Fourth Session, 41st Parliament (2019)
OFFICIAL REPORT
OF DEBATES
(HANSARD)
Thursday, May 9, 2019
Morning Sitting
Issue No. 252
ISSN 1499-2175
The HTML transcript is provided for informational purposes only.
The PDF transcript remains the official digital version.
CONTENTS
| Routine Business | |
Forest Appeals Commission, annual report, 2018 | |
| Orders of the Day | |
| Proceedings in the Douglas Fir Room | |
| Proceedings in the Birch Room | |
THURSDAY, MAY 9, 2019
The House met at 10:06 a.m.
[Mr. Speaker in the chair.]
Routine Business
Prayers.
Introductions by Members
Hon. A. Dix: It’s with great pride today that I introduce members of the Ministry of Health correspondence unit. They’re the people who, when occasionally I say less than eloquent things, respond to letters from the public but, most of the time, respond to concerns that people have with their own health. They do an extraordinary job. So I wanted to introduce Erica Pearn, Taylor Jackson, Marli Postulo and Zoe Staples. I’d like everyone to make them welcome.
Hon. M. Mark: I have some special guests in the chambers today. We’ve got 179 students from Moscrop Secondary School. Madame Tatiana Kazulin from the French immersion program and Kate Ronald are here with parent chaperone Norm Wong. There are 11 teachers and chaperones in total visiting the Legislative Assembly, learning about our parliamentary democracy, getting a taste of what MLAs do. I hope that they have a great day in the chambers.
There’s a special guest joining them, one of the most important people in my life. I thank the member for reminding us that it’s Mother’s Day this weekend. Maya is my oldest. She’s 15. She is the sunshine in my life. She’s in the chambers today. Thank you for letting me do this important work here in these chambers on behalf of my constituents. I’m so proud of you.
I hope that you all have a great day.
She plays rugby, just like the Premier and just like the leader of the Green Party. We’ve got a few things in common.
Will the House please join me in welcoming my special guests.
S. Furstenau: I’m delighted to introduce Meghan Christensen-MacDonald, who’s in the gallery today. She’s here to shadow me. She’s a Shawnigan Lake School grade 12 student. She’s grown up in Vancouver. Meghan wants to go on to study philosophy, hopefully at Dalhousie or St. Mary’s. She’s part of the Shawnigan Model UN, who were here just about a month ago, in this chamber, having a House of Commons. Meghan was part of the debate over the carbon tax, which did, indeed, pass in the Shawnigan Model UN House of Commons.
Meghan is interested in fitness. She likes to hike and do yoga. She likes to sew. I’m delighted to have her here today. Would the House please make her feel welcome.
Introduction and
First Reading of Bills
BILL M214 — THE HUNTING AND FISHING
HERITAGE AMENDMENT
ACT, 2019
J. Rustad presented a bill intituled The Hunting and Fishing Heritage Amendment Act, 2019.
J. Rustad: I move that a bill entitled The Hunting and Fishing Heritage Amendment Act, 2019, of which notice has been given in my name on the order paper, be introduced and read a first time now.
I’m pleased to stand in the House to reintroduce The Hunting and Fishing Heritage Amendment Act, 2019. I first brought this forward in March of 2018. The Hunting and Fishing Heritage Amendment Act is about wildlife management, which is the science of managing wildlife and its habitat, including people. Conservation is a key component, and it is the wise, sustainable use and management of the natural resources, including wildlife, water, air and earth deposits. Adding this to the act provides a clear direction as to the intent of the act: managing wildlife.
Public safety must also be at the forefront of the mind when interfacing with B.C.’s wildlife. Appropriate courses of action must be defined to minimize wildlife-human conflicts while maintaining the natural populations of wildlife. I’m pleased to be moving this bill and to add these key components of conservation and public safety to the Hunting and Fishing Heritage Act.
Mr. Speaker: The question is first reading of the bill.
Motion approved.
J. Rustad: I move that the bill be placed on the orders of the day for second reading at the next sitting of the House after today.
Bill M214, The Hunting and Fishing Heritage Amendment Act, 2019, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
BILL M215 — NO NET LOSS OF
WETLAND ACT,
2019
J. Rustad presented a bill intituled No Net Loss of Wetland Act, 2019.
J. Rustad: I’m also pleased to move that the bill intituled No Net Loss of Wetland Act, 2019, of which notice has been given in my name on the order paper, be introduced and read a first time now.
I’m pleased to stand in this House to reintroduce the No Net Loss of Wetland Act, 2019, which I first brought forward in May of 2018. Wetlands are an important part of how nature functions. Fish and wildlife habitat, organic carbon storage, water supply and purification, soil and water conservation, as well as tourism, heritage, recreation, education and science — all of these things and more are the values of wetlands.
Occasionally, development can impact on the functions of wetlands. This bill is designed to ensure that when a wetland is impacted, government will work with its partners to ensure that there is no net loss of wetland functions through investments or enhancements in other wetlands. This is an initiative that was first undertaken by Ducks Unlimited, and I’m introducing this bill now in recognition of the great work that Ducks has done over the past 50 years.
Mr. Speaker: The question is first reading of the bill.
Motion approved.
J. Rustad: I move that the bill be placed on the orders of the day for second reading at the next sitting of the House after today.
Bill M215, No Net Loss of Wetland Act, 2019, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
Statements
(Standing Order 25B)
SPECIAL OLYMPIAN LINDA RENNER
S. Bond: She’s been to the World Games twice. Prince George Special Olympian Linda Renner most recently participated in the Special Olympics World Games in Abu Dhabi. Linda, who is 56, captured gold medals in the women’s singles tenpin bowling event as well as the doubles competition. She also won a silver medal in the team event at the games.
Linda is known for her hard work. She bowls three times a week, takes fitness classes, lifts weights and participates in rhythmic gymnastics. When asked about her favourite part of the trip to Abu Dhabi, she said: “Riding a camel and going on a desert safari. That was really interesting.”
The trip was memorable for another reason as well. Linda’s sister, Rose, is a long-time employee at Canadian Tire in Prince George. The owner of Canadian Tire, Selen Alpay, who was recently awarded the B.C. Medal of Good Citizenship, wanted to be sure that the sisters could experience the games together. So he arranged the trip, and he accompanied Rose to Abu Dhabi to cheer her sister on at the World Games.
A significant reason for Linda’s success is the incredible group of coaches, volunteers and friends that provide support and encouragement to Linda and many other special athletes. They all deserve our gratitude and appreciation.
Linda, or Peaches, as she is known because of her work at Ness Lake Bible Camp, received a wonderful welcome home. Our community is very proud of you, Linda, for your outstanding accomplishments at the 2019 World Games, and of Selen Alpay, for his very generous gift. Together, both of you represent the very best that our community has to offer.
Nisg̱a’a TREATY ANNIVERSARY
B. D’Eith: I’m very honoured to have been asked to bring your attention to a very special event happening today. This afternoon the provincial government is hosting a delegation of dignitaries from the Nisg̱a’a Nation. This is to celebrate the 19th anniversary of the Nisg̱a’a treaty.
The treaty anniversary is being recognized and honoured with a display of the Nisg̱a’a Nation flag here in the B.C. Parliament Buildings. Displaying our flags together is an affirmation of the strong relationship between our governments and a symbol of the reconciliation work still ahead.
Nineteen years ago the Nisg̱a’a Nation became the first modern treaty nation in British Columbia. That was a landmark occasion that allowed Nisg̱a’a to move away from the Indian Act and to become a self-governing nation again. Today there is so much to celebrate.
Over the past 19 years, the Nisg̱a’a Nation has developed a strong track record of success that has benefited its citizens — success in social, economic and cultural areas as well as in governance. As I stand in our legislative chamber, I know that Nisg̱a’a has their own beautiful legislature to carry out their government business.
Their successes in health care include the Nisg̱a’a Valley Health Authority, which provides medical care in a diagnostic centre. There are also satellite clinics in the Nisg̱a’a villages. The renowned Nisg̱a’a Museum is home to more than 300 treasures that have been returned to Nisg̱a’a land and displayed with honour.
Again, I urge all members to take a moment to visit the Hall of Honour and see the Nisg̱a’a national flag displayed there. In fact, it will be displayed until Saturday, the actual anniversary date.
In acknowledging this anniversary, we acknowledge that a treaty is not a final destination. It’s a foundation to a new relationship and an important milestone in the path to reconciliation between B.C. and Nisg̱a’a.
CHINESE-CANADIAN
COMMUNITY
ASSOCIATIONS
T. Wat: As I let you all know last week, May is Asian Heritage Month, a time of the year when there is no end of amazing cultures to share and learn about. One of these concepts that has flourished for over a century in Vancouver’s Chinatown are the numerous associations that have helped countless Chinese Canadians over the past 100 years. Community-wide benevolent associations provide social services, offer social and business contact and strive to defend against discrimination and segregation.
The clan association is a kind of extended family that one could depend on. It is also a way for this generation to connect to their ancestry. Some examples of the larger influential clan associations are the Wongs, the Chens, the Lees and the Mahs. It should not be lost on you all how important these associations have been to the growth and development of Chinatown and to the cultural tapestry of our province.
Many of them have a rich and long history. The Chinese Freemasons of Vancouver celebrated its 130th anniversary last year. The Dart Coon Club of Vancouver had its 100th anniversary also last year. The Chinese Benevolent Association of Vancouver has been established for 114 years, the Toi Shan Benevolent Society for 122, the Cheng Wing Yeong Tong Benevolent Society for 116 years and the Chau Luen Society for 76 years. The Yue Shan Society, where my ancestry belongs, will celebrate its 80th anniversary in October.
This year also marks the 100th anniversary of the Mah Society of Canada. This society is planning to hold its centenary in Chinatown during the Victoria Day long weekend. I strongly suggest that you all attend the celebration as it will be an amazing event, rich with culture and history.
LUPUS AWARENESS
R. Leonard: Tomorrow, May 10, 2019, is World Lupus Day. Lupus is a chronic disease with a variety of symptoms caused by inflammation in one or more parts of the body. I want to take the opportunity today to talk about lupus and how to create awareness and understanding.
Lupus affects people of all nationalities, races, ethnicities, genders and ages. It can affect any part of the body at any time and in any way. People living with lupus face a lifetime of unpredictable and life-changing health effects of this disease.
Lupus belongs in the family of diseases that includes rheumatoid arthritis, multiple sclerosis, juvenile diabetes and scleroderma. The most common type of lupus is SLE, systemic lupus erythematosus. It’s a complex and mysterious condition that can target any tissue or organ of the body, including skin, muscles, joints, blood and blood vessels, lungs, heart, kidneys and the brain.
Lupus is a chronic autoimmune disease that can affect any organ of the body and in a pattern that varies greatly from person to person. It’s not contagious, and it can affect people of any gender between ages 15 and 45, although women are eight times more likely than men to be affected by lupus.
Each person’s experience with lupus will be very different. Some people will have only a few symptoms, while others will have more. Some are life-threatening. Because it can target any of the body’s tissues, lupus is often hard to pin down or diagnose. That’s why it’s called the disease with 1,000 faces.
Lack of understanding about the disease contributes to the stigmatization of people with lupus, often making them feel isolated from family and friends. There is an urgent need to increase awareness in our communities and worldwide of the potentially devastating impact of lupus. Let’s take the time today to talk a little bit about lupus and to care for those around us who are living with lupus.
TREES
A. Olsen: Today I rise to speak to the ancient peaceful giants, the cedar, fir, hemlock, birch, oak and maple.
You, my friends, my relatives, have seen so many generations. From your canopy, a far-away horizon casts long shadows. A decade for me is but a day for you.
We underestimate your silence, because our ears are not tuned to hear your wisdom. Our eyes cannot see your roots. Our fingers made sticky by your sap. Our noses confused by your beautiful scents. You’re gentle with us, yet we repay you with violence, seemingly ungrateful for the oxygen we breathe and the water we drink. You are the vital life-giving organs of a sustainable existence in this place.
When we stop to learn about you, we understand you live in communities. You sacrifice for each other. And not just those of your own kind, but you coordinate, communicate and collaborate to feed and nurture the other species around you — resilience through diversity.
Your communities are the most generous I have ever visited, yet we cut them down and tear their roots from the earth. You know we prefer your elders — the older, the better — but we’ll take your babies too. We just need more of them. We’ll plant farms in their place and eagerly anticipate the next crusade.
Ancient peaceful giants, please know that many of us are thankful for your sacrifice. We honour and defend you because we know without you, there is nothing.
CITY CENTRE URGENT
PRIMARY CARE
CENTRE
S. Chandra Herbert: For years, we’ve known that too few West Enders have good access to family doctors and to their own doctor. In fact, the West End is a community with one of the highest proportions of people without access to their own family doctor. So we’ve called for an urgent care centre. We’ve called for that assistance for a long time, because we know that people need better access to health care and, through that urgent care centre, hopefully access to their own family doctor.
Well, I must say that in the short time that the City Centre Urgent Primary Care Centre has been open — opened November 26 — it has made an incredible difference. I know it will go a long, long way to meet our community demand.
The challenge is, with such a new service, people have yet to discover it. Although we’ve had over 2,408 patients go through so far — that number is probably already out of date — we know that people still don’t know where it is, how to get there and what it’s for.
It’s located at 1290 Hornby Street. It’s the former location of the Three Bridges Health Centre, which has moved up the road — another big improvement for health care for West Enders. It’s to serve people with non-life-threatening illnesses or injuries when they don’t have their own doctor, and that’s a lot of the West End, as I said. Sprains, strains, cuts, wounds, skin conditions, high fever, infections, asthma attacks, new and worsening pain, less serious child illness or injury. But not life-threatening illnesses or injuries. Those are still to go to St. Paul’s, just up the street.
I know that constituents of mine have gone to St. Paul’s, as they don’t have access to a family doctor, and they were told wait times of three hours, four hours, five hours. But now they’re told: “If you just go up the street, you can get seen, in some cases, immediately and, in other cases, in ten, 20 or 30 minutes at the most.” People have done that, and they’ve found it incredibly beneficial, because they’re not stuck in an emergency room at sometimes painful or bad times in their lives.
I want to thank the Health Minister, and I thank the government for bringing us the City Centre Urgent Primary Care Centre.
Oral Questions
GOVERNMENT POLICIES ON
FOREST
INDUSTRY
D. Clovechok: Yesterday the Council of Forest Industries presented very alarming news at the annual North Central Local Government Association convention. Not only have they been blindsided by Bill 22; they reported that eight to ten mills are at immediate risk because of the myriad of reckless government policy being imposed on this sector.
My question to the Premier, who seems to be AWOL today…. But to the Premier, will he…
Interjections.
D. Clovechok: Oh, can’t say that? I retract that. I retract that.
Mr. Speaker: Thank you, Member. Proceed.
D. Clovechok: …press pause and consult with the industry and communities?
Hon. D. Donaldson: This government values the forest sector, values the jobs it creates for communities, for workers. We have consulted with the forest industry on the coast forest sector revitalization initiative. We have consulted with them on the new Interior process that’s beginning. We consulted with them on the contractor sustainability review. We’ve consulted in a whole number of processes.
What we want to get to the basis of is the fact that the previous government kicked the can down the road on the concentration of tenures. That’s not good for communities. They kicked the can down the road on the caribou issue, which could be a total disaster for communities, until we took over the portfolio. And they have kicked the can down the road on the closure of mills. We’re determined to reverse those trends. We do it with communities, we do it with First Nations, and we do it with industry.
Mr. Speaker: Columbia River–Revelstoke on a supplemental.
D. Clovechok: That’s just ridiculous. On Tuesday, the Premier made another ridiculous statement: “Everyone that I just talked to is excited.” Well, big surprise: that’s just not true. He brushed off serious concerns being raised by industry as only one company wanting to take a pop at government. The Premier hasn’t got a clue when it comes to this file. According to COFI, the NDP’s big, heavy-handed approach blindsided the entire sector.
Will the Premier get out from behind his ministers and show some courage by pushing pause and actually consulting with those who have been blindsided?
Hon. D. Donaldson: I’d like to let the member know and the House know that many people are excited about the changes that we’re putting in place to support communities and workers around the forest sector. For instance, David Elstone, executive director of the Truck Loggers Association: “For more than 70 years, it has been the TLA’s position that consolidation is not good for the financial stability of all stakeholders in the forest industry. Now, finally, this government is making a substantial effort to prevent further tenure consolidation.”
C. Oakes: This week the Premier completely dismissed the serious concerns of West Fraser, saying they “wanted to take a pop at government.” How incredibly disrespectful, not only to the largest employer in my community but to the workers and to the small and medium-sized businesses that depend on the forest sector.
Mr. Speaker, will the Premier press pause and consult with the people that employ the families that work in forest-dependent communities?
Hon. D. Donaldson: We’re launching the Interior process around the forest sector to attempt to reverse the trends that fell into disarray under this previous government. The forests belong to the people of B.C.; the forests are not assets belonging to the companies. We’re taking that position, and that’s the position that communities and First Nations and small companies, even in the community the member represents, are supportive of.
Mr. Speaker: The member for Cariboo North on a supplemental.
C. Oakes: Just yesterday the industry told mayors that Bill 22 and the NDP’s heavy-handed approach have blindsided the entire sector. And just to inform the minister about what types of impacts that the policies this government is making on forest sector communities, on a community like Quesnel…. Let’s look at that.
In the case of West Fraser alone, this threatens the loss of $83.4 million in the local economy, which threatens tire shops, welding shops and hard-working contractors and the entire supply chain. They’re not really excited about what initiatives this government is doing.
Also, let’s look at the forest policies that threaten the workers. The minister says he stands up for workers, but is he standing up for the 1,467 direct employees with an annual payroll of $119 million in my community with West Fraser? Are you standing up for them?
Finally, he dismisses concerns from industry. He doesn’t care about the workers; he doesn’t care about businesses. Maybe he will care about the taxes that will be lost. Maybe he’ll care about the loss of $30 million in provincial and local taxes that these companies bring.
Why doesn’t the Premier stop and properly consult with industries and communities?
Hon. D. Donaldson: We’re making changes to the Forest Act to give government more oversight of the forest sector, support reconciliation with First Nations and improve public trust. My questions to the member and those on the other side: are you against more public oversight of the forest sector? Are you against reconciliation with First Nations? Are you against improving public trust? Or maybe you’re against all three.
Comments from a major licensee in the Interior, Tolko forest products, from the president and CEO, Brad Thorlakson: “We are prepared to work with British Columbia to develop local coalitions and to plan collaboratively. I am completely aligned with our common purpose: a competitive forest industry with opportunities for local workers, real partnerships for First Nations and security for the forest-dependent communities and an industry that maximizes value rather than relies on volume.” That’s the CEO of Tolko Industries.
MONEY LAUNDERING AND LUXURY
VEHICLE SALES AND TAX
REBATES
A. Weaver: Earlier this week the Attorney General confirmed that money laundering goes beyond our casinos. Our biggest city is not just known for the dubious criminal distinction as the Vancouver model for money laundering; it’s also known as the luxury car capital of North America, fuelled, in part, by suspected criminal activity. Indeed, provincial employees identified numerous red flags connecting money laundering to the luxury vehicle export market, and despite these flags, the province issued over $85 million in PST refunds since 2013 to many suspicious individuals.
My question is to the Attorney General. He has said he has taken action on this finding. But why was this suspicious activity allowed to persist for so long? And why did it take this special report to highlight what government officials have known for many years?
Hon. D. Eby: I thank the member for the question. This is, obviously, a very serious issue, and I’m very grateful to Dr. German and his team.
Former chief LePard was a key part of this report that uncovered this troubling information. Among other things, car dealers saying they’re in the middle of money laundering and uncovering the use of straw buyers to purchase luxury cars, thousands of straw buyers acting on behalf of exporters who are the true purchasers, claiming PST rebates. People with extensive criminal backgrounds running resale operations of luxury cars, people who wouldn’t qualify for a liquor licence or other government licences but are allowed to operate and run these businesses. Obviously, major issues.
The member asked why it has taken so long to uncover these things. One of the major reasons, which has been a theme throughout Dr. German’s reports, is a lack of oversight, a lack of enforcement. We are moving quickly to address those issues. The Finance Minister is, obviously, reviewing this program, making sure that criminals don’t get PST rebates, for a starter, which seems like a pretty good start.
The second piece is we’re working with RCMP, with police and with the Solicitor General’s office to ensure that the provincial government can do everything we can in terms of enforcement. We’re working with regulators in terms of their mandates.
There is a lot going on in this file to respond, and I’m very grateful that Dr. German is bringing this stuff to our attention so that we can take action on it. And I agree with the member about: why did it take so long?
Mr. Speaker: The Leader of the Third Party on a supplemental.
CALL FOR PUBLIC INQUIRY
INTO MONEY
LAUNDERING
A. Weaver: Thank you to the Attorney General for the answer. One quote in the German report on luxury cars, the section released earlier this week, stood out for me. A car dealer said: “I’m right in the thick of money laundering here.” He also said: “It’s unequivocally money laundering.”
It’s not surprising he came to that conclusion when it appears to be a regular occurrence for cars to be bought with bags of cash, sometimes in the hundreds of thousands of dollars, with zero reporting requirements in the industry. It’s absolutely crazy what’s happening in B.C., not just in casinos but in the luxury car sector. We know the next chapter of the German report will tell us the extent of money laundering in our real estate sector.
To the Attorney General, the more we learn about this, the more we know how important it is now to have a public inquiry. The B.C. Green caucus has been calling for one for months now. Thousands upon thousands of British Columbians have been calling for a public inquiry, and just last week I introduced a petition from a federal EDA of the NDP calling on this government to bring forward a public inquiry.
My question to the Attorney General is: will this government launch a public inquiry, and if so, when?
Hon. D. Eby: Thank you very much to the member for the question. The member knows — and I’ve outlined for him and for the Legislature — our government’s approach on this, which has been to identify what’s happening right now and move as quickly as we can to stop it. We’ve had some success in the casino sector, stopping the bulk cash transactions. We will have success in the luxury car sector addressing the issues that have been raised here.
The issue around a public inquiry is really more aimed at: who knew what when, and are there any issues related to corruption? People want to know the answers to those questions. I understand why people want to know that. I mean, this went on for a long time. It’s the decision that is in front of cabinet. Cabinet will have their decision, and government will have a decision for British Columbians very shortly.
I thank the member for that.
GOVERNMENT POLICIES ON
FOREST
INDUSTRY
J. Rustad: From 2009 through to 2017, the B.C. forest industry added almost 10,000 jobs. Since that time, since the NDP have been in power, they’ve lost 3,000 jobs.
So congratulations, Minister, you have changed the trend.
Industry has been blindsided. Workers are hurting, and the people now who finance our forest industry are also expressing concerns. Paul Quinn of RBC Capital wrote: “Unfortunately, we believe that this government has very little idea of what’s required to foster a globally competitive forest industry, whether it be on the coast or the Interior.”
Why won’t this Premier heed these concerns, press pause and stop his crusade that’s destroying the backbone of 140 forest-dependent communities in British Columbia?
Hon. D. Donaldson: I appreciate the questions on forestry today. If it was my choice, we’d be talking forestry all day. So it’s a great day.
It’s a great day, too, to acknowledge the $33 million investment by Kalesnikoff Lumber in a new mass timber-processing facility in the Kootenays and also the recent investment, just in the past year, by Sumitomo in Prince George in a pellet-producing facility.
We’re doing all of this while also ensuring that workers and communities are, first and foremost, the primary beneficiaries of the publicly held resource: the forests in B.C.
Mr. Speaker: The member for Nechako Lakes on a supplemental.
J. Rustad: Well, we’re hearing from COFI the concerns — between eight and ten mills because of the myriad layers of bureaucracy that have been added in cost structure. The forest industry is hurting. Government is driving up costs. We’re now the highest-cost producer in North America, creating the vulnerability, quite frankly, to our forest industry.
The Premier says: “Everyone I’ve talked to is excited.” Well, clearly, he needs to pause and speak to more people. Workers have come to me in my communities and have said they haven’t had consistent work now for six months. Why doesn’t this Premier care enough to press pause and stop doing more damage to our forest industry?
Hon. D. Donaldson: We know that the decline in the annual allowable cut due to the end of the pine beetle infestation is affecting the timber supply to mills. That’s what COFI is talking about. In fact, the member on the opposite side, when he was in government, said the same effect. He said it was very clear, during the review and on the 2013 election trail campaign, that mill closures were inevitable.
Now, what this government has done is not kick the can down the road. We understand that the beetle infestation is over. We’re launching the Interior process to ensure a smooth transition from what was before to what is now, something the previous government never undertook.
J. Tegart: People in my riding and across this province are concerned about how this Premier’s policies will hurt forest-dependent communities. But when I raised concerns in this House, the Premier told me to quit whining. This week….
Interjection.
J. Tegart: He absolutely told me to quit whining. This week the Premier dismissed legitimate concerns of West Fraser as “wanting to take a pop at government.”
When will the Premier stop his condescending remarks and actually consult with industry and communities and listen up?
Hon. D. Donaldson: I thank the member for the question. I note that she was at the same convention I was at last week, the Interior Logging Association convention, where the president of the Interior Logging Association said that for once, they finally have an ear of government in Victoria.
Mr. Speaker: The member for Fraser-Nicola on a supplemental.
J. Tegart: Well, this Premier has shown no respect for the industry workers or families in forest-dependent communities — none. People who have concerns are not whiners, nor are they just wanting to take a pop at government. They are worried, they are concerned, and they deserve to be consulted in a meaningful way. Consultation doesn’t happen after you table the bill.
Will the Premier press pause and actually start to listen to the people in the industry and to our communities?
Hon. D. Donaldson: The Interior process that we’ve just launched is a partnership with industry, with First Nations, with communities and with labour on a TSA basis to address the needs, interests and challenges facing the transition that the previous government ignored.
I’ll also point out that the industry is composed of workers, workers like those that belong to the Interior Logging Association and workers like those that belong to the Truck Loggers Association. David Elstone, the executive director of the Truck Loggers Association, in quoting and in reference to changes that we’ve been making in forest policy and legislation, said: “We are encouraged by this change. Combined with the recent policy changes resulting from the contractors sustainability review, it will ensure a more sustainable future for contractors and communities.”
M. de Jong: Official after official, senior people in the forest sector are sounding the warning. The minister seems content to want to ignore those warnings. I think he does so at his peril. More particularly, he does so at the peril of forest workers and their families.
The forest sector is facing uncertainty — trade disputes, competition, international competition and changing markets. The minister, the Premier and the government have chosen this moment to add to that uncertainty, to add greatly to that uncertainty. You see it in the comments we are hearing from the forest sector — uncertainty around regulatory reform and uncertainty around tenure reform.
Doesn’t the minister recognize, in the face of the kind of commentary we are hearing from the forest sector, that the prudent, wise and responsible thing to do is take a pause and consult with the very people that employ the thousands of forest families in forest-dependent communities across B.C.?
Hon. D. Donaldson: Well, we are consulting with industry, we’re consulting with communities, we’re consulting with First Nations, and we’re consulting with labour. Of course, what we hear from the other side is: “You have too much public engagement.” Today we hear: “You haven’t had enough engagement.” It’s important to get the story straight on the other side.
What introduces uncertainty and what has introduced uncertainty are the actions, the legislation and the behaviour of those members when they were in government. I’m referring to the concentration of tenure that was allowed to happen after the 2004 changes that the previous government made.
That concentration of tenure led to a swapping of publicly held resource tenures by Canfor and West Fraser. The uncertainty that that created in communities in Houston, with a mill shutdown, in Quesnel, with a mill shutdown — those are the uncertainties we’re addressing, the uncertainties against workers and against forest industry workers.
Mr. Speaker: The member for Abbotsford West on a supplemental.
M. de Jong: So all of those experts are wrong. The Council of Forest Industries, which is making dire predictions about significant mill closures, is wrong. The experts that are saying the legislation that the minister and the government have introduced is adding immeasurably to the uncertainty that already exists in the forest sector — according to the minister, they are wrong.
The minister, I hope, will acknowledge that the views of the people that make decisions around investment, that sign the paycheques for the hard-working women and men in the forest sector…. They have views that deserve to be taken account of. The appropriate thing to do, the responsible thing to do at this time of uncertainty is to pause and have an opportunity to talk to those people about the legislation that purports to significantly alter the tenure relationship between the forest companies and the land base.
Won’t the minister see that people are calling out for him to show some leadership and do the responsible thing, take a pause and talk to the people that are involved in forestry in British Columbia?
Hon. D. Donaldson: I understand that the member, at one point, was Minister of Forests, and things have changed due to the policies that he helped put in place — changed for the worse for workers and for communities that are dependent on forestry.
I’ll speak to the Interior first. Mills are closing due to a lack of fibre supply, due to the fact that the pine beetle transition was unaddressed by the previous government. We’re addressing it through the Interior process.
Now, on the coast, the concentration of tenure that was allowed to occur under the previous government has led to fibre starvation in some of the pulp mills. We’ve addressed that through the coast forest sector revitalization initiative. In fact, Brian Baarda, CEO over at Paper Excellence, who made an incredible investment in three mills on the coast just recently…. I’ll quote from him: “B.C. coastal pulp and paper mills are in urgent need of additional pulp fibre supply. We support changes to improve the availability of fibre supply and ways to reduce the costs of scaling and handling of pulp logs.”
That’s exactly what we’ve done under the coast forest sector revitalization initiative.
Mr. Speaker: The member for Abbotsford West on a second supplemental.
M. de Jong: That’s not what leaders within the forest sector think the minister and the government have done. The people who know the forest sector, people within the communities that employ families in the forest sector, are saying precisely the opposite.
I don’t understand. The minister refuses to explain to the House why he feels the Council of Forest Industries is wrong when they predict significant closures, ten to 12 mills, why he says people who make decisions about investing in the forest sector — investment, by the way, that creates the work the minister says he values — are saying that they don’t think the government understands in any way, shape or form, either the Interior…
Interjections.
Mr. Speaker: Members, we shall hear the question. Thank you.
M. de Jong: …or the coastal forest sector.
Faced by the kind of commentary that is arising in forest-dependent communities amongst forestry experts in British Columbia…. Instead of doing the irresponsible thing, which is, as the Premier did the other day, taking cheap shots, dismissing those comments, will the minister do the responsible thing and say that we value the input from the people that sign the paycheques for forest workers and that we value the input we have not yet received from people that own forest tenure in British Columbia and push the pause button and talk to the very people who are involved in forestry, who care about forestry, who work in forestry, who support communities that are dependent on forestry?
Hon. D. Donaldson: Well, I think that — I think it was a question — statement typifies it all: outrage around criticisms of an outgoing CEO but no outrage for the jobs that workers lost under 16 years of that government.
GOVERNMENT HANDLING OF ISSUES
AND POLICIES ON FOREST
INDUSTRY
M. Polak: Here’s the most frightening thing about this. It’s part of a pattern that started back when the speculation tax got introduced. It was a speculation tax….
Interjections.
Mr. Speaker: Members. Members, we shall hear the question. Thank you.
M. Polak: A speculation tax that, lo and behold, after it was introduced, we found out had nothing to do with speculation. Instead, it was being paid by people who were not even close to being speculators.
The elimination of MSP. No, it’s not being eliminated. It’s being transferred to being paid by businesses. That’s not an elimination of MSP.
The ALR. Going to help farmers? No. Going to say that farmers are not persons and can’t make applications on their own behalf.
The caribou….
Interjections.
Mr. Speaker: Members. Members, we are not being respectful to the person who has the floor.
Member, proceed.
M. Polak: I am amazed at how many days we’ve been talking about forestry and how many days those members on the other side make a mockery of what they say is caring by laughing and mocking us as we ask the questions. It is shameful.
We are asking questions about an important industry. The types of things they are heckling are all about how…. Oh, this is laughable to them. They think it’s funny. I hope that they are willing to stand up and admit that when these kinds of clips are on the local news back home in Quesnel. The fact of the matter is that those people get to hear what you say in here. You’re not going to like the way they feel about it.
On caribou, nothing. No consultation until the Premier rode in and tried to fix the mess.
Gas. They have no idea what they’re doing.
Now they strike at the heart….
Interjections.
Mr. Speaker: Members, you are out of order.
M. Polak: Now they strike at the heart of industry in British Columbia, and that is forestry. After all of that long list — the pattern — that they should have learned from by now, they haven’t. This minister stands here. He laughs, and he mocks us for asking him to consult.
They need to consult with industry. Will the minister finally relent and do the right thing and consult with the industry?
Hon. D. Donaldson: Well, I’m sorry if the member doesn’t like my reaction to the questions, but it’s hard to keep a straight face with the absurdity of what’s coming from the other side.
I’m not sure why it is so difficult for members on the other side…
Interjections.
Mr. Speaker: Members.
Hon. D. Donaldson: …to comprehend that the forests are a publicly held asset, not an asset held by private companies. We’re going to manage that public asset in the best interests of the public, the best interests of communities and the best interests of workers and First Nations.
[End of question period.]
Tabling Documents
Hon. D. Eby: I have the honour to present the 2018 annual report of the Forest Appeals Commission.
Orders of the Day
Hon. M. Farnworth: Before I move the rest of the business of the day, I move the motion.
Motions Without Notice
APPOINTMENT OF SPECIAL COMMITTEE TO
APPOINT A CONFLICT
OF
INTEREST COMMISSIONER
Hon. M. Farnworth: By leave, I move:
[That a Special Committee be appointed to unanimously select and recommend to the Legislative Assembly the appointment of an individual to exercise the powers and duties assigned to the Conflict of Interest Commissioner for the province of British Columbia pursuant to the Members’ Conflict of Interest Act (R.S.B.C. 1996, c. 287).
The said Special Committee shall have the powers of a Select Standing Committee and in addition is empowered to:
(a) appoint of their number, one or more subcommittees and to refer to such subcommittees any of the matters referred to the Committee;
(b) sit during a period in which the House is adjourned, during the recess after prorogation until the next following session and during any sitting of the House;
(c) adjourn from place to place as may be convenient; and
(d) retain such personnel as required to assist the Committee;
and shall report to the House as soon as possible, or following any adjournment, or at the next following session, as the case may be; to deposit the original of its reports with the Clerk of the Legislative Assembly during a period of adjournment and upon resumption of the sittings of the House, the Chair shall present all reports to the Legislative Assembly.
The said Special Committee is to be composed of Ronna-Rae Leonard (Convener), Nicholas Simons, Coralee Oakes, and Steve Thomson.]
Leave granted.
Motion approved.
Hon. M. Farnworth: In this chamber, I call continued debate on the estimates of the Ministry of Finance. In Committee A, the Douglas Fir Room, it is continued debate on the estimates of the Ministry of Municipal Affairs and Housing. In the Birch Room, I call estimates debate on the Ministry of Energy and Mines.
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 11:05 a.m.
On Vote 25: ministry operations, $265,327,000 (continued).
S. Bond: Good morning, Minister, hon. Chair and the staff. We want to take a very brief step backwards, just for a moment, to review a bit of a conversation that we started yesterday. The minister made comments that attempted to clarify, but we remain concerned about information that was shared by one of her colleagues. We all know how people get carried away when they use their fingers on their devices and use Twitter. So let’s talk about a comment, once again, made by the member for North Vancouver–Lonsdale.
There is a lot of concern in British Columbia, and the minister, I think in some way, has acknowledged that. This government is intent on collecting data. My colleague did an excellent job yesterday of talking about excess capacity that’s been built into the system. In fact, we find that it’s almost double the size necessary to deal with the speculation and vacancy tax, and we do recognize that information is going to be linked.
British Columbians have been providing information. Let’s take a look at what the minister’s colleague had to say about that. “Yes, information from all avenues will be used with the SVT,” meaning the speculation and vacancy tax, “and lifestyle audits, or the like, may be triggered when things don’t add up.”
The minister yesterday said she wasn’t going to comment on her colleague’s commentary. We’re very concerned about that. This member that made the comment is involved in a number of very high-level committees, including Treasury Board, as we understand it. So maybe the minister could once again try to explain how there may be lifestyle audits, or the like, triggered — and how information from all avenues may cause that to be triggered when things don’t add up.
Now, I can tell you that British Columbians who didn’t want to provide their social insurance number in the first place, who didn’t see themselves as speculators — in fact, 1.6 million British Columbians…. Now we have the minister’s colleague sharing information, saying: “Well, wait a minute.” They’re going to take information from all avenues, and if things don’t add up, it’s going to trigger something, maybe a lifestyle audit, or the like. Could the minister explain exactly what that member was talking about?
Hon. C. James: Yes, we canvassed this yesterday, and I will again provide the member with the same information. Audits are a practice, obviously, in the Ministry of Finance when it comes to a number of different tax measures. We have enforcement in place. We talked yesterday about the individuals who’ll be working in the system and who’ll be providing that support. Those kinds of processes are practised in the Ministry of Finance and will continue.
S. Bond: Thank you to the minister. I don’t think anyone would suggest there aren’t audits taking place in the Ministry of Finance. What aren’t taking place, according to this minister, are lifestyle audits. It introduces a whole new level of concern to British Columbians if there’s even the slightest indication that, suddenly, their lifestyles and what doesn’t add up might be reviewed by this government.
Perhaps let’s try this. Did the minister and the ministry use the language or discuss, at some level of committee…? This member that made the comments is certainly party to and privileged to be part of a number of committees. Did the ministry discuss, commit to, talk about — or is there language related to — lifestyle audits, or the like, in any of the work that was done by this ministry?
Hon. C. James: As I said, audits are a continued practice in the Ministry of Finance. The audits that will be done for the speculation tax will be consistent with the existing audit practices that are there. We would be using existing audit practices. They’re consistent with that. There hasn’t been any change in the auditing practice that is already in place.
S. Bond: Thank you to the minister for that answer. I take that as no, that there was no discussion about the concept of a lifestyle audit. I would just note that those kinds of — in my view, off-the-cuff, we would hope and assume — remarks are not helpful. At a time when there are significant additional new taxes, people are concerned about providing information.
I would simply urge the minister to ask her colleague to withdraw, to apologize or to admit that that was not accurate information. I think that would bring to an end….
Well, the member can shake his head all he wants. The fact of the matter is this: that information was shared by a colleague. It is incorrect, it is misleading, and it is annoying and worrisome to the people of British Columbia.
Interjection.
The Chair: Member. Member.
S. Bond: The right thing to do would be to remove that information and admit that it was incorrect. The minister has made it clear….
Interjection.
The Chair: Member.
S. Bond: That was very disrespectful. This is a place….
Interjection.
The Chair: Member.
S. Bond: The member who presented the incorrect information to the people of British Columbia should be expected to correct it, withdraw it or clarify it. That’s our job on this side of the House. The member may not like it, but we’re going to continue to do it every single day to hold this government accountable.
I want to just let the minister know that I’m going to ask a random question here before we move into the next section that my colleague is going to lead. It’s one of the ones that have been punted to the Minister of Finance. I’m sure she’ll be having a conversation with her colleagues about the number of questions that weren’t answered in other ministries and have been sent over to her to be answered. This was actually punted in two ministries — the Ministry of Municipal Affairs and Housing and the Ministry of Tourism, Arts and Culture.
Let me repeat the question for the minister. I should tell you that the answers from the minister were: “Any questions regarding the use of MRDT and those communities have to go to the Minister of Finance.” Here’s the question: can the minister provide us with a list of communities, if any, that have determined to make use of MRDT funds for staff housing or employee housing projects, which is something new and ultimately outside the original mandate of the MRDT funding?
Hon. C. James: The member is referring to the enabling ability for municipalities to be able to take a look, if they wanted to, at housing related to tourism. There are communities that are inquiring and looking at the program. I don’t want to identify the communities. They haven’t made any decisions yet. But there are seven communities that have approached us and are inquiring about the program.
T. Redies: Minister, we’re now going to move to the speculation tax, which, frankly, continues to be a bit of a dog’s breakfast of issues that seemingly never end. For many in my constituency, this is creating a tremendous amount of stress and anger.
First, there are many cabins in places like Crescent Beach, just like Belcarra, that aren’t winterized and are summer cottages used by B.C. families to enjoy in summer months. These properties can’t be rented year-round without substantial and expensive upgrades. In some cases, like Belcarra, they’re not practical from a rental perspective, just in the sheer difficulty in getting to and from the cabin.
My constituent, Gordon Wrightman, who owns a cabin at Crescent Beach, says this: “Since my family has lived, worked and paid taxes in B.C. for over 100 years, and has owned the cabin for 70 years, we are hardly speculators. I feel totally offended by this action.”
Is the minister expecting Mr. Wrightman to either pay the tax, refurbish a 70-year-old property in order to rent it out, or sell the property that has been in his family for 70 years?
Hon. C. James: The member knows — we canvassed this yesterday and, I think, the day before as well — that I won’t give individual advice to individual tax pieces. As we’ve learned, there are often additional pieces of information that are not presented or perhaps haven’t been gathered or shared. That’s important for that to go through the process. If the member wants to share the information, we’re happy to take that information and have it looked at by the tax people.
Again, I won’t be giving individual case information in the Legislature because we need to ensure that all the information is gathered.
T. Redies: Well, I’m sure Mr. Wrightman has already approached the Finance Ministry. But again, maybe to make it more general, given that there are a lot of people who have these cabins that are not winterized, does the minister expect people who own cabins that aren’t winterized to make the expensive refurbishments in order to rent them? Or does the minister expect them to sell them or just pay the tax?
Those are not three very good options for those people, Minister. For a lot of these people, they’re on fixed incomes. It’s an unfair situation. Again, these cabins have been in families for generations. Yet the minister basically, I think, believes that because the cabins sit on valuable land, somehow that gives people the cash to be able to pay the tax. That’s not the case.
Again, to the minister, does she expect people who own these cabins to make the expensive refurbishments, pay the tax or sell the properties that have been in their family for generations?
Hon. C. James: As the member knows, the individuals with a second home that they may own, if they’re a B.C. resident, do get a $400,000 exemption. So the first $400,000 is exempt from the tax.
The issues that the member raises, or any other issues that have come forward…. Certainly, part of our analysis…. After the July 2 date, as I talked about, after we get the process complete, we will be looking at all issues that are raised as part of that analysis.
We also will have the opportunity, of course, to meet with the mayors from the affected areas, and I am certain those mayors will bring forward their issues and concerns — the positives and the challenges that they face. We’ll be doing a thorough review of that based, again, on the facts, based on the information that we have, based on the data that we’ll be able to have after July 2. That review will occur.
T. Redies: Thank you, Minister, for that answer. I appreciate that there is going to be some further discussion on this. I really do hope that the minister and the ministry find some fairness in this. Again, it’s creating a lot of stress for people who own these properties.
Frankly, the $400,000 exemption in the Lower Mainland…. I mean, that is worth nothing, really. These are properties that are worth more than $400,000 because of the land value. Again, it doesn’t help people who are having to make these very, very difficult decisions. Do they get rid of their cabins? Do they somehow scrape up the money to pay the tax, or do they somehow scrape up the money to pay for the refurbishments in order to rent them? These are just not easy choices for these people.
Minister, I’d like to turn now to the extent of the information being collected by the speculation tax. We’ve talked a little bit about that. A confusing number of questions, especially for elderly people. I believe the seniors advocate, Isobel Mackenzie, has also spoken out on this.
I’m going to quote a couple of constituents. I’m not talking about their specific issues but their observations with respect to this tax. Then I want to ask a question of the minister.
My constituent Judith Dingle writes: “I feel disturbed, violated and angry at the invasiveness of this request by the current NDP government. I am sure there are a lot of elderly homeowners in this province who will not know what to do, will not be able or capable of filling it out, let alone understanding it and, therefore, will fall innocent victims to paying a tax they do not deserve. My 83-year-old partner would fall into that category. I reiterate: there must be another way.”
Another constituent of mine, Gail Neilson, advises: “We live on bare strata land, on which my husband is a council member. We have 120 homes owned by seniors, most of whom do not have computers and, frankly, are very confused by the scare tactics deployed by the NDP. Should they be penalized in their senior years because they do not understand this kind of propaganda and, in their confusion, fail to comply with it?”
Minister, of the 40,000 people who have not filed their exemptions for the spec tax by March 31, how many are seniors?
Hon. C. James: I want to start with the information collected in the process. In fact, we did consult with the seniors advocate. We did look at all the options available to individuals. Just in the same way people fill out their homeowner grant application each year, we ensured that support was available for those who don’t use technology. They had the opportunity to phone in. There were some Service B.C. locations, as well, that provided personal service. So if people wanted to come in and have the form filled out with support, we had those kinds of supports available.
Then I think the most important piece, just to reiterate…. I know I’ve said this before, but I think it’s critical to say it again. If someone is exempt, they will not pay the tax. So if someone has not done their declaration, for a variety of reasons, and they get their notice, they have the ability, still, to fill out their declaration. And if they are exempt, they will not pay the tax.
On the numbers of individuals…. They obviously haven’t done their declarations, so I could not tell the member whether those people are seniors or not. They have not done their declaration. But again, it’s part of the reason that we’ll be doing the analysis once the information is all gathered after July.
S. Bond: While the minister may not be able to tell if they’re seniors or not, one of the biggest concerns we’ve had through this process is…. We’ve heard from very, very many vulnerable seniors who were worried and are worried and were very overwhelmed by this. That needs to be taken seriously and taken into consideration, especially when you look at a tax where the minister….
After going through this process last time, asking questions, we discovered that the speculation tax, which, by the way, wasn’t supposed to apply to British Columbians, according to the Premier, who said that if you live in B.C., you won’t pay the tax…. Most of these people are hard-working British Columbians. They’re not speculators.
Everyone in this House wants to legitimately deal with the issue of speculation. We just didn’t assume that this government would require 1.6 million British Columbians to demonstrate they’re not speculators. That is a massive undertaking, collecting 1.6 million people’s sensitive information.
The minister chose to use a negative-billing option, which we know has actually been outlawed when it was used in other circumstances. The minister chose to use negative billing. Did she consider any other options?
The minister and I have known each other for a long time in this House, and I know that the concern expressed by seniors is not lost on her. It was overwhelming for many of them, frightening, and they were upset. Did the minister contemplate any options other than negative billing and requiring 1.6 million British Columbians to send in sensitive personal data and prove that they were not speculators?
Hon. C. James: I know the member will persist, as the opposition has done, in referring to this as a negative-billing option. It is not a negative-billing option. The members know that full well. I’ve said often that if someone is exempt, they will not pay the speculation tax. But I get it. I understand the referral that the members across the way want to continue to put out.
The importance of making sure that the information is collected and people have the opportunity to get their exemption…. As the members know, there are a large number of exemptions. There are opportunities for people to be able to take a look at the exemptions. In order to do that, we need people to be able to fill out their declaration.
We did, as I said, have discussions with the seniors advocate. We looked at options. The option, clearly, just as you do with your homeowner’s grant, is to fill out a form each year to be able to claim, as you do with your homeowner’s grant. You claim if it’s your principal residence. You claim if you’re a senior citizen. You get an additional amount off your homeowner bill. This is the same kind of process.
I recognize that this was a first year, as we’ve said, for the tax. That’s why the supports were put in place. That’s why we looked at making sure that the opportunities were there for people to get help. So I recognize, as I said, that for a new process, there are some people who would need additional supports to be able to fill it out. But I think, for a new tax, to look at 97 percent, over 97 percent now, of declarations filled out and in, it’s a very good result, and we’ll continue to look at how we can refine the process.
T. Redies: With all due respect to the minister, with respect to comparing the spec tax process with the homeowner grant process, that is a ridiculous comparison. The spec tax is 7, 8 pages on line to fill out. It’s got absolutely…. From a simplicity perspective, there’s no comparison at all with the homeowner’s grant.
I’d like to again pursue this issue with seniors, because again, a lot of the people that we have been receiving concerns from are people who are seniors. Not surprisingly, many of the people who own second homes in our province are seniors. They’ve worked hard all their lives. Instead of maybe putting their money into an investment account, they put their savings into real estate, usually for a little vacation getaway.
Many of these seniors don’t rent their homes, because they don’t want to deal with the issues of a being a landlord and renting to strangers and managing tenants, especially, frankly, under the new tenant rules implemented by this government, which make it even more difficult to evict a bad tenant.
My constituent Linda Mouller writes:
“I am a 70-year-old grandmother with a large family and 11 delightful grandchildren. I recently sold a recreation rental property in Hawaii as it became too difficult to look after from afar. Together with the funds from that sale and my savings, I recently purchased an apartment in Kelowna. My daughter that lives there helps me look after it when I’m not there. We don’t rent it out, because I’ve rented property out for 20 years, both locally and in Hawaii, and in both cases, there were considerable problems that arose. I don’t want the stress of going through that again.”
Ms. Mouller goes on to say:
“I’m not a speculator of any kind. I’m a Canadian citizen that has saved enough money to retire and enjoy spending time with family and friends. These are funds that I’ve saved after paying both business and personal taxes here in B.C. and throughout my life. I think seniors should be given an exemption from any speculation tax. It took me years of hard work and diligently paying my taxes to be able to be self-sufficient during my retirement. Taxing seniors again for having a second home, even if it’s an apartment, is just mean.”
Seniors like Linda, who are on fixed incomes, who’ve saved and worked hard all their lives, who’ve helped build this province, are now seeing their financial and retirement plans disrupted by this tax. While it’s all well and good to say that this government can just sell the property, that’s an unfair approach to people who, again, have built this property, paid their fair share of taxes over the years and just want a vacation home without the stress of renting it.
Would the minister please consider exempting seniors from the speculation tax?
Hon. C. James: I think we need to take a moment to go back to why we’re talking about a speculation and vacancy tax. We’re talking about a speculation and vacancy tax because we have a crisis in this province when it comes to real estate. We have a crisis in this province when it comes to affordability for housing for people in British Columbia.
The vast majority of people in British Columbia in our urban settings struggle to be able to find affordable places to live, never mind looking at a first or a second or a third home. They’re struggling to be able to find any place affordable to live.
That’s a crisis that we committed to addressing on behalf of the people of British Columbia and on behalf of the economy of British Columbia. If we take a look at the challenges that businesses are facing when we have the hottest labour market in the country, the lowest unemployment rate in the last 21 months….
When we take a look at those challenges in trying to recruit and retain people who take a look at the real estate page and decide they need to go somewhere else because it’s cheaper to be able to live, because they can’t find an affordable place to live…. Even if they have an income, they aren’t able to find an affordable place to live. The reason we’re dealing with the 30-point plan, including the speculation and vacancy tax, is to be able to address that crisis on behalf of all British Columbians. There are seniors who have come and been very clear about the lack of housing that they’re able to find.
The speculation and vacancy tax was in fact designed to encourage more housing on the market, as well as to ensure that those people who have second and third homes have an opportunity to not pay the speculation tax by renting it out, providing them some support for individuals and communities in areas…. Again, let’s remember where the speculation and vacancy tax takes place. It takes place in our major urban settings with the least affordable housing and the lowest vacancy rates. This provides an opportunity for those individuals to be able to contribute back to the housing crisis.
You can take a look in the information around the support for the speculation and vacancy tax. I know that British Columbians care about ensuring that affordable housing is there for everyone — for seniors, for families, for individuals. That’s why the speculation and vacancy tax is in place.
S. Bond: You know, those are certainly the minister’s talking points. That’s what her government believes. We respectfully disagree. We don’t believe that hard-working British Columbians who, perhaps, have inherited a cabin, who have worked hard all of their lives to acquire a second property — that it’s their responsibility to deal with speculation in British Columbia.
This is a government that actually said…. The Premier of this province told British Columbians that if you live in this province, you will not be considered a speculator. What happened? 1.6 million people, including seniors in this province, were told that unless they can prove they are not speculators with a list of exemptions and a complicated process, ultimately, they were being considered speculators. The minister can stand here and give those talking points. We’re concerned about seniors who have worked incredibly hard in this province to acquire a second property.
Let’s talk about that. In the recent…. It was in fact yesterday the minister actually said that property prices for seniors with second homes had appreciated significantly since 2010. That probably is accurate. But the minister didn’t tell the other side of the story. Incomes haven’t kept pace. So we have seniors who have properties that are increasing in value, and now they’re about to be hit with tax increases that are significant. Yet many of those seniors have fixed incomes. The minister knows that. This government knows that. Those seniors are not speculators.
This minister wants them now…. She just heard the story of a 70-year-old grandmother and others. This minister says: “You will now become a landlord. The government is going to require you to rent out your property.” We disagree. There are other ways that the issue of speculation could have been tackled in this province. The minister knows it. The government knows it. In fact, the Premier promised that British Columbians wouldn’t be impacted. What did we discover? That, in fact, two-thirds of the people impacted by this tax live in British Columbia. That’s not speculation.
Let’s talk about those vulnerable seniors. Can this minister explain what’s going to happen or what she’s going to do or what seniors are supposed to do when they are on fixed or moderate incomes? Property values have gone up, but by golly, they’re going to get taxed because they’re going to get hit with a vacancy tax. The minister expects them to become landlords. Can the minister explain to us, when many of those seniors are losing equity in their homes — they probably can’t even sell them now — how on earth they are going to pay that tax bill and deal with this issue?
They are not speculators. They don’t deserve to be forced to become landlords. Let’s have the minister answer that question for the dozens and dozens of seniors who have contacted us.
Hon. C. James: I think the majority of that I’ve spoken to already, in my previous answer. But again, I’m happy to speak about the speculation and vacancy tax and the formation of the tax. As the member knows, 99 percent of British Columbians are not paying the speculation and vacancy tax. As the member also knows, the speculation and vacancy tax is only in place in urban settings that have the least affordable housing and low vacancy rates.
Again, British Columbians all across the province have been calling on us to address the housing crisis. It was the biggest issue in the last election. I think it’s important to note this is certainly an issue that the public has expected their government to act on because it has become a crisis for them.
We are talking about people who own second homes. Again, I think it’s important to note there is a $400,000 exemption, if you’re a B.C. resident, on the value of your home.
I think, again, the opportunity is there to be able to not pay the speculation tax if you have a second home or a third home by renting it out. So that opportunity is there for people who own second homes as well. But I think, again, it’s important to note that 99 percent of British Columbians will not pay the tax and that the public expects us to address this issue on behalf of all British Columbians.
T. Redies: I think I’ve said this before. For the minister to continue to refer that 99 percent of British Columbians don’t pay spec tax is disingenuous. Of the people that are paying the spec tax, two-thirds are British Columbians, and 99 percent of British Columbians don’t own second homes.
The minister shows a shocking lack of empathy for seniors on fixed incomes who now, because sales are down 43 percent, can’t even sell their house, even if they wanted to do that. I mean, again, it just seems to be a shocking disregard for the people who have built this province and have just wanted to have some vacation property to be able to enjoy their senior years. Now they can’t do that because of this government.
Minister, I’m going to go to another area which I think is just really, perhaps, an unintended consequence. But it’s something that I’ve seen in at least two cases in my riding. This is the satellite family issue.
One of the constituents is married to an American. I’m just backing up. This woman was born in British Columbia and has paid taxes in Canada all of her life. I guess from this tax perspective, she made the mistake of marrying an American gentleman who has family in the United States. They’re both from previous marriages.
They’re living and working in different countries because of the family situation. But because he now makes more than 50 percent of the family income, she is now classified as a satellite family, and she is going to have to pay speculation tax at 2 percent, ultimately, which represents about 33 percent of her income.
Now, when the minister was crafting this tax, was her intention to capture families like this? If so, why? These are British Columbians who have paid tax here all their lives, and they’re living in their homes. Yet they’re now, because of an accident of marriage, I guess, having to pay speculation tax.
Did the minister think about this? Did this ever come up as an unintended consequence? Why would the minister think it’s acceptable to tax British Columbia families like this?
Hon. C. James: I’ve talked to the member about the specifics as well, but the member knows I won’t give details on the specifics. Again, it’s critical to make sure that all the information is gathered because there are a number of exemptions, and that needs to occur.
But the member is quite right. There are satellite families included as part of the speculation tax. There’s a great deal of concern about people who may be benefiting from British Columbia and not paying taxes in British Columbia.
So yes, we do look at where people report their income. We do take a look at where people pay their income tax. But if there are individuals, couples where there is B.C. income being claimed — so they are paying taxes on their B.C. income — they do have an opportunity, within the speculation tax, to use that B.C. income to claim a credit to be able to address the speculation tax.
T. Redies: I should have been much clearer in my last question. That 33 percent of her before-tax income that is now going to be paid to the Ministry of Finance is net of the credit that she gets for paying income tax here.
I mean, this is an example of a tax that has gone crazy. I understand that the minister wanted to capture people who were moving here from other locations, who weren’t necessarily Canadian citizens, whose spouses were earning the majority of the family income offshore and no income tax was being paid here in B.C.
This is a situation with somebody who — and I know this person is not the only one — was born in Canada and has worked and paid tax in Canada all her life. Now, just because she married an American who is working in the United States, has no ties to Canada, she is now having to pay 33 percent of her income on this tax. It’s shocking. I mean, how this cannot be exempted is beyond reason. This woman lives in her house. She’s not a satellite family. She’s a Canadian who has been working here and paying tax here all her life. Just because of the blunt implementation of this tax, with little thought, now this woman, really…. Most of her income is going to be going to taxation, thanks to this government.
Minister, I have another constituent, a Dr. Evans, who retired from UBC to take up a post for several years at a number of U.S. universities, a well-respected academic. He worked in the United States for a few years. His wife is here, paying tax here. Now he’s retired. He has come back to Canada. But because the income that he earned in the United States, again, is more than 50 percent of his total income, he is now facing paying the speculation tax.
I know you’re not going to talk about Dr. Evans. But again, when the minister brought in this tax, did anyone think about the implications for people who do go offshore to work from time to time, whose families often stay here? Was the intent to basically stop people from taking up offshore opportunities with this speculation tax? If they do, and they make more than 50 percent of the family income, their family, living in their house, is now considered a satellite family and has to pay the speculation tax. Was that considered when the minister brought in this very heavy-handed tax?
Hon. C. James: The member asks whether we had thought about people who may be working away temporarily. Yes, in fact, that was thought about. There is an exemption, as the member knows — a one-in-ten-year exemption for those who are working away temporarily if the house had been their principal residence the year before. So in fact, yes, those issues were considered.
Noting the time, Chair, I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 11:53 a.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 progress, was granted leave to sit again.
Hon. A. Dix: See you all at 1:30. I move that the House do now adjourn.
Hon. A. Dix moved adjournment of the House.
Motion approved.
Mr. Speaker: This House stands adjourned until 1:30 this afternoon.
The House adjourned at 11:55 a.m.
PROCEEDINGS IN THE
DOUGLAS FIR ROOM
Committee of Supply
ESTIMATES: MINISTRY OF
MUNICIPAL
AFFAIRS AND HOUSING
(continued)
The House in Committee of Supply (Section A); N. Simons in the chair.
The committee met at 11:08 a.m.
On Vote 37: ministry operations, $318,559,000 (continued).
The Chair: Good morning, Members and visitors. This is a continuation. Should we just go right into the questions? Does the minister wish to make some comments?
Hon. S. Robinson: Before we go in, I just want to correct the record around a number of responses that I provided yesterday. I have some up-to-date information. I think it’d be helpful to the members opposite to read that into the record.
The first one is just a clarification. We reviewed Hansard. The previous member, from Kamloops, had asked questions about the Peace River agreement. In one of his questions, he provided two different options. My response was: “The member is correct.” So I want to make sure that it’s accurate.
The member asked if the amount in the budget for this fiscal year is $50 million. That is correct. The government’s contribution for the Peace River agreement in 2019-20 is fully funded within the base budget. That’s the piece that I wanted to clarify. He had provided an option that it might be in the way it had been previously. I want to be really clear that it’s all in the base budget. That’s the first item.
The second item that was queried was about energy advisers. The member from Kamloops had suggested or identified that there were no energy advisers in his community, in Kamloops.
I’m pleased to let the members know that according to the CHBABC website, there is a listing of energy advisers: one in Kamloops and another one in Salmon Arm. We are building the capacity to make sure that the step code is doing what it’s supposed to do and that there are actually energy advisers in the member’s community.
S. Sullivan: Thank you, Minister. We’ve organized the questions, as you know, yesterday focusing mostly on municipal affairs and some of your other portfolios. Then today will be mostly housing. There are a couple of questions that were holdovers from yesterday. We can maybe ask them first, just in case you don’t have staff, and maybe there’s a chance you could consult with the staff throughout the day. Then we’ll also have some other MLAs who have some questions related to the budget and housing.
On the issue of TransLink, I know that last year the minister notified TransLink that the government would help them with the major transit costs they were experiencing. It was a lot of discussion on how to support the local governments and TransLink. She offered that they could increase the gas tax so that they could fund the budget gap in their transportation plan. A few weeks ago — I believe it was called the municipal budget implementation act — that received royal assent.
Now I wanted to ask about this: the details around what commitments were made and what impact that might have on people who are paying gas prices. This is not a topic that is of great personal interest to me, because I don’t have a car. Lynn and I live in a very dense environment, and we do not require an automobile. But I know that it is of great interest to many citizens. Could the minister help give some clarity around what is committed and what the result will be?
Hon. S. Robinson: I know the member appreciates and values the fact that expanding transit services is a critical element to making sure that people can move more easily around the region. The member himself declared that he, as a non–car owner, lives in a higher-density area, moves more freely through the region using other modes of transportation, which is, I think, a value that we certainly share as a government.
We can’t build our way out of congestion. We know that with one million more people, the congestion is only going to get worse and that we need to have a robust transit system. Based on some of the conversation that we had yesterday, in terms of the investments that we’re making in — I think the member called — completing the line, it was a very interesting frame.
With that in mind, I know the member is aware that we brought in 40 percent of the capital costs for transit investment. That’s a significant investment. It’s the largest investment ever made in the history of this province. The region had to come up with a 20 percent share. That’s a commitment that they made, and we all agree to.
The mayors looked at the number of tools that they needed in order to generate that kind of revenue. They worked really hard. I want to give a shout-out to the mayors, to the Mayors Council. I know that they worked really hard to identify how they can come up with their 20 percent share, given the revenue tools that they have at their disposal and the challenges that come with that.
They put together a mixed bag, if you will, of where to deliver those kinds of revenues, recognizing that we all benefit when we have a functioning, robust transit system. They put together a package that included a transit DCC, a parking tax, a property tax increase as well as a gas tax. It was with the combination of all of these components that they were able to bring forward their portion of this transit investment, making sure that we were all better served and that the economy was better served.
I’m sure the member knows that when we can get people into buses and into trains and other modes of transportation, it frees up the roads for goods movement. That’s really good for the economy. Everybody benefits by this mixed bag of investment that the Mayors Council put together.
S. Sullivan: Can I get some clarity about the gas tax and how much it would be extra, when it would be implemented and if there are any more details the minister could give on how that would effect, especially, drivers and affordability in the region?
Hon. S. Robinson: The Budget Measures Implementation Act, 2019, amended the Motor Fuel Tax Act and the South Coast British Columbia Transportation Authority Act, which is enabling legislation that would allow TransLink to increase the regional fuel tax by up to 1½ cents per litre, beginning July 1, 2019. The Mayors Council asked for that as an option for them, when they put together their 20 percent share, to have that available to them as part of their package.
S. Sullivan: On July 1, 2019, we might see an increase in gas prices. I’m wondering if the minister is concerned that the timing might be difficult, given that summer is typically a difficult time for gas prices?
Hon. S. Robinson: I’m always concerned about affordability, which is why we eliminated the tolls on two major bridges that unfairly penalized people living south of the Fraser. It’s why we eliminated the MSP, so there’s more money in people’s pockets. It’s always an ongoing concern to make sure that people can afford to live and move around the region easily and that we can have goods movement moving around regionally.
It’s also why we brought in 40 percent, as a government, to the capital cost, which has never been done before. It’s a significant investment. We know that that’s going to make a difference in people’s lives — being able to move around — because the amount of time that people spend in traffic, as well, is very expensive.
Making sure that we can move more freely is a worthwhile investment, so we’re always making sure that we’re paying attention to how to balance all of those challenges and making life more affordable for British Columbians.
S. Sullivan: I respect that that is an important goal for all of us, but I also am concerned about some of the commitments made in which there will be a gas tax increase. There will also be increases to property tax, partly as the employer health tax; development cost charges; and then, of course, the parking tax.
I think it was a 24 percent increase that will affect certain people, like students who park at higher institutions and also people who park at hospitals. You know, Surrey Memorial, Eagle Ridge and Port Moody would all be affected. Can the minister confirm that those institutions would be affected by this increase in parking tax?
Hon. S. Robinson: I want to thank the member for the question. It’s a very specific operational question. I’ll have to get back to the member. I had TransLink folks here yesterday, so we’ll get back to the member on that question.
S. Sullivan: Question about LECFA, the local government financing.
Interjection.
S. Sullivan: Yes. Sorry. As I mentioned, there was some miscellaneous left over from yesterday. If the minister doesn’t have staff, perhaps they can…. Okay. Good.
It’s very important what’s going on because it will…. This was sort of like a trial run, I guess you could say, for what we’ll be experiencing with what happened with the elections for the municipal governments. I’m just wondering if the minister could…. Has she done an evaluation on how things went? Were there concerns that came to light?
I have heard, from a number of people, questions about candidates who ran for local government who seemed to be, basically, a party in all but name. They worked very much together. They shared information.
Has the minister taken note of this? Are there any efforts to, perhaps, have a threshold about when a group of people is considered a local election group or when they would be considered independent, truly independent, candidates for council?
Hon. S. Robinson: I’m grateful for the question from the member. He is absolutely correct in that this is the first time in the history of local elections that there have been not just election expenses, limitations, expense limits. There were campaign contribution limits, as well, that we brought forward. So this is the first time.
It is really important, and I agree with the member. It’s absolutely critical that we pay attention to: how did it work? Were there challenges? Were there concerns? How do we make sure, for the next election, that it’s even better, as robust as possible and as fair as possible? Because, really, at the end of the day, that’s what people want. They want fair elections, where people can participate and where there’s transparency through the whole process.
Ministry staff continue to monitor and gather information. That process is ongoing. I would encourage the member, or any member of the House, if they’ve heard any feedback, to direct it to the ministry. That is an ongoing process. We’re gathering. We look forward to hearing from the public, from those who participated in the elections — those who were successful, those who were unsuccessful — about what the experience was like so that we can make sure that we have the most robust, most fair and most transparent local elections going forward.
S. Sullivan: Certainly, I’ve heard a number of concerns about dark money, as they would call it, being used, non-disclosed money that’s being allocated toward the elections and local government, and third-party organizations doing a lot of things sort of off the balance sheet. One of the concerns about trying to constrain things so much is that often some of the activity then goes on outside of a typical campaign.
One of the concerns that was brought up to me was independent candidates who claim to be independent, but then they share their information — say, door-knocking and such. I believe the Privacy Commissioner has expressed concerns about sharing data. Either it would be an organization that has collected data and then shared it with different candidates or candidates who have shared it with each other.
Is the minister aware of this concern? Has this been brought up? Has any effort been made to clarify with the Privacy Commissioner what the status of that would be?
Hon. S. Robinson: Again, I appreciate the member raising this. We are in the process…. Like I said, October was the first time we had these kinds of rules. I want to urge him and anyone else that he may know that has heard of these sorts of things to feed it into the ministry. We are gathering feedback, as part of the process of having a first election where we have these rules, and making sure that we understand the impact it’s had and, going forward, if there are adjustments needed to make sure that these are fair elections, that they are transparent and that they work for the local government context.
We’re absolutely committed to making sure that we continue to move forward on making the adjustments, as needed. So again, I want to urge the member to share with the ministry what kinds of things he’s heard. If there are people in his life and in his world who have some feedback for us, we’re absolutely open to hearing that and making sure that we continue to move forward in making the best elections we can.
S. Sullivan: Well, thank you very much — that there’s an openness to looking at that. Certainly, I’ve heard a lot of chatter, a lot of feedback. There have been some efforts to raise this publicly.
Perhaps the minister might clarify if some of these issues have actually been received. Is there a formal process that the minister will have to make sure these issues are brought up? Or perhaps the minister could just make us aware right now what issues she’s looking at, what complaints, what concerns have been brought to her attention so we could have a bit of a list to make sure that she has got the information she needs. If not, then we can have a more formal presentation on that.
Hon. S. Robinson: I thank the member for the question. It is actually quite a process. We have staff that have been monitoring a number of areas, including disclosure statements, newspaper articles that they’ve been sort of tracking. They monitor in two ways: sort of the administration component as well as the financing component. They take a look at that.
We are anticipating an Elections B.C. report. Again, this was the first time that we’ve had these rules, so Elections B.C. will be generating a report. We expect it at some point in the fall, coming up. That’s when they have let us know that we can expect it.
We also engaged with the UBCM for feedback as well as the LGMA for feedback. We received some correspondence from members of the public as well — either formal letters or email letters — around their experience. All of that will be taken under consideration in order to take a look at how to best proceed in advance of the next election.
S. Sullivan: You say the fall is going to be a time when a lot of that is done?
Hon. S. Robinson: What I’m saying is the fall is when we’re going to receive the Elections B.C. report.
S. Sullivan: Before I go into more housing issues, I think it would be appropriate to have some of our long-suffering MLAs ask a few questions.
The Chair: Your wonderful long-suffering MLAs.
I recognize the wonderful member for Fraser-Nicola.
J. Tegart: I’m wondering if I could ask the minister to give us an update on the Clinton seniors project. I’ve been here and talked to the minister a number of times on Clinton. My committee is waiting with bated breath to get an update on whether we’re ever going to get a shovel in the ground. We’re still waiting for transfer of properties within government.
They just want the go-ahead. They’re ready to go. They’re in my office every week, as I said last year. At a recent round table, we’re seeing people making difficult decisions of having to move out of their community. So if I could get an update on Clinton, they’ll be watching with bated breath.
Hon. S. Robinson: I can appreciate how long the folks in Clinton have been waiting. What I can tell her is staff actually just had a meeting last week. They’re moving. It’s a priority file. It was a positive meeting. I hope to have a more definitive response for the member in the next little while. But it is moving forward, and it is a priority file for us.
J. Tegart: Well, it’s been a priority file for quite some time, and our people are getting old. We would love for the minister to give us maybe a six-month window of when we might think there might be a shovel in the ground.
Hon. S. Robinson: I do know that I have a meeting with the member on Monday. There’s time between today and then for some more conversation amongst staff. Like I said, it is a priority file. The progress on it is moving faster now than it was a couple of years ago. We’ve lit some fires, and there is progress being made. I’m hoping that I will have something more definitive for the member shortly.
J. Tegart: I’m looking forward to the meeting on Monday. As I said last year, I see my people weekly, and I’m going to share their concerns weekly. That’s not a threat; that’s a promise. They are very concerned. I appreciate the work being done.
My next question is in regards to supportive housing. I have communities, Merritt and Hope, that are on the list for supportive housing. What I’m hearing from the community is that the wonderful announcements of actual space are great, but unless there are wraparound services, we’re very concerned about what that might mean to community.
As much as we can identify different groups in communities who provide services, our people are really interested in: what do the Ministry of Housing, or the minister, see as wraparound services? Do you look at capacity, on whether the community does have the capacity? They might have all the right groups, but whether those groups have the capacity to deliver to the housing unit is another question.
I would be interested in hearing from the minister what wraparound services look like, how they evaluate that there’s capacity for wraparound services for the units that are being built and what kind of consultation happens with community around that.
No one wants to say no to housing units, but we’re certainly hearing impact around when the units come in and the assumption that there are wraparound services and there aren’t.
Hon. S. Robinson: I appreciate the member’s question. First and foremost, I think we need to recognize that people living out in the rough is a bad thing for everybody. It’s bad for communities. It’s bad for the people who are living rough. Housing them, with the supports, is critical because if they’re not housed, then they are left, really, to their own devices, and they continue to be in our communities, regardless of whether or not there’s housing with supports.
There is a vulnerability assessment tool, and this is used with every single one of the projects that we’ve done — the 22 projects in 20 communities where we have done a number of projects. It’s the exact same process, and we are getting lots of good feedback about how the process has worked. The vulnerability assessment tool that is used provides a consistent and fair way of identifying those who would most benefit from supportive housing and the different approaches to handling their case. It prevents people from falling through the cracks in the system.
We coordinate service among agencies so we really understand who’s going to be living there and what their needs are. It also assesses a person’s vulnerability in ten areas: survival skills; basic needs; indicated mortality risks; medical risks; organization and orientation; their mental health status; substance use; their communication level; their social behaviours; and their level of homelessness, how long they’ve been living rough. They also assess support needs of applicants. What are they going to need? They assess eligibility for supportive housing. Is this going to be a good fit for them, and are they going to be successful?
It informs the housing placements to create a healthy tenant mix. It’s really important that we’re creating a community and that it’s a fair and transparent process. Everybody that’s identified as eligible goes through this process, and then the non-profit housing provider…. They’re a group of professionals, and I have to give a shout-out to all of those housing providers around the province who’ve been working with us to deliver. Their folks are trained — front-line workers who are there to support people as they make the transition from the streets, from living rough, to being housed. There’s 24-7 staffing by these folks.
There are meals provided. There is case planning that they provide. There are life skills as well, and they work to provide access to mental health and addictions services that are provided by the health authorities throughout the province, making sure that they are continuing to keep their appointments and that they have access to those sorts of services that they need — whether it’s diabetes and they need to see a diabetes nurse or a nutritionist in the community — making sure that they maintain their health and that they can have an opportunity for a good life.
The other thing that I think is important…. I just want to finish with a quick story, and I’m also aware of the time. In one of our supportive housing projects, 80 percent of the residents, after about eight weeks, had to go and get new photo ID because they no longer looked like the same people they were when they came in. That’s the impact that happens when people have stability, when they have a place to rest their head at night — it’s their room; they can lock it — and when there are people around to support them to make better choices for their lives.
We’ve been doing this in communities right around the province and having some tremendous success with that.
Hon. Chair, I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 11:48 a.m.
PROCEEDINGS IN THE
BIRCH ROOM
Committee of Supply
ESTIMATES: MINISTRY OF ENERGY,
MINES AND PETROLEUM
RESOURCES
The House in Committee of Supply (Section C); B. Ma in the chair.
The committee met at 11:11 a.m.
On Vote 22: ministry operations, $177,038,000.
Hon. M. Mungall: Hon. Chair, before we get started, I just want to introduce some of the exceptional staff that are with me today. We have the president and CEO of B.C. Hydro, Chris O’Riley, and my deputy minister, Dave Nikolejsin. We have the ADM responsible for the energy division of the ministry, Les MacLaren. We have Wes Boyd, who does all things finances for this ministry and many others. He is a superstar in this room and in the Douglas Fir as well. And we have David Wong, who is the CFO of B.C. Hydro.
I’ll take a quick minute here just to let everybody, all the people watching at home — and I know there are many — all the staff in the building who are watching, as well as members opposite, know that this ministry has such an exceptional roster of dedicated staff, people who are dedicated to working for British Columbians every single day. I am continually impressed with the work that they do that comes onto my desk. I just really want to acknowledge that the questions and the back-and-forth that transpires today are allowed because of this tremendous work that these civil servants are doing every single day on behalf of British Columbia. I’m very much grateful for the hard work that they put in every day.
With that, I anticipate several wonderful questions over the next few hours from members opposite, and I will let them get started.
T. Shypitka: Thank you, Minister, and thank you, staff, for affording us this time to ask some questions concerning the budget and concerning some of the ways we’re going to be looking forward to mining in the province. I want to echo the minister’s comments on the exceptional staff that are in place. Since I’ve been thrown into this role a couple of years ago, I’ve been to many conventions. I’ve been to many gatherings that support the mining industry, and I’ve seen the exceptional work that the staff has done.
I haven’t really met them on a one-on-one too much, but I bask in their glow sometimes, on the support and the knowledge they provide the industry. It’s good to see the support. It’s good to see the communications. I know that for some of them, they’ve been doing it a long time, and it shows. The expertise is very well appreciated. So thank you for that.
Just to give you a little sample of the framework on how we’re going to try to anticipate to proceed here in the next couple of days, we’re going to start with B.C. Hydro. We want to try to make sure we’re in and out and we get some of that staff that isn’t from the Island to get back home, maybe, in Vancouver and make sure that they’re not spending unnecessary time here. So we’ll start with B.C. Hydro. We might finish the day off with mining questions, maybe on permitting, perhaps, and then on Monday we’ll get into some CleanBC, more mining questions. We’ll get into some upstream LNG and then oil and gas to finish off the rest of Monday, and maybe dive into Tuesday a tad. We’ll see where it goes from there.
With that, once again, thank you very much for the time. I’ll turn it over to my colleague from Shuswap on some B.C. Hydro questions.
G. Kyllo: This is my first opportunity to ask a number of questions to our Energy Minister as the critic for B.C. Hydro. So I certainly appreciate the opportunity. Thank you, Minister, for providing us this opportunity to delve into some of the issues and concerns that British Columbians may have with respect to the operations of B.C. Hydro, which many British Columbians refer to as B.C.’s crown jewel. British Columbians, I think, are very proud of its success and some of their heritage assets, and certainly, as we look to moving toward a more green economy, the place and the position of B.C. Hydro in our economy as we go forward is just going to be that much more important and focused.
At the start, if the minister could share with us the gross revenues for B.C. Hydro in the past fiscal, how that compares to the previous year, and as well, what the net operating profits are for B.C. Hydro.
Hon. M. Mungall: What I have for the member are the audited numbers. These have been confirmed through the auditing process. For 2018, we had a gross revenue of $6.2 billion. For 2017, $5.8 billion. The net income for both years was $684 million.
G. Kyllo: Thank you, Minister. Would you also be able to share with us what the net revenue to government was in the past fiscal, and what the forecast is for 2018-19? These would be revenues to the province.
Hon. M. Mungall: As I said, for the operating profits, what came to government last year, in 2018, was $684 million. This year…. Now, before the member goes too far down the road, I want to explain the numbers for this year and why they are the way they are. It reads on the balance sheet as a loss of $424 million.
The reason it does is because government has taken the revenue that we normally get from B.C. Hydro to pay off the rate-smoothing account. So we have now paid off a debt that was owed. That was called the rate-smoothing account. The revenue we have generated from B.C. Hydro — we’ve used that to pay down a debt that was incurring interest over time so that we are no longer paying that interest into the future. So our anticipated, our budgeted, net income for the future fiscal years of 2020 and 2021 is $712 million.
G. Kyllo: Just for clarity, when the minister referenced the $712 million, is that in each of the next two subsequent fiscals?
Hon. M. Mungall: Yes.
G. Kyllo: I just want to move into capital expenditures. In the three-year fiscal plan, there are a number of projects that were identified for B.C. Hydro with years of completion between 2015 and 2024. That’s referred to on page 49.
I just want to ask a number of questions of the minister. Of the different projects that are identified, I’m wondering if the minister could share with me, on the capital expenditure plan…. Of those works that were undertaken, did any of those capital expenditures and improvements for those operating facilities result in a net increase in hydro output?
Hon. M. Mungall: Several of our projects have increased B.C. Hydro’s energy output and therefore have also increased the revenues that are able to come into B.C. Hydro. The member, I presume, wants a list, so I’m going to give him the list of what some of the capital projects have resulted directly in, whether you look at it from the generation or the load side, an increase in revenues to B.C. Hydro.
We have the G.M. Shrum units 1-5 turbine replacement that was completed in 2015. We have the Mica units 5 and 6 project that was completed in 2015; the Dawson Creek–Chetwynd area transmission, which was completed in 2015; and the Ruskin dam safety and powerhouse upgrade, which I toured myself. They did a fantastic job, I can say, from personal experience and seeing it myself. That was completed in 2018. All of these would be considered power generation and transmission projects that yielded increased output from B.C. Hydro.
Sorry. On that list, I forgot to include John Hart generating station replacement, which is completed in this year. We have the Cheakamus units 1 and 2 generator replacement — again, to be completed this year; the Bridge River 2 units 5 and 6 upgrade project, to be completed this year; the LNG Canada load interconnection project….
This is a little bit different. Some of those other projects were generation projects. This is what would be considered a load project. We have an increased demand as that construction is going on, so we had to ensure that we had the appropriate interconnection to that. That involved work at various substations and so on. That’s going to be completed by 2021. That will, obviously, result in increased output and therefore increased demand and therefore increased revenue to B.C. Hydro.
Then, of course, the Site C project is a new generation and transmission project that will increase output by 2024.
G. Kyllo: Would the minister be able to share with us what the increase in generating output is for those projects both that the minister referenced and for those that are actually set out on page 49 of the three-year fiscal plan?
Hon. M. Mungall: You’d think with all the number of pages in all the binders we have that we would have that. Unfortunately, we don’t. The reason we don’t is that for several of these projects, because they were upgrade projects, it’s an incremental increase based on percentages. We just don’t have that spreadsheet. Happy to get it to the member as soon as possible. We might be able to come back at it, perhaps on Monday, and I’ll be able to read it out for the member, or we can send it through the building mail system.
G. Kyllo: It certainly would be appreciated if we might have that for this afternoon, because it’s certainly very important as we’re trying to establish the capital expenditures but then also the incremental increase in power-generating output of B.C. Hydro. So I’d certainly appreciate any efforts that could be undertaken to have that ready for this afternoon.
There are a number of other projects that the minister didn’t reference in her answer that are set out, again, on page 49 of the three-year fiscal plan, including, as an example, the purchase of the Waneta dam power expansion. That was a purchase of a 51 percent increase. So that acquisition, I’m assuming, also would have increased the power output of B.C. Hydro. If the minister would be so kind as to provide information, a fulsome report, on the increased hydro generation for B.C. Hydro that’s associated with those specific capital projects for this afternoon.
While we wait for that specific answer, I’m just going to move over.
Just following up on the capital expenditure that was entertained or undertaken by B.C. Hydro on the increased generating output, I also would like to ask the question: if the minister would also be able to provide for us the energy that has actually been purchased through the IPP projects over the last ten years, just on what the incremental increase has been for power that’s provided by the IPP projects in each of the last ten years and what the projections are for the next five years going forward.
Hon. M. Mungall: Before I answer the member’s question, I just want to point out…. He mentioned Waneta dam. Obviously, wouldn’t the purchase of the Waneta dam increase B.C. Hydro’s output? Well, yes and no, because the output is not going anywhere different than it was going before, which is to supply Teck, in Trail, with the energy that they need for smelting various ores — lead and zinc, notably. So the recipient of that energy is staying the same. We wouldn’t consider that increased output because it was existing power. It’s not an increase in overall energy generation, but B.C. Hydro now owns the Waneta dam, as opposed to Teck.
For the numbers around the energy purchased from IPPs, we have fiscals ’17, ’18, ’19, ’20 and ’21 for the member. He asked for ten years past and five years going into the future. We’ll have to get those other numbers to him at a later time. What we have here with us is…. For fiscal 2017, we have 13,644 gigawatt hours. For 2018, 14,354 gigawatt hours. For fiscal ’19, so ending this year, it was 14,631 gigawatt hours. What we’re projecting for fiscal ’20 is 15,449, and for fiscal ’21, it’s 16,040 gigawatt hours.
G. Kyllo: Thank you very much for that answer. With respect to Waneta, I certainly appreciate that there’s no additional capacity created by Waneta. However, I would say that with the purchase of Waneta, that is additional output that has now been acquired by B.C. Hydro. So in B.C. Hydro’s load forecast, they would actually be showing that increased output based on the acquisition of that particular asset.
Now, just moving on, there was a contract that was tendered last year to a gentleman by the name of Ken Davidson. The contract number was GS19MAN0053. I understand that it was a direct award, and I’m just wondering if the minister could share with us what process was undertaken, both in determining the need for the contract to be awarded directly to an individual and if any other individuals or corporations were considered for that work.
Hon. M. Mungall: I know that the issue of Ken Davidson’s direct-award contract and whether or not he was qualified has been an issue for the opposition. I won’t go into my own speculations of why that is or, basically, what I’ve heard from them over the last several months about this. But I want to make sure that everyone is well aware of Ken’s excellent reputation working for governments, no matter what the political stripe was at the helm of the day.
In terms of the direct award, the reason why we came to the need to seek out the information that Ken ultimately provided…. First off, it was identifying what information we needed. As we were doing our phase 1 review of B.C. Hydro, that review’s primary focus was a structural review to identify costs at B.C. Hydro so that we could reduce those costs on behalf of ratepayers.
We are a government with an affordability agenda. We want to make life more affordable for British Columbians. We want to make sure that they can count on the services that they need. That means that we have to make sure that B.C. Hydro is financially sound going well into the future so that British Columbians can rely on that service but also so that they rely on it in a way that’s going to provide affordable rates for them.
As we were doing that review, it became obvious to us that we needed to drill down further on the financials around the IPP program that was put in place by the previous government. There were some serious questions there in terms of its financial impact on rates. We needed to know exactly what those impacts were, and I think British Columbians deserve to know that. When we looked at who would be the right person to get that information, to do the job, who had the skills and the expertise, we didn’t have it in-house.
We had to go outside of government to find that, but we didn’t have to go too far. Ken Davidson has been, like I said, a consultant working for governments, regardless of their political stripe, for a very long time. He also worked for the government of British Columbia in the past, for Treasury Board.
Let me just read off his expertise. Mr. Davidson holds a bachelor of science in pure mathematics and is qualified as a professional accountant. He is a commercial banker by trade, specializing in restructuring and asset realization transactions. He has worked as director in provincial treasury and Treasury Board staff from 1989 to 1997. He created the program evaluation function in Treasury Board and managed that function for four years.
In his role, Mr. Davidson reported directly to the deputy and the minister and was charged with investigating and bringing to resolution issues and concerns raised by cabinet. Mr. Davidson has been a consultant in private practice since 1997 and has been recognized, on master standing offers maintained by numerous provincial ministries, as a qualified consultant in areas including procurement and contracting advisory services, strategic planning, program evaluation, business process improvement and negotiations and evaluation.
I hope reading out Mr. Davidson’s qualifications can alleviate the member opposite’s concern that he has the skills necessary to do the task he was asked to do.
G. Kyllo: Thank you for that lengthy answer. My question was not about the skill set of Mr. Davidson. It was just about the procurement process. If I may, Madam Chair, with all due respect to the minister, if I could just ask again: were any other individuals considered for the work? The minister, by her own words, has indicated that there was not sufficient expertise within the Ministry of Energy and Mines to undertake this work, which I find a little bit interesting.
In any event, when the minister was charged with looking for somebody to undertake these works…. I’m just wondering if the minister would share with us if there were any other individuals that were considered and how the minister was able to determine that the contract award, at $49,500, was good value for money.
Hon. M. Mungall: Before I answer the member’s question, I just want to go back to the Teck issue. I want to make sure that the member is aware of how things are calculated at B.C. Hydro to make sure that we have transparency.
The Teck smelter load is not in B.C. Hydro’s load forecast, for the reasons I said previously. That’s why it was a bit of yes-and-no answer rather than a clear, cut-and-dried one or the other. Just to add to that, the special arrangements were that Teck leased this portion of Waneta Dam to supply the smelter. That’s why it’s not in the load forecast. Teck no longer owns the Waneta Dam, as it did in the past. How the deal was constructed is that B.C. Hydro buys the dam but then leases it back to Teck for the next 20 years. So that’s why it doesn’t show up on the load forecast books.
Then in terms of: was anybody else other than Ken Davidson considered? Certainly. We looked at a variety of people who might have the qualifications. Ken clearly had them. He had decades of experience, and we felt that he had the best skill set to do the task that we identified needed to be done. As is often the case in these situations, government decided to move with a direct-award contract. Time was of the essence, and that’s precisely why you have a direct-award contract.
With that, hon. Chair, I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 11:47 a.m.
Copyright © 2019: British Columbia Hansard Services, Victoria, British Columbia, Canada