, but looking forward over the next couple years, there’s no actual achievable, like a percentage of the ministry to achieve its targets, whether we’re talking schedules or budget…. Nothing firm or fixed, like to achieve 85 percent, or are you just setting that and “we want to do the best we can and spend all the money”? I just want to clarify if there’s an actual matrix that’s used for the ministry to achieve its capital goals.
Hon. R. Fleming: We have, as I mentioned, 157 unique projects underway across the province. Each one of them has or will have a project agreement attached to them. Those outline responsibilities, accountabilities, timelines to assist us in ensuring that school districts that deliver capital projects are meeting the specifications of a project agreement. We have regional directors out in the field that work with the different districts. So there is ministry oversight on every project.
Both partners, the school districts and the ministry, work together, for example, to meet the most important performance targets, which are around the timeline and, of course, the budget scope.
We have also tackled the problem around moving more quickly in certain settings, certain districts, where we need to move more quickly, because of the backlog of projects or the proliferation of portables — for example, in Surrey, where we have worked with the school district to bring local government to the table.
We’ve had a couple of what are called Surrey summits thus far. Our most recent one was in February with the new mayor, Mayor McCallum. Again, people came to the table with ideas about how each of the partners, the Ministry of Education — of course, I’m accountable to Treasury Board in that equation — the school district and local government, can help each other get projects started and completed more quickly.
We’ve actually had some success. The Surrey project office is reporting that permitting time has been reduced, in some cases, by up to six months on projects, which is fantastic progress. It helps us manage cost pressures on construction escalation costs, but it also helps us get kids, ultimately, out of portables more quickly.
I could go on, because, of course, we have different relationships with different districts where we do work together to speed up projects or to make sure that they’re configured properly.
There’s, obviously, a lot of dialogue sometimes in terms of what a district wishes for in their capital submission. That has some iterations and back-and-forth and dialogue and discussion with the ministry that will then, ultimately, shape the business case developments for different school projects.
D. Davies: Thank you, Minister, for that.
The former ten-year capital plan assumed a 20 percent cost share. I know you mentioned yesterday, briefly, cost-sharing and how it’s looked at case by case. On the ten-year capital plan, though, the difference of the case-by-case basis — has that changed the long-term budgeting for the ten-year plan?
Hon. R. Fleming: The ten-year capital plan, of course, is costed. But they’re very high-level estimates because of how many out-years into the future they are. The three-year capital plan is, of course, much more detailed and imminent and contemplates the spending in the…. Typically, a project is over two, possibly even three, fiscal years, depending on the construction cycle. In other words, you get a higher degree of accuracy with the schedule than you do with the ten-year plan.
As I say, in terms of a cost-share policy, this government really works on a case-by-case basis. We take into account, in each Treasury Board submission and approval, the capacity of the district. For example, we had the member from Quesnel in here earlier looking at the balance sheet of that district and its cash position. It’s not really able to make a contribution. Other districts that have significantly larger accumulated surpluses may be asked to make a contribution. So it’s on a case-by-case basis.
I’m not aware that we’ve achieved 20 percent on any project thus far into our mandate. We did formally remove the previous government’s target to achieve 50 percent cost-share contributions to capital projects, because that clearly was unworkable, and I don’t even think the previous government took that very seriously. They abandoned it, I think, before the end of their time in office for seismic mitigation projects, which at one time were contemplated for 50 percent contributions. As the member knows, SMP, seismic mitigation program projects, are 100 percent funded by the province.
D. Davies: Thanks for that. I certainly understand the ten-year — certainly the high-level, kind of, almost shooting in the dark when you get out to that ten-year mark as far as budgeting. Just kind of looking, though, at…. I guess, leading from that, then, and going on the case-by-case piece, what are some of the criteria, then, that you look at as a ministry that goes from — either it gets support or does not. Is there a kind of looking at the health of the school districts in regards to cost sharing? What is the matrix that the ministry looks at when they say: “Yeah, you guys are on the hook for this” or “The ministry will fully fund it”?
Hon. R. Fleming: To the member, as I mentioned earlier — I’ll just expand upon the point where his question seeks additional information — the capital plan instructions no longer require a fixed percent cash contribution to projects. We took that out. As I say, that was an impediment to acceleration and some of the other goals that this government had around capital investment. It doesn’t specifically state that any longer, which is another way of confirming that it’s on a case-by-case basis.
We do sit down and look at the ranked priorities of a school district, work on a sort of pre-business case — you might call it a worksheet — where we look at the things that will have to be considered and analyzed in seeking an approval. It would very definitely look at the capacity of the district to make a contribution. It might look at their local capital balances, a school district’s restricted capital funds, cash on hand, that sort of thing. It would also allow the district to account for restricted funds that are for other priorities, obligations, that they have.
Also, other projects on the horizon. So it would be a matter of looking more immediately than just what their capacity is on one project, but potentially where they may make additional investments in future projects.
I think if the member’s satisfied with that, in a nutshell, that’s how the cash contribution policy is managed by the new government.
D. Davies: Over the past…. Certainly since we last met for estimates, does the minister have, readily available, a list of projects where the variances have been done: fully funded by the province versus projects where there’s been a partnership, a shared agreement — a list of those?
Hon. R. Fleming: I don’t have a complete list or analysis of cost share on every project. We don’t have it at our fingertips here. But what I can confirm for him is that there are certain areas of the capital budget that we’re debating here in estimates that do not have a cost-share requirement. So we talked about the seismic mitigation projects. That’s a significant portion of the $2.7 billion.
Also, where districts are involved in site acquisition, there’s no local contribution required unless there happens to be a fund — the acronym is SSAC — so locally generated municipal taxes, which are, typically, a very, very small percentage of the school site acquisition charge.
What I do have available, and I think it’s instructive for…. At least, Surrey is a large school district — by far, the largest. I do have some information for the member on how cost share works in Surrey that maybe is of interest to him.
We had an agreement with four projects where the district would make a $5 million contribution, for a total of $20 million. But it was also in the context of a number of approved projects that had no cost-share requirement at all.
So when you add it all up together, it totals about $287 million worth of investment in Surrey that is for projects on the go or soon to be underway. In terms of percentage amounts, that would amount to about 6.96 percent. That’s the local contribution to the province’s investment in Surrey.
D. Davies: Thanks for that, Minister. I understand you may not have that at your fingertips. Is it possible to get a list of those at a later date? If we can get a commitment?
Hon. R. Fleming: I’ll commit to the member that we’ll endeavor to get him some information on cost-share examples or cost-share agreements — those sorts of things that will give him some of the information, I would imagine, that he’s looking for.
D. Davies: Great, thanks. Yeah, I’m just looking at the school districts that there are cost-share agreements with and ones that the province has fully funded as well. That would be great to get that.
Does the minister have an idea of how much construction costs have increased on new school construction projects? Looking at this year as well as next year, just looking at the general costs of everything, what is the number that the ministry is using for looking at for increased construction costs?
Hon. R. Fleming: The assumptions we’re using to manage construction cost pressures escalation is currently about 1 percent a month for the project, which is measured to the date of tender or the midpoint of construction, depending on what risk management tools are being utilized in the project agreement.
D. Davies: I assume that’s the same for seismic projects as well.
Hon. R. Fleming: Yes.
D. Davies: Recently lots of discussion around the community benefits agreement, increased employer health tax — all these other costs that are out there right now that are burdening a lot of construction folks. Just kind of tying into the last question, has that been taken into increase? When I look at 1 percent, I’m not too sure if that has.
Has the ministry been looking at…? Well, I guess maybe what my first question should be: are school projects going to be bound by the community benefits agreements? I’ll start with that question first to the minister.
Hon. R. Fleming: Thanks to the member for the question. The answer is no. School projects are currently far below the threshold in the CBA of $500 million projects.
D. Davies: Area standards policy that is set out in the ministry. You know, it was interesting. I think yesterday out on the front steps…. Of course, we’re looking at the music and education. I know the Premier was out there and such.
From the looks of it, the policy does not allocate space for art rooms, music rooms and such. I’m just wondering if that is now the policy moving forward in regard to the area standards policy.
Hon. R. Fleming: To the member, the area standards policy actually hasn’t changed in 18 years, so I don’t know if he’s making an argument that schools were underbuilt during the 16 years his government was in office. But they haven’t changed, or barely changed. We are reviewing them, however, but I don’t think it would be a very sustainable argument to suggest that art rooms and multipurpose space and common areas and, in some cases, third gymnasiums and all the features that we’ve seen in new high schools or elementary schools, as the case may be, haven’t been present.
If he’s talking about the points that I think the member for Vancouver-Langara was trying to make, the district has the flexibility to design the school within the scope that is approved, that is based on the area standards that have been around for at least 18 years.
The design is ongoing at Hamber secondary, still. There is consultation with the community on that, but the latest update I received from a Vancouver school board administrator who’s working on the project is that there is a band room, there is a strings room, there are five practice rooms, and there is a choral room. So there are music facilities contemplated at that new high school.
I think I’ll leave it at that because, undoubtedly, maybe the member has some additional questions about the capital standards, but I will also let him know that we are, as a government, planning on reviewing the area standards. We have not undertaken that work at this point in time, but we are building schools right across British Columbia that have innovative class space.
The member knows — you know, Margaret “Ma” Murray. I was touring that school with him. I can’t think of a more beautiful, flexibly designed school that is better in tune with the new curriculum in 21st-century learning spaces than that school. It is a model. Similarly, Salish Secondary in Surrey, a beautiful, brand-new school that has all kinds of music and recording facilities and different specialized spaces that align with the district’s learning choice programs.
There’s lots of room and there’s lots of autonomy for school districts. I appreciate there has been a little bit of static and noise at Hamber, and we hope that the school district, through its engagements with that community, will be able to satisfy the expectations of parents and students. But we don’t hear that typically from other districts.
I mentioned yesterday the school that was approved, Burnaby North Secondary, at almost the same time as Eric Hamber. They have proceeded to consult with that community and build the school that they want to design on that site, and even though it was announced after Eric Hamber, they’re months and months and months ahead of the Vancouver school board.
So we appreciate that Burnaby and other districts are moving quickly, and we’re confident that Hamber and the Vancouver school board are working on ensuring that the space that they design will support all of the programs that that school has historically supported, and maybe even some new programs that they contemplate.
D. Davies: Great. Thanks. I certainly agree about Margaret “Ma” Murray. I know that you yourself have toured it. It certainly does capture a lot of that, and a lot of that has extended to our school districts around the province — you know, their creativity and resilience, maybe, and such to work within the confines of budgets.
On to my next question, which you kind of alluded to. You’ve already mentioned that there’s a plan to review the policy. Are there any timelines to that, and what might that look like rolling out?
Hon. R. Fleming: What I’ll tell the member is that I have instructed staff to prepare a workplan around this project, around this review of the area standards. I expect to have that workplan for my review at the minister’s office in the next couple of months.
D. Davies: Great. Thank you. I look forward to hearing about that as well.
I know my colleague from Surrey touched on the Surrey portables, Surrey schools. I know that it’s certainly a challenge for government. I had the opportunity to meet with the Surrey school board some months back. Actually, I can’t remember who I bumped into outside. It’s certainly at the forefront of the school district’s mind, as it is for the residents of Surrey — of course, a very unique situation, just the sheer growth of the Surrey school district.
I think the last couple of estimates, this has been a big topic of discussion during this time with the minister. The last time that we were talking, there was a goal to substantially complete the timeline of eliminating portables. Again, as my colleague had already stated, we can see that that…. I’m not too sure if the goal just didn’t happen.
I’m just wondering where we are. We’ve moved from…. During the budget update estimates that we had back one fall, there was a lot of talk around the Premier and the minister’s four-year commitment to remove portables. Last estimates, the minister’s commitment to substantially reduce, having the aim toward a 50 percent removal of portables in two years….
We’re coming up on that, and we’re still not seeing the portable issue being dealt with as stated by ministry, as stated by the Premier. I’m just wondering if we can get a real in-depth update on where we are on eliminating the portables and building schools in Surrey.
Hon. R. Fleming: I know we had the chance to canvass this with the member for Surrey South the other day. But he’s asked for more of an overall update, so I think it’s a totally fair question.
Maybe to begin with, in fairness to the Premier when he made the commitment to the people of Surrey, neither he nor Glen Hansman nor literally anyone in the province could have imagined that the Supreme Court decision would have happened in 15 minutes flat and would have, in an instance, absorbed 10 percent of excess capacity in B.C. schools. Literally 10 percent of schools became occupied by smaller class sizes.
I think that’s on the previous government, quite frankly. After 12 years fighting with the B.C. Teachers Federation in court and losing in such spectacular fashion, it has put a pressure on districts around B.C. Having said that, we responded by funding the additional portables. That required Surrey, which did not have excess capacity, to purchase portables for the September 2017 school year. Those were funded by the government. But our approach has been to really double down and work as hard as we can to get kids out of portables in Surrey. So I’m really, really pleased.
I’ll list these out for the member to see the unprecedented level of construction going on in Surrey. Disappointing that when we inherited government, there was very, very little underway and very few that were actually approved by the government. There was no money attached to some of the projects that had been announced. We’ve talked with one of the opposition members already about that in estimates.
Here’s what we have done. We have 11 approved projects under construction with contracts awarded or in the tendering process: Panorama Park Elementary addition; Pacific Heights Elementary addition; Coyote Creek Elementary addition; Frost Road Elementary addition; Sullivan Elementary addition. Maddaugh Road elementary, new school; Edgewood Drive elementary, new school. Those both have 655 seats attached to them. Douglas area elementary, new school under development. Regent Road elementary, brand-new elementary school — 655 additional seats there.
Grandview Heights secondary, which was not funded by the previous government — in fact, it was languishing entirely — has got underway. Contracts have been awarded. That’s a brand-new 1,500-seat secondary school that will be built in Surrey, targeted for a September 2021 opening. Sullivan Heights Secondary addition, an additional 700 seats at Sullivan Heights Secondary. So that’s 5,670 seats approved.
Then we have supported seats. Again, I’ll read the list of the ten projects. We have 11 projects that are approved and underway and ten that are now supported by our government, a total of 21 projects. The ten supported ones include: South Newton area elementary, Sunnyside area elementary, Sunnyside Elementary addition, Morgan Elementary addition, White Rock Elementary addition, Martha Currie Elementary addition, K.B. Woodward Elementary addition.
That’s an additional 2,085 seats. When you combine them with school spaces that have already opened during our mandate — that would include Salish Secondary and Woodward Hill Elementary — it’s a combined total of 9,450 seats either completed, approved and underway, under construction or supported by the government. So I’m pretty pleased with the pace of things in Surrey.
As I mentioned earlier, the Surrey summits have been invaluable. We’ve retooled the Surrey project office. We’ve had the cooperation of both the previous mayor and the current mayor of Surrey to be able to achieve cuts in the permit wait times that, of course, cost money. That’s a way we can manage construction cost escalation and just move faster so we can get kids into schools more quickly.
We’re closing in on 10,000 seats. We also have some other things that are under discussion with Surrey, but I’ll save those for another occasion to discuss with the member.
D. Davies: Thanks, Minister, for the response. It is good to see that there is stuff happening. I know my colleague from Surrey South certainly did thank you, as well, and the ministry for that.
The fact remains…. I guess this kind of goes back to what we were talking about with Burke Mountain, as well, and other things that we’ve heard from this government over the past few months. It comes down to the statements being made and the promises being made. To use the Supreme Court ruling, which was done in November of 2016, well in advance of the promises being made…. I think it was November. It was in 2016, I believe, anyways, but in advance of the promises being made. I think that’s kind of where this comes down to.
When the minister took the role — I’m just re-echoing what my colleague had said — there were 273 portables in Surrey. The number now, since the new government has been in place, is 358. We’ve got an increase of well over 30 percent, a 32 percent growth, in portables in two years. We’ve talked about a promise of removal in four years, a double-down on that — the budget update estimates on having 50 percent of them removed in two years — but it has gone the other way. It comes back to the promises being made.
My question: does the minister still believe that the minister can complete the elimination of portables during this term of the minister’s government?
Hon. R. Fleming: Thank you to the member for the question. First, maybe I would just say that we’ve got a lot of support amongst the business community, the city hall and the Surrey school district, which are delighted that they have a government that is working as quickly as we are, that is focusing close to a quarter billion dollars already, in just 20 months, on school construction. They’ve never seen that, quite frankly. When we saw a new school open up in September 2018, it was the first one that had opened in Surrey since 2014.
I would contest the member’s characterization of portables. Look, this problem was made far, far worse under his government, and we didn’t inherit projects in the capital envelope when we took office. When they took office, there were 160 portables in Surrey. When they left office, there were over 300. So they nearly doubled in Surrey. We are still aiming to eliminate portables, and we’re on our way now to see a significant reduction in portable use in Surrey. But the reality is that because there was so little construction underway or funded in Surrey, we have had to start from square one with projects announced.
As much as we would like to build a school in three years or less — we are really leaning on the throttle to be able to build a school in three years in Surrey — it’s still very, very difficult to do. We have an unprecedented number of projects underway. I listed them all to the member. We have 21 projects being built or supported by the ministry, representing 9,300 seats. For a school district that has about 7,000 kids in portables to have 9,300 identified seats on the way is what Surrey has been waiting for, for a very, very long time.
I’ve mentioned to the member, too, that there are two sources of portables increase in Surrey that are not the fault of this government. In fact, they are the fault of the previous government. The largest was around the Supreme Court decision. Because they’d fought the teachers for 12 years and were ruled to be acting entirely unconstitutionally, class sizes were reduced — which is a good thing for kids — but in a district like Surrey, which has far too many portables already, it meant that more had to be acquired.
The other policy this government has pursued that has claimed most of the new portables ordered is our elimination of adult basic education tuition fees. Again, this is a good unintended consequence, but by removing barriers to adults who either don’t have a Dogwood certificate or don’t have the right transcript to be able to get into college or university or a trades program, we have seen a phenomenal response — by people investing in themselves, wanting to build better lives for themselves and their careers — which will have tremendous dividends for British Columbia and, incidentally, will also help us with the construction labour situation in B.C.
Investing in those people has required…. I think last year about 14 new portables were required in Surrey to deliver adult education. That’s not strictly K to 12, five-to-17- or 18-year-old education, but it is education delivered by the school district that’s very valuable and that is delivered by the Surrey school district.
D. Davies: Do the ministry and the minister have a cost estimate of how much we’re looking at it costing to get those 10,000 students out of portables? What kind of a cost figure is that looking at?
Hon. R. Fleming: For the projects that I read out — the 11 approved and the ten supported projects, which are all commitments of our government that are funded now — that total is $510 million of investment into Surrey. I can also tell him that there are additional projects contemplated that have notional costs attached to them that will drive that number up even further, but to date, it’s a $510 million commitment now.
I should say that how that $510 million will be expensed over the next two to four fiscal years is a different matter. It might be a little bit tedious in estimates to try and get into that kind of schedule detail. It’s a $510 million total approval right now, which is directed towards the projects that I’ve identified.
D. Davies: Construction of several schools in Surrey has been delayed. There are a couple of news articles. The Peace Arch News talked about some delays expected due to cost increases and such.
The minister has had to increase spending by as much as 300 percent overall on some of these projects. What is the government, the ministry, doing to try and get control of the pressures that are on construction in Surrey?
Hon. R. Fleming: The member’s question was what this government has done to manage cost escalations. First of all, I don’t know if he was misreading a number, but the cost escalation is nowhere near what he’s described, if I heard him say 300 percent. We’re not finding that $30 million schools now cost $90 million.
We have employed a couple of strategies. One is we’ve updated the unit rates. That hasn’t been done in five years. That helps get more realistic project estimates for tendering. Our government has also bought sites far in advance so that we don’t overpay for them. We have them acquired, and we’re able to build more quickly on that. So we have become more active on site acquisition.
The district has pursued common design for some elementary schools — or, at least, common major elements of design. They’re not either delaying or wasting money unnecessarily on architect fees, and they are able to scope some of these in a similar manner.
I’ve mentioned already the Surrey summits, which have allowed us to bring an increased focus on expediting city approvals and permitting. The example I can give the member in terms of delays, if he likes…. Grandview secondary was announced in 2016, under the old government. Inadequate funding attached to that. I’m not actually even sure that it got approval from Treasury Board. So in that sense, not a real project but announced to the community, nonetheless, in 2016.
When we came into office, we found that no work had been done on Grandview at all. We went out to the market, and we found, lo and behold, that it cost considerably more than what the government of the day, which announced it but never funded it, thought it would in 2016. So I wouldn’t count Grandview secondary, quite frankly, as a delay. I would count it as government trying to expedite a project that never got off the ground.
What I will also say is that there were a number of projects that are mentioned in the article that the member cited. These were projects that were re-tendered. In other words, there have been some cost escalation issues on some of the projects that we endeavoured to begin. We moved as quickly as possible to make sure that those were re-tendered as quickly as possible. So what could have been interminable delays…. In some cases, we’re talking three- to six-month delays. We managed them aggressively. We managed them as quickly as possible to get them re-tendered.
I will tell the member happily that those five projects that he cited…. Since they’ve been re-tendered, none of them have come in over budget. They’re all proceeding.
D. Davies: This was a fairly recent article that talked about…. Grandview was mentioned as one of them. But all the schools in the Douglas and Edgewood Drive areas, Pacific Heights as well, came in over budget. From what I understand now, they’ve been re-tendered, and they’re all on budget. Can you talk a little bit more about that? What does that look like?
Hon. R. Fleming: They’ve all been re-tendered, and all of them have come in under their tendered budget.
D. Davies: Was there an increase in those numbers when you re-tendered them?
Hon. R. Fleming: Yes. That’s why they were re-tendered. I mentioned Grandview as, I think, a shining example of something that was notionally approved in 2016 and had a number attached to it. Lo and behold, in 2018, that number was wildly wrong, and the market didn’t support it. We found that out when we tried to get bids.
We re-tendered it. Now it’s under the new, re-tendered budget.
D. Davies: Going back to my question of a couple of minutes ago, when I hear the minister say that they were re-sent out and now they’re magically on budget, it doesn’t really go back into: what’s the government doing to try and control these cost pressures on government? Obviously, as you move forward…. I believe the ministry, then, has to look at some different techniques, other than: “Let’s tender a school out. Okay. Well, we’ll just increase the number.”
What are some measures that can be looked at to control these expenses that are going up, not just cranking up the tendered budget?
Hon. R. Fleming: I think I have given the member some idea of some of the approaches we’ve brought to the table to manage costs. I mentioned that we’re acquiring sites quicker so we can build quicker. The school district is using common design techniques to cut down on architect fees and also have the project designed much more quickly. Time is money in a cost escalation market.
We don’t control the cost escalation market in British Columbia. We don’t control the White House and steel tariff policies and those sorts of things. Those are some of the things that are driving costs. We also can’t predict accurately what it will look like in the future. It could be that it will cool off, which would be a welcome occurrence this year. There are some speculating that it will. We’ve gone through an extreme blip that affected both the public and private sectors. It’s related to material costs increasing. It’s related to specific products like steel. That may normalize.
We have also, as I mentioned, as a cost escalation strategy, sought the assistance of city hall. They have, as I mentioned earlier — on a couple of occasions now, I think — reduced permitting time. Any time we can reduce time, because time is the enemy on cost escalation, then we manage costs more successfully.
Now, the only alternative I can think of, and it would run counter to what I think I heard the member for Vancouver-Langara talk about yesterday, is we could, I suppose, to stay on the original budget, shrink the school or forgo the quality of the school. But we’re not interested in doing that.
We want to keep those projects that have been determined by the school district under development. So I think it was a good strategy to re-tender the five that we needed to re-tender. The market responded quickly, where there was no interest before. Those projects are underway. They did come in under the re-tendered budget, which is a positive development and maybe is a sign of a normalizing construction environment.
D. Davies: Going back to a question two questions ago, I kind of got a long preamble. I’m not sure if I got the answer, looking at cost increase and such on Surrey. Again, just as recently as a few months ago, the minister said he was very confident that he would have these projects done by 2021 and all students out of portables. I guess I still wouldn’t mind a firm response on portables if he still believes that his government is able to stick to having all students out of portables by 2021, during the term of his government.
Hon. R. Fleming: Just to go back to some of the projects that I’ve listed a few times now…. I won’t list them again, but I will go back at summary level, where we have completed, under construction, contract-awarded and tendered projects. We have about 7,300 seats under development that are scheduled to be completed by the fall of 2021. I believe the next election is the fall of 2021, unless we hear differently. That is the mandate. We can expect that many seats.
We also have additional supported projects too that may come good, because some of them are additions, and the construction period is a lot shorter for that. They’re in business case development or on the verge of getting funding attached to them.
We’ve got the 7,300 underway or already completed. Let me get the member an accurate number. We have up to 2,100 additional seats that we hope to aggressively push and have built. I think in the case of the additions, those are achievable. In the case of additional new schools that we have contemplated, they would probably come in the 2022 period.
Let’s not kid ourselves. This is a fantastic sea change of a story in Surrey. The school district has never seen this magnitude of construction. One of the things we had to do, in terms of ramping up, was to make sure that the Surrey project office had the expertise and the available personnel to manage this many projects all at once. They’ve never had this much work on their desks. But morale is high. We’re proceeding at record pace with the city of Surrey, getting projects done.
Where we do encounter really, really difficult market circumstances, the construction escalation that we’ve already talked about, I’m sure other governments would have shied away from the challenge and said: “You know what? We’re not going to build in this environment.”
We took the opposite route. We said: “How do we put out a competitive re-tendering process so that we don’t delay those schools that were promised to Surrey families by the old government for, let’s face it, 12 years?” We want to deliver on it. We want to do things a different way.
I think, all in all, when you look at the validation quotes from the Surrey Board of Trade, when you look at business leaders…. Even Dianne Watts has been incredibly complimentary to the efforts that our government has made, in marked contrast to what was promised and underdelivered previously. I feel good about where we’re at. We want to do even more, and I think we’re in a position where we can deliver more.
D. Davies: Again, I just, you know…. A lot of this that I go back and mention a few times goes back on to what the minister said. I’ll just read a quote from last estimates: “I would love for this member” — that’s talking about me — “to judge our government by its action in a year or two from now.”
Here we are a year from then. I am judging, and I will certainly continue, as you move on, to do that. That is certainly my role as the critic. I kind of chuckled at one of the…. I don’t have it verbatim, but I remember the minister quoting that to me: “Just watch. You’ll be seeing the tail-lights, and those will be the tail-lights of the trucks hauling the portables out of Surrey.”
Interjection.
D. Davies: It’s in Hansard. But you know, we’re not seeing the tail-lights of trucks. I think we’re seeing headlights of trucks hauling portables into Surrey. I am hopeful for the residents of Surrey. I’m hopeful for the government that things are achieved, that this isn’t just wind that is being given off.
We hear a lot about our track record. The minister certainly has mentioned it. I’ve lost count of the track record. But in reality, in 1999, there were 370 portables in Surrey. In 2017, we had reduced those by over 100 portables in that time. So there has been work; there has been action happen. We understand the complexity of the issue, so instead of looking at the past, I am certainly willing to look at the future, and we can get things done.
With that, I’m going to move on to a couple generalized portable questions, moving on from Surrey. Do the minister and the ministry have a breakdown of the numbers of portables in each school district around the province that he’s able to share?
Hon. R. Fleming: The answer to the member’s question is yes. There is an inventory kept of portables in districts around B.C.
I know the member wasn’t satisfied with the completeness of my answer previously around Surrey and portables, so let me just offer counter information to the way he has identified, and even claimed as an achievement, some kind of mythical portable reduction under the B.C. Liberals.
I think we’ve covered well enough in this set of estimates and others that it takes three or four years to build a school. Where we saw the steepest portable reduction in Surrey’s history was between 1998-99 and 2002-03. The government changed in 2001. Projects that were approved and under construction would have continued right into 2003. That’s when Surrey reached its lowest point of 160 portables, when the government left. Immediately after that capital cycle of approved projects, under a different government, we saw portable usage go up each and every year in Surrey, until it climbed to 340. They left office with about 300 portables in place.
The record is not good in Surrey. The growth was predictable. The school capital budget in the ministry was cut in half day one when they assumed office, and there was underinvestment in Surrey. Everybody knows that, including people who are members of the member opposite’s political party. They’ll tell you that quite frankly.
The people who are running the school district in Surrey are not card-carrying members of my party — quite the opposite — but they’re thrilled to be working with a government that is seeing construction activity all around Surrey right now, that has moved quickly to approve projects.
If the member thinks that he’s not seeing it and wants to quote me out of Hansard, fine. But what I would really encourage him to do is to spend half a day in Surrey and drive around to all the sites that are under construction. I’d be happy to invite him to the next groundbreaking we have. We’ve had several. His own caucus members have attended them. They’re pretty good at getting there.
He’ll see that things have changed in Surrey. There’s more underway. There’s more about to be underway. It will lead to a significant reduction in portables that we have not seen in 20 years. We did see it 20 years ago. Then we saw the foot taken off the gas pedal and the number of portables allowed to double.
We’re now in an aggressive period of school-building in Surrey, finally, once again, and it’s paying off.
D. Davies: Just regarding the portables provincewide, I’m looking forward to getting a list of those.
Does the ministry have a cost estimate of how much it’ll be to eliminate portables across the province?
[R. Glumac in the chair.]
Hon. R. Fleming: I appreciate the member’s question. What I can say is that the ministry has been looking at alleviating over-crowdedness. That’s what portables are a symptom of — overcrowding in school districts that are experiencing that. There are about nine or ten districts in British Columbia that are particularly fast-growing, and we have announced, in 20 months, projects in all of them. The member will be familiar with some of them because we’ve canvassed them in estimates.
I mean, you look at some of the announcements we’ve made in Chilliwack, which is a district that definitely does have portables that were allowed to accumulate under the previous government. We have announced a new South Side elementary. It’s an elementary-middle school, actually — 900 new seats there. We’ve acquired the former University of the Fraser Valley campus site, which will be supported to be converted to a secondary school. These are major creations of thousands of new seats that will allow the district to significantly reduce, if not eliminate, portables and their use.
His own constituency is where I had the privilege of attending the Margaret “Ma” opening day and then breaking ground on the new elementary school there, which I think has a working title of northeast elementary. Fantastic facility, which the school district at the time said will eliminate the use of portables in that district. So we hope…. We can’t get complacent about that, because if we don’t have additional school construction in the years ahead, we won’t be able to maintain that claim. But the school district certainly claimed that they would eliminate portables in the critic’s own riding, which I think is fantastic news.
In my backyard, Sooke is the fastest school district, in terms of growth, per capita. We have announced new schools, additions. We’ve purchased land.
We have many, many more announcements under development and underway. I would ask the member just to pay attention, because we have a very busy cycle of announcements coming up that will follow the very busy cycle of announcements we’ve just had. He knows how busy we’ve been on the seismic front.
Another growing district I could cite is Langley. There’s a new northeast Latimer school that’s underway. We purchased a site for Yorkson elementary. So Langley will be seeing a portable reduction. They’re also going to see the opening of Willoughby secondary school in September 2019 — so thousands of spaces in Langley as well.
The list goes on and on. Abbotsford, as well, has been supported by our ministry to acquire sites or build new schools. We intend to do more of that. We have a budget that is before all members of the House. I know the members opposite will quibble with some things in the budget. I hope they don’t oppose, in spirit and intent, the record level of capital funding that we have on the table, because it’s going to allow us to do what we’ve already done in the member’s own riding, which is eliminate portables, if we keep the sustained boom in school construction going on in B.C.
D. Davies: I certainly recognize a lot of growth. Again, I’m going to go back in some of our records. Some of those schools certainly were pushed forward from the previous government. Good to see that the current government, of course, is continuing on with those, because it is a benefit to all students, at the end of the day. And I’m certainly happy with what is happening up in Peace River North as well, with the schools.
You mentioned seismic. I’m just going to move on to a couple of seismic questions. I know the minister has certainly had brought to his attention Edith Cavell School. Lots of discussion around seismic upgrade. I think they’ve titled it with the #getseismicright hashtag on Twitter. I’ve met with the parents and such from Edith Cavell School. Lots of worry about the precedent that is maybe being set or how Edith Cavell is being undertaken — a multi-million-dollar maintenance deficit on the school, a planned multi-million-dollar expansion on the school, but moving forward, initially, with a seismic upgrade to the tune of $13 million or $15 million, I think it was. I don’t have the number right in front of me.
Parents are concerned. Is this the best use of tax money, going about it this way, as opposed to just looking at a new school? I’ve had contact from lots of parents that are wondering that question. I know that you’ve been barraged with the same emails that I’ve been receiving. I mean, I’m cc’d on most of them.
I’m just wondering: what is the plan with Edith Cavell? With all the seismic projects happening, are they looking at what’s best in the long term regarding how to deliver these, looking at replacement option versus just doing a seismic upgrade?
Hon. R. Fleming: I certainly have spent my time meeting with Cavell parents, visiting the school site. I met the principal and some of the teaching staff there as well. I would say this as just a general comment. Not every school — even a school of the age that Cavell is, which is 100 years old — is going to be a replacement project. I think everybody knew that.
We have a sophisticated 40-year life-cycle analysis, but we do have to pursue the low-cost option — although, having said that, there are some districts who still prefer replacement or substantial replacement of a school, and they’re more than welcome to put in their own additional local funds. The memorandum of understanding in Vancouver allows the VSB to do that. In fact, they were asked, I think, by the parent community of Cavell to do that, and they declined to do that. I’m not going to speak to that decision or criticize it in any way.
For the ministry, if we were to look at the gap between replacement and seismic upgrade and they were to run in the $6 million to $8 million range and skip towards replacement…. You know, we inherited a backlog of almost 70 schools in Vancouver alone. Now, you magnify or multiply $8 million by 70. What you’re going to do is suddenly take a program that is designed primarily for life safety — let’s not forget, this is designed to have kids and staff survive a major seismic event — and if you were to absorb all of the additional costs and make every school a replacement, you would be doing less seismic upgrade activity.
You would have less safe seats. We’re pretty proud that after 20 months in office, we have 20,000 safe seats underway, being delivered in Vancouver and other districts. We’ve invested nearly a quarter billion dollars in Vancouver in ten seismic projects, some of them major projects. A number of them are replacements schools because that’s what the detailed business case analysis suggested was the best investment.
Edith Cavell, in the analysis that was done by the Vancouver project office, came up short. There is a gap. The parents lobbied the school district to fund that gap. The school district declined, or has so far declined. I appreciate that parents have advocated to the Ministry of Education, but it’s difficult to make an exception that could become a rule and would cost our ability to make more kids safe throughout Vancouver.
It’s not a “get a new free school” program. It’s a life safety program, first and foremost. It’s designed to meet the engineering standards that can withstand a major, serious earthquake, and that’s what we should do. I would say that one of the projects I was able to announce in my own constituency was an $11 million project on a 70-year-old school. I’m not expecting anything different for kids in this district than I would in Vancouver.
We have districts like North Vancouver that desperately wanted replacement schools. They funded the gap. That’s their choice, and that’s great.
Vancouver is free to do that, and they may wish to do that. They may even have the means to do that now that they’ve had, for example, $75 million put into their pockets from B.C. Hydro on the Roberts Annex sale. I can’t speak for them. I think they’re making decisions that may allow for that.
We are going to have a lot more announcements. We’ve had one every two months in Vancouver. We’re going to continue at that pace. Some of the announcements we make…. The member will appreciate that some of them will be replacement schools and some of them will be upgrades. They will all be good projects.
We will endeavor to address deferred maintenance, as we go, on the projects that are upgrades. So $2 million, I think, in the case of Cavell, is to look at outdated electrical and other mechanical deferred maintenance. It was not deferred under us, just to be fair. But that will be part of the scope of work.
D. Davies: I certainly understand that. Of course, the school district is making a lot of its decisions based on the funding that they have. The argument is quite sound. When you look at the deferred maintenance, you look at the proposed expansion on the school, and then you add in the cost of what a seismic upgrade is going to be. Looking at the footprint of the land, it makes sound sense to have a new school built there.
I think a lot of it comes down to, again, that funding gap that’s there — what the ministry is able to provide. So maybe I’ll have the minister…. If he wants to respond to that, and then I’ll move on to a second question about seismic upgrades. How many seismic upgrades have been approved in the last year?
Hon. R. Fleming: Let’s go back to the member’s previous question. He asked me how we’re going to manage construction cost pressures. And now he appears to be suggesting a policy that runs completely counter to what his government’s own policies were.
I guess your new policy is a replacement school in every instance. Is that what it is? It costs a lot more. So how are we going to manage those cost pressures? You just asked me how we’re managing cost pressures on new schools in Surrey. If we were to do what you’ve just suggested — I think I’ve heard you clearly — we would have additional cost pressures that would mean less construction activity: either less portable reduction activity or less kids safe in the event of a major earthquake.
I don’t know what you’re advocating for here, but we have said, very flexibly, to Cavell and to the Vancouver school board: “If you want to replace the school, we will pay the whole 100 percent cost of what was agreed upon through the Vancouver project office.” They’re free to do that. Other districts have done that.
We can agree that there should be the same set of rules for different districts, I presume, unless there’s a Vancouver exceptionalism that is being argued here. Look, we’ve done ten projects in 20 months in Vancouver. If the previous government had gone as quickly as we have gone in Vancouver in our 20 brief months of existence as a government, we wouldn’t even be talking this afternoon about seismic upgrades in Vancouver. They’d all be done.
It’s a little bit hard to take advice from a former government that failed so utterly in Vancouver to keep kids safe — after looking in the camera repeatedly, as former Premier Christy Clark did, and saying, “Nothing is more important than the safety of our kids,” and then not following through.
We will continue to accelerate seismic upgrades in Vancouver. We committed to doing that. We are doing that. And if I were a Cavell parent, I would want exactly the same thing, quite frankly, and I told them that. I said: “I’d probably want a new school as well.” But I would probably look to my school district to assist in doing that. I think that they have. I don’t want to, in any way, compromise any discussions that might be happening between the Cavell school community and the school district, but we’re willing to cooperate. We’re willing to add SEP funds to make this an excellent project.
We see lots of 100-year-old buildings and 50-year-old buildings that have been re-engineered to the most modern building standards so that they can survive an earthquake. We’ve done it cost-effectively. We’ll continue to do it cost-effectively. Some of them will be replacements, and some of them won’t.
From an opposition, once government…. I won’t blame the member, because he wasn’t here. But for a government that had a record, like the old one did, of utterly failing to come through with the seismic upgrades — and I’d love him to ask about Richmond; we can get into that too, our record versus the old government’s — to now suggest that they advocate for a completely different standard is very interesting to hear. Let’s put it that way.
D. Davies: Let’s also say that the minister is government right now, and we’re looking at how we’re moving forward right now. Those are my questions and what I’m aiming at.
Going back, there are going to be case by cases. I’d encourage that the ministry, partnering with the school board…. Hopefully, there can be some resolve with the parent advisory council and the parents of that neighbourhood that are looking to advocate for a new school, which seems like the best option.
My last question I did have — I’m not too sure if you have an answer for it yet — is looking at how many seismic upgrades have been done in the last year.
Hon. R. Fleming: The answer is 31.
D. Davies: That’s 31 that have been completed or 31 that have been approved?
Hon. R. Fleming: That’s 31 approved.
D. Davies: Just to confirm, approved — that’s funding’s in place by Treasury Board?
Hon. R. Fleming: Yes, approved means approved by Treasury Board.
D. Davies: Great, thank you. I think that really completes the main questions that I had around the capital, so I’ll move on to other questions. I’m not sure if you need a little switch of staff or if they’ll come over as needed. We can do it that way.
The question for the minister is…. The report is out. There’s going to be more consultation done regarding gathering information. There are stakeholder engagements happening. Is there going to be anything open to the general public regarding engagement?
Hon. R. Fleming: What I will give the member is just a brief update about where we are and where we’ve been. We have been at the funding model review close to 18 months. Various periods of intensity — some very public-facing periods at the outset and in the intermediate period of the review.
This is something that I know the critic will know is part of my mandate letter. It’s part of our commitment. It’s something we talked about in the election and also was something that, for at least 12 years — nobody can quite remember, but 12 or more years — resolutions were soundly endorsed by the B.C. School Trustees Association and others to undertake. That’s why we started this exercise.
The first phase was to have a publicly available comment period. So we put out a discussion paper that sort of set the frame about what the current model is like, what the things are that may be of interest to the public and for consideration of government.
I should say, in contrast, that the transparent and open manner that we have conducted this funding model review is really quite remarkable in contrast to the current model that we use, which was imposed in 2002 with no consultation. School boards weren’t asked. Parent organizations weren’t asked. Teachers and support staff certainly weren’t asked. The opposition barely even had a chance to debate it. It was rammed through the Legislature in record time. So we didn’t want to do that.
I can’t imagine designing a better funding model that would deliver on sustainable, predictable, multi-year funding for the school districts and that will address the agenda around student success and help vulnerable kids who currently aren’t particularly well served by the model that’s being used by school districts and the ministry today without having the kind of input that we have had and will continue to have.
To go back to the outset and the initial period of openness and transparency, we had 350 organizations and submissions and engagements. All 60 school districts — and it’s hard to get 60 out of 60 on everything — were part of that engagement period. Then we went to the phase where the panel recommendations and report, the independent panel, were delivered to government. Again, the panel of seven was dominated by our partners in the school district sector, so two superintendents, two secretary-treasurers, were part of the brain trust of seven. We had some very smart people there who were familiar with public sector finance. They delivered that recommendation to us just before Christmas.
In considering it, we realized that actually, the most important phase comes after the review, after the initial public consultation. That is around implementation. What we’ve done is extend the engagement with all of the major partner organizations. We’ve grouped the 22 recommendations into four separate working groups. They are deliberating on what the recommendations could mean for adult education, could mean for distance learning, could mean for inclusive education and could mean for things like accountability and efficiency of delivery of budget allocation.
Those are underway. We expect that the working groups, which represent the BCTF, CUPE B.C., BCASBO, BCSSA, Principals and Vice-Principals Association, BCCPAC and a number of special education organizations, including BCEdAccess andInclusion B.C….. All of them are helping us shape the recommendations that government will ultimately consider around implementation.
We’ve got to animate the report — the report wasn’t enough — and take those recommendations and model them out. That’s what we’re doing. We expect to have that work completed by the fall of 2019.
D. Davies: Just in your last couple of sentences there, you answered a couple of my next questions. It was good.
You listed off a number of the stakeholders. Do you have a full list of the stakeholders that you’re able to share with us?
Hon. R. Fleming: Yes, I’m happy to do that for the member.
Organizations involved in the four different working groups — some of them are involved in all four; some of them are involved in one, two or several: British Columbia School Trustees Association, B.C. School Superintendents Association, B.C. Association of School Business Officials, British Columbia Principals and Vice-Principals Association, B.C. Teachers Federation, BCEdAccess, Canadian Union of Public Employees B.C., First Nations Education Steering Committee, British Columbia Council of Administrators of Special Education, B.C. Confederation of Parent Advisory Councils, Inclusion B.C., Representative for Children and Youth, B.C. English Language Learning Consortium, Family Support Institute of B.C., B.C. Distributed Learning Administrators Association, B.C. School District Continuing Education Directors Association, Rural Education Advisory Committee, Métis Nation B.C., Office of the Auditor General.
D. Davies: Perfect. Thank you, Minister, for that.
I think you mentioned the fall that this would be completed. Did I hear the fall? I think I heard the fall. Following that, when does the minister plan to make decisions and implement?
Hon. R. Fleming: The working group will complete their work by the fall of 2019. Then it will be available to government to make a number of decisions, including, potentially, budget-making for Budget 2020.
D. Davies: Okay. So the document, then, will be moved to government, and government will make decisions around that based on next year’s budget. That’s kind of the plan, from what I understand. Is there then a plan to implement all the recommendations?
Hon. R. Fleming: I would say to the member that I think it’s probably a little bit premature to judge what the outcome might be. We’ve asked the working groups to take on a very large responsibility, which is to not only make sense of the report and digest its recommendations but to give advice to government and the ministry based on the contents of the report.
It does involve a lot of dialogue. It involves ministry staff and others with expertise in school sector financing and inclusive education policy and adult education and distance learning.
We’ve got the right people and the right organizations at the table. They’re doing their work. It’s very engaged. We are asking a lot of participants. I will be very much looking forward to what the working groups come up with, but I can’t prejudge what those recommendations might be.
D. Davies: With that being said, and understanding that decisions aren’t firm until after…. Recommendation No. 6 on it. I’m just wondering what the minister’s opinion is around the prevalence model. We’ve been hearing a lot of discussion…. I’ve received a lot of feedback from people around the province. What is the minister’s opinion on the prevalence model for funding on special education, when it comes to the grants? What is your opinion on that?
Hon. R. Fleming: To the member who asked about recommendation 6, where I think the panel heard a lot of interest from its travels around the province in regional meetings with regards to special education…. There was a significant feeling that the supports in the current model that we have around special education were not serving students with those learning needs as well as it could be and as well as it ought to be.
Therefore, the panel listened to a number of submissions and deliberated in making recommendation 6. Really, I think the intent of that recommendation is to figure out a way, based on what they heard and reflecting back on it….
How can they help school districts get resources more quickly for vulnerable learners, for special needs students and for, quite frankly, students that aren’t counted and get no funding attached to them right now but would be seen as vulnerable learners? How can they get those resources more quickly to school districts so it’s available to them to work with special needs learners all year long — not waiting and then claiming, but available, reliable, predictable?
There’ll be lots of discussion in the working groups. There is lots of discussion about recommendation 6. We also additionally canvassed each of the school districts post-report, just to figure out what areas of the 22 recommendations were of greatest interest and of least concern to school districts. We have that data as well.
D. Davies: I’m now referring to the panel and some of, obviously, the recommendations and such. I’m just wondering if the minister supports allocating funding to school districts based on stats about assumed need versus actual need. I guess that’s the question that I’m asking.
Hon. R. Fleming: Maybe just at the outset, my comment would be…. One of the reasons I have a high degree of confidence in the entire funding model review, writ large, becoming a useful exercise is that it has been consultative all the way along. It has had advocates, for example, for special needs education not only at the table but shaping the recommendations, playing a significant leadership role in giving advice to government.
I actually have looked at other jurisdictions that have done funding model reviews around the world, whether it’s Ireland, a number of western European countries. Australia did one, as well, I think, in the last decade. I have not found any jurisdiction that has brought stakeholders directly into the policy-making position that we have with the funding model review in British Columbia.
I think it’s going to make us more successful, but it also means that it needs the right amount of time to have discussions about policy implications, avoiding unintended consequences and looking at how a model is built out properly. I think there is broad agreement right now that one of the problems with the current funding model is there’s only a finite, small number of things that are measured and have special funding attached to them.
Of course, that funding is not attached to the child. It goes to the district. Is it accountable enough? Certainly, the panel was quite surprised to find that there was an awful lot of, let’s say, paperwork attached to getting additional funding. So a high cost of overhead, if you will, before the resources get to the child and to the learning team that would work with the child.
To the member’s…. I think where he was going with the question…. Certainly, what I believe is that the learning needs that kids have…. Those have to be assessed in the system. There’s no other way to identify what a kid needs in terms of help without looking at their individual learning needs. So I see assessments continuing and certainly support individual education plans as a key element in student success.
What I would say to the member, as well, though, is that this is a generational opportunity to have a better funding model in B.C. We have so much data that isn’t just assumed data. It’s actual individual data about a person that can be privacy-protected but can inform a school district, via the Ministry of Health or another ministry — the Ministry of Children and Family Development — to account for children in care of the ministry who might, by policy identification through the funding model review, deserve additional supports in the school system, where currently there are none.
We can use the data to inform districts about students in the care of the ministry that are attending their schools. We can look at health data that tracks language development issues that are identified for kids or medical diagnoses that are currently conducted in the health system that look at learning disabilities. We can have that data readily available to school districts. Instead of having the “wait, assess, claim and file,” take the data that we have — continue to do assessments, of course, for individual education plans — but have accurate information shared between ministries. And have funding attached to it, quite frankly.
For example, even though we have extensive data based on postal code, right down to the most granular level about incidences of poverty and vulnerability…. We have a ton of information available to government that is currently not part of the funding model. Those are the kinds of things that are being considered by the working group in consideration of recommendation 6.
D. Davies: Chair, I was just wondering if we can maybe do a five-minute recess. I have one question I’ll ask after, and then I’ll turn it over to my colleague from the Cowichan Valley.
The Chair: That sounds good. We’ll recess the committee for five minutes.
The committee recessed from 3:47 p.m. to 3:59 p.m.
[R. Glumac in the chair.]
D. Davies: Just kind of carrying on…. My colleague from Cowichan south, I understand, is going to be asking questions also on funding models, so you might get some more questions.
Following up on what the minister had answered in the previous question around prevalence model funding, around assumptions versus actual need. I certainly understand that assessments still need to happen. I know that’s certainly a bit of a struggle in some of the smaller, rural areas.
I guess my question would be: should this recommendation be accepted or brought in, will there be the ability to create some exceptions in school districts that require more funding? Is there that ability where school districts can apply for more funding beyond that?
Hon. R. Fleming: I guess my answer would be substantially the same as before, in the sense that I described where we are in this exercise and how it relates to where we are in the estimates process today, because right now, the most significant body of the work around the funding model review is being undertaken. I’ve described who’s been discharged with that work, who has that responsibility to make significant policy recommendations. What they recommend may differ a little or a lot from the original panel report. I don’t know.
There’s a significant amount of work to be done. The member’s questions are absolutely understandable. They come in the midst of that work happening, so I’m not really in a position to comment about what they may give myself and government in six months’ time from now.
I do have confidence, though — as I’ve said before, and I’ll say it again — that we’ve got the right people at the table from the right organizations, who have insights and some perspectives on where there has been a high degree of dissatisfaction with the current funding model. There are a lot of advocates who have been involved in casework where the school system has not served individual students or groups of students well in the past. Those are the kinds of situations that we’re trying to improve upon, and we’re trying to make writ large. The whole exercise is about making funding for school districts, funding allocations, more stable, more predictable, multi-year and reliable.
I’m thinking where the member was going with the question is around…. There’s a different set of costs to deliver education based on geographic factors and all those sorts of things. There is some accounting for that in the system now. We’ve heard that there actually needs to be a more sympathetic formula to the different cost drivers in rural and remote education, for example, or inner-city settings, for that matter. That is also part of the policy work that’s being done by the members of the working groups.
I look forward to receiving it. It will have to be considered by government for some time, undoubtedly. This is quite complicated stuff.
I will say, just anecdotally, it was interesting to be at the launch of the implementation phase because we had well over 100 people in the room from various different sectors and parts of the school system. I think many of them were long-time veterans of the school system. When we went through the refresher about how the current model works, there was a lot of gained understanding, if I can put it that way, about how the current model works and doesn’t work amongst people who are experts and who, perhaps, thought they understood it differently.
There has been a tremendous amount of education for everybody involved, but there are also, as I said, a whole bunch of unique perspectives that are available to government in what is an extraordinarily consultative exercise to allow members of stakeholder organizations and advocacy organizations to ultimately shape government, fiscal and educational policy.
D. Davies: Thank you for that. I certainly look forward to the recommendations on the recommendations in due course.
With that being said, I’ll turn it over to the member for Cowichan Valley.
S. Furstenau: It’s been great to be listening to this discussion and these questions back and forth. I think my first question, based on what I’ve been hearing and also based on experiences…. The minister referred to a kind of chronic state of challenges that teachers face in classrooms around getting the supports and services, particularly for children with special needs. That’s been a long-standing kind of state of affairs in British Columbia and, I would say, in many, many places around the world — speaking to, in a larger way, a strange thing that governments do, which is underfund the services for the youngest people in our populations.
I’m wondering. In all of the discussion about the new funding model, is there discussion that’s going along with that about what I think has been called for, for a long time, which is a significant increase in operational funding for education in B.C.?
Hon. R. Fleming: Thank you very much to the member for the question. A few things to say in answer to her question.
One is that in a very short period of time — and admittedly, this is using the same funding model — the issue around under-resourcing of education is one that I think our government has been quick to address, even under the flawed model that we’re currently using while we discuss where we may want to take a new direction in British Columbia.
The annual spending in this ministry, operations spending…. We’ve talked a lot about capital, but operations spending is $1 billion this year and each and every year now, than it was in the last year of the previous government, 2016-2017. In respect to the Supreme Court decision, our government faced the responsibility of funding the hiring of new teachers. We do have 4,000 more teachers in the school system, which is fantastic.
To the member’s, I think, specific area of concern, within that 4,000 approximate number of teachers, there are about 500 special education teachers that are additional in the system. There are 190 that are teacher-psychologists and counsellors in the school system as well. There are more resources to, I think, the areas where parents were a bit beleaguered and fatigued and where the cuts typically were first to happen under the previous government when budgets became tighter and tighter year after year.
I’m really, really happy to say, too, that what you’re seeing in the local press…. I have got media scans from a lot of places, but not Cowichan Valley, so I do apologize that I can’t provide a Cowichan example. What we’re hearing from school district chairs quoted in the local media is just an absolute sea change from where we were a few years ago. I just want to take the opportunity to quote a couple.
The Daily Courier in Kelowna, just a couple of weeks ago, quotes the secretary-treasurer of the district saying: “We’re pleased that we’re not in a situation where we are cutting. We’re actually able to put everything we need into the budget as well as add a few extras.” She goes on to note that this is a serious and significant change from where that district was a few years ago.
Delta school district secretary-treasurer Nicola Christ told the Delta Optimist: “Last year we shifted some things around, but this year, we didn’t take a penny from anybody.” What’s helped the district in a big way has been an increase in funding announced by the provincial government last month.
Go to Kamloops. Rhonda Kershaw, with the district, describes the SD 73 operating budget as a good-news story, saying, “It’s on track to meet its strategic initiatives, focusing new resources on mental health, enhancements for children with special needs, improving Indigenous student success, among others,” and credits the government’s funding record undoubtedly in regard to the extra $1 billion available in the school system.
Saanich school board, closer to the member’s constituency and mine, quotes board chairwoman Victoria Martin: “Last year’s budget of about $92 million was the first in 15 years that did not require cuts to be balanced.” I could go on and on. There are stories from other regions in the province.
I raise those examples just to give some context under which a review is being conducted on a better model. We have not paused as a government and failed to add resources. We’ve added resources while we’ve thoughtfully examined what a better model might look like, and I feel confident that we can build a better model.
I guess by way of explanation, too, instead of creating a quantum and building a new model towards a sort of magic number, I think what we thought was the best idea as a government was to refocus the discussion for the first time in a long time in B.C. around the original promise of equity: the principle that has guided our public school system for decades and decades, which is that a kid studying in Prince George should have the same quality education as a kid in Kelowna or Vancouver or right here in Victoria.
We’ve seen a lot of tensions and exacerbations and distortions in the current funding model that we want to correct. We just sort of reset the sights. This exercise is all about re-establishing the bedrock principles of equity between students, of equity between students from different regions — all of those sorts of things — and getting it right.
I think when we thoroughly examine what equity means in the context of 21st-century education, we will get to the implications and the model that will allow us to have a quantum of what kind of funding should be available for the system.
S. Furstenau: I thank the minister for that response. I think one of the issues around equity is, of course, what was fought for so long through the courts — class size and competition. That is one way of ensuring that whatever class you’re in as a student, you can be assured that there’s some basic equity with other classes in that there won’t be more than a certain number of kids or more than a certain number of kids with special needs in that class with you.
One of the concerns that the BCTF has raised about the prevalence funding model proposal is a decoupling of class composition, in particular, related to the funding. I’ll explain it a little bit clearer.
What I think the concern is — it’d be just great to hear what the minister has to say about this…. If it is a prevalence-based funding model — so we’re looking at the data; we’re looking at the stats — does that potentially move us away from a teacher being able to say in my class: “There will not be more than X number of children with special needs, because now it’s all being measured at an aggregate data level and the classes are being distributed in such a way that I can’t abide by those class size and composition rules or factors anymore”?
Hon. R. Fleming: To the member, I appreciate the perspective she’s raised. Certainly, I’ve heard it in other quarters as well. What I would say, as I’ve said on previous occasions, is that whatever the new model looks like…. We’ve had a discussion here this afternoon about where we are in the workplan and how much input is yet to come into shaping what education policy might look like.
The new model, whatever it may wind up looking like for government’s consideration, in no way can supplant or supersede negotiated collective agreements that exist between the 60 school district employers and the B.C. Teachers Federation, for example. Whatever the model may look like, those employers are going to have to adhere to their collective agreements.
I guess what I could also say, as an additional comment, is that whatever data government may wish to use in pursuit of redoubling on an equity commitment, that equity-based data may drive new funding that is outside and apart from the collective agreement. But in terms of the composition language that the member has discussed here, whatever that looks like after this round of negotiations, that will, of course, be legally binding. This government respects it and will respect it.
As I said earlier, I think to the critic, assessments very clearly are required now. They will be required in the future for individual learners. I can only imagine a situation where the model will actually utilize assessments better than the current one does in the future.
S. Furstenau: Thanks to the minister. Just to follow up on that around the assessment, one of the other things that I’ve seen in advocacy from the teachers is to really focus on the early designation and early assessment, particularly kindergarten and grade 1, and to have targeted funding available in order to ensure that that assessment happens at the earliest possible time, along with those designations, so they can be attached with those kids as they go through and get the supports they need.
I think the other aspect that has been raised…. Again, as a teacher, this is something that I know can be quite challenging and has come up in the review of what’s happening in Ontario, the CBC programs about Ontario of late, around the behavioural issues. It’s the recognition of the impact of the high-incidence special needs kids in the classes — maybe the more minor learning disabilities or the behavioural challenges and the kinds of supports that can be typically lacking for teachers in those situations.
I’m wondering if the minister can provide some insight into some of the thinking around those areas of problems that have been identified.
Hon. R. Fleming: Thank you very much to the member for an excellent question. Just to begin, maybe, with the interest in early screening, early assessments, of kids coming into the school system, I should say at the outset that we have incredibly skilled kindergarten teachers all around British Columbia who are able to conduct an EDI, an early development assessment. They look at a range of vulnerabilities of kids coming into the school. They score them. That data is reported to the principal and to the district. Not often enough does that generate additional consideration in terms of resources.
I think the rub is the problem with the current funding model — that some districts can maybe have a tendency to look at the base budget and the additional money that’s not attached to a kid as, essentially, one large base budget. Therefore, spending isn’t always directed towards the area which ministry policy would like it to be.
Having said that, there are some districts that add additional resources to special education, for example. That’s something that’s come out in the discussion around this funding model review. Kindergarten teachers, of course, in some cases — I think Victoria district is an example here — do use some outside experts to screen every kindergarten kid coming into the school system for whether the child needs a speech pathologist, whether there are auditory or motor skill deficits — anything that could trigger, in the medical system, the use of an occupational therapist for a student. Those sorts of things do go on.
Educational psych assessments typically happen around grade 2 or 3. Some of our learning remediation is, of course, directed at that age level because it tells you the most at that time. Again, to go back to the potential for a more sophisticated, better funding model review, earlier in the estimates we talked about how the data is not just guesswork or aggregated; it’s personalized. It does have individual information. It is individual information.
If we were to use health data, for example, about vulnerable kids with known medical conditions that will lead to special learning needs, we could use that data to notify the school in advance, before a kid even arrives in the school. That would help make services for that kid much more seamless. The district would have the ability to plan in advance and provide that. Those are the kinds of good discussions that are happening in the working groups. Those are the kinds of things that I know the member is passionate about and that government should be working on to improve.
The school system, as I’ve said often before, works perfectly well for about 85 percent of kids. If we’re going to drive up student success, we need to focus on the 15 percent of kids or so that haven’t been served as well as they should be under the school system. I am happy to say that we’re moving in the right direction. We saw the biggest gain in the Indigenous graduation rate in 2018 that we’ve seen, I think, ever.
We’re starting to see special education graduation rates increase again, which is fantastic. So there are better student outcomes, which point to better resources in the system that are being utilized to help drive more student success, but we’re still a long way from where we ought to be. I think we could use even more government information, helpful data, to make the system even more responsive and better.
S. Furstenau: It’s very helpful to be hearing these responses.
The last thing I just want to touch on, in terms of the funding model recommendations and process that’s underway, is around education assistants. Again, we’ve been hearing — and, I’m sure, the critic for the other party has been hearing — from education assistants who are concerned as well. The starting point for education assistants…. I will take my hat off to EAs who have worked in my classrooms. They are extraordinary. They are dedicated. They are there. But when you look at the overall picture, they tend to be underpaid, in my opinion, and working far beyond what they’re typically tasked with doing, because they’re there for the right reasons. They’re there to help students.
I’m just wondering. Maybe the minister can just give us some insights into how the roles of education assistants are playing into the funding model review and recommendations and the implementation stage that’s coming ahead. Can the minister provide some sense of what the landscape will look like for education assistants? Can they expect, ideally, some improvements to their own situations?
Also, and this comes back to the first question I asked, I would say every classroom teacher is going to say: “I need more resources.” And one of the single greatest resources a classroom teacher can have is education assistants — not just for an hour a day or not just for half the day. When you have these situations, an education assistant can make the difference for the whole classroom, for all the kids, to be there. I’m just wondering what the minister can provide, in terms of what the outlook is around education assistants.
Hon. R. Fleming: Thank you to the member for this question about educational assistants. We haven’t had a chance to discuss them yet in the estimates. Obviously, a critically important member of the learning team in a school. Educational assistants, by definition, support teachers. They support the entire class, so they’re of benefit to every student, including those that have a high incidence as well.
I should say that CUPE B.C. is an integral stakeholder that’s at the table with the funding model review. They’re involved in the working group, specifically representing educational assistants, which are a large portion of their membership.
In terms of this government’s record on the rates of EAs, utilization of EAs, in the school system, I am happy to say that in 2018-19, there were 9,800 FTEs of educational assistants in the school system. That’s up 1,600 from where we were in the previous mandate of the government. There are a lot more EAs, in other words, which is good.
We’ve just concluded a new three-year agreement with the largest union that represents EAs. We do have, also, a $20 million learning improvement fund available to all districts, and 100 percent of this is specifically for the hire of additional EAs as they’re needed in the school system. So that fund is provided by the ministry to school districts, and that will help support the presence of EAs in more classrooms around B.C.
I have some statistics, but not at my fingertips, that show the use of EAs — the number of EAs and the ratios of EA per classroom — in districts like Vancouver school board and others dramatically increased, which is great. You’re seeing other districts invest over and above what’s provided in the LIFT funds. North Vancouver, I think, deserves a special shout-out. They’ve hired 90 new EAs. They have a very robust special education program there that focuses on the EAs.
Not to jump around like a kangaroo but just to circle back to the previous answer about how we could use data to inform incoming kindergarten cohort students. The same would be true for not just teachers but also educational assistants. We could identify kids who have already been diagnosed or involved in the medical system or Ministry of Children and Family Development coming into the schools. They could prepare a learning team around that kid before day one of their school career. That would apply to EAs as well.
Thank you for the question.
S. Furstenau: If the minister were to start jumping around like a kangaroo, this would make it very entertaining for classroom learning experiences. Although it is late in the day, so I don’t recommend it.
I just have two more topics to talk about. One is the school food program. In the city of Vancouver, city council passed a motion February 26 to renew their support for the Vancouver school board meal program for 2019. This motion demonstrates their commitment to ensuring children in Vancouver schools have access to healthy meals.
At this point, I also want to identify one of the heroes of the Cowichan Valley. It’s Fatima Da Silva, who started the Nourish program in Cowichan and is providing the most extraordinary, delicious meals to children in the Cowichan. It’s my honour and privilege to know Fatima and the work she does. What she recognizes and what Vancouver city council recognizes is how important healthy, nutritious food is to children’s learning outcomes and to their well-being in a school day.
I just have a couple of questions for the minister on this. The fact that these programs are typically funded by other agencies…. Fatima does an enormous amount of fundraising. We have the city of Vancouver funding this. Does the ministry intend to provide funding to municipalities or to communities to supplement these programs to ensure that they have longevity and stability?
In terms of a universal school nutritious meal program, we could see that as being very much in alignment with the province’s commitment to poverty reduction. Has this been considered as a part of a tool for reducing poverty in the province?
Hon. R. Fleming: Thank you to the member for a question about hunger in schools among students. What I will maybe say at the outset is that about 71 percent of schools have a meal program in British Columbia. So there are a number of schools that don’t, but that’s the typical coverage. It looks different in different school districts.
The member has mentioned Nourish Cowichan. Ministry staff have had the privilege of meeting with Fatima to discuss that initiative and how it might be scoped and expanded. You’ve got some really, really innovative, interesting programs.
You’ve got school districts…. I’ve been in a couple where they have red seal chef programs, and they have heavily subsidized, affordable meals for the school population while they do formal trades apprenticeship training. Those are innovative and interesting. You’ve got organizations like Farm to Cafeteria, which now has quite a reach around Canada and British Columbia, looking for new opportunities and partnerships every year.
Then you’ve got some communities…. I was just at an awards event for principals and vice-principals. A lot of school districts have really strong partnerships with Rotary clubs and other service club organizations that do breakfast programs or do hot lunch programs — serve tens of thousands of meals in the school system.
We looked at this — I don’t want to call it a patchwork — unique cluster of different programs that have evolved in different parts of B.C. and decided it would be good for the ministry to do a research project on what food in schools looks like in B.C. It’s not specifically, obviously, a School Act responsibility, but it’s pretty much a need that’s constant in most parts of B.C.
The project…. It comes at a good time, because we’re actually getting more data from students themselves. We’ve just added questions in the student learning survey that we do annually for grade 4, grade 7, grade 10 and 12 students — a question about hunger: “Do you feel and how frequently do you feel hungry in school?” We’re getting a handle on self-reporting from students themselves about how big of a deal this is — an impediment to successful learning. We’ll have that data. We’ll have the research project that will tell us, around B.C., where there are some problems, especially for students that simply are completely unserved and go hungry.
The member’s question comes at a good time as well, because it certainly got our government’s keen attention that the federal budget included a provincial transfer for student hunger and student food programs. We’re eager to confirm with Ottawa how much money we’ll accumulate — how much B.C. can expect. We expect we would get 15 percent of it, based on our population. A more pertinent question is when can we get the money?
We have our long-standing program that supports meal programs. It’s CommunityLINK. It’s funded at about $52.4 million a year. It doesn’t just go to food. The majority of it goes to food. Some of it goes to wraparound services for vulnerable kids. But if we can get the federal money to enhance CommunityLINK and then maybe add some of our own money, we’ll be able to, based on the research and what it tells us, I think, do a lot more in terms of innovative food programs in schools. Thank you for the question.
S. Furstenau: Thank you to the minister for that. I think I had one of the most amazing meals of my life at Spectrum high school with the program they had there. I could barely walk by the end of the meal. I think it was a 13-course meal. What we saw up in Haida Gwaii on the Finance Committee was also pretty extraordinary. The work they’re doing up there — gardening and hunting and feeding the school.
I acknowledge there are a lot of innovative things happening. It would be great to…. As the minister says, it’s equity. It’s that every child, ideally, in B.C. could be assured of having that access to that nutritious food. It would be a great outcome.
My last topic and maybe my favourite — public libraries. In 2009, the B.C. Liberals cut the budget for public libraries by 20 percent. We know that cutting library funding has very real impacts on communities. Right now in Ontario, library funding cuts initiated by the Ford government are restricting access, particularly for Indigenous and rural communities — something we would never want to see here.
Two years ago library funding was protected at $14 million. Can the minister tell me how much funding in this budget is being allocated to public libraries? If there is a decrease, how is that justified?
[D. Routley in the chair.]
Hon. R. Fleming: To the member’s question, I can confirm that the $14 million is continued in Budget 2019. We do have a strategic planning process going, underway, with our library partners, which I think is pretty exciting, recognizing the evolving role of libraries in different communities, some of the impressive statistics about circulation increases, increased library usage. We have a number of local governments now that are making their own investments in better library infrastructure. I haven’t been able to see, for example, the new library in Trail, but I think you’re seeing, in different parts of rural B.C., making the community hub a renewed library centre.
Obviously, that has an incredible link and benefit to the school system. You have a lot of early literacy programs that are run out of libraries. B.C. is lucky to have a pretty amazing library system, given our regional diversity and, in some cases, sparsely populated areas. To have library services have a reach to 99.9 percent of B.C.’s population, I think is an impressive feat.
I think the strategic review that is being undertaken with our partners — the B.C. Libraries Cooperative, the B.C. Library Association, the Library Trustees Association — is going to be able to inform government about that evolution and, looking ahead in the 21st century, about how libraries will serve populations.
S. Furstenau: It’s good news to hear about the strategic planning. I know that last year my colleague from Oak Bay–Gordon Head raised concern about the municipalities having to take on more costs associated with libraries and local governments feeling that pinch. So it’s great to hear.
Can the minister just let us know when the results of that strategic planning might be available?
Hon. R. Fleming: The brevity of the answer will contrast with how much reading up….
The short answer is that we have additional stakeholder work to do. What I can say is the status of that strategic review is pending. But I couldn’t get the member an accurate schedule of engagements that are upcoming, to give her a better, more precise calendarized answer than that. I apologize. But when I do have one, I will forward that to her office.
S. Furstenau: My final question will be the money question. Does the minister anticipate that there will be an increase in funding to libraries as a result of the strategic review?
Hon. R. Fleming: Thank you to the member for the question. I expect I will have the strategic review and it will be informative to budget-making for Budget 2020. When I have that, I will take its conclusions, the directions it recommends to government and forward to the rest of government. It will be made in consideration of all the other initiatives that government funds. But yes, I expect there will be some instructive findings in the strategic review.
T. Redies: Thank you to the minister for allowing some of us to ask some questions that are important to our constituents. I’d like to thank my colleague for giving us some time in his estimates to ask questions.
Minister, my question is actually with respect to portables and operating budgets at the Surrey school board. I believe you know that Surrey actually has approached the government for about $10½ million to pay for extra portables for students for next year. It’s required to pay for about 20 to 30 new portables needed to accommodate the growing numbers of students in Surrey. It comes directly, of course, out of the Surrey school board’s budget.
As board vice-chair Terry Allen recently said: “The board’s position is throughout the province there’s money for declining enrolment, there’s money for northern allowance, but there’s no allocation whatsoever in the budget for growth, and the growth in Surrey is absolutely huge. This year alone we’ve got 1,200 more students. We’re actually asking the province for some relief from that cost.”
Given that the removal of portables is not going to be a four-year exercise in Surrey, can the minister commit to providing Surrey with $10½ million in order to cover the increased costs of portables for the increased number of students?
Hon. R. Fleming: Thank you to the member for the question. It’s a tricky one, the question that’s asked.
In general, the fastest-growing districts actually fare the best, in terms of their cash balances. The idea, not to disagree too publicly with Mr. Allen, that remote and rural education settings are easier to manage than fast-growing districts, there’d probably be some that would disagree with that. Having said that, I’m not unsympathetic to the argument that he puts forward, which he has put forward to the previous government as well.
I would note that the difference, though — and the member has missed a significant number of hours of capital discussion around Surrey in these estimates — is that we’re not off-loading the operating costs of portables and failing to invest significantly in building new schools to reduce the use of portables. I have said to the chair of the board from day one that our focus is on getting rid of portables. She has our commitment to do that, and we have the evidence all around us that we’re doing that.
To give the member some information that she may not have, we had a question here earlier about cost-sharing on capital projects, and we have about $287 million worth of projects underway in Surrey right now. The district is contributing 6.96 percent, $20 million, on $287 million. The district was able to make that contribution because it has a good cash position right now. It has total cash of $151 million. The province has debt. The school district in this case has cash on hand and assets; $27 million of that is an accumulated operating surplus. They have $65 million involved in the government’s cash deposit program. We pay them interest to deposit with us. So they’re in a good fiscal position, and it’s good to see Surrey district and other districts in discussions with other members.
This budget-making season in school districts is an entirely different scenario than where we were a few years ago. We’ve heard school leaders in Delta, Kamloops, Kelowna, all around the province, acknowledge that they’re having the easiest time they’ve ever had in balancing their budgets. In fact, they’re projecting surpluses, and what they’re using their surpluses for is to enhance mental health supports, enhance investments in special education, which is great. That’s what we want them to do. There still are a number of districts, though, that don’t spend what we annually give them, so we have seen surpluses actually climb in B.C. in our 20 months of government. So we’ve advanced the allocations of resources to school districts.
The operating budget today is $1 billion higher annually than it was in 2016-2017. That’s supporting a very healthy fiscal position for school districts. We’ve got $510 million worth of investments scheduled into Surrey new schools to try and get rid of portables, and we’re going to keep focusing on that.
T. Redies: Thank you, Minister, for that answer. I appreciate that other jurisdictions around the province are having easier times with this, but Surrey has got a number of challenges around growth. And whilst I appreciate that there are schools underway, I believe the minister did commit to actually eliminating portables in four years. That’s not going to happen, obviously.
In the meantime, it’s my understanding the school boards can’t run deficits — right? — so the issue is, of course, that that $10½ million out of the operating budget means that there’s $10½ million less to be able to invest in teachers and educational assistants. In fact, I think Mr. Allen indicated that that money could be used to hire an additional 100 teachers or 200 additional education assistants.
I guess I’m really asking the minister…. I get that we have schools coming. Whether or not that’s actually going to deal with the portables problem — I think there are a lot of questions around that. But in the meantime, Surrey has an issue with its operating budget in that it has to provide more portables because we can’t get the schools out there in time. So will the province provide funding for Surrey to help them with this so that we can accommodate the students while not shortchanging investments in other areas, whether it’s special needs or education assistants or necessary teachers?
Hon. R. Fleming: Thank you to the member for the question. I think what Mr. Allen voices in this article that the member cites is a principled position, and I understand that. But we have committed to him and to his colleagues to take a pragmatic position and aggressive position on eliminating portable use.
I don’t want to repeat this for the member, and I say that to the critic because surely he can advise her. But we have read the 21 projects underway in Surrey into the record, the 9,500 seats, plus the 2,000 more, potentially. There has never been more construction happening in Surrey. It’s a significant investment. It’s one we’ve moved quickly on.
With all due respect to Mr. Allen, he takes a principled position that they have taken for a number of years: that every penny of portable cost conceivable should be part of the operating allowance. At the same time, I think it should be put into perspective that ten million on…. This year the budget will be at least $677 million operating in Surrey, so we’re talking about a 1.4 percent cost item.
The member can go back through the financial statements of the Surrey district, and I will put a round, accurate, if not underestimated, number to this. Typically, they are setting aside annual surpluses of about $30 million, so I would put it to Mr. Allen that if they’re failing to spend what we allocate them annually and insist on an additional $10 million, then my question would be: what happens to the $30 million that doesn’t get spent in an annual cycle?
That’s not to in any way diminish his concerns or undermine him. Mr. Allen should be appreciated on a whole bunch of levels, not the least his service to BCPSEA as an employer representative. He’s also a very, very strong ally and a great advocate with city government, with the ministry, on getting schools built in his community. He’s waited a long time. I appreciate his passion. I just know that this is a long-standing position he’s had, and it’s one that we haven’t been able to come to agreement on. But we do agree that rather than treat the symptom of the proliferation of portables, let’s keep the focus on getting rid of portables.
T. Redies: I have another couple of questions, if I may, for the minister. With the reinstatement of the contract with the teachers, we’re seeing, perhaps, some unintended consequences of that. I just want to talk about a particular situation with a constituent of mine, a lady by the name of Olga Stevens, who moved into the Ocean Cliff Elementary School catchment thinking that her two children would be able to attend elementary school there and that they would be able to walk to and from school together.
However there’s no space for her younger, grade 4 daughter, and she has been advised by the principal of Ocean Cliff Elementary that they can’t take anyone if the classroom is full. They’ve been advised to go to Chantrell Elementary, which is 3.8 kilometres from their home and therefore will require transportation. There is actually no easy public transportation, and it’s about a two-kilometre walk to the closest bus stop.
They are also unable to get a school bus because the distance is less than 4.8 kilometres, and the school is not served. Both parents work. They have no family help to get their children to school, and further, because of a car accident, their younger daughter is not actually comfortable getting in a car with anyone other than her parents.
Mrs. Stevens is now thinking that she will have to quit her job as a successful entrepreneur because of this black-and-white policy that allows for no flexibility at all in the classroom.
I guess what I’m asking the minister…. This isn’t just the only situation I’ve had in my constituency. Again, when you put down hard-and-fast rules, there are going to be challenges around this. I’m not disputing the contract. I’m just saying that this is an unintended consequence. So I guess I’m asking the minister: what are parents like Mrs. Stevens supposed to do? Are they supposed to quit their jobs so that they can take their kids to school?
Hon. R. Fleming: Thank you to the member. We may not be able to completely answer your constituent’s query in this session of estimates. But we have talked about some transportation challenges in this set of estimates.
We talked to the member from Quesnel about a washed out road that is causing a five-hour-per-day — 2½ hours each way — commute for some kids. The Ministry of Transportation is trying to address that with a $70 million rebuild. In the meantime, we have an emergency fund through the ministry for circumstances like that to provide additional bus acquisition.
In this situation, with the details I’ve been provided, what I would advise the member to do is to talk to the superintendent to see if there is a hardship policy that can be accessed for situations like this. I’m reluctant to comment on the catchment policies. That is entirely the purview of the school district under the School Act, and I want to respect their autonomy to set catchment policy.
I would note, though, for the member’s constituency, that to give more catchment options for White Rock residents, we are supporting an addition project at White Rock Elementary. That school needs to be expanded. It will not be of immediate relevance to this constituent, but to the extent that this issue is about space, our government is working to help school districts with the space issues they have.
This seems to me an issue, if the member hasn’t already had the chance to engage trustees, to even go beyond and talk to the superintendent directly, enquire about whether the hardship policy could apply in this case and whether the student and their family could get help in that way.
T. Redies: Thank you, Minister, for that answer. Ocean Cliff is actually in Surrey. I don’t expect the minister to know where all the schools are in the Lower Mainland, but thank you for that answer.
Minister, I have another question. Since district 36 has an applied behaviour analysis support worker program…. I think we’ve actually had conversations about this in the past. This is a program for autistic kids in the district. Now, apparently, 15 percent of all autistic kids have moved to the Surrey area to take advantage of this program, which is creating a huge, unbalanced burden on classrooms and the district, especially with the new rules for classroom composition size.
The ABASW is a very successful program that is providing children with autism with better support and outcomes in the classroom. When does the minister expect that other school districts will be able to implement a similar program so families across B.C. don’t have to move to give their kids what they need? As it is, our district can’t even simply hire enough ABAS workers and EAs to cover the need.
This is a program that, as I said, has been very successful and is attracting a lot of parents as a result. But what’s really needed is additional funding for programs like this to support kids with autism across the province. I’d just like to query the minister on what options there are in order to increase funding for programs like this.
Hon. R. Fleming: I don’t want to correct the member’s correction, but I think Ocean Cliff is in White Rock, in the Surrey school district — at least, according to Google Maps.
Interjection.
Hon. R. Fleming: That’s all right. I learned something as well.
I thank her for this question. What I would say…. I’ve heard similar information. Obviously, parents are exercising school choice — in this case, going across boundary lines to enrol in programs that they feel are better suited to their child. I’ve met enough autistic children and families to know that each child presents very differently, and parents will look for good fits and good options for them. There probably is an element of word of mouth around ABA services that Surrey offers that neighbouring districts — Coquitlam, for example — do not. It is a different model, and districts do have different ways of configuring special education.
I can’t say that we’re contemplating, at this point in time, imposing a specific model of how districts must work with autistic children. What we are doing, through the funding model review, is actually bringing the districts in contact with one another and putting special education writ large, including a designation “Kids with autism” under a special focus, a spotlight on how we get better results, how we support families better, how we support classrooms better, how we fulfil the promise around inclusion.
So we’re having a very intense, lengthy engagement. I think it very likely will lead to helpful recommendations to government to more specifically target resources that will support parents with autistic kids or other special learning needs.
What I would say is that parents understandably will advocate for what they think is best for their child. It concerns me if there is a lower level of confidence, if I can put it like that, in programs that a certain district runs. But I think that Surrey should be commended for the resources it puts into special education. Other districts are leaders as well. I think we’re trying to make everybody do special education better and learn from one another.
T. Redies: Thank you for your answer, Minister. Over the years, through personal experience, I’ve had to deal with this issue myself. I’m sure you know the key to supporting children with special needs is early diagnosis, followed by comprehensive support. It can make a difference between them having a successful school career and life versus disenfranchise from the school system and not realizing their full potential in life.
I was a member of the Finance Committee for two years. We heard from parents and special needs teachers, speech and language therapists, etc., about the need for increased special needs support in the classroom across the province. I believe that the committee put forward a strong recommendation that more resources be put into this, because it’s very important to catch these things earlier and to make sure that the resources are there so kids can overcome some of these challenges as soon as possible.
I guess my question is…. I may have missed something, but I don’t know if there’s been a significant increase in support for special needs. The minister is talking about this report, their study that you’re doing. I guess I’m here on behalf of parents who have kids with special needs to ask the minister to really make sure that this is a priority. Because I think both the kids and the parents will be better off, society will be better off, if there’s more funding put up front in this.
Maybe the minister could just give me a sense of what the plan is around that and making sure that these kids are properly looked after.
Hon. R. Fleming: Thank you to the member for the question and for her work on the Legislative Assembly’s Finance Committee, to hear from and make recommendations that are thoughtful to government.
A couple of things I want to address. Her previous questions have been around services for children with autism. I did want to mention that Minister Dix, I think, should be commended for his wait-list reduction initiative that he has added additional dollars to, to do medical diagnoses of autistic children, to help clear the backlog in the wait-list issue. I think the main obstacle there is around hiring the appropriate experts available to do that. I think there are eight to 12 additional qualified persons to do that. The enhanced investment was in the magnitude of $2 million or $3 million, and he may be contemplating additional ones. There have been some great results. There have been more assessments being done annually, and that is helpful for families with autistic kids.
What I want to say, too, is in regard to the recommendation that she highlighted around hearing the need for more special education funding. I thank her for the question, because we have heard that as well, as government. Since we’ve come in to government, special education funding has increased by 23 percent. The good news is that while funding for special education through all categories has gone up in the 23 percent magnitude, the number of kids with designations has stayed about the same at 11 percent. So more funding, a similar number of kids, and there’s more help in the system as well.
We talked earlier in this set of estimates about the 4,000 additional teachers who are new in the school system. Five hundred of those are special education teachers, designated; 190 of them are school psychologists and counsellors. They’re available in every district to work with kids in a way that wasn’t possible just a couple of short years ago. That additional special education funding throughout the system is about $120 million new funding annually.
Just to give the member an additional level of detail about students with special needs and where the funding is targeted, level 1 designated students’ funding, since our time in government, is up 26 percent for those categories. Level 2 is up 21 percent. Level 3, designated learners, is up 22 percent, and there has been a 22 percent increase for English and French language learners as well. So it’s a good rate of new investment.
It’s leading to lots of conversations I’m having, where parents new to the school system or even in the school system for some years are noticing the difference. You hear that from teachers teaching in the system, too, in terms of their workload, their ability to work with new colleagues in the school system. When you look at 4,000 teachers with about 1,200 schools in British Columbia, there’s a noticeable number of additional teachers, non-enrolling teachers, special education teachers, psychologists.
There are also 1,600 more educational assistants in the school system, too, so basically more adults with specialized skills working with the student population that the member’s talking about. I think that’s good news, and it certainly respects the recommendation of the committee that she serves.
J. Thornthwaite: I’ve got a couple of questions with regards to mental health resources. Then I’m not too sure…. Maybe I’ll ask this question first.
I got asked a general question from my school board about what the ministry’s position is — I don’t know whether or not you can answer with the staff that you’ve got here — on construction cost increases due to increased steel tariffs, delays in plans that they have nothing to do with, the availability of the trades to do the building and how those costs will be considered when there’s been an agreement on a capital project. I don’t know whether or not I’ve asked that easily, but I’m going to give it a shot.
Hon. R. Fleming: Thank you to the member for the question. We did canvass construction cost pressures quite considerably in the estimates and, I think, maybe some of the examples implicit in the member’s question. We also talked to her colleague previously, so I would urge her to go through the Hansard. But I can try and add to those answers and see if I’m hitting the mark here.
What I would say as a general comment is that staff are working with the North Van school district on this construction management issue around rising costs and how to handle pressures where there are legitimate pressures that are pushing the budget. We have a process for districts to contact ministry staff and work with us on identifying those pressures and coming up with solutions. There has been one on Argyle, for example, that relates to the site, and staff and the district are working on that.
If the member was referring to the Handsworth School project, which has a significant amount of money attached to it — it’s going to be a 100-percent-ministry-funded seismic mitigation project; it’s going to be great for the community, and I know there is a lot of excitement for it — it is facing some cost escalation pressures as well. We haven’t landed on where that may be. It may be that the budget will go higher than we originally anticipated. I would say that’s sort of a stay tuned, and we’ll have more information in the near future.
I would say that there are cost pressures that are not related to steel tariffs and material costs and legitimate construction cost pressures. They’re related to, maybe, some of the forces that might slow down school construction. As we’ve said many times in this set of estimates, time is the enemy. Every month, costs go up to build the same project, so we want to move as quickly as possible.
It does concern me, for example, when I hear the mayor of the district of North Vancouver considering refusing a development permit for Handsworth to get going. That puts more and more pressure on both the school district to manage the scope of the project and the ministry to fund those sorts of things.
I appreciate that neighbours will be concerned with parking and be concerned with weekend users of a sports field and whatever those local issues are, but I do not think it’s appropriate for a mayor to try and slow down a project that is good for that community, that has been agreed upon and funded by our ministry in coordination and partnership with the school district.
J. Thornthwaite: Thank you for that answer. I’ll go on to what I was originally going to ask, and that was about mental health resources.
In February, the government announced that there would be a $3 million investment that will support new school-based mental health programs focused on prevention, wellness promotion and early intervention.
So my question…. Math is not my best subject, but if we take all of the schools, independent and also public, $3 million ends up to just over $1,900 for each school. Is that how it’s going to be designated, or is it going to be designated through school districts? I’m just wondering how everything’s going to be designated — that $3 million.
Hon. R. Fleming: Thank you to the member for the question. Very timely. It is Child and Youth Mental Health Day, so I thank the member for the question. I think this is the first time we’ve been able to canvass this specific topic, and it’s a really, really important one. The member comes from a district that, I think, deserves a lot of credit for having exemplary mental health services for students.
What I would say in response to her specific question is that the additional funding that was announced at the mental health conference — a couple months ago, recently — should be looked at as additional to the $6.6 billion that goes into education writ large.
What we’ve tried to do, as a government, is first of all work with our school district partners to make sure that every school is a safe and welcoming school. That has taken time and persistence to have every school district, for example, sign on to the sexual orientation and gender identity policies that government — and that reaches back to the previous government — has been pursuing. Also within that $6.6 billion, we have a very focused amount — I think it’s 144 million of operating dollars — specifically for student mental health services.
The announcement at the conference was really money to help districts come up with projects or enhancements to their mental health and mental well-being initiatives that relate to a few key areas. One is around social and emotional learning. The other is mental health literacy or trauma-informed practices, which Dr. Kutcher, who was one of our keynote speakers, spoke to so well.
We have sent that money out to districts — not schools; we fund school districts, not individual schools — and they have a high degree of autonomy to use that as they see best for their district needs. In terms of a few examples of where the 60 districts might want to spend that money, it could be for staff training. It could be for parent information nights. It could be for student workshops inside the schools. It could be for other programs that the district already has up and running that maybe they want to scope up.
It has a wide range of positive purposes where it will help districts have more preventative mental health opportunities to animate the curriculum and help promote mental well-being amongst their student population. It’s a good initiative, and I’m pleased to say that all the money is out the door. There was a high interest and a very quick, fast uptake in the money to add these planning and learning resources.
J. Thornthwaite: Either I missed it, or it wasn’t said, but I’m still wondering how it’s being designated — per school or per school district. I recognize there are 60 school districts, so that’s easy to divide it up, but there are also 300-some-odd independent schools. So how do those independent schools get their fair share?
Hon. R. Fleming: Thank you to the member for the question. The way the money was allocated is $2.2 million are in grants to school districts, and each school district could individually receive a grant of between $30,000 to $37,000. The larger grants actually were, typically, for the smaller districts with higher travel costs, distances between schools and less budget capacity. So that’s the range of grants that covers $2.2 million.
In terms of independent schools, it was a lump amount of $175,000 to FISA, the Federation of Independent Schools. They’ll determine their internal distribution around that. And the remainder is for further provincewide professional development opportunities that are associated with the annual conference.
There was also a good announcement that’s over and above what I’ve just described at the most recent conference, and that was a partnership with Anxiety Canada, which was an additional $1 million to develop the everyday anxiety strategies for educators — the acronym is EASE — a collection of educator resources focused on anxiety prevention, specifically designed for use with students in grades K to 7. Those resources have become available free of cost since January 2019.
D. Davies: Thank you, Minister. I’m not too sure, but I think my colleague might have a couple of questions more, but she’s got another engagement she’s got to run to. So I’ll finish off in the next few minutes.
Just a couple of questions around the constituency office expenses. I’m just confirming that the minister has an executive assistant, from the ministry budget, that is based in the constituency office. Just that question.
Hon. R. Fleming: I do not.
D. Davies: Thank you, Minister.
Moving on to a few questions around contract negotiations, of course, it’s going to be a big discussion over the next little while. I realize there are some limits, probably, to what can be discussed. Will the minister confirm, though, that they do plan on offering the 2, 2 and 2 over the next three years?
Hon. R. Fleming: To the member, I think his question is whether the B.C. Teachers Federation is required or is being asked to operate within the mandate, the sustainable services negotiating mandate, and the answer is yes, as are all public servants in British Columbia.
D. Davies: I thank the minister for the confirmation. That is what I was asking.
Under that mandate, will the minister confirm that there are no economic stability dividends that could go to increase wages for teachers?
Hon. R. Fleming: To the member, and I think he’s probably aware of this, the sustainable services negotiating mandate is a bargaining compensation and increases within the framework. It is not attached to waiting for year-end economic results. It’s actually committing to the parties in the collective agreement to have compensation increases freely and fairly negotiated and be made automatic.
D. Davies: Just to confirm again, then. The economic stability dividends, which were in place with the previous government…. I just want to understand that that is in place or that that is no longer part of the formula.
Hon. R. Fleming: It’s part of the negotiated agreement that ends June 30.
D. Davies: Teacher supply. The BCTF says that there are still 300 teachers needed provincewide. Does the minister expect to fill these vacancies by the end of the school year before we start the fall?
Hon. R. Fleming: I don’t know if we’re continuing into estimates tomorrow. But let me just say at the outset of what might be a few follow-up questions the member will have on recruitment and retention. We are in a very good position in British Columbia, having hired 4,000 teachers. It’s a record amount of hiring that all 60 districts accomplished incredibly well. A large number of districts have no current postings at all.
We coordinate postings in the Make a Future website. The member’s correct: there are about 300 postings provincewide. That’s on a workforce of about 43,000 professional teachers in the school system, so a rate of vacancy, if you will, far less than 1 percent. This will account for not necessarily a failure to recruit but maternity leaves, all sorts of circumstances where postings do arise — far less than most occupations in British Columbia. There’s a whole category of professions out there that certainly have a much higher posting rate than two-thirds of 1 percent.
Having said that, our government has taken the issue of recruitment and retention very seriously. We created a task force. We worked with the deans of education. We worked with the B.C. Teachers Federation. We directly funded and spearheaded a number of initiatives, including out-of-province recruitment initiatives. Just last week, the member may be interested, ten districts were in Toronto, recruiting teachers. There may be a lot of teachers soon available in Ontario to work in British Columbia. They would love to work in a jurisdiction that is supporting growth of education funding.
We have had recruiters in every part of Canada. We have had some success internationally in France and Belgium, I’m pleased to say. The teacher regulation board has certified a number of teachers since the ministry was in those countries, hammering out memorandums, and we have a lot more that are currently in process of issuing teaching licences.
Finally, what we’ve done is to try to create additional domestically trained teachers. The Ministry of Education, I think for the first time ever, has directly funded teacher education program spaces in B.C. universities: UBC, UBC Okanagan, Simon Fraser, Simon Fraser up north, Vancouver Island University — a number of locations — University of Victoria, of course. We’re focusing on the shortages of specialist teachers, so special education teaching positions, Indigenous teachers and, of course, French immersion teachers to teach in the French language.
Hundreds of seats have been funded by the Ministry of Education. The Ministry of Advanced Education has also…. That’s in addition to the about 1,900 educators that they graduate every year. There’s going to be quite an additional supply available September 1, 2019.
Therefore, I think that even though the member has cited 300 postings, there will be more applicants, I’m confident, applying for those positions. But also, it should be recognized that 300 postings is where the situation was in 2015, when it was very difficult to find a job as a teacher in B.C. It has gone back to the level where it historically was in British Columbia.
D. Davies: Thank you for that. I guess one of the big concerns is on the scale…. When you look at total teachers in the province to the vacancies, it is small. But unfortunately, it’s in a lot of communities like mine where we do see these struggles — smaller communities being able to attract and retain teachers. So just looking for any plans to focus and assist school districts for recruiting into these more difficult places to recruit into.
Hon. R. Fleming: Through the Make a Future and the recruitment and retention task force, there were some targeted incentives that would help districts like the member’s, including full coverage of moving costs. Also, in this budget…. It’s fantastic. Any teacher who is in school right now, borrowing to afford the cost of their education, will not have to pay interest rates on their student loans. British Columbia is a leader in providing student relief. That’s going to help teachers immensely reduce the overall level of their payments once they graduate.
I want to stress this. There has not been a better time to come out of university as a student teacher with a teacher’s licence in this province in decades and decades because previously — I know this; I had roommates who studied to become teachers in university — you could expect to be a substitute teacher for seven, nine years. You’d be well in your 30s before you made day one of a contribution to your pension plan. You’d have no mobility to other districts. Now you can work anywhere you want in the province.
You would have very limited opportunity and a lot of uncertainty in your life. Now you can get a teaching position, full-time, in a variety of districts around B.C. It’s very exciting to see young teachers, people in their early 20s, with incredible technology skills — who have only known the new curriculum, because that’s what they learned in their university program — finding full-time, secure work that they love in school districts right around British Columbia. We expect that that will be the situation for the foreseeable future, because we’re supporting the expansion of the education system. There’s record levels of funding into the system. There are more and more teachers being hired, and the government is supporting the teaching profession in a way that we haven’t seen in a long, long time.
I will say to the member that there may be — I don’t want to call them opportunities — additional occasions where we’re going to start to see teachers just over the Rockies, in Alberta, have a serious look at living and working in British Columbia, because what we hear there, according to the Premier’s pledges in the election around education, is that the funding for the education system won’t be increased. The early estimates are that just to stand still will mean $150 million in cuts in the school system. That means potentially hundreds, if not thousands, of teachers in Alberta could lose their jobs. I don’t want to speculate too much on that situation, but that would be a tragedy.
I would move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 6:15 p.m.
PROCEEDINGS IN THE
BIRCH ROOM
Committee of Supply
ESTIMATES: MINISTRY OF AGRICULTURE
(continued)
The House in Committee of Supply (Section C); S. Chandra Herbert in the chair.
The committee met at 1:35 p.m.
On Vote 13: ministry operations, $80,134,000 (continued).
M. Hunt: Before we broke off for lunch, we were talking about what the owner, the farmer, thought was ecotourism, or farm tourism, whereas the Agricultural Land Commission is saying: “No, they’ve got to apply for non–farm use.” Just to be clear. The minister wanted more information, so here we go.
This is Darvonda Nurseries, which is in Milner, in Langley. They have over 100 people in their employ. The event that was described is called a Glow event. This is what they had to say. This is talking about the people from the ALC.
The Chair: Member, according to our standing orders, we do not use electronic devices in estimates. We’re not able to read from them.
M. Hunt: Oh, you would do this. I wanted to be precise. I was thinking before that I should write this down. But then let me….
The Chair: Yeah, just not while you have the floor. You can use it in between.
M. Hunt: Okay. This is a challenge.
Anyhow, the basic essence is that while they had the event on, there was supposedly a complaint that came from a neighbourhood about asphalt on the parking lot, something like this. They came to the event. They wandered through the event. At the end of their examination, they said: “This doesn’t comply with the rules. This is non-compliance. It needs to stop.” They didn’t say why. They didn’t say what was not compliant. They implied that it was too big an event. They also said that the goods being sold aren’t farm goods.
Well, I’m sorry. They never went into the store to see what was in the store. The whole event is to promote the nursery, to promote the flowers that they grow. It’s all about selling their product. It’s all about marketing. That’s what it’s all about. This is all about farming. It’s all about farming produce. It’s all about what’s happening in this nursery.
These farmers are wondering what in the world is going on, because nobody said: “This is not what’s complying. This is the piece of the puzzle that needs to be changed.” It just seems as though, arbitrarily, someone decided to show up and say: “We don’t like this. Stop it.”
The Chair: Thank you, Member. And of course the standing order is 17A, just to be clear that I’m not making it up as I go along.
Hon. L. Popham: To the member: thank you for bringing more information. Of course, it’s an Agricultural Land Commission issue. I’m going to answer to the best of my ability, but if the member needs more information, I suggest that he follow up with the Agricultural Land Commission.
The situation that he’s outlined is a compliance and enforcement issue that has been taken by the Agricultural Land Commission through interpretation of the legislation that was put in place by the prior government. I believe, but I could be corrected, that the operation was asked to have a non-farm use application submitted to the Agricultural Land Commission. I don’t know if that was done or not. The member might want to check.
What I can say is: when the commission looks at non-farm uses such as, maybe, a festival, what they consider are size, scope, scale and duration of the event. Perhaps this one was too large. That’s something that the member will have to follow up with the Agricultural Land Commission on.
I. Paton: I’m sure that the minister is getting a lot of correspondence, like I am, from people all over the province with issues related to secondary housing, agritourism, different things like that.
I’d like to read a letter from the Coombs Farmers Institute. It’s regarding Will Gemmell and his wife, Jodie Lucas, owners of Rusted Rake Farm and eatery — I’m going to read this out — who are members of the Coombs Farmers Institute.
“They approached us last fall with the request that we assist them with some matters related to the governance of farmers’ rights on ALR properties in general and their farm activities in particular.
“The eatery, currently in operation on their mixed-product farm, falls outside of the allowable activities a farmer may engage in. They are allowed to grow food on their farm and sell the raw product, but they are not allowed to value-add to that product and serve it, on location, to willing customers.
“When we legislatively protect farmland, we must be able to measure the benefits. If farmers cannot afford to make a living on ALR land, they will not farm. There are minimal gains to food security and/or the ability of a farmer to make a living simply by retaining land within the ALR.
“We strongly support Will and Jodie in their efforts to improve all farmers’ rights to earn a living off their land. By working to change the laws, policies and regulations that restrict food growers from value-adding their products in a farm-based food service facility, they are responding to an overwhelming market demand. The current requirement that a farmer must produce alcohol on the farm in order to serve food produced on the farm, frankly, seems odd.
“We hope you see, as we do, that we must create an environment in which farmers who are willing to innovate and diversify are supported. Farmers must be allowed to earn a decent living, or they will not farm.”
To the minister: could you please respond to this letter from the Coombs Farmers Institute?
Hon. L. Popham: Thank you to the member. As it stands now, the legislation that pertains to the ALC does not allow a restaurant to operate on a farm. That’s the legislation that has been in place. We have not made any changes. That has been the legislation that has been in place under the prior government. That being said, if a farm does want to operate a restaurant, they have the opportunity to submit an application to the ALC. That would be considered a non-farm use. It may or may not be approved by the ALC, but there is that opportunity to apply to be able to do that.
Now, I did mention to the members, before we took our lunch break, that as we look at any future regulatory work, this is something that we could investigate to see if there is a need and to see if it would fit under our current vision for the agricultural land reserve and the commission.
I. Paton: One more question on this particular letter from Coombs Farmers Institute. If we look at recommendation No. 16, under “Actions,” No. 2, it says: “The recommendation is clearly defined in the regulation on the nature of permitted food service provisioning at alcohol production facilities in the ALR and explicitly indicates that restaurants, bistros, cafes, catering kitchens are not permitted.” I’m wondering, to the minister, if she could respond to that recommendation No. 2 on No. 16.
Hon. L. Popham: Just as a point of clarification, that recommendation pertains to alcohol-producing facilities — so wineries and breweries — not stand-alone restaurants on farms. That, again, is legislation that was adopted by the prior government.
Also, I’d like to add that this list of recommendations that came forward from the committee is, again, a set of recommendations, so it doesn’t pertain to legislation changes currently. But if the members feel that this is a good avenue to go down, I’d certainly entertain and be willing to look at it in the future.
That would take public consultation. If we went out and talked to the farming community, the people of British Columbia and the Agricultural Land Commission and there was an interest in allowing stand-alone restaurants on farms, then we would be willing to look at it. But that would take, as I said, the regular amount of consultation work.
Currently we’re not changing that. Currently the legislation that’s in place, that was put in place by the prior government, does not allow for that.
I. Paton: One quick question to follow up on that. Would you suggest, then, that Horsting’s…? I think everybody in the room knows Horsting’s. They have been serving soup and sandwiches, and they bake pies. They’re famous. Would they have a non–farm use permit from the ALC to continue what they’ve been doing for probably 30 years at the same location?
Hon. L. Popham: Well, it’s hard for me to say what approvals that farm had or didn’t have over the last 30 years, but I’m happy to look into it more closely.
J. Sturdy: Further to these issues or this line of inquiry, is it true that on-farm processing facilities are a permitted use as long as 50 percent of the input, by weight or volume, originates on the farm?
Hon. L. Popham: The answer is yes. The ALC has the 50 percent rule, but local government can further regulate the scope and scale of a processing facility.
J. Sturdy: Thanks to the minister for that. Is it also true, according to the regulations, that that processed product generated on that farm and meeting the criteria is allowed to be consumed either on or off the farm?
Hon. L. Popham: The answer is that it depends, and it’s complicated. There are many things that it depends on. There are some other regulations that may overlap the decision to allow it to go ahead — meat regulations, alcohol regulations. It also depends on the definition of “processing.” I think that I would have to have more details. It’s also site-specific. If the member has a specific example, I’m happy to take that further.
J. Sturdy: No, I’m trying to get some clarity. It is fairly straightforward in the regulation. It is written in black and white. It says you can process — and that involves a bunch of different techniques — as long as 50 percent of the input, by weight or volume, originates on that farm. It also says in the regulation that that output can be consumed either on or off the farm. It’s very clear.
Yes, I recognize there are other licensing issues — certainly liquor control, local regulations — and that it can be administered through local government. Fair enough. But we’re not talking about them. We’re talking about the Agricultural Land Commission.
Not to create discomfort for some of my colleagues, but at the end of the day, we look at some of the facilities around the Okanagan that are very important to the economies of British Columbia. From what the minister is suggesting, that puts it…. In conjunction with this report that has been developed by the minister’s handpicked committee, which has a significant potential…. So it’s the interpretation of what’s out there right now. I think growers deserve some clarity there, and I think the broader industry deserves some clarity.
Can the minister provide us with any other regulations through the Agricultural Land Reserve Act that I might have missed that are relevant to this particular conversation? Not other jurisdictions, not alcohol or local government ordinance.
Hon. L. Popham: Thanks for the question. These are complicated issues, but I can say that, when I look at the legislation…. I’m going to read it out, because I think there needs to be some clarification. “The use of agricultural land for storing, packing, preparing and processing farm products is designated as a farm use….”
I don’t see the word “consumption.” There’s no mention of consumption in this legislation, so maybe the member has found it somewhere else and he could bring it forward to me.
M. Hunt: Going in history to Bill 52 and the passing of Bill 52. In the midst of Bill 52, we had a whole discussion concerning house sizes, building permits — all those sorts of different, exciting adventures and things.
Let’s see. We were talking about multigenerational farmers, and it was said that they simply needed to apply to the ALC to be able to get their larger home. Could I just ask the minister, to begin with: how many applications have they had so far for homes over 500 square metres?
Hon. L. Popham: As the member will know, with the change in legislation — actually, this was part of the old legislation — applications would go through local government before they ended up at the ALC. The pathway that we created for the needs of intergenerational farmers that are needing larger homes for farming purposes would initially go through their local government and then end up at the ALC.
We don’t have the numbers of how many are at the ALC currently. They might not have gotten through the local government process yet, as the legislation is new, but we could certainly follow up with those numbers.
M. Hunt: I would ask that you do follow up with that and that I get that in writing, please. Thank you.
Next is the member for Surrey-Fleetwood, at a meeting of several hundred farmers in Surrey, told the farmers that they could build whatever they wanted to. There were, in fact, two cabinet ministers that were present that didn’t disagree with the member. Later he put a qualification on that. He said that “if they had farmed for some number of years — I don’t know how many years, but some number of years” they would, in fact, be grandfathered.
My question is: how many years do you have to have farmed the land in order to be grandfathered from the house size restriction?
Hon. L. Popham: I’m certainly not going to comment on hearsay from a meeting that I didn’t attend. But what I can do is lay out how grandfathering works under this change.
To ensure fairness, landowners who have all their authorizations to construct a residence in place when the act comes into force by regulation will be grandfathered to continue if the construction of the foundation has been substantially begun by November 5, 2019.
If somebody doesn’t qualify as a grandfathered application, then they have every chance to apply to the Agricultural Land Commission. We’ve created a path through local government for farming families, multigenerational families, anywhere in the province who require larger homes to support their farming operation.
Once it gets to the Agricultural Land Commission, the Agricultural Land Commission will assess that under scope and scale. I think that probably answers the member’s question.
M. Hunt: Probably, but it’s interesting to call it hearsay, because actually, the member was very happy to say it in front of TV cameras. I can certainly get you the footage of it, and it will not longer be hearsay. You’ll actually have to deal with it….
The Chair: If I might remind the member, please come through the Chair.
M. Hunt: Always, Mr. Chair. I’m trying to express the reality to you, Mr. Chair, so that the minister can understand.
The member was quite pleased to say this in front of the TV cameras that were there, that were present. There were at least four TV cameras that were there recording this, so this isn’t hearsay. This isn’t something that I created. I know the minister would never accuse me of such a thing. Actually, he went further. He told the farmers that if they had their preloading down, they would be grandfathered to build without even applying to the ALC.
Let me ask this simple question. Any application for a building permit over 500 square metres — actually for any metres, but let’s just stay on the over 500 metres — must go through the Agricultural Land Commission. To the minister: do I have my facts straight?
Hon. L. Popham: Except for those applications or homes that have been grandfathered, the current process is that an application would go through local government to the Agricultural Land Commission if the house size is greater than 500 square metres.
M. Hunt: I’m wanting to make sure that I have this clarified, because this was what was causing a particular uproar at this particular meeting that I and the critic just both happened to be at. That was that there were members of the agricultural community who had spent upwards of $50,000 to get their approvals, to get their preload and to actually have their sites preloaded — or were in the process of preloading. In the agricultural lands in Surrey, which is all soft soils and lowlands, it all takes about two years for that soil to settle. They are now in the process of creating their plans, and their plans are being created. So they’re spending even more money.
There’s a considerable amount of money that’s at stake here. In fact, when they apply, how do they establish that they are a “multigenerational family that is in need” — I believe that’s what the minister said — that is, that they are in need of a home that is over 500 square metres? And how do they justify that to the ALC? What are the requirements of the ALC so that these people can intelligently take their applications to the ALC and defend them?
Hon. L. Popham: I think it’s a two-part answer that I have for the member.
In the member’s words, if the landowners have approvals and have done their preloading and local government decides that they are grandfathered, then they’re grandfathered. But if there is the case where they didn’t get grandfathered and they still want to build a home larger than 500 square metres, they would go through their local government. The application would go to the Agricultural Land Commission.
As far as an agricultural assessment to see if there’s an agricultural need to have a bigger home, the Agricultural Land Commission has considered residential uses based on current level of agriculture on the property, so whether it’s an intensive agricultural operation, and the number of people involved in agriculture on the property — if most or all of the people in the residences are involved with the agriculture on the property. And of course, the lens that they always use is minimizing the loss of arable land, so the size and siting of the residence.
M. Hunt: Well, Mr. Chair, I would suggest to you that, in fact, this has brought nothing but confusion to local governments. I know that the city of Surrey stopped taking applications over 500 square metres, because I was involved in getting them to reopen the process because they were misinterpreting what the act said.
We of course had the one that went from Richmond, where the individual was told to come and pick up their building permit. They were given a demolition permit. They started the demolition. As they went to get their building permit, they said: “Oh no. You can’t get your building permit now because you’re no longer allowed to by this new legislation.”
We’ve got tremendous…. I hear other stories coming from other municipalities. My question is a very simple one. How is the minister communicating the facts to local government?
Hon. L. Popham: Thanks for the question. All local governments received a bulletin around the changes, so that’s one way that the information was disseminated. There is the information on the Agricultural Land Commission website, which we know local governments access to find guidance. Also, the Agricultural Land Commission is in constant contact with local governments. So there are lots of ways to clear up confusion.
I think when laws change, there is a need to educate people on what’s happening, and I think that that’s happened. The member did mention a particular application in Richmond that the permit…. We’ll double-check, but I think that that application was actually approved in the end.
Interjection.
Hon. L. Popham: It has been resolved, yeah. So that doesn’t seem to be a problem.
Also, just to give the member some more statistics on these types of applications just simply coming from Surrey, there were eight of these types of applications in 2016. This is for homes larger than 500 square feet — sorry, metres.
Eight of those in 2016, so before the legislation. In 2017, that number was up to 13, and then before the legislation happened in 2018, there were ten applications. This is just to show the member that there has been movement with municipalities and that local government has been informed on how to do the new process.
In the interim, when the legislation came in and then we gave the extension to when the regulations dropped, the grandfathering time was allowed for. People were allowed to get their final permits in place. Surrey moved along 29. So there has been movement there, and I think that’s because local government had been educated, and there is a lot of free-flowing information.
R. Coleman: I think maybe Hansard could become the clarification for municipalities today, because it certainly isn’t bulletins. Otherwise, my experience up to this point is that we have a real lack of clarification.
On February 22, every application in the township of Langley that was in process but not at a building permit stage, whether it be preloading of the land…. One family actually tore down their house and moved into a house and a basement suite because they were told they couldn’t get their building permit prior to getting the demolition of the old house on the property.
As they came through that, somebody told me, “We checked that there might be some environmental issue with the old house,” which led them past the 22nd of February, and they can’t build their house. The letter that was issued by the township of Langley is: “We will not process any application, whether it had been in process or not, from February 22.” They haven’t been told or given direction as to where they go from here.
I have one family who adopted five children, all from one First Nation family, living in a house of about 1,200 square feet with ten people. It’s a multigenerational farm. They cannot build now because the house is over the 500 square metres. There was a small environmental issue that had to be taken care of in the back of the property. It came up at the last minute, and they had to get that done before they could get their permit. But they’re now told they can’t apply in the township of Langley, that after the 22nd of February, it was all stopped. So where do they go?
Hon. L. Popham: I’ve got some updated information around how many homes have landed at the Agricultural Land Commission since the legislation came into place for homes larger than 500 square metres. There have already been two applications. So that pathway is working; that opportunity is working.
As far as the member for Langley East, the process of going through local government has always been there. That’s not a change. If local government is deciding not to forward those applications on to the Agricultural Land Commission, that’s a local government issue.
R. Coleman: Yes, it is. In every local government, except for a couple, in the province of British Columbia, they’re regulated communities, and they feel that their hands are tied differently. Langley is a regulated community under the agricultural land reserve — as, I believe, Delta still is. I’m not sure. The difference is that they don’t sync. They have the same flexibility. On any change they want to make, they actually have to go through for approval of a regulation or bylaw to the minister. They can’t just work with their community.
The letter is very clear: no applications will be accepted. So they’re not going to forward anything, because they believe your regulation is cut and dried, done 22nd of February, and nobody can go in. I totalled it up between six families, who have spent $1 million of their own money, today, to do a variety of things. One is a preload of $60,000. One is the one where we had the demolition of the house. The plans and the site work that were done there are $250,000. Each one adds up. The lowest one is $60,000; the highest one is a quarter of a million.
They were all in process, having to follow engineers, design, plans — all the things you do to be able to get to your building permit stage — whereas, on February 22, that stopped for all of them. It was: “Your house is too big. You have nowhere to go. We’re not doing anything, because we’re going to follow the regulation.”
If the minister is saying that the municipality can process those applications — if she could say that publicly — I’ll take it back and tell the municipality to get on with it. These people, some of them…. One of them is in pretty significant financial stress, quite frankly, with regard not just to their farm but also to their family finances, because they were building this money. One is a separated family where the elderly couple are now living in a basement suite because the house was demolished. They’re living in a house off the farm, simply because they can’t build the house. As a result, now the parents are failing in their health, and they’re very concerned for them.
What happened on the 22nd of February is that that stopped the opportunity to get where they needed to get to. This is really about how we get them into a process that could be clearly identified for them to be able to get their application active at a level where all these hundreds of thousands of dollars they spent could actually somehow be worth spending. They might have to redesign the house or whatever.
There’s one example that was given to me from another municipality, where they were just told: “Well, make the garage into a carport, and close it in later.” I mean, these are the types of things I’d rather not see happening in the ALC. But I’m really concerned for these families. Any answer they’re getting now is: “You’re done. Unless you’re going to go redesign a house to 500 square metres, you’re done.” That means redesigning the entire house, because you hired an architect or an engineer to design the house already and spent the $40,000 or $50,000 to design the house that would go on the property.
This is where my concern is. I need clarity as to where these folks can go so that I can call them all in on Friday and say: “This is the process you can take now to get on with your life.”
Hon. L. Popham: To answer the member’s question, I think we need to clarify some facts, first of all. The member mentioned that the township of Langley was a regulated community. There is nothing with regards to regulated communities that affects this application process. They don’t affect each other. It would continue like every other local government process.
Then as far as the pathway to the Agricultural Land Commission…. We’ve created this pathway, and local government can take that path if they choose. We don’t tell them they have to take the path. They can choose not to take the path. We would never want to start telling local government what to do in that regard. It’s their choice whether they forward it to the ALC. What we’ve done is created that path for farming families.
If the member does think that it would be helpful for the township of Langley to receive a briefing from the Agricultural Land Commission or the Ministry of Agriculture, we would be happy to provide that or offer that.
R. Coleman: To clarify, though, these families…. If the township of Langley takes the position that on February 22 everything stopped and changed, and they’re not going to forward any applications, other than bigger than 500 square metres, it can’t go anywhere.
Can they apply directly, or do they have to go through the township of Langley?
Hon. L. Popham: We’ve been very clear that you must go through local government.
R. Coleman: We have a grandfather clause that has taken $1 million out of the hard-working people of British Columbia’s pocket. Their valuations have been totally devaluated because somebody is interpreting a regulation differently than the ministry is relative to who should be forwarding an application with regards to a home.
I really think — this is just an opinion — you missed the boat on the grandfathering and how long you gave people. Housing in my area, on the floodplain, is not easy. It takes a long time to preload and to get ready to build. The time frame that was put into that box, I thought, was unfair to begin with.
I think I mentioned the one family of ten, which is now in a very small home, that were moving through a process. That family has eight children and two adults. Five of the children are one First Nations family. It was adopted by them from Vancouver Island. These are human stories that are being affected by these changes.
More than a briefing, I think we have to tell the township of Langley, or anybody, that these people need to be allowed to go forward. If they get turned down by the Agricultural Land Commission, fine. But at this point, to me, it’s like an expropriation of an asset.
People were doing, in good faith, what they were doing. They weren’t doing anything illegal. They hired engineers. They hired environmental engineers. They did the preloading with engineering advice. They designed their homes — all with the view that they were following the proper rules. By the way, none of these homes are like 8,000 or 10,000 square feet. They’re over 5,000, but they’re not monster homes, like would be compared to some areas.
My concern is that they get lost in this mix. They appear to be lost in the mix because we’re taking the position that the municipality has to forward the application. I guess we’ll get to a different debate in Bill 15, but if it’s up to the municipality and they say, “This is our cut-off date — period,” what do these people do with the $1 million invested in property, engineering and everything else?
Hon. L. Popham: It has always been the case that these applications go through local government.
R. Coleman: Just to make my point to the minister. Yeah, it has, except, in the midst of the process, you changed the date and cut them off on February 22. After February 22, the municipality can say: “We’re going to follow the new rules. We’re not forwarding anything.” So you gave an opportunity for these people’s lives to be destroyed financially because local government chooses to interpret one thing versus another and not actually deliver for their citizens.
Now, I’ll go back to the township of Langley and have the argument with them after this particular exchange, because somebody’s got to wake them up over there. If Surrey can do it and Delta can do it, why can’t Langley do it? That’ll be a question I’ll add now that I’ve got the clarification.
J. Tegart: It’s a pleasure to be here this afternoon. I want to share some information that I recently got at a round table with ranchers in the Clinton area. I’m going to ask your indulgence in sharing their comments. It’s their perception, and it’s their reality. It’s in respect to the outcome of the 2017 fires.
Around Crown leases, what they’re finding is Crown grazing ranges have been designated non-use for three years. Ranchers are incurring additional feed costs as cattle cannot be put out on the range. Logging to harvest salvageable wood and deep ripping is taking place on ranges while grazing cattle is not being allowed. These activities are also resulting in erosion, washouts, weeds and soil loss, not to mention removing grasses that cattle could be grazing on. Logging before fences are rebuilt gives cattle greater opportunity to move into burned areas where livestock are not allowed to be. Logging should not be allowed until fences are repaired.
Lots of this has been shared with other ministries. People in my riding don’t care whose ministry it is. It’s their holistic look at their lifestyle.
Hayfields. In many cases, repairing dams and irrigation systems could not be done in one year’s time, particularly where permitting was required for work on dams. So ranchers were unable to produce hay in the summer of 2018. In many cases, hayfields were used for grazing, as cattle could not be put out on Crown range. In other cases, because irrigation was not available, grasshoppers became a problem.
In some cases, it did not make sense to seed the hayfields before fencing was done to keep the cattle out. They could not get fencing done for many reasons that were mentioned during the input to the Ministry of Forests.
The impact on the cattle. The last two breeding seasons have increased the number of dry and late-calvers after the preg tests, cows out of cycle and having to sell open cows at a loss. Cows were separated from bulls during the 2017 Elephant fire so were bred late, resulting in not having a certain number of calves to sell in the fall and the extra cost of keeping calves through the winter.
They’re experiencing landslides. Infrastructure and properties are now being damaged by flooding and mudslides. Natural water courses have been altered by fireguards and other firefighting activities. Groundwater has surfaced, and ranchers are seeing water where they’ve never seen water before.
Geological assessments were conducted on some properties, and property owners were advised that their property was at high risk of landslide caused by back burns. The property has lost its value, yet no mitigation or compensation is available to the ranchers on AgriRecovery.
Funding doesn’t take into account for recovery, which is multi-year. Can’t get fences built, so can’t put cattle on range. Additional feed costs. Uncertainty regarding reseeding as cattle may have to graze on hayfields. Availability and fluctuation of hay prices not considered in the compensation formula. Delays in getting irrigation and dams repaired or restored. Should include compensation for grazing pastures, as they are an important part of the operation, and should have been, in some cases, and are overgrazed in others.
The formula used to determine incremental grazing costs assumed ranchers would be putting up hay on some fields and grazing on others. Due to lack of progress on fencing, dam and irrigation repair and non-grazing use of range, this was not possible in so many cases.
Ranchers understood AgriRecovery would help as long as they were required to be off the range. However, the program only provided assistance in their first year. AgriRecovery has certain terms and conditions, and the deadlines are difficult to complete the work by. It’s hard to find someone to do the work in our rural areas since the ranchers cannot pay themselves.
Revenue for income tax purposes was a huge issue. It resulted in huge tax bills, because the money came so late in the year that they couldn’t put the expenses in against the income. It was too late in the year.
Questions to the minister in regards to AgriRecovery. The ranchers are requesting that coverage be extended to cover multi-year recovery needs. Consider the extra feed costs associated with livestock not being permitted on the range for three years. And that the compensation formula be: consider the region, the availability and the fluctuation of hay prices. If the minister could talk about those three issues.
I just wanted to get their concerns on the record and to remind people that, although it’s been two years, we’re really starting to see the extended impact on our farmers and our ranchers, in particular. They are trying so hard to get back up into business and being productive but are finding a lot of barriers.
These are people who are used to being on the land. They just want to get out there and do the work. To be having to fill out grant applications and worry about deadlines and all those kinds of things…. Any way that we can help them would be of great assistance.
Hon. L. Popham: Thanks so much to the member for the update. It’s a great initiative — having the round tables with ranchers and farmers. It’s really excellent work that you’re doing, and being able to bring it to our ministry is also very good. Thank you for doing that.
I wanted to just give a quick update on some of the stats we have for the two fire years so far. In 2017, 173 ranchers and farmers received support from the program that equated to nearly $9 million. In the 2018 fires, we had 60 ranchers and farmers that have applied to the program, receiving nearly $800,000, with several applications still to be finalized. We believe that we are reaching out to people.
Specific to some of the issues that you mentioned…. I won’t be able, probably, to answer all of them, but we could get back to you on some of them. As far as the idea that the paperwork is onerous at this time of year, last year we sent out teams from our ministry to have workshops to help people fill out their paperwork and get it done. Some of that we did by phone. We’d be happy to set that up in the region to help the specific farmers and ranchers that she has mentioned.
Also, we do have confirmation that AgriRecovery is addressing some of the multi-year feeding issues, but if there’s somebody who has fallen through the cracks, that’s what we need to know. Maybe the member could bring those specific examples, and we could help walk them through it.
J. Tegart: Thank you to the minister. My people will be very pleased to hear that. As I said, these are ranchers who are living in black. They talk about the fact that there is no way that they can sell their property. They’re having difficulty working their property, and they are trying so hard to survive. Any way that we can support them is so critically important.
I thank the minister for her offer of assistance. Our people will be in touch.
R. Coleman: I just want to get some clarification on whether we can lock down anything to do with cannabis here today or not.
I’m familiar with the minister’s comments on March 6, 2018, where you’ve recused yourself from all discussions with regards to cannabis policy, as your partner is a GP who prescribes medical cannabis to his patients which is provided through licensed producers. I’m not privy to the decisions that have happened.
Further to that, on April 17, the minister also said that she had transferred the ministerial responsibilities to the Minister of Forests, Lands, Natural Resource Operations. Usually when a minister does that, she also transfers any direct communication that would not come to her, to the deputy minister. Is that the case with regards to non-medical marijuana as well, or just with regards to medical marijuana?
Hon. L. Popham: It’s for both.
R. Coleman: That leaves me with some concern. Maybe we can get some clarification at some point from the minister. The second time the minister said that….
The reason I ask this is because we have a significant problem of odour, size, scope, whatever, in the agricultural land reserve. It’s, actually, a really big problem in the Delta and the Langley areas.
If that was the case on April 17, 2018, why did the member sign, as a presiding member of the executive council, the order-in-council to enter into a coordinated cannabis taxation agreement between the government of Canada and the province of British Columbia?
Hon. L. Popham: Could I ask the member to clarify his question for me?
R. Coleman: Sure. My question was…. The minister had said she recused herself from discussions in and around cannabis because her husband was a GP and prescribed it. On April 17, she further transferred all ministry-level decisions and anything to do with cannabis with regards to the Minister of Forests, Lands, Natural Resource Operations.
When I asked the second question, I said: “Did that include both medical and non-medical marijuana?” You said both. Yet you signed a document on April 27, on behalf of government, as the presiding member of executive council, on a piece of the marijuana file to deal with an agreement with Canada. My submission would be that somebody put a document in front of you that you shouldn’t have signed.
The Chair: If I could remind both the minister and the member that under Standing Order 36, questions are to come through the Chair.
[N. Simons in the chair.]
The Chair: Minister.
Hon. L. Popham: Thank you, Chair. Nice to see you today.
To the member, I have been recused from all policy discussions. Once the policy discussions have taken place and a decision has been made, then I am able to fulfil my administrative duties. In that case, as my administrative duties, I was the presiding OIC signing officer.
R. Coleman: Well, that wasn’t my experience — that a minister would ever sign off on anything that he recused himself on, relative to directions to a deputy or something else under the file. That wasn’t my experience. It was just never allowed or done. I’ll take the minister’s explanation, but I think somebody made a mistake on your behalf, and I would’ve taken that as an acceptable answer.
I know the minister can’t talk about marijuana and cannabis, but is the deputy able to have direct discussions with regards to the issues in the ALR relative to that particular file in our communities? The folks at Forests, Lands and Natural Resources Operations really don’t have any experience in the agricultural land reserve. Can we have the deputy committed to have direct conversations with us with these problem files that we have in our communities?
W. Shoemaker: To the member, I understand that I am permitted to have those conversations on the difficult issues.
R. Coleman: I will be in touch with Mr. Shoemaker — probably quite often, actually, in the next few months.
To the minister: I really do think somebody, even just exercising all caution, shouldn’t have put that OIC in front of you and had some other member from executive council sign that order.
L. Larson: I’m going to change the dial to something different in just a moment, but just to the minister for clarification, several times I have referred to the report, and the minister has said that it is just a report and that I shouldn’t be maybe as fearful about some of the recommendations in it. However, I would like to point out that Bill 52 and Bill 15 are already on the table from the recommendations that are in here. Therefore, I do feel that my nervousness about some of these recommendations is justified.
Moving on to minimum wage, I realize that this is cross-ministry — Labour, Finance, etc. However, for farmers, the bottom line of profitability comes down to two issues: wages and taxes. To the minister, I would like to ask if you have had any comprehensive studies done on the impact that the proposed minimum wage will have on agriculture.
Hon. L. Popham: Thanks for the question. The Ministry of Labour is responsible for looking at that issue and also the economic impacts across many sectors, including agriculture, but our ministry provides expert advice when needed.
L. Larson: My question relates more to what input Agriculture has had or conversations back and forth between Labour and Agriculture on this issue. I said very clearly at the beginning that I understood there was Labour and Finance, etc., involved, but obviously, this is very, very important to agriculture. Surely the minister has had conversations regarding the impact that raising the minimum wage will have on her ministry and the agriculture industry that she’s responsible for.
Hon. L. Popham: Absolutely, I’ve had discussions with the Minister of Labour.
L. Larson: All right. Moving on.
The easiest way for a farmer to recover the extra costs of getting his crop to market is to raise the cost to the consumer. That’s a little bit counterproductive, as the minister has stated very clearly that she wants more British Columbians to enjoy healthy local produce. What plans does the minister have in place to offset those rising costs and keep the produce at a price that consumers can afford?
Hon. L. Popham: There are a number of things that we’re doing to support farmers to increase production levels, to increase their access to markets. Our whole ministry is designed around Grow B.C., Feed B.C. and Buy B.C. The Grow B.C. portion of it is helping farmers on the ground. That includes protecting the agricultural land reserve, but it also includes putting programs in place that help new and young farmers access land. One of the biggest barriers for farming is the cost of land. We’re able to make these land-matching contracts that will allow farmers to not have that barrier in place.
We’re doing so many other things. We’re making sure we’re accessing federal funds to help berry growers, for example, have research to have berries that will allow them to continue to sell into the export market. But we know that that can be a place where there’s a lot of price fluctuation, so we are also doing a lot to improve the domestic market. The member has implied that costs are going up, but we’re also making sure that we increase the opportunities, to help farmers make more money.
L. Larson: My concern is also the cost of the product to the consumer. If produce in British Columbia continues to rise in cost, it pushes consumers to purchase what comes from Mexico and California, etc., first — and what we can grow in B.C., second — because we have the highest amount of wages and taxes added onto the production of our food. The president of the B.C. Fruit Growers Association, at their AGM in Penticton, talked about the many challenges facing the industry, with wage hikes creating a tipping point of profitability for many farmers.
What impact will the wage hike have on the ministry’s projected income from these agricultural industries? In other words, Finance has assumed a certain amount of income coming in from agriculture. I’m asking whether or not these types of things have been taken into consideration in the Minister of Agriculture’s projections on what agriculture is going to produce in B.C. in 2019.
Hon. L. Popham: It’s a good question. Just in general, I can’t predict revenues. It’s not my ministry’s job to do that. It’s the Ministry of Finance — the provincial revenues. What I can say is that the latest Stats Canada report shows that farm-gate sales are going up in British Columbia. That’s really good news.
One of the things that we can help offset any of the increasing costs is to support industry by helping them modernize. In fact, the B.C. Fruit Growers…. We were able to give them a $5 million competitiveness fund last year. That will allow them to modernize their fruit-packing plants and, I believe, will offset some of the costs that they’re struggling with now.
There are ways to become more competitive. There are ways to modernize, and we’re assisting the industry in every way that we can. We can even look at…. As far as the ranchers in British Columbia are concerned, we’ve been supporting a study to help a meat-packing plant go ahead in Prince George. This will all help B.C. farmers get money back into their pockets.
The Chair: This committee will stand in recess for 5½ minutes.
The committee recessed from 3:13 p.m. to 3:20 p.m.
[N. Simons in the chair.]
L. Larson: We were discussing wages and that type of issue. As you know, a lot of the industries, certainly the ones in my riding, have a lot of piece rate. A lot of the youth that come to pick in the Okanagan come in from across the country still. Not as many as there used to be, but certainly, there is still a fair volume of them. They’re a huge benefit to these smaller producers.
One of the things that having the piece rate has been able to do for those particular young people is that they can start at 5 a.m., be done at ten, put $300 in their pocket, walk away for the day and spend the rest of the day on the beach, which is a pretty good lifestyle. Should that particular ability to have that type of rate of pay — in other words, by volume of what they actually pick — be in any way put in jeopardy, then there is….
I can guarantee you that these young people will not start at five and finish at ten and walk away with $45 or $50 or even $100 in their pocket and still come back again. They have, over the years, developed this ability — for some of them, an incredible ability — to pick huge volumes in very short spaces of time.
The minister did commission a report, I understand — it was actually completed at the end of December, but I’ve yet to see it at all — on the piece rate. If the minister could please let me know what is happening with the piece rate report, I’d be most appreciative.
Hon. L. Popham: Thanks for the question. It was actually the Minister of Labour who commissioned that report. He has received that report, and it’s under consideration. I, of course, have input, when the discussions will come up.
L. Larson: Then I understand you have not yet seen the report?
Hon. L. Popham: Yes, I have seen the report.
L. Larson: Do I assume that you are not allowed to disclose any part of that, as related to the question that I have just asked?
Hon. L. Popham: It is not my report. It’s the Minister of Labour’s report. It hasn’t been released yet. So I won’t be able to comment on it until it has been released.
L. Larson: Can you tell me when it will be released?
Hon. L. Popham: I can’t tell the member when the report will be released. That’s a decision for the Minister of Labour.
I. Paton: I’d like to make a little statement. I know the minister travels the province and attends many agricultural functions, galas and meetings, as I do. I hate to be doom and gloom, but what I’m hearing throughout this province is that in less than two years, we’ve made agriculture very, very difficult in this province for farmers with a combination — and not necessarily from the Ministry of Agriculture but just, in general, from the government in place now — of different taxes and programs. I’m hearing this over and over again. I’m getting comments. I’m getting letters, emails, from farmers institutes throughout the province.
I’ll give you an example of a greenhouse in Delta owned by two brothers that live in Ladner, Westcoast Vegetables. Here are their calculations for 2019 as opposed to 2017. With their operation in Delta, the carbon tax will go up by $18,000 for 2019. The health tax of 1.95 percent will bring them to $96,000 in added costs. Minimum wage will increase again to $455,000, bringing their total increase for 2019 to $575,000 over 2017.
They go on to say: “We have seen slight decreases year after year in our prices due to increased competition from Mexico and California. We have also seen costs of our packaging, corrugate and greenhouse supplies increasing due to exchange rate, resin costs, etc. Unfortunately, we’re unable to pass on these cost increases to our customers.” It is no wonder that vegetable greenhouses are switching to cannabis.
My question to the minister. The greenhouse industry is particularly labour-intensive and will be hit hard by the payroll tax. Will the minister be preparing any targeted relief for the greenhouse industry from this tax hike?
Hon. L. Popham: I appreciate the member’s question, but any questions regarding tax relief will have to go to the Minister of Finance.
I. Paton: Well, to continue on, I would like to quote from a very well-known individual, a gentleman named Murray Driediger. I think most of us know Murray Driediger. He’s the CEO of BCfresh, which is probably the biggest handling company in British Columbia for root vegetables. They all get delivered to BCfresh, and from there, they go out by transport to all the different grocery stores across British Columbia.
I’d like to quote from a Business in Vancouver article they did with Murray just recently.
“Driediger has not yet done a full calculation of how much all the new federal and provincial tax hikes and other measures will cost his company. He just knows it’s going to affect the company’s competitiveness and result in having to pass on escalating costs to consumers.”
To quote Murray:
“‘It’s unbelievable that both the provincial and federal governments have literally been dumping costs onto business at the levels that they have and expect us to remain competitive,’ he said. ‘These are moneys that we use to modernize to ensure that we remain competitive, and they’re doing everything they can to throw sand in the gears.’
“The biggest, most immediate tax hit will come from the new payroll tax that is being foisted onto employers, from businesses to school districts, to replace the Medical Services Plan….
“In addition to the payroll tax, B.C. businesses will pay increased corporate taxes thanks to a 1 percent hike from the provincial government. And a $5-per-tonne hike in the carbon tax in April will increase per-litre fuel costs, bringing total carbon taxes on gasoline to eight cents per litre.
“‘Freight is a major component of getting produce to market throughout British Columbia,’ Driediger said. ‘Fuel costs are a major component to growing produce. All of these increases are doing nothing but adding on cost to the consumer, and freight costs are going through the roof.’”
The Premier had made comments — and we’ve asked this many times in question period — that there were some possibilities of relief to fuel prices. Is there any relief in sight for the farming industry for the costs of diesel, which are going to be exorbitant this summer for farmers operating trucks for delivery and tractors in their farm fields?
Hon. L. Popham: I can give the member an answer on the fuel tax situation for farmers. In 2018, B.C. farmers received $3.7 million in fuel tax benefits. This included 14.9 million litres of fuel sold to B.C. farmers exempt of fuel tax, amounting to a tax savings of $1.6 million, and $2.1 million in tax refunds on 71 million litres of fuel.
Any other tax-related questions would have to go to the Minister of Finance.
L. Larson: Just on this tax issue for one more question. Like you say, I certainly understand that the minister is not responsible for answering for Finance, etc. But the minister is responsible for advocating with the ministries, including Finance, for the farmers of British Columbia.
Currently in my area, employees who are part of the seasonal agricultural workers program are required, under the federal contract, to purchase third-party health insurance. As they are generally here for less than six months, they’re not eligible for provincial MSP. In other words, it hasn’t been something that has been collected and charged, etc.
The EHT will add a layer of costs and double the cost of health care to foreign workers. What is being done to ensure famers and farmworkers are not being double-charged for health care under the new programs? As I said, the Minister of Agriculture is certainly responsible for advocating for the farmers of British Columbia.
Hon. L. Popham: Thanks for the question. Of course I advocate on behalf of the sector. I’ve done it for many, many years, even before I was the Minister of Agriculture.
On the issue of the employer health tax, any issues like that would go to the Minister of Finance.
L. Larson: Then I would suggest that the minister at least raise the issue, as I do know that foreign workers have to be covered by their own health insurance if they’re here less than six months, or up to that six-month limit. Now we are asking the employer to double up and pay health tax on top of that. So I would ask the minister to please look into that particular issue with the Minister of Finance, as this is only going to add to the cost of producing food in British Columbia.
I. Paton: Once again, on the employer health tax. I just want to make a comment, with a question to follow.
We need to understand that the employer health tax is a major burden to all of the agriculture industry in British Columbia. Everything from greenhouses to big packing plants such as BCfresh, B.C. Tree Fruits in Kelowna, milk plants, processors, poultry farms, berries, packing plants, seafood plants, as part of agriculture, and the abattoirs…. All of these companies with large payrolls are all now paying the employer health tax. That is going to get passed on to the farming industry.
There is no other way to get around it. The employer health tax is going to get passed on to the farming industry. Every time a farmer receives business that comes to the farm, there are going to be increased fuel costs to the companies that are making deliveries to the farm and to the companies that are taking product away from the farm to the processing plants. Between the employer health tax, minimum wage, increased fuel costs and carbon tax, this is a big hit to agriculture in B.C.
Once again, my question is to the minister. Has she consulted, before the introduction of some of these bills that were passed, the Minister of Finance regarding the effects of these taxes on the agriculture industry in British Columbia?
Hon. L. Popham: I think what the member is asking is if I advocate on behalf of the agriculture industry when it comes to any policy changes, tax changes, within our government. I am a sitting member of cabinet, so of course I bring the views of agriculture to that table all the time. But if the member wants to know any details or to discuss the taxation policy, the member will have to go to the Minister of Finance.
I. Paton: To switch gears briefly, I’d like to go back to Bill 52 and house size. As you know, our side of the House made an amendment to Bill 52 regarding the size of homes and the square footage at the base level, which was defeated. So we went ahead with 500 square metres as the home size.
However, even in the recommendations…. It is said, under recommendation 11, that we need to look at farm home plate size and not be so concerned with the size of the house, which to me makes total sense. In Delta, as you know, we have regulated our farm home plate, I believe, to 60 metres by 60 metres located on a corner of the farm, not in the middle of the farm.
I think it’s very important to understand that, sure, we want to take away these massive tennis courts and swimming pools and all the things that add to taking up farmland. To the minister: do you have any intention of establishing a farm home plate, as recommendation 11 suggests? If the intent is to preserve farmland, a home plate makes more sense than limiting the square footage. The square footage should be left to municipalities.
Hon. L. Popham: First off, we did have quite a discussion around the bill in November. The member mentioned the house size that was landed on. The 5,400 square feet that was landed on was actually taken from the minister’s bylaw standards that were developed by the former government. We wanted to keep that consistency.
I’d just like to add another thing. The member did talk quite a bit about just being able to go up a level — to double the house size that way. You know, the members continually talk about the increased cost of farming. The one way to increase the cost of a farm is to make a house bigger on that farm. If you double that house size, it raises that evaluation on that piece of farmland. One of the biggest barriers for young and new farmers is the cost of land. So that’s one thing that we did keep in mind.
Now, with regards to home plate regulation, that is under consideration in the regulations, but we won’t be able to move forward on that without great consultation with local government and other stakeholders.
T. Shypitka: Thank you to the minister and staff for affording me some time here to ask a couple of questions on behalf of the constituents of Kootenay East. I’m just going to start off with a quick baseline question. You’ve probably been asked it already, so sorry if there’s some repetition here. It’s just to set the tone.
The constituents in my riding are very concerned. Rural B.C. We’re in the southeast corner of the province. The minister is well aware of where it is. She’s been out there a couple of times, and I thank her for that. But they’re concerned. Private land owners on the ALR are concerned for a couple of reasons.
One, obviously, was a takeaway of zone 2. This was an optional tool they could have used to further sustain their properties on the ALR. They were concerned with that. Also, now the elimination of private owners directly applying to the ALC for land repurposing issues has also been another sense of concern. So the minister can probably understand that there’s a sense of confusion, a sense of paranoia, I guess, maybe. Change isn’t always received well with people. They’re receiving some changes here, so some of my constituents are a little concerned.
When the NDP introduced the ALR legislation back in the ’70s, it was to include ALR land for agricultural purposes. That was the original intent. However, in the East Kootenays — I’m not sure if the minister is aware; the staff may be aware or not — only 16 percent of privately held ALR land is in agricultural production. That’s privately held ALR land — only 16 percent. If you include Crown-held land, it’s only about 6 percent of the ALR land in the Kootenays that is in production. So a very, very small part of that is actually in production right now.
There’s probably a reason for that. I think the minister could probably wrap her head around the idea that, when the ALR was first put in, it was put in with a fairly broad brush, a fairly broad stroke. The soil types and the growing season in the Kootenays aren’t the same as they are down in the Lower Mainland, where you have some really rich delta areas and 12 months of growing season and lots of rainfall — things that are really conducive to agriculture. In the Kootenays, we’re really in a different world where we live.
The question I have is from the Kootenay Livestock Association, a great group in my region — great ranchers, great farmers. What they want to ask is: why does the NDP put so much emphasis on locking up private land, like the two examples that I was mentioning? They’re a little concerned on losing some of their private rights. So why does the NDP put so much emphasis on locking up all private ALR land when it has managed zero percent of its ALR for agriculture production?
Hon. L. Popham: Thanks for the question. I have been up to the member’s area quite a bit, and it’s fantastic. In fact, I’ve met with many farmers in that area that do have farms and ranches in production, so I take a little bit of an issue to nothing is under production up there.
I think that it’s got a lot of potential, but at the same time, a lot of the work that we’re doing in the ministry is about encouraging farming and putting in programs that get people onto the land base. Of course, there’s an element of making sure that the agricultural land reserve is intact and is protected, but the majority of the work we do in the ministry is about getting farmers onto the land and supporting farmers in what they’re doing with their activities.
I just also wanted to have a point of clarification. We are treading a little bit on the Bill 15 legislation. It has been tabled and is in the chamber now, so we won’t be able to discuss anything that pertains to Bill 15 in estimates.
T. Shypitka: The minister has highlighted she’s been to the region three times, many times. I think you missed me once for lunch. She came by, and I wasn’t around, so I apologize for that.
Yeah, it is — I think we do have a lot of opportunity there. But we also need the tools to get there. This is exactly what these ranchers are concerned with. They’re being limited — the tools that they have to make their land sustainable.
We’re talking about generational hand-downs from ranchers to their kids, and they need those tools so that they can perhaps subdivide a piece of their property off to bring in the young rancher’s family to take over mom and dad’s shop a little bit. Those opportunities are becoming limited, and they feel like they’re getting squeezed out a little bit.
The minister mentioned also that she has been there many times. Has the minister ever had discussions with the Kootenay Livestock Association?
Hon. L. Popham: Thanks to the member for the question. Yes, I do meet with the Kootenay Livestock Association. My staff in my ministry I think have discussions with them almost monthly, so there is constant conversation going on between my ministry and that organization.
I’d like to add that the things that we’re doing to support agriculture directly affect the member’s riding. Last year we were able to double the funding for 4-H, and that’s a pretty incredible program. I think anyone who comes from rural B.C. understands the value of that program. We gave them quite a big lift, and that’s because of making sure that the younger generations are engaged as much as they can. So 4-H is a wonderful way to do that, and that allows for that generational transfer of property and interest in agriculture.
I think I’ve also mentioned to the member before about our land-matching program. We have people on the ground that are creating a database of people that are landowners that aren’t able or don’t want to farm anymore and matching them up with new and young farmers that are bringing great energy into agriculture. I think what the advantage is in that member’s riding is that land is more affordable than it would be in the southern part of British Columbia, so there are a lot of young people interested in coming up to that area. We’re giving them the supports they need to start farming.
T. Shypitka: I encourage those young families to come out to the Kootenays and check it out, absolutely. I, unfortunately, have seen a couple of young families recently just leave the family farm because of the lack of confidence they have with what they’re seeing right now, with the changes with legislation and government and the things that I highlighted earlier.
This is terrible. I mean, these are long-standing family farms. There are ranches that have been in production for a long time, and now the children are looking at it and saying: “You know what? I could probably make over $100,000 driving a truck up in the Elk Valley coal mines. Why do I need the hassle, and why do I have to be batting my head against the wall with some of this new legislation that’s coming on board?”
I’m encouraged by what the minister says. But in reality, in my riding, it’s not quite that way. But I’m optimistic.
The next question I’ve got is a process towards predators — lost stock due to predators. Can the minister tell me the process a rancher undergoes, as well as the ministry’s involvement, when a rancher puts in a claim for lost stock due to predation?
Hon. L. Popham: Thanks for the question. I just wanted to get back to another point that the member made around the ability for people to do subdivisions in the agricultural land reserve. That requires an application to the Agricultural Land Commission. That application process is still available. The member might know that, or not.
As far as the livestock protection program goes, this is a program that is administered through the B.C. Cattlemen’s Association. It’s a third-party-administered program. It works in conjunction with the conservation officers, through Forests, Lands, Natural Resources and Rural Development. If a farmer or rancher has a problem with predation, they can contact the B.C. Cattlemen’s Association, and they will start that process with them.
T. Shypitka: It seems like a somewhat rigorous process. I mean, the rancher has a claim, goes to a third party — the Cattlemen’s Association — and then they, in turn, talk to COs on proof of kill. Is that part of it as well? I’ll ask the minister that again.
Hon. L. Popham: I’m sorry. I said that the conservation officers were through FLNRORD. It’s actually through the Ministry of Environment, but the member probably already knew that. The conservation officer would have to verify the kill and then submit the paperwork to the B.C. Cattlemen’s Association.
T. Shypitka: Yeah, so we’ve got a lot of different moving parts here when a claim like this comes through. As the minister stated, the rancher goes out, goes to the field, sees one of their dead cattle lying there, goes to the Cattlemen’s, puts in a claim, goes to the Ministry of Environment and talks to COs. They look at the dead animal. They verify whether it’s a kill or not from a predator. There are lots of different factors there.
If the minister can understand, when a cow or calf is attacked by a pack of wolves, there’s not one pile. There are probably many piles. There’s a bone over here. There’s a jaw over there. There’s a toe over there. It’s really hard, sometimes, to nail it down. Did the calf break its leg in a gopher hole and die of natural causes, and then the predators there came to clean it up afterwards? Or was it a true predator kill?
It’s rigorous. It’s complicated. I remember the minister saying last year that the reason they got rid of zone 2 was because it was a rigorous and administrative nightmare. This seems to be somewhat similar to that. The Ministry of Environment COs have said that the provincial government has a formula for estimating predation on livestock. They have told livestock producers that government estimates 70 percent of all livestock mortalities on open range are caused by large predators — wolves, grizzly bears, black bears and cougars.
If this is true, why is it that the livestock protection program only pays for verified kills and not for a percentage of mortality? It certainly would ease up a lot of time, money, resources and frustration, quite honestly. I throw that to the minister.
Hon. L. Popham: Thank you to the member for the question. The member stated that it’s a complicated and onerous process, but what we are finding and what the B.C. Cattlemen are reporting back is that it’s not. It’s quite a smooth process.
Now, as far as how the program works, it’s guided by very strict program protocols and the Wildlife Act permit conditions. We use this verification process with conservation officers who are very well trained to know whether it’s a predator attack or, as the member showed, maybe by natural causes.
T. Shypitka: Well, I’ll have to talk to the Cattlemen’s Association. I know that in my riding, the ranchers don’t think it’s a very smooth process. They think it’s a fairly rigorous one, and sometimes very unfair, to put the onus, or burden, on the rancher to prove, instead of taking the Minister of Environment’s own statistics on mortality rates due to predation. It seems to me like it’s logical to use that same formula — it’s good enough for the Ministry of Environment — to put to the ranchers of the province. That’s my only thing I have to say. I’ll follow up on that with my local group.
The last question is to deal with AUMs, grazing rates and tenures for ranching. When ranchers get grazing rates for AUMs, they’re allocated a certain amount. Let’s use the number 600 because that’s an easy one. That means that would be 100 head of cattle. Sometimes they don’t use that whole allocation of 600 AUMs. They would maybe use 150, which would be 25 percent, or 25 head of cattle.
I’d like to ask the minister: how is that allocation handled if a tenure holder doesn’t utilize his complete allocation?
Hon. L. Popham: Just back to the predator program. It would be my pleasure to help set up a meeting between Kevin Boon of the B.C. Cattlemen’s Association and the member. He can completely brief the member on how that program is run. I think it would be really…. It’s great information to have in his back pocket.
As far as the question around grazing, that doesn’t happen within my ministry. That actually happens through the Forests, Lands, Natural Resource Operations and Rural Development Ministry.
T. Shypitka: I’m pretty much done. I do have quite a few water rights issues, and there’s a whole bunch of other stuff. But we are limited on time.
Would the minister give me a commitment, if I forwarded a nice copy to her, that she would get back to my constituents in the Kootenays?
Hon. L. Popham: Absolutely.
T. Shypitka: Thank you.
L. Throness: I would like to have a couple of updates. I want to thank the minister, first of all, for her help on hazelnuts. That’s something that I’ve bucked for, for a long time. So I appreciate that.
A year ago we had a grow op in Rosedale. The RCMP came and raided it and took away 3,900 plants. It was an illegal thing. It re-established and was again stinking up the neighbourhood. So the neighbours bought it. Now they have that place, and they have resolved that problem. But I have another complaint now. This is going to happen over and over again.
It seems to me that the legal path forward is through a complaint to FIRB under the normal farm practices. It was my understanding that FIRB had not drafted that set of rigorous guidelines. I’m wondering if the ministry and the minister have worked with FIRB on those normal farm practice guidelines so that grow ops are not allowed, frankly, to stink out their neighbours’ farm country.
Hon. L. Popham: First off, I need to tell the member — he probably knows — that I’m recused from the cannabis file due to a personal possible perceived conflict. So I’m not involved in any policy development work around cannabis. I can tell the member that the ministry staff have been working with FIRB to come up with normal, accepted farm practices around cannabis, but I’m not involved in any of that personally.
L. Throness: One more update. The minister is aware that there is a volunteer agricultural plastics recycling group of producers in the district of Kent who get together once or twice a year. They bring their plastic to a central place, and they share the cost of trucking it to Richmond for recycling. The group would like some assistance with that, of course. They think it’s a good program. I think it’s a great program that could be replicated across the province. It would take care of 5 percent of all of the plastic that is produced in the province.
The minister was going to consult with her colleagues. I’m wondering if she has been able to do that or if she can provide an update.
Hon. L. Popham: Thanks for the question. The member brings up an issue that I’m also very interested in. I did make a commitment to pursue this and bring it to my colleague at the Ministry of Environment. We have had discussions. I don’t have a current update for him, but I’d be happy to do that as soon as I get one.
D. Clovechok: Thanks to the minister and her staff. We’ll get right at it. I certainly appreciate the opportunity.
I’m going to give you some back-channelling to get to the questions. I’ve got a few questions on two issues, but we’ve got to do a bit of a History Channel here.
On February 16, 2018, the minister would have received a letter from Gary and Karen Persson, who own G and K Persson Farms just south of Golden — good, hard-working people who have provided their community and others around them with good, clean meat consistently over the years. The purpose of the letter that they wrote was to bring to the minister’s attention the class E regulations, which I know she’s very familiar with.
They’re wanting to do that on their property. The problem is that they exist within a two-hour drive to the abattoir in Invermere, which is a small operation, as I know that you’re aware. They slaughter once a week, and it’s focused on cattle, not pigs. The folks from Golden are raising pigs. It doesn’t work. As I say, it’s small. What it does is it kind of excludes them from a class E possibility. I think, in your new plan, you’re looking at reducing that travel time down to an hour, if I’m not mistaken. But I could be; I was wrong once last year.
I personally talked to these guys, and they’re very, very frustrated about the whole process. Not only through the process, but they didn’t hear back from the ministry. I said that that’s unusual, but they did not hear back, and that’s a problem They’ve taken their issue to the Columbia-Shuswap regional district and their area director, Karen Cathcart, who’s the director of area A. You would have received a letter, as far back as April 13, 2018, from the chair, Rhona Martin, of the CSRD regarding the issues. They didn’t hear back either. You did send an email, though, or a letter…
The Chair: Through the Chair, please.
D. Clovechok: …to Ms. Martin from an email that she sent on February 7. They were pleased to see that, but they didn’t hear back. And now there’s another letter out there that was sent April 25, 2019, directed to you as well, Minister, through the Chair.
The Chair: To the Minister.
D. Clovechok: Yeah, gotcha.
They have not heard back from you yet, so that’s obviously an issue. One of the key points on this letter is that “we believe it’s important to support the sentiments of rural farmers in their ask for a class E licence and changes.” So that has happened already. They also went ahead and got a letter of support from the agricultural society in Golden, who say basically the same thing. You would have gotten all this information.
I guess the first question I have around this issue…. It’s very frustrating for these people who desperately need to have a class E licence, but because of the restrictions in terms of travel time, they’re not being afforded that. Even though the abattoir in Invermere is accessible two hours away, it doesn’t have enough capacity to support that.
I’m wondering then, through you, Chair, to the minister, if you could help Gary and Karen and the CSRD and Karen Cathcart, who’s the area director of CSRD, and why they didn’t hear back from your ministry.
Hon. L. Popham: Thanks for the question. I love this topic, and I know that the member is passionate about it too.
First off, I just want to acknowledge the letters that weren’t responded to. It’s not normal practice for my ministry not to respond. If the member could provide those letters after he’s done here, we’ll make sure that we follow up with that right away.
Now, as far as meat regulations, the regulations that the member was talking about around the two-hour travel time were put in place by the previous government. I have also heard the same complaints about that. That’s why I made sure that one of the first tasks of the Select Standing Committee on Agriculture, Fish and Food was to go out and consult with British Columbians, even up into those areas, about how meat regulations could change to better serve the people of British Columbia.
I don’t have anything that I can say definitively today, but I can say that I hope to deliver some very positive news soon.
D. Clovechok: Just to underscore the importance of that — and I certainly appreciate the minister’s answer on that — it’s so important for the ranchers and the farmers in the entire riding that the CSRD actually put forward to UBCM a resolution. For the record, I’d like to read that in too, because it was presented at UBCM: “Therefore, be it resolved that the Minister of Agriculture be requested to make an immediate change to the class E licensing requirements to give farmers the ability to slaughter their livestock on farm premises and offer and promote farm-gate sales.” That was put forward at UBCM. Again, I will provide those letters, and hopefully we can get some answers.
My question to that is: will the minister commit today to reach out, first of all, after I’ve given these letters over for the record, to those that are on this file?
Hon. L. Popham: It is my pleasure to guarantee that. We will contact them tomorrow if I get that correspondence today.
D. Clovechok: Very much appreciate that. I guess the question that’s really underlying all of this is that…. I did hear that there’s some good news coming forth. I’m going to press her on that good news. Obviously the best news is that…. For Gary and the other folks that are in my riding and throughout the province of British Columbia, will the class E situation that I’m talking about here end up in a favourable light, foreshadowing the good news that’s coming?
Hon. L. Popham: Thanks to the member. I understand why he’s pressing, because it’s an exciting topic. I can say that the standing committee put forward a strong recommendation that I feel is very supportable. But the member is going to have to stay tuned.
D. Clovechok: We will stay tuned. Appreciate the forthcoming…. We’re going to pass it back over here. I’m coming back in a bit with a different question.
I. Paton: While we’re on the topic of abattoirs, licensing and inspection, I’m sure the minister is aware that I spent a pretty good portion of my last summer, along with the member for Powell River–Sunshine Coast, on the select standing committee for revitalizing meat inspection and abattoirs in the province. In fact, I think you probably know I was actually at the B.C. Association of Abattoirs conference just, I think it was, last weekend.
Out of the standing committee’s report that we did, there were a lot of recommendations. I could talk for a long time about some of the things that are in there. But first of all, my question to the minister. Can the minister tell the House what work, if any, has been completed on the recommendations outlined in the Select Standing Committee on Agriculture report on abattoirs? Can she identify which of the 21 recommendations have been completed, which are currently in progress and which are yet to be started?
I’m just a little bit…. I don’t know that I’m disappointed, but we’ve all spent our lives doing reports, and this report seems to be…. I don’t want to be rude by saying “collecting dust,” but we haven’t heard anything about it. I guess my other question is: what’s happening with the report?
Hon. L. Popham: Thanks for the question, and thank you for going on that tour. I committed that for every member who became my critic, I’d send them out for a year of slaughterhouse tours. I’m just kidding.
That’s really important work that was done. The report was excellent. I can tell the member that the report was broken down into three areas of focus. There was the first one, which was abattoir licensing and oversight. The second one was skilled labour and workforce. The third was industry growth and development.
As far as the last two — skilled labour and workforce, and industry growth and development — those are areas that my ministry got to work on right away. There’s ongoing work happening right now. The abattoir licensing and oversight was a little bit more complicated, but work has been done.
I expect that I will be able to make a formal response to the members’ hard work, to that report, very, very soon.
I. Paton: Well, I will have a question, but I’d like to start with just a comment on our tour and our report that was put together by the group of the Select Standing Committee on Agriculture.
From what I learned and what I’ve heard from members of the Abattoir Association of B.C., I think it’s very important to understand that there are licences A and B — as you know, Minister — and D and E. I think it’s very important to understand that the A and B licences are inspected by the Ministry of Agriculture, which is a good thing. Even the A and the B licences said they enjoy having the inspector there for eight hours a day to oversee the handling of the livestock, to oversee the process.
But the Ds and Es are sometimes 20 kilometres off the main road, in the backwoods of northern B.C. or the Kootenays or whatever. They have these D and E licences. However, if you talk to the Ds and Es to say, “When was the last time you were inspected by the Ministry of Agriculture?” it’s: “Well, we don’t get inspected by the Ministry of Agriculture.” “Well, who inspects you?” “We get inspected by the Ministry of Health.” “When was the last time the Ministry of Health stopped by to have an inspection of your facility for your D and E licence?” “We haven’t really seen an inspector for a year and a half or maybe two years.”
This is totally unacceptable. I think the number one thing that I’ve heard is that we have to get boots on the ground, with the Ministry of Agriculture hiring more inspectors to get out and be able to inspect the Ds and Es in this province, because if Ds and Es are selling their meat product…. They’re cutting out behind the barn, possibly, and selling at a farmers market, which says: “We’re licensed.” Okay. Sure, you’re licensed; you have an E licence. But it doesn’t say you’re inspected.
This is something we have to nip in the bud. We need to get more inspectors out. My question to the minister: how soon can we get inspectors through the Ministry of Agriculture to be out there inspecting the D and E licences, rather than depending on the Ministry of Health?
Hon. L. Popham: Thanks for the question. In reviewing the report, I didn’t see that as a specific recommendation that came from the select standing committee, but I understand the member’s point. The member is right: the inspection responsibility does lie with the Ministry of Health. But we are working with the Ministry of Health, looking at ways to enhance the inspection process. I think that’s a good conversation that we’re having.
Within the Ministry of Agriculture, we have been working around issues like slaughter safety, specifically with the D and E licence holders. So we are improving the educational levels of those operators through my ministry. But I take the member’s point. It is a conversation that is happening.
I. Paton: In reply to that answer, I would just like to say that I believe it was in one of the recommendations, because we’ve talked about it many, many times, even last week at the conference.
However, I think it’s very important that we do have inspections from the Ministry of Agriculture for all the licences, even for animal welfare. The Ministry of Health can come out and can inspect your stainless streel tables and make sure that your knives have been properly cleaned and all those things, but they’re not there to inspect animal welfare — how the animal is handled and how the animal is put down before slaughter. I think it’s very important.
We need people, but they don’t have to be there eight hours a day, as for the As and the Bs. What I have suggested is that the Ministry of Agriculture have some people that do spot checks on the Ds and Es, just like in dairy farming. We had barn inspectors that would come and inspect that our facilities were in good shape, but they never let us know when they were coming. They would pop in. So it always kept us on our toes to keep our facilities clean.
I guess my question to you — which is sort of off-topic from that; I think it’s my last question on this topic — would be on mobile abattoirs. To the minister: do you know of any mobile abattoirs that are currently functioning in British Columbia?
Hon. L. Popham: Thanks again for the question. When I look at the recommendations coming forward from the standing committee, I see recommendation 2: “As a way of supporting small-scale meat producers and processors, require the Ministry of Agriculture, or their designate,” which in this case is the Ministry of Health, “to increase resources to enable engagement with Class D and E licensed facilities to ensure increased inspections at those facilities, including slaughter.”
I think that’s what the member is referring to. I don’t think it’s super-clear that there would be a transfer of responsibility, but I understand the member’s point and the concern around the Ds and Es. In my ministry, we have been including new resources for educational purposes. I do understand the member’s point.
Now, as far as if there’s a mobile abattoir operating in the province, we did have one operating in the Cariboo. The business plan didn’t work, so it shut down. Then recently, through Investment Agriculture, there’s been funding for the mobile abattoir to get going again. That’s operating in Lillooet.
I. Paton: I promise this will my last question on this topic.
Speaking of…. I like to use the term “abattoirs.” We know that there’s been a lot of money spent on consultation and looking into a possible federally inspected abattoir in Prince George. Nobody is quite sure where that’s going, but I do know that there is the opportunity for a complete rebuild of an abattoir on 184 Street in South Surrey–Cloverdale. I don’t know if you remember the name. It used to be called AGM Grand Maison Beef Farm.
Meadow Valley Meats, I believe, is the company that owns it now, and they want to do a massive renovation and restructuring. I think it would be a huge asset to the livestock industry, not only in the Fraser Valley but to truck cattle down from upcountry to a state-of-the-art facility.
They asked me if I would forward a question through the Chair to you — whether there is any sort of provincial funding that could go towards Meadow Valley Meats’ restructuring of this huge abattoir in South Surrey.
Hon. L. Popham: Thank you to the member. It’s the first time I’ve heard about this idea.
The ministry doesn’t fund capital investments in such things as slaughterhouses, but we certainly could help with a feasibility study. If the member wants to bring forward more information and connect us with the operation. If there’s a feasibility study need, then we would absolutely want to take part in that.
D. Clovechok: These questions that I have are associated with the ALR and the ALC.
Just to give the minister some backstory on it, because you may not be aware of this. Around the mid-2000s, the Columbia-Shuswap regional district — again, this is a CSRD issue — were looking to put a boat launch in, in and around Golden. Basically, what they did is they started a…. Three sites were evaluated. One was chosen. They actually chose the site itself. The CSRD chose the site — and their folks, with consultation — on private land.
What they did is they went ahead and secured a statutory right-of-way agreement with the property and launched the process. They also applied to the ALC for a non-farm use exemption and received approval in 2010. This whole process was approved by the ALC in 2010.
Shortly thereafter, the federal government came in and were looking at some changes in terms of motorized use on the Columbia River. This project, in terms of a boat launch, was put on hold until such time as the federal government made their decisions. In the interim, while waiting for that federal government decision, the planning kept on going on site.
The MOE biologist at the time reviewed the site launch. What they decided to do was to actually shift the site itself about 30 metres from the original one — it was an old disturbed site from some logging — so it would have less environmental impact. Everybody was happy. So that’s all good.
In 2017, a new conceptual plan was moved forward to launch the program, and the federal government came in with their new regulations on motorized use. The CSRD negotiated a new right-of-way plan with the owners, so it shifted, as I said, about 30 metres.
Here’s the kicker: they were surprised when the ALC staff advised that a new application had to be filed because of the shift, although it had been approved in 2010. That’s fine. They submitted a new application to the ALC, already having the approval in 2010. So this was all signed off on. Well, lo and behold, here’s the problem. In 2018, they met with the two panelists with the ALC out in the Kootenays and were absolutely shocked that this planning was declined, even though it was approved in 2010. Completely. All this planning — done. Refused.
The problem is that they’ve gone ahead and raised a bunch of money. Columbia Basin Trust is involved in this. They’ve got some money involved in this that they’re holding back on. I guess the question is…. This launch was already approved by the ALC. All of sudden, out of nowhere, because of what would seem to be — it’s kind of absurd to me — a 30-metre shift into a location that was better for the environment and approved by an MOE biologist. And all of sudden, they’re shut down. They’re dead in the water, having done all this work back into the 2000s.
I guess my question to the minister is…. First of all, is the minister aware of this issue? I certainly can provide you with the documentation associated with it. What can be done immediately to get this project back on the rails?
Hon. L. Popham: I’m not familiar with this situation at all, and as the member will know, the Agricultural Land Commission decisions are independent from myself. I don’t know if the parties have initiated a reconsideration option that’s available to them. This type of option is available in case the applicant feels that there are facts that are new that might apply to the situation. I don’t know if they’ve already done that, but that’s an option that’s available if they haven’t.
Could I also add at this time…? The member brought forward some correspondence that perhaps my ministry hadn’t replied to. That really concerned me, so my staff did a quick check, and we have found two letters in reply to those constituents. We may have missed another one; I don’t know. But I can certainly give these to the member, and then if the member could give me his letters, we can make sure that we’ve covered everything off. But I do have two letters in response.
D. Clovechok: I appreciate that and look forward to seeing those.
I think it’s really important to note that the request to walk this back to an approval that was done in 2010…. It’s really important to underscore that the request was not for land exclusion out of the ALR. It wasn’t. It was for non–farm use, so the land still remains in the ALR, but it’s shifted by 30 metres.
Maybe you could give some direction as to what this reconsideration option looks like so I can advise my constituents.
Hon. L. Popham: This would go through the Agricultural Land Commission. My suggestion is that the party contacts the Agricultural Land Commission and avails themselves of the correct application of reconsideration to go through.
D. Clovechok: I appreciate that.
Also, on behalf of the Columbia-Shuswap regional district and in one of the letters that I will present to the minister…. I’ll review it. Thank you, Minister. I’ll have a look at that and make sure we’ve got what we’ve got here.
They did invite the minister to come out and visit the Golden area, so hopefully that is on your radar. With that, I’ll take my seat.
Hon. L. Popham: I appreciate the invitation, and I will be coming up there. I will make sure the member knows when I am.
S. Thomson: I just have one quick question. There’s lots behind the question, but my purpose in raising it today was just to determine where the minister may be at in consideration of this file and this opportunity. It involves the craft distilling sector and the Craft Distiller Guild.
They’ve been making recommendations to government around some changes that they feel would provide great opportunity for the sector — growth, lots of jobs, more utilization of agricultural product. It is a sector that uses 100 percent B.C. products. There are a number of limitations and constraints to the future growth of the sector, but this is one that has tremendous growth potential and opportunity. The sector is winning awards nationally and internationally. I’ve got a very good craft distilling operation in my riding, with Okanagan Spirits.
They’re frustrated that the recommendations that they’ve been providing don’t appear to be getting response or attention. I just wanted to ask the minister: has she engaged with the Craft Distiller Guild? Is there consideration underway within the ministry around the recommendations that they’ve put forward? Has she engaged with the Ministry of the Attorney General? Ultimately, a number of these recommendations that they’re putting forward relate to the Attorney General and his responsibility for liquor control, licensing and those sorts of things.
I just wanted to get an update on where the minister may be at in consideration of the file, recognizing that her mandate is to grow agriculture, grow the utilization of B.C. products and create new jobs. This is a sector that can certainly do that but is constrained by a number of regulations and issues. So has she engaged? Has she engaged with the Attorney General on this, and what’s the state of consideration within the Ministry of Agriculture on this particular sector and this file?
[S. Malcolmson in the chair.]
Hon. L. Popham: Thank you for the question. The member is right and is well aware that the recommendations that came forward around this file do reside in the Ministry of Attorney General. Of course, we are engaged in anything that encourages agricultural production, but we don’t have any decision-making abilities, as those recommendations would go through that ministry.
S. Thomson: I guess the question that maybe I would ask as a follow-up, then, is: has the minister had direct engagement? Are you working with the Attorney General’s ministry on the recommendations? Are you advocating for some of the recommendations that would help assist and grow this sector? Have you engaged directly with the guild recently on the recommendations?
Hon. L. Popham: Thanks for the question. There haven’t been meetings recently — I’d be happy to do that, for sure — but there have been meetings in the past. The Ministry of Attorney General will be making decisions on that file.
As far as what we can do from the Ministry of Agriculture, of course we are going to be champions for any agricultural product that is going to be used and made into a value-added product, such as they’re doing. The member will know, as he was the Minister of Agriculture, that the business development programs within the ministry support the activities that that sector would be doing.
We’ve really encouraged producers to take part in our Buy B.C. program. Currently May is Buy B.C. Eat Drink Local month, so we’re featuring all products made in B.C. that are being featured in the restaurant sector, which is a great place for that sector to have a spotlight put on them. But we would be happy to meet with them in the future.
S. Thomson: I appreciate that response. I think what I would finish with is that request: that a meeting be organized with them as soon as possible, as early as possible for the minister. I think it is a sector that has a tremendous opportunity, and they see some significant constraints. I don’t think they’re looking, at this point, for the business development funding. They certainly appreciate and want to work with the Buy B.C. program. It’s all B.C. product and fits in that category. But it’s really about finding that champion within government who can help move consideration forward on a number of the constraints that primarily rest within the Ministry of Attorney General.
If a meeting could be organized as soon as possible…. You could come up to Kelowna again and meet with them. The president of the guild lives in Kelowna. I think they would appreciate that.
L. Larson: I’m changing focus again.
The minister did announce in the Okanagan not that long ago a new program to try and move more of B.C. fresh produce into hospitals. My question to the minister is: what supports are currently in place to support those farm produce producers who have the capacity to go into food processing at the level they would need to be in order to supply something like a health authority with a particular product?
Hon. L. Popham: Thanks to the member for the question. This is a program that I’m super excited about. We did launch the Feed B.C. pilot project at the Penticton Hospital.
This pilot project is really to figure out exactly what is being purchased already and what the avenues are that can be taken to purchase locally and in B.C. to move more food through the hospital system. The pilot project was announced in Penticton and is being done in Penticton, but the opportunities to expand it around the province are huge.
Now, just in Penticton, the purchasing contractor was purchasing eggs, not necessarily B.C. eggs, but because of this pilot project, the type of purchase on eggs was directed at British Columbian eggs. Just in one year, the Penticton Hospital uses 600,000 shelled eggs. Those are now 100 percent B.C. eggs. So even in supply management, this shift is very encouraging.
We have a vegetable and fruit farmer that’s in the area, who is actually growing their business this year just to meet the demand of what the Penticton Hospital needs. They are putting in a very large greenhouse. I think they are doubling their greenhouse just to supply the Penticton Hospital. As soon as we have these successful partnerships, it’s obvious that this can be done everywhere.
Now, as far as having products that are hospital-ready or at the quality and safety level that hospitals can use, we are currently developing a food processing network across the province. We did announce our pilot project in Vancouver. It’s a Commissary Connect. It’s our first pilot in a series of food hubs. This is a HACCP-ready facility. HACCP is a certain type of processing that would not just allow products to be sold in the international market but also to look at health institutions and what their requirements are.
The idea is to build these food processing hubs around the province, in rural British Columbia, where we can access food that’s being grown, turn it into a value-added product and get it into our health institutions. Of course, it’s not limited to health institutions. The possibilities are endless. This is really how we’re connecting the dots, using the power of procurement.
L. Larson: To the minister: thank you for the answer. I’m a little bit concerned re the footprint allowed on agricultural land for doing these types of processing. Right now it’s a very small footprint, and recommendations are for it to be very low percentage. Is the minister anticipating that the food processing itself will happen on industrial land versus agriculture land?
Hon. L. Popham: Currently most food processing is done on industrial land and some is done on agricultural land. The food hubs, the pilot projects, in our network are actually on city land. They’re within city zones. This is the way it is right now. I expect that this is the way it will continue.
L. Larson: To the minister: thank you for that clarification. Right now testing of new products for market — which is ongoing all the time, especially in the area of seasonings and spices and along that line — has been done primarily in the United States for some Canadian products. So is this testing now happening in B.C.? Are we now able to test these products — again, I’m going to be very specific to seasonings and that type of thing — in British Columbia? Or are we still sending it across the line for testing, and then it’s coming back?
Hon. L. Popham: Sorry. Could the member clarify the direction of the question? We’re not quite sure if it’s a safety test or what type of testing she’s talking about.
L. Larson: Yes. I have a small producer in my area who was making seasonings, and so on, and who had informed me that even a couple of years ago, in order to get the proper approvals, it had to go to a facility in the United States because there wasn’t one in Canada to do the testing, or whatever.
I’m not sure what’s happening now. Perhaps the minister could enlighten me. I know that at farmers markets and everywhere we go now we see all kinds of seasonings that are available. What involvement…? Where is that in the agriculture end of things in your ministry?
Hon. L. Popham: I might miss the mark here, because it’s going to be my interpretation of what the member was discussing. If I do, I invite the member to bring the specific situation to me afterwards.
From what I can tell, this is probably a Canadian Food Inspection Agency question. If that’s the case, that would be a requirement from the federal government. I don’t know specifically how it would impact testing on the seasonings that the member is talking about.
But if it’s more of a product testing, then the member is right. We are one of the only provinces in Canada that doesn’t have a food innovation centre where products could go through a rigorous testing. They test them for potential markets or even the packaging, any type of testing that would be consumer testing — food safety and food quality testing as well.
Many provinces in Canada do this. Even next door in Alberta, they’ve got one that’s very well known. They also have them in the United States. Many of our food entrepreneurs are using their R-and-D money in other areas, and we’re losing that opportunity in British Columbia.
With the B.C. Food Processors Association, the University of British Columbia, we are helping to support the creation of a B.C. food innovation centre. Work is being done on that right now. It’s very exciting. It will be a huge opportunity for food entrepreneurs around the science of food, product development, etc. This will be tied in to our Food Hub Network, our food-processing network. These food hubs would be able to tie in around research and R and D with the food innovation centre.
It’s quite a remarkable idea that’s going to help our food entrepreneurs, and it may just help the person that the member has brought up. But if that doesn’t answer the question, I’m happy to take it after with more detail.
The Chair: Members, maybe before this question, or maybe you can gauge among yourselves…. It’s been a while since there’s been a break.
Member, do you want to pause now, or are you close to the end of your particular questions?
L. Larson: I do have a couple more questions in this area, although the minister is hitting what I’m trying to find out. We certainly can take a five-minute break right now. It would be just fine.
The Chair: By consent, then, let’s recess for seven minutes.
The committee recessed from 5:14 p.m. to 5:22 p.m.
[S. Malcolmson in the chair.]
L. Larson: As this is estimates, I would like to know from the minister what the budget is for the recently announced plan for the food innovation centre. Also, I was aware that UBC was in the process of developing major research and education and innovation centres in advanced manufacturing and agriculture technology. Are this B.C. food innovation centre and what UBC is doing tied together? Also, as I first said, what is the cost of this? What is the budget line item for the B.C. food innovation centre?
Hon. L. Popham: I’m going to give the member an overview of the Food Hub Network, which we’ve been discussing. The Food Hub Network model is being developed with support from industry, communities and post-secondary. It’s an innovative approach, unique to B.C., and is intended to build provincial food and beverage processing while serving the regional and agrifood sector diversity in the province. The model consists of a physical core centre at UBC in Vancouver and four to five regional food hubs, which will be virtually connected through a shared technology platform. The technology that is going to be used has yet to be determined.
Budget 2018 provided a budget uplift to Agriculture to deliver the Grow B.C., Feed B.C., Buy B.C. strategy, and this uplift included $8.3 million over three years for the development of the B.C. Food Hub Network. Of those funds, $2.8 million was committed to the core centre at UBC and $5.5 million to the regional sites. The majority of the funding allocated to the UBC core centre will create and endow the food and beverage innovation research professorship at UBC, which will provide leadership for the innovation centre.
L. Larson: Thank you, Minister. I’m aware that there have been a lot of announcements on different things, and I was concerned that they weren’t all interconnected. Stand-alone we don’t need. We do need them all to be interconnected, certainly from a cost perspective.
The minister has a new task force on food security and innovation. Could she tell me, if possible, please, what their terms of reference are? Who will be on the task force? What is the budget?
Hon. L. Popham: Thanks for the question. I think it is an exciting task force. It’s early days for the task force, so the terms of reference are just being developed now. I can tell you that the task force will be tasked with dealing with technology, innovation and food waste in the food system.
C. Oakes: I would like to recognize the minister and her team for their passion for agriculture. I certainly recognize that and appreciate that.
As I’ve discussed in the House, our communities have certainly been significantly impacted over the last few years by both wildfires and floods. We’ve also been impacted in the forestry sector with epidemics and such. It’s critically important for us to look at diversification. A significant portion of that diversification is, of course, to grow our agricultural sector. I’m a very passionate supporter of that, as a fourth-generation member on a family ranch.
In the Cariboo regional district area, we have 16,050 farms that generate $131 million in farm receipts; 90 percent of that currently is in meat and hay production. We believe that there’s a real opportunity for us to look at the value-added food-processing sector. The ministry has certainly worked very closely with our community, and we really want to appreciate all the work that the ministry staff has done to support our region on the Agri-Food Centre.
Perhaps there is an update that the minister may have around the support for this highly important food centre in the region.
Hon. L. Popham: Thank you for the question. I know the member is excited about food processing and value-added, just like me, so I’m happy to answer this question. Quesnel has shown a lot of interest in taking part in being a member of the Food Hub Network. We’ve been engaged with the local government level. Mayor Simpson has come down and toured our first pilot at Commissary Connect in Vancouver, which would be an example of a food hub that would be tied into this network.
A feasibility is being done right now that we are supporting with the city of Quesnel. I believe that Quesnel does have a lot of potential. I really do believe that. I met somebody from the member’s constituency that runs Long Table Grocery, and they related the story to me that they love doing value-added products. They make relishes, soups, pickles — tons of stuff like that — but they’ve run out of space to process these. They would love to expand, but they’re really contained to what they have right now, and it’s not enough space.
That’s the idea of getting this food network set up around the province. It gives rural British Columbia — and urban — the opportunity to have these shared kitchen spaces, these commercial kitchens, that allow innovative food entrepreneurs from around our province to go in, not have to invest in capital and only have to invest in the time spent in the centre. I think that it takes a massive barrier away from food processors and encourages more, which we hope will be tied in to producers producing more to give directly to these processors to have a business relationship. So the more value-added we produce, the more production that will mean. It’s exciting, and I know that Quesnel is in the running, and I’m hoping to be able to work with them.
C. Oakes: Anything that we can do to help support that…. Amy Corey won a Small Business B.C. Award, and we’ve seen birch syrup and a lot of other value-added interesting things developed over the years. We’re just really, really proud of that.
My final question is, really, just an advocacy and an appeal to the minister. I recognize I’ve raised this in the past, and it actually falls under Forests, Lands and Natural Resources, but I think the minister will understand the challenges that we have. We have many multigenerational ranches in our region and families like mine who came in the ’30s. The way that the agricultural ranches were set up in the ’30s was significantly different. It wasn’t 160 acres; it was different.
Now I have multiple files in my constituency around Crown trespass. What is being required is that they’re making ranches that have been there for four generations remove any fencing. You’re having to remove bridges and any of that infrastructure that has been built over generations. We have several of them in my community and in the region. Perhaps, maybe, some advocacy, some conversations with Forests, Lands and Natural Resource Operations….
I can share with you that our demographic is a little bit older, for ranches in our region. We continue to put these barriers up — really hard sweat equity that goes into this work. You put your fences up. You put all of this infrastructure in place, and then you’re told you have to remove it. It is very discouraging, and I have lots of ranches in my community that have said: “We’re done. We’re really tired, and this is just the last piece.”
If you could advocate for us, on behalf of ranches in the communities of the Cariboo regional district and help us get to a better…. If we can solve that issue on behalf of the ranches in our region, that would really be appreciated.
Hon. L. Popham: I’m not completely educated on the situation that the member brings forward but happy to learn more. If the member wants to come and chat with me in my office and bring forward those specific examples, then I’d probably be more prepared.
D. Ashton: I wonder if the minister could give me a quick update on the replant program and how far out the funding is currently.
Hon. L. Popham: The funding for replant at this point goes to 2022.
D. Ashton: I would also like to thank the minister and her incredible staff for their advocacy for agriculture. They do a good job, and it’s nice to see. I know the minister is fully on board with agriculture.
In closing, I would ask the minister to consider…. The average size of an agricultural property in the Okanagan Valley is about seven acres, and the replant program is five acres. I would just ask the minister and staff to take a look at the opportunities that are presented on some of these smaller farms where you have mixed crops, and you have the ability to change from different varieties of apples to apples that pay a lot more in today’s standards. If that could be considered in the future.
No answer is required. I’m just planting a seed for the future.
Hon. L. Popham: Just to understand the member, is the member saying that there should be smaller…? The minimum is five acres now. Maybe there should be a smaller acreage that’s allowed?
D. Ashton: Correct. It’s my understanding it is five acres. With the size of the farms…. You have mixed crops. If the ministry could take a look at the opportunity where some of those smaller acres could be transplanted over to more productive crops. It just provides an opportunity for some of the smaller farmers.
Thank you, Madam Chair, and thank you to the staff.
I. Paton: At this time, I’d like to make a bit of a statement regarding cannabis. Perhaps there will be no answer. Perhaps the deputy could answer a couple of my questions, if that’s allowable.
I recently got back from touring a medical and recreational marijuana facility up in Pemberton. This was a massive new building, absolutely brand-new. It was the size of three ice arenas. Inside was…. I’m not a cannabis guy, but I’ve never seen anything so spotlessly clean, high tech — booties, hats, everything we had to do with this. It was a very impressive facility, with all sorts of workers. They were growing it, they were packaging it, and they had people shipping it out. There was absolutely no odour coming from the building.
They said that the controlled lighting in this facility and controlling the humidity were making for a really good product. They said that the products being grown in Aldergrove and Langley and Delta in greenhouses are not good products. They’re having all sorts of problems with the amount of sunlight, the amount of heat that gets into these greenhouses, and the humidity. The humidity is being a problem. I’ve even heard that there have been a couple of crop failures initially in the greenhouses in Delta.
The situation is beyond out of control. I know this is going back several years. But the recommendation…. This is one of the few recommendations — I shouldn’t say few — I certainly agree with in the final assessment of recommendations. It’s recommendation No. 15, which says there should be established “an immediate provincial moratorium on all non-soil-based cannabis production facilities in the ALR.”
In Delta, this is completely out of control, along with for my colleague from Langley East. The amount of…. They don’t even look like greenhouses anymore. They’ve brought in massive generators. They’ve brought in massive stacks. They’ve brought in packaging facilities. On 264th Street in Aldergrove, it looks like an Ikea that’s being built in and around the greenhouse facility just for their processing, packaging and shipping out. Same in Delta.
This is beyond agriculture. I mean, I just can’t even stress enough how beyond agriculture these greenhouses have come to with the cannabis production. I’m so glad to see this recommendation, No. 15, that cannabis should be totally outlawed in the ALR in British Columbia.
My colleague from Langley East and I have recently looked into the fact that odours have become a huge problem. We’ve gone to Metro Vancouver — I have, personally, to Metro Vancouver — and we’ve also written to the federal government about section 85 of the federal regulations on cannabis that say that the federal government needs to look after the odours coming from a cannabis facility.
These indoor facilities up in Pemberton, Whistler and places like that — and in Tilbury Industrial Park on Annacis Island in Delta — have looked after the filtration of odours. But these greenhouses have not looked after it. They actually have vents that open up to let some cool air in and some of the warm air out. It smells of cannabis all over my riding of Delta. It’s become a huge problem. So we’ve sent a letter off to the federal government.
My question, through to, possibly, the land commission, if they can answer this — or the deputy minister or the Minister of Agriculture — is: are there compliance officers from the land commission out inspecting these greenhouses, particularly in Delta and in Langley, to see that they are abiding by the rules of what they can do as far as the amount of infrastructure they’re putting on for packaging, warehousing and different things like that?
Hon. L. Popham: I will remind the member that I am recused from the cannabis file. I think I can just give a basic answer at this point but then offer up my deputy to meet with you later on and have a sit-down and talk about how some of these complaints and enforcement issues are affecting our ministry. Currently the Ministry of Agriculture and the Agricultural Land Commission have no role in enforcing anything around odour, and the member has gone the right route to the federal government.
R. Coleman: Police officers in British Columbia enforce traffic bylaws, highway traffic bylaws, provincial statutes and federal statutes. This is a federal statute. We have one family where the mother leaves every night when the odour’s there — has to leave their property and go into town to be away from the odour because the migraine headaches are so bad she cannot get to sleep.
The odour is literally — I just can’t even…. I mean, I’ve dealt with and supported mushroom farmers and pig farmers and chicken farmers in this agricultural operation, including mink farms, over the years because of the Right to Farm Act and the fact that they’re in the agricultural land reserve.
This federal statute’s pretty clear. It says no odour. It doesn’t say you can mask odours. It doesn’t say you can play with odours. It says no odour. It says that they’re responsible for containing all odour. It’s a federal law. It has federal penalties.
I think, through the minister to the deputy, that somebody needs to enforce the law. It doesn’t have to be just the federal government because it is a federal statute. We have federal police officers. We have police officers and RCMP officers in Langley. We actually have other people with peace officer powers with regards to this.
What we have though, now, is an entire community that has a cloud of stink come over it, in Aldergrove, if the wind’s running the right way. It is so over-the-top bad. Then you add in the four or five generators that run to keep the lights on, and you add in the light coming from the greenhouse if they don’t put the curtains on, which is also polluting the light in the area.
I know the minister can’t talk about it, but the deputy and the ministry need to know: someone’s breaking the law. The law needs to be enforced. I’m letting you know that the law’s being broken, because I’m there once or twice a week, at the least.
We have a large email train that’s going on with regards to how bad the smell is and the light pollution. We have a bylaw officer who’s compiling a file. But it shouldn’t just be an MLA having to write. It shouldn’t be my constituents having to write. It should be that a law needs to be enforced. There’s an official complaint now with the federal government, but that complaint should be a police complaint into the Langley detachment, and it should be followed up, and the law should be enforced.
So through the minister to the deputy, my expectation is that somebody is going to get a hold of a law enforcement body with enforcement powers, which includes, if not an enforcement officer, then the Agricultural Land Commission, who can enforce the law, to go enforce the law, because this whole community is being held hostage by stink. It is not pretty. In addition to that, my colleague has the same problem in Delta. We know they can do it without stink, so that’s all we’re asking — that they actually follow the federal law.
The penalties are severe. They’re not cheap. They go right from, like, $1 million a day all the way to full shutdown. So the power is there in the law. Somebody needs to be charged, or the law needs to be enforced, because frankly, this community shouldn’t live with this.
Hon. L. Popham: I’ll thank the member for his comments and, again, offer a conversation with my deputy. There needs to be follow-up.
I. Paton: I’ll kind of, perhaps, close up cannabis with a bit of a statement.
In Delta, one of the most controversial agricultural things that took place in the 1990s was greenhouses, which arrived in Delta. They started going up, and the farmers in Delta were not too thrilled with the greenhouse industry. We didn’t really know them. They weren’t really family-operated companies. They were companies with head offices in Seattle and Chicago and New York.
But as time went by and we started to take a few tours of these greenhouse facilities, the Farmers Institute of Delta started to think: “Wow. This is fabulous.” I mean, these guys were growing the most beautiful peppers and employing people from not only B.C. but from Jamaica and Mexico and Guatemala and different places like that. The atmosphere to work in these…. In the middle of winter, you had a T-shirt on because it was so warm.
The most beautiful tomatoes, beautiful cucumbers, the most beautiful peppers you could ever imagine being shipped to Japan. My daughter, who’s in Japan teaching school for two years, just bought peppers in Japan the other day with Windset Farms on the box, which is a company out of Delta.
Basically, my statement is that in the ’90s it was very controversial, but finally, the Delta Farmers Institute and the farmers said: “Okay, let’s work with these guys. Let’s be part of them. Let’s make them part of the Delta Farmers Institute.” Then all of a sudden, they were approached by cannabis companies that said: “How much are you guys making with your peppers and your cucumbers and your tomatoes? Well, how about if we make a deal? We’ll collaborate with you, and we’ll switch everything out from growing food to growing cannabis.” That is just wrong, wrong, wrong for agriculture in this province.
We’ve heard about the odour issues, the fact that food production is being replaced by cannabis production, which I considered an illegal drug. I still kind of, in my mind, consider it an illegal drug, even though the federal government has made it legal. I think it’s just a real tragedy.
When we talk about — and the minister loves to talk about — the value of farmland going up, and young people are not able to purchase farmland…. Well, when you’ve got cannabis companies that are multi-million-dollar companies that are on the stock exchanges and whatnot purchasing up farmland to grow cannabis, that is driving up the price of farmland all over this province.
I know I won’t get this question answered, but my question is based on recommendation No. 15. Recommendation 15 is “to immediately establish a provincial moratorium on all non-soil-bound cannabis production facilities in the ALR.” Will the minister or her deputy agree to do this immediately?
The Chair: Member, would you like to get on the record, again, whose recommendation that is?
I. Paton: Recommendation 15 from the Revitalizing the Agricultural Land Reserve and the Agricultural Land Commission final committee report to the Minister of Agriculture, “Recommendations for revitalization.”
The Chair: Thanks very much. I appreciate it.
Hon. L. Popham: The member will realize that the change that he’s suggesting would be a change in policy. I’m recused from any policy work, due to my perceived conflict of interest.
But I will say that the member’s comments are on record with us. My deputy has heard those comments, and I appreciate the feedback.
L. Larson: I’m going to change channels again, just for the last few minutes.
I want to talk about fish, all right? There obviously has been a recognized benefit to First Nations communities who are harvesting farmed salmon. I know that the Broughton Archipelago is…. There is a lot of work that has been done there with First Nations and to continue this process, etc. But they have been, not just there, certainly under immense pressure in other areas from people who are opposed to fish farming. They have, certainly in the last number of years, been threatened, etc., by people that show up in boats and do damage to the facilities, even First Nations–run ones.
I’m just going to ask what is being done to protect those First Nations whose livelihood is under immense pressure from anti–fish farm activists?
Hon. L. Popham: Thank you for the question on fish. That’s great. It’s been such a big part of the ministry, so it’s nice to have some questions in estimates about that.
I understand the member’s concerns. When we became government, the member will know that we made a statement that things had to be done differently because the tensions were increasing. It was just getting to a point that it was untenable. So we were quite bold, and we took on the project of the Broughton Archipelago.
At the same time as that really important work was being done, we did announce a provincial policy about fish farm tenures going forward. In 2022, the policy is that for an aquaculture company to have a tenure in an area, they would have to have not just a checkoff from DFO saying that their operation is not going to harm wild salmon but also an agreement in place with First Nations. That is to encourage First Nations who want to be involved in the industry to have these agreements in place with aquaculture companies. I think that’s a remarkable position that we’ve taken.
In the Broughton Archipelago where we saw those tensions getting to be very, very critical, we sat at a table, for the first time in decades, with First Nations, with industry and with the provincial government.
It started off as a government-to-government talk. Once that trust was gained, industry joined the table. The first six months of that conversation were very difficult because not only were there tensions rising on the ocean, but it’s a conversation that hadn’t happened. There was a lot of trust-building, a lot of conversations, a lot of tension. But step-by-step, they managed to move forward to a place now where there’s an understanding that in the Broughton, there are some fish farms that have to be moved out of migration routes. If there are going to be operations happening there, there has to be an agreement with First Nations whose territory they’re operating in.
I’m really proud of the aquaculture industry for stepping up and taking part in a process that I know is probably pretty scary. But they’ve really stepped up, and we work together now from this table. In fact, DFO has also joined this table at this point. It’s been so successful because we’ve been able to find common ground. I think that’s the key. It was hard to get there, but we got to this common ground.
The common ground is that all of us rely on wild salmon. This whole province relies on it. Decisions that are being made, ways that farms operate, the positioning of farms, the agreements with First Nations — it all has to have no effect on wild salmon, or else it also has to be able to have the support to enhance wild salmon. That’s a pretty remarkable place to be.
We have a salmon fund that was announced. It’s a joint fund between the federal government and the provincial government where we’re going to be doing enormous rehabilitation and remediation work in salmon-bearing streams and any other projects that will enhance wild salmon. That’s all being done because the end result of sitting at this table was that we had a common goal.
Now, as far as the tensions around aquaculture, I don’t think they’ll ever go away. But the industry is certainly stepping up to be the best that they can be, to constantly be improving their sustainability. That’s really what the public wanted to see, I believe. Those tensions will never be completely gone, but we’re certainly in a much better place. With a deadline of 2022 for First Nations agreements to be in place with the aquaculture industry, I can see that those tensions will also be alleviated.
L. Larson: I appreciate that there certainly have not been as many front-page headlines as there were with this particular issue.
Land fish farm research. I’m personally very interested in that, simply because, to me, it would make common sense that if you were trying to save the wild salmon, you would get out of the ocean and do them up on land. I know it’s not as easy as that sounds. But I do want to know whether or not there has been any financial budget allocation on land fish farm research in the past year.
Hon. L. Popham: I’m going to give a little bit of an overview, over the last two years, on what’s being done and what’s being spent, specifically on closed-containment land-based. Over the past two years, the province has supported seven producers that employ or are developing closed-containment and/or RAS production systems using FACTAP funds. This is a joint fund that we get access to from the federal government, FACTAP.
In 2018, a total allocation of $118,000 out of the $340,000 that we have to spend was spent to support these types of projects, and this is shared with the federal government and industry. The ministry has committed $50,000 towards a study on the state of salmon aquaculture technology — and this is in collaboration with the federal government, so they’re also putting money in — to just look at the most up-to-date technology that’s available.
We also have our fish fund. The projects that would support closed-containment would be eligible for this fund as well. So there is movement on this. I think the announcement from the federal government that they’re also committed to this study…. We will see results coming out of this study that will be very useful and very hopeful.
L. Larson: I am aware that Kuterra, which was the only onshore production facility in B.C., closed after it proved to be economically unviable. Now, I don’t know whether that was because it was a forced transition to land-based containment. I’m assuming that with the amount of research going on now, perhaps the outcomes would be better going into the future.
It is a huge industry, as you know. I have a fish farm in my community, Arctic char — very successful, and it certainly is not in a stream or in a river or in the ocean. So my concern would be that, certainly, going forward, the research and support for somebody — or a company like Kuterra that is willing to move onshore instead of offshore and actually raise fish in this manner — were there and the science was there to make them profitable and not for them to fail.
The only other observation I have is that there certainly have been huge efforts to save wild salmon. It would seem to me that looking more at doing…. We desperately need the fish. We could feed the world if we could farm fish effectively. We definitely need to keep doing that. But I’ve always been curious as to why the restaurants go through such a huge promotion of eating wild salmon, when…. I would be wanting to encourage people to have farmed salmon versus wild salmon in order to give the wild salmon stocks a chance to revitalize themselves.
With that, I don’t think that the minister needs to comment again unless there’s something else she can add. Just to make sure that the off-site containment end of things receives enough support to make it become a profitable industry.
J. Thornthwaite: The minister obviously is anxiously anticipating this question. It’s about the puppy mill bill. I would like an update on whether or not there has been any action on the idea of a registration system or a licensing system for the enforcement system, if the SPCA has been chosen as the enforcement agency, whether or not the concerns of the responsible breeders were taken into the legislation regulations, and any other updates that she could have since the last time we spoke.
Hon. L. Popham: Thanks for the question. I knew that was your question.
The first part of my answer will be that the responsible breeders organizations that the member is referencing have been brought in and have been consulted with along the way, and will continue to be consulted with. They’re an important stakeholder.
I can give an update on what’s currently happening. The BC SPCA has not been chosen yet, but what is happening is that there is design of the registration system that’s underway. Draft regulations are underway. There’s going to be a complete outreach to UBCM to make sure that where we’re heading aligns with the direction of local government in the province, and then we’re establishing operating procedures for registration system officers and inspection staff.
J. Thornthwaite: If the SPCA has not been chosen yet, which I think is what the minister said, does that mean that it’s perhaps pending, and they’re still being considered, or is whatever the enforcement agency is going to be taken in-house?
Hon. L. Popham: They are still being considered.
L. Larson: Just for myself, a closing remark, if I could. One other thing that we didn’t discuss, which is very important, and I’m sure the minister is aware it, is the renegotiation of the Columbia River treaty. The Columbia River treaty, while it initially was meant to just supply flood mitigation and power to our neighbours to the south…. The water is used to irrigate thousands of acres of land and competes with our farmers, especially in apples and other things.
It’s in the process of renegotiating. I know the farmers have been very, very concerned and want to be at the table or at least have an agricultural voice at that table. I would just give the minister a heads-up to please, at those negotiations, make sure that agriculture does have a say in that as it’s being renegotiated.
I would like to thank the minister and her staff for the time we’ve had yesterday and today and for the enthusiasm for agriculture that is always demonstrated by the Agriculture Ministry.
The Chair: Thank you to the member for Boundary-Similkameen for your closing comments.
I. Paton: Actually, Madam Chair, I would like to ensure that we still have another seven or eight minutes.
The Chair: We are required to report out right about now.
I. Paton: Okay. One quick last question before I make a final statement. The current definition of a bona fide farmer is somewhat too broad. The $2,500 annual farm-gate sales requirement is enabling rural property holders to access tax exemptions while they are producing only nominal amounts of agriculture. Do we see that figure of $2,500 being raised to $5,000 or $7,500?
Hon. L. Popham: The short answer, because we’re running out of time, is that that would fall under the purview of the Ministry of Housing, because it’s B.C. Assessment. But I know that it’s of interest. It was one of the recommendations, and it’s a conversation that’s been happening quite a bit. So I’m interested in it. But I could have a further conversation with the member at another time.
The Chair: Member, we are out of time. This is a requirement of the standing order. Do you have a brief closing comment?
I. Paton: I have a brief closing comment. I think I would like to make this statement. It actually comes from the Coombs Farmers Institute. It’s a letter that was written. It was written to the Minister of Agriculture, and I believe it sums up some of the interest and policy ideas of the Liberal caucus on my side of the House. It goes something like this.
“The recent tabling of Bill 15 caught us rather off guard. Those most impacted by a significant change of legislation should expect to be alerted to its existence and given a reasonable time frame in which to respond. We learned of the bill on a Facebook post.”
The letter goes on to say, from the Coombs Farmers Institute:
“There is increasing frustration being expressed at the unavoidable but unfortunate decision to allow cannabis crops on ALR land. Cannabis is not food. There is building anger and amazement. The ALC legislation allows alcohol on ALR land but prohibits the farmer from cooking and serving value-added food grown on the ALR land.
“The ALR/ALC revitalization committee and/or the ALC commission is being increasingly viewed as secretive, autocratic and biased. There is very strong feeling against the centralization of governance. The regional panels provided invaluable local knowledge. The suggestion that a centralized commission with regional representation will result in a higher percentage of equitable, unpressured application verdicts is very debatable.
“Farmers, both tenured and new entrants, are giving up on the hope of making a living in agriculture in B.C. The collective weight of bureaucracy, legislation, regulation and policy from various branches of government, not to mention insurances, is becoming increasingly impossible to bear.”
My final statement is:
“Removing the right of landowners to apply on their own behalf to the ALC and gifting that power to local governments is unwise. There are many examples of local and regional governments having vested interests and double standards as it relates to the altering and removing of land from the ALR.”
Thank you for your time. I thank the ministry. I thank the deputies, the staff that came out. I’d like to thank the Minister of Agriculture for being energetic, with lots of great ideas. They don’t always appeal to this side of the House, but we carry on. Hopefully, we’ll do estimates together again next year.
Hon. L. Popham: I’ll just be quick. Thank you to the opposition for bringing forward thoughtful questions. It’s always a pleasure to do estimates. As I’ve said in the past, since I’ve become minister, my door is always open. If you have issues, just come on in.
I’d like to thank my staff for being so supportive and helping me get through this.
Vote 13: ministry operations, $80,134,000 — approved.
Vote 14: Agricultural Land Commission, $4,873,000 — approved.
Hon. L. Popham: I move that the committee rise and report resolutions and completion of the Ministry of Agriculture and ask leave to sit again.
Motion approved.
The committee rose at 6:21 p.m.
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