Fourth Session, 41st Parliament (2019)
OFFICIAL REPORT
OF DEBATES
(HANSARD)
Thursday, May 16, 2019
Afternoon Sitting
Issue No. 260
ISSN 1499-2175
The HTML transcript is provided for informational purposes only.
The PDF transcript remains the official digital version.
CONTENTS
Orders of the Day | |
Bill 4 — Witness Security Act | |
Bill 7 — Business Practices and Consumer Protection Amendment Act, 2019 | |
Bill 11 — Civil Forfeiture Amendment Act, 2019 | |
Bill 16 — Protected Areas of British Columbia Amendment Act, 2019 | |
Bill 17 — Environmental Management Amendment Act, 2019 | |
Bill 18 — Workers Compensation Amendment Act, 2019 | |
Bill 19 — Energy Statutes Amendment Act, 2019 | |
Bill 20 — Medicare Protection Amendment Act, 2019 | |
Bill 21 — Forest and Range Practices Amendment Act, 2019 | |
Bill 23 — Land Owner Transparency Act | |
Bill 24 — Business Corporations Amendment Act, 2019 | |
Bill 25 — Coastal Ferry Amendment Act, 2019 | |
Bill 26 — Financial Services Authority Act, 2019 | |
Bill 27 — Ticket Sales Act | |
Bill 29 — Miscellaneous Statutes Amendment Act, 2019 | |
Bill 31 — Police Amendment Act, 2019 | |
Bill 32 — Protected Areas of British Columbia Amendment Act (No. 2), 2019 | |
Bill M209 — Business Corporations Amendment Act (No. 2), 2019 | |
Proceedings in the Douglas Fir Room | |
Proceedings in the Birch Room | |
THURSDAY, MAY 16, 2019
The House met at 1:34 p.m.
[Mr. Speaker in the chair.]
Orders of the Day
Hon. M. Farnworth: In this House, I call committee stage on Bill 14, the Heritage Conservation Amendment Act. In the Douglas Fir Room, I call continued committee stage debate on Bill 19, the Energy Statutes Amendment Act. And in Committee C, the Birch Room, I call continued debate on the estimates for the Ministry of Health. If those were to wrap up, then it would be the Ministry of Attorney General estimates.
Committee of the Whole House
BILL 14 — HERITAGE CONSERVATION
AMENDMENT ACT, 2019
(continued)
The House in Committee of the Whole (Section B) on Bill 14; J. Isaacs in the chair.
The committee met at 1:39 p.m.
On section 14 (continued).
M. Bernier: Thanks to the minister. In section…. Actually, I’m not sure where in this bill, but section 14 looks like it might be the appropriate place.
It was my understanding, and I’m just trying to find it in here…. When I look through the Peace region, part of the Elk Valley and other areas where we have some of the majority of the paleontological finds in the province of British Columbia, I’m wondering if the minister can point to in this bill, under the heritage protection, if or where we have protection for those particular finds that we have in British Columbia.
Hon. D. Donaldson: Paleontological finds are not automatically protected but can be protected under a formal designation, which is the way they’re protected under the current act and the way they’ve been protected in the past. So those kinds of formal designations can happen on private land under section 9 of the act that we covered already and under Crown land under section 11.1 that we covered already. That’s under the newly formatted sections of the act under these amendments.
M. Bernier: Sorry. I know the minister…. If I heard him correctly, it’s not specific. This is one of the, I guess, questions I have. This is something that most of the local governments, communities, regional districts around the province that have these specific, I would say, assets have been asking for.
When you look at, right now, I believe, within this minister’s purview and jurisdiction, everything appears to be more of a handshake deal if it’s on Crown land. I’m curious on what the thought process was when this bill was being drafted, why it’s not in here. Or is there something that’s going to be applied maybe later in regulation to actually protect this provincial asset, which is of huge significance.
As the minister knows — I believe he knows — in the northeast, for instance, we have a UN designation as a global geopark because of these paleontological finds, some that are very unique and some of the only specific fossil finds that we’ve found anywhere in the world. So we get that designation because of it.
In order to keep that UN designation, which the province has been very proud about, we have to have some form of regulation legislation in order to protect these finds. One of the challenges that we have right now is that there is nothing stopping someone from going into my area, the Elk Valley, and taking an amazing asset, fossil find, and transporting it out of the province, whether it’s for financial gain or even just into a museum to showcase. The thought is — and I hope the minister agrees — that these are B.C.’s assets and we should be showcasing and touting them.
Back to the point, I assume I heard the minister right when he said there’s nothing specific. Is there a way through regulation, if this bill passes, to put something in to protect these fossils that are mostly in Crown areas around the province?
S. Chandra Herbert: If I might make a request for leave to make an introduction.
Leave granted.
Introductions by Members
S. Chandra Herbert: I want to welcome students, teachers, parents from my neighbourhood, from King George. Of course, they’re represented by myself, but they live in the West End, Coal Harbour, downtown Vancouver and from across Vancouver, coming down to King George. It’s a great pleasure for me to be their representative, to stand on behalf of themselves. They can’t vote yet, but they certainly have opinions. I look forward to meeting with them after they view this proceeding — to hear them so that I can better represent them as their member of this Legislature.
Please welcome King George to the House.
Debate Continued
Hon. D. Donaldson: What is or can be protected under the act is not changing. There’s no automatic designation or no automatic protection for paleontological discoveries or finds or artifacts, I guess. However, under section 11.1, they can be formally protected on Crown land.
M. Bernier: I appreciate the minister’s comments, and I read that in here. I guess my question is: is there any intention to…? When the minister is saying it can be….
One of the things that we’ve been trying to get in legislation, or through regulation, even, is the designation for paleontological finds to actually be identified as a heritage find in the province. I was always told, and the minister can correct me if I’m wrong, that under this Heritage Conservation Act…. That’s where I was told would be the best place.
Originally, we were trying to see, you know, if there is a better way to do this — through, maybe, a different act, a different regulation specific to paleontological finds. But under 12.1, when it talks about heritage protection…. I mean, everything — it’s in 12.1, under section 14 — talks about how we should be protecting heritage finds.
I guess my question is, back again: is there an intent by this government or by this minister, even though it’s not specific in wording, because he said just now that it can be…? Is the intent that it will be, after this act passes, able to bring in designation around paleontological finds as well?
Hon. D. Donaldson: The intention is to protect paleontological resources as it is now, using a formal designation. So if there’s a fossil discovery, then the ministry is able to go and inspect that discovery and to assess the significance of that discovery. Then depending on that, a temporary protection order under the existing act can be issued until the significance of that discovery is assessed. If it’s decided that it’s a significant site, then under the existing act as it is now, a formal designation can be created.
M. Bernier: I appreciate…. I’m bringing this up, obviously, as the minister is aware. But I guess I should backtrack a little bit and quantify the views that I hope to see as we go forward.
Obviously, the last thing I want to see is back-country areas shut down because of paleontological or heritage sites. What we hope to see, though, is that relationship — created through local government, industry, provincial government, as well, whether it’s regulation or in the act — to make sure that these significant finds are protected.
The minister, if he’s ever travelled to places like the Museum of Natural History in New York, if he’s gone to Drumheller in Alberta — places that showcase amazing paleontological resources and finds — what he will notice is a lot of those are from British Columbia. The reason why I bring this up is I think we’re missing out on a huge opportunity here.
This isn’t about necessarily protecting the land base. It’s about making sure that we have opportunities and policies to make sure that when something is found, we can actually benefit from it. The people of B.C., the local governments, can benefit.
If the minister hasn’t been there, I encourage him to stop by Tumbler Ridge specifically. This all started as volunteer-based. We have an old school that was closed down that is now turned into a museum. Volunteers working with partnership and sponsorship from industry — in the coal-mining industry specifically — have worked really closely with the communities and the volunteers to set up an amazing resource that they have there, as well as not only the discovery centre.
They’re doing all of the paleontological research. We have some of the only paleontologists in British Columbia based in that region because of the immense finds.
I guess it’s that tricky area. We’ve been very lucky — and I’ll use the word “lucky” in a sense of good stewards — in the fact that the industrial partners we have up in the area…. If they found a find or something that they think might be of historical value of any sort — whether it’s under the heritage act, as it is right now, or their due diligence as good partners in the area working with the volunteers — they’ve done the right thing and stopped whatever activity they’re doing, called in the experts that we’ve been able to get.
Because of that, again, these finds that we have, have now been recognized globally, without regulation or policy. But what has happened, as I said at the onset of this time, was that there’s nothing guaranteeing that those stay in B.C.
Again, I just want to…. I guess, if the minister has given some answers that it’s not in the act, it’s not something, obviously, I’m wanting to put an amendment on or anything. It’s more of a comment, then, to the minister that as this goes forward, I invite him, again, up to the region for him to see firsthand, and also through the Elk Valley and other areas.
The minister would obviously note that where most of these finds are, are in areas where we have active mining operations. Specifically, because you’ve got historical coal beds, which typically, also because of the geology, bring out a lot of the time — through about 100 million years ago, where these species were on earth.
I’m hoping that the minister will take note of the fact that we want these assets to stay in B.C. We want support for our local governments who are doing the best they can to promote these assets with no help or support from government. Actually, I will quantify that again by saying that’s not specific to this minister or this government. It’s something I’ve been working on for a while, and I think it’s time that we get those supports in place.
Does the minister look at anything, then, after this bill to try to work with local governments around these finds to actually identify them more specifically? And can he, maybe, tell this House what his plans are going forward on that?
Hon. D. Donaldson: The member covered a lot of ground there, but I think the essence of the comments was the importance of these finds in B.C., not just for the natural history that they represent but the opportunities for local communities. I take those comments to heart. The bill that we’re considering here does not contemplate that blanket designation through regulation or otherwise. I think the member, in the beginning of his comments, pointed out what could be some unintended consequences of that, as far as access to the back country and other factors.
There’s still, as I said, the ability to create a formal designation. If a site has been formally designated — and the act has permitted this since 1994 — then if artifacts are removed, people can be charged. If they’re taking them out of the province from a formally designated site and transporting them out of the province, then that’s an offence.
As far as the member’s comments about how to work through some of the concerns that he has voiced on the future, I’d be more than happy to meet with him and talk about some of the possibilities that he has in mind. As well, I’m always happy to meet with local governments who have those concerns, to see if there are solutions in the future that go beyond what we’re contemplating today.
J. Rustad: When last we were speaking about this, on section 14, we were talking about the requirement to pay for an order that is being done. I’m just curious. Under section 14, 12.3(3), the comments at the bottom there: “…the minister may require the person purchasing, subdividing, developing or using the property to undertake or pay for the heritage inspection or heritage investigation.” But under 12.3(5), if there is damage done, it’s the government that would be required to pay or compensate for any damage that might have been done to the property.
I’m just curious as to why the difference there between government asking a proponent to pay on one hand, but if something is done, then government is offering to pay for any particular liability or damages that are created.
Hon. D. Donaldson: Just to clarify, under section 12.3(3), the minister may order a person to pay for a heritage inspection. And then under 12.3(5), if the person has been ordered to undertake the inspection and that person has contracted somebody, or during the course of the inspection that has been ordered, damage occurs, then the government is responsible for that damage, liable for that damage, because that order was issued by the government in the first place.
J. Rustad: So the order was issued by the government. The individual or group has to pay for that order, but if there are damages done, then the government is liable for the damage that has been done.
The reason why I’m asking, as well, and we’ll get to this under section 24, where it says that to preserve…. This is the issue of if the minister considers the property protected. The minister “may order the owner, subject to requirements, specifications and conditions that the minister considers appropriate, to preserve the property” at the expense of the government.
I know that we’re not at that section yet, so I’m not asking a question specifically about that. But we’ve got a case here, where, if something is found and protection is put in place, government is ordering that to be preserved. Government will pay for that. We’ve got a case where if there are damages done, the government will pay for that. But the individual is still required to pay, if the ministry asks that individual to, for the actual inspection process.
I’m just wondering why it’s not consistent all along. Why wouldn’t we have the situation where, if an order is put in place to do an inspection, there’d be an expectation that government would pay for that order?
Hon. D. Donaldson: I would suggest to the Chair that we’re on section 14, and there is no inconsistency in section 14 between 12.3(3) and 12.3(5). If the member wants to bring up inconsistencies that he feels exist around section 24, we can deal with that when we get to section 24.
J. Rustad: It wasn’t a matter of inconsistency. The question directed to the minister is: why is the minister asking individuals to be burdened with that cost — or potentially, they may be burdened with that cost — when in other circumstances, the Crown accepts its responsibility?
Hon. D. Donaldson: This section, 12.3(3), is if…. The minister may — it’s discretionary — require a person purchasing, subdividing or developing the property to undertake or pay for a heritage inspection. If a proponent is developing the property, the minister may require a heritage inspection and may require the developer to pay for that. If damage occurs during that undertaking, the government is liable for that damage because the government ordered the developer to undertake that heritage inspection in the first place.
J. Rustad: I guess I’m not stating the question clearly enough. Perhaps I’ll try it a different way. Does the minister feel it’s appropriate that, from an order from the Crown to undertake work, the individual or party responsible should be required to pay for that order?
Hon. D. Donaldson: As we’ve stated before around this section, this is no change from the existing act. It’s a discretion for the minister, who “may require the person purchasing, subdividing, developing or using the property to undertake or pay for the heritage inspection….” This is consistent with the proponent-pay policy that we see in other legislation, such as in the Environmental Assessment Act.
J. Rustad: I’d love to get into the Environmental Assessment Act, but that isn’t what we’re here to debate.
Maybe I should ask this question first before we go any further. Have there been any orders under this section of the act since its introduction in the Legislature in 1994? How much was the cost to the individual or group that that order was given to, in terms of carrying out the inspections?
Hon. D. Donaldson: There have been orders since 1994 of the type that is referenced in this section. As far as what have been the costs of those orders to those developers or individuals — the persons purchasing, subdividing, developing or using the property — they’re not required to reveal those costs to the ministry, so we don’t have an accurate figure on how much that has resulted in costs to developers. But as I already answered in a previous question, costs for these kinds of inspections can vary from hundreds of dollars to tens of thousands of dollars, depending on the scope and scale and the geographic location where the inspections take place.
J. Rustad: As I mentioned last time, when we were discussing this the other day, the cattlemen have come and expressed concern with regards to having to pay. They had a recommendation that the province establish a process to fund these sorts of inspections and assessments that are required to be done. I have heard from developers. I’ve heard from individuals that have expressed concern.
For example, there is an area where I live, at Cluculz Lake, that has a designation as a potential heritage site. People have said: “I want to build. I want to put in a driveway” or “I need to build a shed on my property” or “I want to do some modifications to the home.” The cost they had estimated ranged anywhere from $30,000 to $80,000 for an individual, for a house on a lake, to do something simple in terms of a modification to a property. And because these areas are not identified — they’re not necessarily out there on a map — it’s buyer beware. This is a real challenge for individuals as they buy a piece of property, and they want to do something. Or maybe they had this property for years or in the family, and they wanted to do something on the property.
I know we all have the desire or interest in terms of wanting to protect the values that are of an archaeological nature. You may think of $30,000 or $50,000 on the Lower Mainland, where housing prices are $1 million, as not being a lot. But in a place like Cluculz Lake, where I live, where housing prices might be $250,000, you’re talking about potentially up to a third of the value of the home and property having to be spent on an archaeological assessment to maybe find something or maybe not find something in terms of this.
Now, that isn’t necessarily an order as per this section, but it speaks to the issue that I’m trying to get at, which is: this act creates a burden, whether it’s on property owners or people that want to do things, whether it’s on private land or otherwise, that is, of no fault of theirs, an interest to the province.
The province has said it wants to protect its heritage, and I don’t disagree with that. I think we need to protect the heritage. But there needs to be a mechanism, because these kinds of costs could lead to a situation where people don’t want to report because they don’t want to have to go through this stuff. I mean, that would be breaking the law, and I’m not suggesting anybody should do anything like that, but I’m concerned that you may end up in a situation where you’re missing valuable archaeological information or artifacts simply because the cost becomes too prohibitive for an individual to be able to proceed. So it’s a real concern.
For that purpose and for that reason, I’m suggesting an amendment. I’d like to move the following amendment to this section. There’s only small change, but I’ll read through the whole section which starts off with 12.3(3):
[SECTION 14, by deleting the text shown as struck out and adding the underlined text as shown:
12.3 (3) If an order for a heritage inspection or heritage investigation made under subsection (1) relates to
(a) alienation of government-owned property,
(b) a public work authorized to be undertaken under an Act,
(c) the extraction or harvesting of resources from land,
(d) the subdivision of land, or
(e) changes in use or development of land,
the minister may require the person purchasing, subdividing,
developing or using the property to undertake or pay
forthe heritage inspection or heritage investigation and
have all related costs reimbursed by the
government.]
On the amendment.
J. Rustad: The piece that is changed is taking out the “or pay for” and adding in at the end “and have all related costs reimbursed by the government.”
The intent, once again, with moving this motion forward is that it is a government responsibility for heritage in the province of British Columbia. We recognize that. We have an act that is in place to protect the heritage values. It shouldn’t be a burden upon individuals who, by no fault of their own, may find themselves in a situation where there’s an order in place to investigate the potential heritage value.
By putting this in, it creates ability for people to be able to come forward with information willingly because they know it’s not going to be a significant financial burden. Quite frankly, it is the responsibility of the Crown, so that’s henceforth why I’m moving this amendment.
The Chair: Could I suggest a two-minute recess until we get a copy to the minister?
The committee recessed from 2:13 p.m. to 2:15 p.m.
[J. Isaacs in the chair.]
The Chair: The question is the amendment to section 14 proposed by….
Member for Nechako Lakes.
J. Rustad: Thank you, Madam Chair. I think the minister was going to be responding. You sounded like you were about to call the question. I just wanted to be careful, because there may be some discussion about this before we get to the question.
The Chair: Fair enough.
Hon. D. Donaldson: Before we call the question, I would just say that the consequences that are outlined by the member in this proposed amendment could have significant financial costs to the government, so we’re not going to be able to contemplate this amendment at the time.
For instance, on looking at it, it would require the government to undertake all costs related to a developer proposing a major development if the minister has ordered that a heritage inspection has to occur as part of that development. We can’t support this amendment because of the significant potential cost to government.
J. Rustad: I find that somewhat interesting from the perspective of the minister talking about the potential of a significant financial burden upon government. What do you think that would be to an individual, in terms of this going forward — as individuals that are out trying to do something?
I get that there may be a situation where there may be some talk with regards to a developer and a large product and that side of things. But if somebody is just trying to put in a shed, and they have to incur a significant financial burden, that is not fair. It’s not right.
It’s the province that values the heritage components that are out on the land base. It’s the province that has asked for this. It’s the province that should have that responsibility to pay.
If the minister is worried about a significant contractor, a large developer doing a project, perhaps there’s a way to modify this. But we need to find a way so that we aren’t overburdening individuals in particular, whether it’s ranchers or others, with the costs associated with doing this type of project, and create a potential fund or some other mechanism where government can help or cover the costs associated with this.
I’d ask if the minister is interested in potentially even standing down this section, assuming the amendment does not fail, to give an opportunity to be able to work collaboratively to come up with a process that could see individuals not having to cover these sorts of significant costs.
Hon. D. Donaldson: We’re not considering this amendment in its current form because of the potential implications, which are unaddressed, to significant financial costs to the government.
The member talks about some other examples beyond major development. We’ve already covered the ground around fence posts and ranchers, where, if there is low impact to potential sites, they might not even be required to get a permit. There could be blanket exemptions, depending on specific circumstances.
The member brings up an example of a shed. If it’s not a ground-altering project, then a shed could be permitted or not even require a permit, depending on where and the circumstances. If there were potential impacts, then the ministry can work with the proponent to create mitigative measures, so we’re not going to be entertaining this amendment at this time.
J. Rustad: It’s a shame. The minister knows that if you’re putting in any structure, whether it be a septic tank or a shed or something else, you pretty much have to lay some foundations of some kind or put a hole in the ground to be able to do these things. If that is within an area that has potential archaeological values, there’s a potential issue with doing that.
It’s unfortunate the minister won’t consider the amendment. We’ll let the amendment go forward for a vote, and then I’ll ask the minister about potentially other options that we could consider.
Amendment negatived on division.
J. Rustad: Well, like I say, it is disappointing. Would the minister consider, like I mentioned earlier, potentially standing down this section to find a way to create a bipartisan approach, a mechanism by which individuals — small projects — would not have to burden the cost of such inspections or orders?
Hon. D. Donaldson: This section is a discretionary section. It says that the minister may order a proponent, a person “purchasing, subdividing, developing or using the property to undertake or pay for a heritage inspection.” It doesn’t say it has to happen. It’s discretionary.
I’ve already discussed some of the measures that can be taken into consideration, site-specific, and how those can be applied in cases where individuals are bringing either the construction of a shed or fencing. So I’m not willing to stand down on this section.
J. Rustad: Moving past section 14 on 12.3(3), looking in particular at 12.5(3): “A permit does not authorize the permit holder to enter property, or to make any alteration to property, without the permission of the…occupier.”
Later in the act, when it talks about entry and inspection, it talks about being able to go onto property. I’m just wondering why, under the permit requirements and conditions, it does not allow the authorization to enter onto the property, in particular, without permission of the owner.
Hon. D. Donaldson: This section 12.5(3) refers to a permit holder — a site alteration permit, for instance. It just gives the permit holder the ability to do the site alterations, not to enter property.
We’ll get what the next section that the member referenced…. When we get to that, that’s regarding not permit holders but natural resource officers.
J. Rustad: I’m just curious. How does one go about getting a permit to undertake work on a piece of property that isn’t their own?
Hon. D. Donaldson: An example of that would be Crown land.
J. Rustad: Okay. That’s an interesting example. So the Crown has issued a permit to go onto property, and they have to get permission from the Crown to go onto the property? Is that what the minister has just said?
Hon. D. Donaldson: The permit authorizes the permit holder to conduct an activity, and that’s what the permit is strictly referencing. To access the property in order to do that activity requires permission of the property owner. That’s what this section is about — that the permit issuance for the activity doesn’t automatically grant the permit holder access to the property or permission to enter the property.
J. Rustad: I’m just curious about this again. I need some further clarification from the minister, if I could. How does an individual or a group organization receive a permit for an activity on somebody’s property, without their permission to do that? I’m not quite sure. I’m not sure exactly what this is trying to get to.
Assuming you’ve got somebody who is going to do some construction or some work or a road or whatever it may be, there would have been some sort of agreement in place to get on the property. Otherwise, they would never have been able to get access to a permit. So I’m just curious. I’m confused with the minister’s answer, so perhaps the minister can provide some more details.
Hon. D. Donaldson: Again I want to emphasize this is the current wording from the act. It’s not changed under the amended act that we’re considering today. This is simply to provide legislative clarity that because you hold a permit doesn’t mean you necessarily can enter the property.
An example might be that a property owner might not hold the permit because the permit might require some specific recognized skills that are required under archaeological training. So an owner would not be able to access that permit.
The heritage branch, under this act, or the government, the ministry, would issue the permit to a qualified individual. That’s legislative clarity. In no way does that allow the professional entry to the property, unless it’s under the authorization of the property owner.
J. Rustad: To the minister, thank you for that explanation.
[R. Chouhan in the chair.]
I want to continue moving on through section 14, in particular, looking at No. 12.7 under section 14: “Amending, suspending or cancelling permits….” Under (2), it says, “The minister may take any action under subsection (1) if the minister has reasonable and probable grounds to believe any of the following,” and it goes through a list of a number of things.
Where would the minister receive information that would lead the minister to have probable grounds to believe that any of those followings may have occurred?
Hon. D. Donaldson: The probable grounds. The member was asking how the minister would get information around probable grounds. Well, that would come from expert witness testimony. For instance, an archaeologist could be on site monitoring the work and inform the ministry that there has been a contravention. That would be probable grounds.
J. Rustad: I would recognize that — if there was such oversight that was happening in an activity and it was reported. What I’m concerned about in this particular section is if a member of the public at large, of no particular skill set, were to report something to the minister, whether that would be giving the minister probable grounds to believe that any of the following had occurred.
Hon. D. Donaldson: Obviously, part of the act is to ensure the protection and conservation of heritage values. If a person reports concerns to the ministry and, therefore, to the minister, it would depend on the circumstances — whether they had, for instance, photographic evidence or otherwise. Those are just examples. If it’s deemed that there’s a possibility, then the minister could ask the ministry to send a qualified individual out to inspect the site to determine if probable grounds are there.
J. Rustad: Is there any penalty or other consequence for somebody making a false claim with regard to potential activity that may be happening or potential archaeological value that may be there?
Hon. D. Donaldson: There’s no penalty in this act. There are other forms in other acts that would qualify for Criminal Code mischief. Staff are well versed in working with individual members of the public. I’m sure that the member’s constituency assistants know about what can sometimes become people who are continually registering false assertions. The staff is well able to understand legitimate, serious concerns from those that aren’t as valid.
J. Rustad: The situation, in particular, I was thinking about was a situation where there were some artifacts that were found on the Coastal GasLink project which were likely had been placed there after the fact and then, of course, reported through to the ministry, looking for a way to be able to stop a project. The concern, of course, is that that obviously could potentially have financial consequences or other consequences to a project that might be moving forward. I just use that as one example.
In cases like that, obviously, there’s a requirement — or the minister may, at his discretion, decide — to do a follow-up and look at it. That’s a situation that could be quite serious, particularly for a small developer or for other types of projects where there may be some contentious issues that are going on. That’s just why I was considering that.
If the minister thinks that it’s covered off under Criminal Code activity, then perhaps that’s good enough. But I want to just ask the minister for some clarity around that so that if one of those circumstances does happen, there’s some clarity in terms of how this act would be applied.
Hon. D. Donaldson: The member brings up and makes some statements about a specific situation. I’m not going to address those specifics because there have not been the determinations that he has outlined. However, I am willing to discuss the broader question that he addresses of how the act deals with considering probable grounds when it comes to information reported by members of the general public.
Again, I’ll say that once those concerns are registered with our ministry, staff assesses those concerns and any evidence presented and then can send a qualified staff member from the ministry to the site to investigate the report. There are opportunities to address the concern if it is found to be valid. In the section we’re discussing, 12.7(2), it outlines what actions can be taken if it’s deemed by the minister as probable grounds. If there are cases where the situation warrants it, then investigations can lead to violations under the Criminal Code. That’s often up to law enforcement or even the proponent.
Sections 14 to 17 inclusive approved.
On section 18.
Hon. D. Donaldson: Before we get to the member’s question, I move the amendment to section 18 standing in my name in the orders of the day.
[SECTION 18, in the proposed section 15.1 (3) (d) (ii) and (iii), by deleting “or control of” and substituting “or control, of”.]
On the amendment.
The Chair: The member on the proposed amendment.
J. Rustad: If we could take a two-minute recess, I just want to read the amendment that the minister is putting forward. I haven’t seen it yet. So five minutes here.
The Chair: The House will be in recess for ten minutes.
The committee recessed from 2:40 p.m. to 2:48 p.m.
[R. Chouhan in the chair.]
Hon. D. Donaldson: I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 2:49 p.m.
The House resumed; Mr. Speaker in the chair.
Committee of the Whole (Section B), having reported progress, was granted leave to sit again.
Report and
Third Reading of Bills
BILL 19 — ENERGY STATUTES
AMENDMENT ACT,
2019
Bill 19, Energy Statutes Amendment Act, 2019, reported complete without amendment, read a third time and passed.
Hon. D. Donaldson: I call estimates for the Ministry of Attorney General in the Douglas Fir Room and continued committee stage of Bill 14 in this chamber.
Committee of the Whole House
BILL 14 — HERITAGE CONSERVATION
AMENDMENT ACT, 2019
(continued)
The House in Committee of the Whole (Section B) on Bill 14; R. Chouhan in the chair.
The committee met at 2:51 p.m.
On section 18 (continued).
Amendment approved.
On section 18 as amended.
J. Rustad: I’m curious. Through this section, there are fairly sweeping powers that are in here in terms of entry and inspection where an order’s been put in place. I’m just wondering if this lines up with the Criminal Code and the authorities that have been enacted for RCMPs for peace officers.
Hon. D. Donaldson: I’ll actually read to the member the intent of the change in this section, provision. I believe that will help to answer his questions. This new provision brings the Heritage Conservation Act into alignment with enforcement provisions in other natural resource legislation such as the Forest and Range Practices Act, which provides these powers for the Forest Act and Range Act, the Environmental Management Act, the Wildfire Act and the Water Sustainability Act.
Those are just a few examples of natural resource officers having the provisions that are being outlined in this amendment. Of course, these were drafted by legislative counsel to ensure that they adhere to constitutional law.
Section 18 as amended approved.
Section 19 approved.
On section 20.
J. Rustad: Just a quick question on section 20.
In 16.1(1), it talks about a “stop work order that prohibits any alteration of the property for a period of up to 120 days.” Is that standard with other acts that may see similar types of orders being put in place?
Hon. D. Donaldson: The 120 days that’s referenced in this section 16.1(1), under stop-work orders, is consistent with the current act. There’s other natural resource legislation that has stop-work order provisions as well. A couple of examples are the Wildfire Act and the Forest and Range Practices Act. Those periods of time vary. That isn’t necessarily the same as the 120 days, but there are stop-work order provisions in other acts as well.
Sections 20 to 23 inclusive approved.
On section 24.
J. Rustad: I referenced this earlier with regards to 21(1), which talks about the expense of the government with regards to preservation intervention. Perhaps I can give an opportunity for the minister to explain why, and with this particular section, it’s appropriate that government would pay for this action.
Hon. D. Donaldson: This is in reference to damage or deterioration that may be happening to a designated site or a site that’s outside of the proponent proposing something under site alteration or outside of an archaeological investigation. If there’s some kind of natural erosion that could be damaging or deteriorating a designated site on a property, then in order to preserve the property, it can be done at the expense of government.
J. Rustad: Not to belabour the point, but in the discussion we had under section 14, under 12.3 was an order by government to do an inspection in case there was an issue, and here we’ve got an order for a further action should there be potential for damage and deterioration.
Once again I’m asking: what is the difference? Why is government paying in this case, where in that case the government was not paying? Sorry. To be clear, government may not pay, of course, because it is at the discretion of the minister — back in the previous section.
Hon. D. Donaldson: This section — I believe it’s section 24 that we’re on — is in reference to immediate temporary protection for the site or the objects on the site. It’s not in reference to archaeological impact assessments, which the previous section was.
In the previous sections, we talked about a minister being able to order an archaeological impact assessment. If, during the activities of that assessment, it’s deemed that further damage or deterioration may be occurring, then the minister may require the property owner to take measures around preservation. The example we had with that in previous discussions in this committee stage was a tarp being put in place.
This section that we’re referencing right now, section 24, is about being able to take actions to prevent further damage or deterioration. An example is if natural erosion is occurring and it’s impacting a designated site on private property. Then it’s at the expense of government to undertake that.
J. Rustad: I do understand that side. But just once again, not to belabour it, you know, there is that fairness factor. In some cases, that fairness seems to be in place, and in some cases, it doesn’t.
With that, that concludes all the questions I have on Bill 14.
Sections 24 to 40 inclusive approved.
Title approved.
Hon. D. Donaldson: I move that the committee rise and report the bill complete with amendment.
Motion approved.
The committee rose at 3:06 p.m.
The House resumed; Mr. Speaker in the chair.
Reporting of Bills
BILL 14 — HERITAGE CONSERVATION
AMENDMENT ACT,
2019
Bill 14, Heritage Conservation Amendment Act, 2019, reported complete with amendment, to be considered at the next sitting of the House after today.
Hon. D. Donaldson: I call the committee on Bill 21, intituled Forest and Range Practices Amendment Act, 2019.
Committee of the Whole House
BILL 21 — FOREST AND RANGE
PRACTICES AMENDMENT ACT,
2019
The House in Committee of the Whole (Section B) on Bill 21; R. Chouhan in the chair.
The committee met at 3:12 p.m.
On section 1.
J. Rustad: Before we start on this, I forgot to say this on the previous bill: just a thank-you. I appreciate the staff and the work that they’ve done on this and on the previous bills. There may be some difference of opinion, but I always appreciate the work that staff do.
On section 1, definitions. I’m actually kind of curious about “ecological community” and “a group of different species occupying a particular area.” I’m just curious as to that particular definition and what the minister anticipates. Why is that a significant component that needs to be in these definitions?
Hon. D. Donaldson: The new definition for the term “ecological community” is added, as the member has pointed out. An ecological community is a group of organisms occurring together in a particular environmental setting. Examples include some of the most imperiled ecosystems in the province, such as antelope-brush and needle-and-thread grasses.
The definition added by this amendment allows the protection tools in the act, the general measure tools, to be extended to ecological communities. Similarly, what exists already in the act is equivalent to the wildlife measures already in the act, as far as extending those protection tools. This definition just provides more clarity around those potentially imperiled ecosystems.
J. Rustad: Under (b), I recognize, from second reading, the desire to take out the range stewardship plans. There are other sections in the act where we could speak about this, but I thought I would give the minister an opportunity right now to provide a rationale for the removal of “or a range stewardship plan.”
Hon. D. Donaldson: Certainly, I would like to address the reasons for striking out range stewardship plans under the definitions section, under 1.1(c), as referenced by the member. He’s right; we can also get into that later, but I will give him the rationale at this point, since we’re in the definitions section.
The rationale is that of the approximately 1,570 range agreements, no range agreement holders currently use a range stewardship plan, given their complexity and additional costs, without significant improvement to the quality of range management. We’re repealing the authority of the minister to authorize a range stewardship plan, which comes later, but it’s consequential to have this repealed in the definition.
It will provide for a single range plan, an example being a range use plan when grazing or cutting hay. So this will simplify regulatory requirements and provide administrative efficiency not only for government but for range agreement holders, which I know was much appreciated by the B.C. Cattlemen’s Association when we met this week.
J. Rustad: I appreciate the minister’s willingness to provide a bit of an explanation under definitions. It wouldn’t be in the normal place where you’d raise this sort of a question, but I thought it might be simpler than many other places in the act where there are changes associated with it.
Just along those lines, I had heard from some ranchers that range stewardship plans were often considered or even developed, in part or in whole, by some ministry staff. Now, I don’t know…. I wasn’t given any examples of that, but perhaps I could ask the minister if he knows of any examples where a range stewardship plan was enacted or worked on within a ministry for a particular client.
Hon. D. Donaldson: There have been range stewardship plans presented in the past to the ministry. An example would be that Judith Guichon had to have submitted a range stewardship plan over tenure that she was using for range. Similar to the forest stewardship plan, a range stewardship plan was required to be submitted by the proponent or the tenure holder. Oftentimes they had to hire a professional agrologist to create one and to submit it to government. It’s not the work of government to undertake these plans.
As noted, there is no longer a requirement if and when this bill receives royal assent. The direction this bill takes in eliminating the requirement for range stewardship plans was supported by the B.C. Cattlemen’s Association and the Guide Outfitters Association of B.C.
J. Rustad: Back to ecological community just for a moment. Something just popped up that I was thinking about. There’s a group of different species occupying a particular area. As the minister knows, there could be, obviously, invasive species that are not native or not normal within an area. Does this definition or that component consider whether or not that ecological community would be required to be native to the area or whether it could be a combination?
Hon. D. Donaldson: Ecological community is an established term in biology. It does not include invasive plants, as the member was asking. These are about imperiled ecosystems in the province. As I said, the examples I gave were antelope, brush and the needle-and-thread grass ecosystems. So it’s about an established biological term. It’s not about invasives.
Sections 1 to 3 inclusive approved.
On section 4.
J. Rustad: I think the minister provided some explanations during second reading. The gist of what this bill was about was to restrict the ability to be able to extend the stewardship plans beyond five years and require them to be done and posted. I’m just wondering if the minister can provide some rationale for the intent — to expand, if he could, on his comments from second reading — of limiting these plans to the five years for a forest stewardship plan with only the option for the small number of either months or a couple years of potential extensions.
Hon. D. Donaldson: I believe the member was asking for the rationale behind this section. There are a couple of reasons for the changes that are reflected in this section. They have to do with, first off, the fact that there’ve been, of late, many changes on the landscape, whether it’s from pests like the mountain pine beetle or larger fires.
After these changes on the landscape through, oftentimes, natural disturbances but to such a large degree, having the forest stewardship plans renewed every five years and resubmitted every five years…. First of all, it allows the public to be better informed about how forest companies are addressing the changes on the landscape that have happened. It allows First Nations and the public to be better informed. So there’s a transparency aspect there.
Also, it allows more frequent review to ensure that the best forest management practices are being applied on the landscape, due to these large-scale disturbances, under forest stewardship plans. The way the act is now, some of the forest stewardship plans have been continually extended. Some of them are ten years old, and some of them are even 15 years old.
J. Rustad: I thank the minister for that. Has the ministry done a cost analysis in terms of what additional costs this may bring to forest companies?
[J. Isaacs in the chair.]
Hon. D. Donaldson: There will be some additional costs associated with now having to submit forest stewardship plans every five years, but we anticipate there is going to be a trade-off there in that there is going to be greater security for tenure holders, knowing that their forest stewardship plans are going to be looked at every five years. With that increased transparency, there is less likely to be opposition from public or FSPs being held up by public concerns when the public is concerned about forest stewardship plans being so long overdue that they haven’t addressed some of the events that have been occurring over the five-year, sometimes even ten-year, period.
So a balance between additional costs. There’s also greater security for those submitting the forest stewardship plans — because less likely for holdups in implementing those plans and less likely because of the transparency factor in opposition from the public, who don’t have the ability to understand what’s going on, on the land base, by a tenure holder.
J. Rustad: We’ll get to section 6, which has the discussion around damages and what have you that may trigger it. I’m curious, though. If there were changes to the landscape because of natural disasters, fires, pests, other types of activities that may happen, it makes sense that there would need to be an updated plan, and I think that’s probably reflected here. But where there are no changes, why would there be a requirement to update the plan when a plan lays out harvesting activities for a longer period of time?
Hon. D. Donaldson: It’s because requiring every five years for the plans to be submitted triggers public review and comment, and it’s part of government’s role to provide opportunities for that public review of forest stewardship plans on Crown land.
J. Rustad: I’m curious. Forestry is a long-term activity. We’re talking about harvesting within an area, through a rotation — 80 to 100 years, maybe 120 years. A shorter rotation sometimes on the coast, in those areas. The activity, of course, is carrying on. It’s not like they’re not going to be logging or they’re going to be increasing logging. It’s logging based on the cut controls.
Without there being significant changes to the area of operations, without there being significant changes to the landscape that’s going on, the public is aware of and obviously engaged with the forest activities, whether it is guide-outfitters or range or mining activities or recreation or other activities within a particular area. All of these things are known in advance. They’re all contacted. They’re all engaged in terms of when a plan comes forward.
Why would there be a need to force everybody to have to go through looking at this every five years if there are no substantive changes to the activity or to the approach that a company is taking within an area? In a way, it would actually, potentially, raise concerns, because people are wondering: “Why am I getting these questions again when I thought I’d just looked at it five years earlier, and there was no substantive change?”
Hon. D. Donaldson: First of all, just in a general sense, certainly more opportunities to avail people of participating in oversight of the forests in their communities is something that I think is good and this government thinks is good. We’d rather err on the side of caution when it comes to the ability of the public to have a look at forest stewardship plans. That’s why this transparency factor and requiring them to be submitted every five years is part of the amendments that we’re introducing in the Legislature.
The member does bring up a good point about: well, what if not a lot has changed in the area covered by the forest stewardship plan? I think he was referring to a natural disturbance. If that’s the case, then the job of redoing and then resubmitting the forest stewardship plan wouldn’t be very onerous.
However, there are other changes that could occur over the five-year period that aren’t related specifically to a natural disturbance. There could be new rulings from the courts around Aboriginal rights and title that become an overarching direction that has to be considered in a forest stewardship plan. There might be impacts from climate change over a five-year period that have to be addressed. There might be ungulate winter range changes over five years that need to be addressed.
This requirement to have a plan every five years, resubmit a plan, is able to cover all those and address transparency so that the public is more aware of what’s going on in the forests that surround their communities.
J. Rustad: Forestry activity requires a significant amount of capital, whether you’re investing in a sawmill or some sort of processing facility. Boards or owners of these companies have to make these decisions based on the reasonable expectation for return; the reasonable expectation of being able to have certainty, particularly in fibre; the reasonable expectation to be able to operate on a land base.
Now, there are, obviously, factors — whether it be government changing the land base because of an agreement with a First Nation, a natural disaster or these types of things — and those need to be factored in. But for a company that wants to invest significant dollars for operating, they’re looking for some security. They’re looking for some certainty, or at least predictability, in terms of the fibre supply, in terms of what they can think going out.
They know the risks, and they have the understanding of issues such as forest health or other types of things. They also know about the uncertainty on the land base because the land question has not been addressed or settled with First Nations.
Adding this layer in of additional reporting, without being able to extend where there are no other changes, adds a layer of complexity. It may create additional uncertainty for companies that are trying to operate on landscape as to whether or not they should make a decision to invest in the landscape.
As the minister well knows, we’re in a very challenging time in British Columbia at the moment for a variety of reasons. The uncertainty that is being created on the landscape, as well as in the markets, has led to many companies holding back on investments. There’s a concern, of course, that this is just yet another piece of uncertainty.
I guess the question to the minister…. The minister said, I believe…. I’m trying not to put words in the minister’s mouth. From what he said a couple of answers ago, he believes that going back and having to redo plans every five years, going back and engaging the public, going back and engaging various stakeholders and stuff on the landscape will add certainty. The argument, I would suggest, is that it will do the opposite.
Does the minister have any performance measures or any other types of way to measure whether or not this type of policy approach of not being able to extend these beyond five years will create a disincentive or uncertainty for companies, at least over the short term, while there’s an adjustment, or potentially even over the long term?
Hon. D. Donaldson: I know that we covered these kinds of discussions at second reading debate. This is committee stage, so if the member wants to address the question in the context of section 4, or address changes that are contemplated in section 4, then I’d be happy to consider the question.
J. Rustad: Well, it was actually in the context of 4. Section 4 is what drops the forest stewardship plans to five years without the possible extension for another five or ten years, which is what, potentially, is creating uncertainty. This is why I’ve asked the question, so I hope the minister would consider the question relevant, associated with section 4.
Hon. D. Donaldson: In reference to section 4, which requires the forest stewardship plans to be submitted every five years, the reason that this increases certainty for those who are providing the FSPs and are required to provide the forest stewardship plans is that it would be in the realm of the public. There would be less opposition to a plan that is reviewed every five years. The corollary of that is there could be public opposition to a plan that has not been updated publicly or publicly viewed for over five years.
This is an ability for the tenure holders to make their harvesting plans explicit on the land base. It helps them in their relationships with the public and First Nations. This act, this new provision, does not speak to tenure. Tenure is for a set period.
Simply put, what’s being addressed in section 4 is how the company will operate on that tenure, and that is through a forest stewardship plan, and a forest stewardship plan is required in order for the company to harvest. By requiring it every five years, it heads off a lot of potential concern from the public if it goes beyond five years and people aren’t aware of what’s planned for the harvesting close to their communities.
It does not, in this section, prohibit an extension. For instance, that five-year plan, under certain circumstances, can be extended. We can give the extension for up to six months if there’s something that is beyond the tenure holder’s control regarding why they weren’t able to resubmit their plan.
Sections 4 and 5 approved.
On section 6.
J. Rustad: This is the section we were talking about, made reference to earlier, with regard to catastrophic damage changes on the landscape. And I’m just curious with regard to this particular section…. As we know, the landscape is dynamic. There are always changes on the landscape. Some of it could be significant, in terms of a large fire; some of it could be relatively minor. What does the minister consider to be catastrophic damage?
Hon. D. Donaldson: Before I begin the part of the answer that relates more directly to the question, I just want to make sure you note in 8(2) that “The minister may order the holder of a forest stewardship plan….” So under this, it’s not a given, but it’s discretionary.
Of course, this is the section related to catastrophic damage. That is left to be decided under the discretion depending on…. It can depend on climate change. It can depend on insect attack. It can depend on fire. But really, the Forest and Range Practices Act was created in order to empower statutory decision–makers at that statutory decision–making level to have the ability to make discretionary decisions about what could be, in this case, catastrophic, because they’re the ones who are in the best position, knowing the local and regional conditions and local and regional concerns of industry and the public and First Nations.
J. Rustad: I’m just curious. What is considered to be within the vicinity of a forest development plan? I understand there may be impacts within a plan, but I’m just curious as to what the minister is considering with that.
N. Simons: I seek leave to make an introduction.
Leave granted.
Introductions by Members
N. Simons: I just want to introduce a class from Presidio Middle School, I believe, from Richmond, California — grade 7s, 25 of them. They’re here visiting with another group that’s coming in later.
I just wanted to say welcome to British Columbia, welcome to Victoria, and it’s nice to have you here.
Debate Continued
Hon. D. Donaldson: This is about managing ecological risk. There could be a number of forest development units within a forest stewardship plan, so what might have an impact on one forest development unit might impact another part. Therefore, that’s the reason for the language around “within the vicinity of a forest development unit.”
An example of this could be fires that run across forest development unit boundaries or nearby, as it says in the plan, the vicinity of the forest development unit — if there are ecological disturbances nearby that are impacting water flow, for instance. These are all what are captured by the language “or within the vicinity of a forest development unit.”
Sections 6 and 7 approved.
On section 8.
J. Rustad: Just for purposes of this discussion, I’m curious: what is the time frame of a woodlot licence plan?
Hon. D. Donaldson: The woodlot licence plan term remains the same as it is in the legislation right now, and that’s a ten-year plan.
J. Rustad: Given the small size and the nature of woodlots in a very specific area base, does the minister consider ten years appropriate? I’m just curious whether the minister considered any change to that — potentially extending it.
Hon. D. Donaldson: I understand that the member typifies woodlots as small. Whether I thought the requirement for a plan every ten years is appropriate…. I know woodlot owners. I know there can be up to 1,200 hectares. However, there are 855 woodlots across B.C., so from that point of view, they’re not necessarily small, and the stewardship role that they play is significant. So we do feel it’s appropriate for a plan to be required to be submitted every ten years, as it is laid out in the act currently.
Sections 8 and 9 approved.
On section 10.
Interjection.
J. Rustad: The member from the Sunshine Coast thinks it’s too late. Maybe it is too late on a Thursday afternoon.
Under section 10, flipping over to 15.3, “Exemption from requirement to publish a forest operations map.” I’m wondering if the minister can explain the rationale for that exemption.
Hon. D. Donaldson: Just to clarify, was the member talking about section 15.1(3) or 15.3?
J. Rustad: What I was looking at was just where it says: “The minister, in writing, may exempt a person from section 15.1 or 15.2 if the minister considers that timber should be harvested without delay because the timber is in danger of being (a) damaged, (b) significantly reduced in value, or (c) lost or destroyed.”
The reason why I ask that question is that earlier there was the need and the potential desire to update plans if there was a catastrophe or if there was damage being done. And here, it’s saying the minister, in writing, may exempt the person if it’s damaged and to carry on. So I’m just wondering about the rationale for the difference between the two, where one is saying that you may need to update a plan and the second is saying to hurry up and go harvest.
Hon. D. Donaldson: Just to give the context under the proposed amendments to this legislation, a forest operations map has to be published by the tenure holder two years before applying for a cutting permit, with approximate locations of the cutblocks and the roads.
If something happens in that two-year period that could result in losing the shelf life of the timber for its merchantability to be used after being harvested, then this exemption gives the minister the flexibility to allow for that harvesting to occur, even if it wasn’t in the forest operations map that was submitted two years earlier.
Sections 10 to 12 inclusive approved.
On section 13.
J. Rustad: Not that I have a question specifically on 13, but just to let you know that I have no other further questions to this bill.
Sections 13 to 62 inclusive approved.
Title approved.
Hon. D. Donaldson: I move that the committee rise, report the bill complete without amendment.
Motion approved.
The committee rose at 4:02 p.m.
The House resumed; R. Chouhan in the chair.
Report and
Third Reading of Bills
BILL 21 — FOREST AND RANGE
PRACTICES AMENDMENT ACT,
2019
Bill 21, Forest and Range Practices Amendment Act, 2019, reported complete without amendment, read a third time and passed.
Hon. D. Donaldson: Could I request a five-minute recess while we get the House Leader and call the next item of business for this chamber?
Deputy Speaker: This House will be in recess for ten minutes.
The House recessed from 4:05 p.m. to 4:20 p.m.
[R. Chouhan in the chair.]
Committee of Supply (Section C), having reported progress, was granted leave to sit again.
Hon. M. Farnworth: In this chamber, I call continued debate on the estimates of the Ministry of Health.
Committee of Supply
ESTIMATES: MINISTRY OF HEALTH
(continued)
The House in Committee of Supply (Section B); J. Isaacs in the chair.
The committee met at 4:21 p.m.
On Vote 31: ministry operations, $20,698,339,000 (continued).
Hon. A. Dix: For people keeping an eye on the debates at home, my many colleagues in the House — I think about 27 MLAs so far — have participated in the debate with respect to the Ministry of Health — in particular, my colleague critics, the member for Kelowna–Lake Country, who’s the opposition critic for Health, and the member for Richmond South Centre, who’s the opposition critic for seniors. We’ve done about 14 or 15 hours of debate. We don’t want anyone to think we’re just starting here now and will end an hour from now. We’ve had a substantial debate on lots of issues.
These are the estimates debates, and I’ll leave the floor to my colleague and friend from Kelowna–Lake Country.
N. Letnick: Thank you to the minister for the 15 hours of debate. We were actually in another room where we were just a few feet from each other. Now we’re at least six sword-lengths from each other, so it’s a different dynamic. I feel like I skipped a couple of grades in school, right? We’ve gone from this little room, skipped the Douglas Fir Room and come to the big House. This is the only big house I ever want to see, by the way. I don’t want to ever see that other kind of big house.
We were actually getting along really well in the other room. Now that we have to scream and yell and shout so we can hear each other, I’m not too sure if the dynamics will be the same, but let’s give it a try.
Since we had a break over the last 3.6 minutes, I thought what I would do is finish off binder No. 1 and come back to drugs in just a sec.
The town of Sidney has problems with physicians. They have five doctors but are told no nurses, so they cannot deliver babies in the area. The medical transportation is an issue. They have no ultrasound, it’s hard to get X-rays and, as I said, no maternity.
No flights for Fort St. John. They need to go to Prince George, and most people need to transport themselves and wait two to three days for emergency evacuation. Obviously, that’s a challenge as well.
Northern Health bus is available, but they cannot afford, in some cases, the hotels required. Their idea is to have a weekly charter to Fort St. John and wanted to know if the minister would be interested in looking into such a solution.
Hon. A. Dix: I think the issues raised by the hon. member, issues especially of transportation between rural and remote communities and major centres…. Sometimes we imagine those centres to be Vancouver, but sometimes, of course, people in the north view communities such as Fort St. John or Prince George as the centre that they sometimes have to go to and sometimes have concerns about in getting access to all the resources.
I appreciate the member raising issues around the community of Sidney, around the concerns around doctors. What I’ll undertake to do is undertake to have a discussion with the president of the Northern Health Authority, Cathy Ulrich, who is an outstanding leader there, to talk in particular about transportation issues.
I think one of the positive initiatives, an initiative that we’ve improved since we’ve become government but was an initiative undertaken under the previous government, was the Northern Health bus that’s helped many communities. But it doesn’t help all of them, and it doesn’t help people in every circumstance. The member makes a suggestion there. I don’t reject it in principle. I just would want to learn more about it. Now that he’s put it on the agenda, I’ll certainly be asking Ms. Ulrich and also officials of Northern Health to respond with ideas.
I think that in general — and the member will know this because we’ve had this discussion on previous days in estimates — issues around travel assistance and travel are some of the most challenging issues in rural health. Over a period of decades, we’ve centralized care in big cities, partly because we’ve improved care, improved the level of care. The result of that has been….
For communities up here in Logan Lake, it means centralizing care in one place. If you’re in Sidney, it means centralizing care in another place. Generally, health systems have responded to the concerns of rural communities by saying that the issue of transportation is a matter of personal cost, not a health system cost, which has actually improved the case for centralization in many cases.
I’m interested in what the member is suggesting. I would guess it comes from the community. And I would be interested in any material that he has. We’ll be in touch. I know they’re watching on TV now in Northern Health, so I’ll be in touch with them to talk about issues around that community, and I look forward to meeting with people in that community at some point in the future.
N. Letnick: Thank you to the minister for his positive response.
Just for the record, it might help to say who was leading in this particular initiative. Mervyn Lougher-Goodey is a councillor with the town of Sidney, and also Bill Streeper, mayor for the Northern Rockies regional municipality. That might help in the communication. Feel free to tell them I sent you, and feel free to do so prior to UBCM in September, because if he doesn’t, they’ll probably want to make one of those many appointments with the Minister of Health. I think the Minister of Health gets as many appointments as the Minister of Transportation. I’m not too sure who wins that pool, but quite close.
I look at all the things that we’ve covered over the last three days: the health budget, the regional health budget, MSP beneficiaries, people moving in from other provinces, the estimated federal health transfer analysis and GAAP, the office expenses of the minister, the status of Mills Memorial Hospital, medical school spaces, resident spaces, doctor resident remuneration, physician supply, interprovincial mobility and foreign immigrants, violence against nurses, LPNs, chiropractors’ scope of practice, urgent care centres, primary care networks, medical homes. We talked about concerns from family doctors, what defines an attached patient, a non-attached patient.
We looked at non-surgical wait-lists for northern communities, particularly in long-term care, surgical wait times — maybe that’s, probably, the only time we saw a little friction in the room, if I might say that; we’ll see — DBS surgery, bariatric surgery, organ donation, MRI strategy and results, pain management. And that was just the first binder. It’s just amazing how much we’ve covered over the last three days. We’re coming down to the last 50 minutes.
With that, I’d like to ask, on behalf of seniors — the Canadian Association for Retired People, or CARP, and in this case, CARP British Columbia…. Jeff Cowan and Beverly Baxter had a request for the government to look at funding some important drugs.
They represent 74,000 members in the province, approximately, and, of course, there are way more than 74,000 seniors in this province who would benefit from this. Currently MSP pays for the standard dose of influenza protection, but the high dose of influenza vaccine is four times more powerful and, in fact, has been recommended as the vaccine seniors should have by the National Advisory Committee on Immunization in 2019. The challenge, of course, is that seniors have to pay for it. The average retail price is $90.
[R. Chouhan in the chair.]
Prevnar 13 is the best vaccine for pneumonia, but seniors also have to pay for that, and the average price, I believe, is $120. I say I believe, because I did my three-hole punch, and it went right through the number. So maybe his staff can confirm if it’s $120. The Shingrix vaccine is the best possible vaccine for shingles, and of course, seniors have to pay for that. The average price is approximately $330.
Given that the average cost for a three-day stay in a hospital in B.C. to treat lab-confirmed influenza was about $15,000 in 2017, the investment in all vaccines would be offset by keeping just 5,800 patients from getting influenza in the first place. Their research from the UBC college of pharmacy says that some 16,000 folks required treatment last year alone.
The ask is simple: could all three be made available to seniors at no charge to them, just like it is in Ontario and several other jurisdictions?
Hon. A. Dix: There is a process, both nationally and in B.C., to assess the value of vaccines — to assess them and their efficacy compared to one another. I think it’s fair to say in the case…. The member said that in some jurisdictions, some of these drugs are covered. In the case of shingles, for example, it’s not Shingrix. I do not believe it’s covered anywhere in Canada.
The one province that has coverage, in terms of vaccine coverage, is Ontario. It’s for a drug called Zostavax. They estimate, in Ontario, that that drug…. I think Zostavax has a 50 to 55 percent efficacy rate, if I recall. The cost in Ontario of that program is $68 million.
What we’ve done and what we continue to do is to assess the value of vaccines every year, including flu vaccines, including high-dose vaccines, including shingles vaccines and others. We review those issues of cost every year, and we base that in the same way that we review the prescription drugs and other medications. We get recommendations nationally and then here in British Columbia, and we make decisions accordingly.
I know that there is a lot of interest, amongst senior organizations in particular, in expanding coverage for a variety of vaccines. I would say not just in seniors’ populations but in other populations as well. There are also, as the member will know, in some cases, with some of the vaccines, very extensive advertising campaigns that you can see in areas, essentially to promote the direct sale of vaccines, which happens. I have one of the ad campaigns in my head now, but I won’t share that with the member.
These are challenging questions. We base our responses on the evidence. The B.C. Communicable Disease Policy Advisory Committee reviews the provincial immunization schedule annually. It assesses and monitors the evidence and efficacy of all high-dose vaccines for potential inclusion in the immunization process. My job as minister, then, is to respond to those recommendations.
N. Letnick: Thank you to the minister for that answer.
The minister did say that the government does review these requests annually. Could the minister please tell us if that means that on a specific day, the decisions come out, or is this an ongoing thing throughout the year? In other words, does annually mean that at the end of the fiscal year a decision is made, or are they made on a case-by-case basis all the time?
The Chair: Minister of Health.
Hon. A. Dix: Thank you very much, hon. Chair. It’s so delightful to see you in the chair this afternoon too. It raises all of our spirits, I think.
As I noted, the B.C. Communicable Disease Policy Advisory Committee reviews. It sometimes reviews more frequently than annually, because there may be new information about particular vaccines. I’m told that routinely, though, that review happens around June and then is forwarded to the ministry to assess the conclusions of the reviews.
N. Letnick: Thank you for that answer. That’s a good answer. This way, all of the interested parties will know at some point — whether June or July, whatever the particular date is — whether they’re getting the funding or not.
Is there a publicly accessible list of what’s being asked for by the ministry, and then the decision whether or not they have been approved when they do that annual review?
Interjection.
N. Letnick: Let me try it a different way. After three days with the minister, we kind of know each other’s tells.
If we review the requests annually, let’s say in the case of Orkambi, and the decision is made in June or July, will something be posted on line that shows Orkambi approved, a tick, or Orkambi not approved, an x, and perhaps the reasons why, along with all of the other drug requests that have come into the ministry over the last year that are also approved annually in the June time frame?
Hon. A. Dix: We were talking about immunizations. There’s a review process for immunizations, vaccines.
With respect to Orkambi, it’s obviously a different process. It’s not an annual process — or drugs such as Orkambi. The member may be asking about Orkambi, and therefore, I can give him an answer on that now, should that meet his needs.
In this case of Orkambi, the process is first guided by the manufacturer, of course. They submit in the CADTH process, the Canadian Agency for Drugs and Technologies in Health process. In the case of Orkambi, that occurred in June of 2016. The original decision was made in June-July 2016. There was an appeal by Vertex, which is the manufacturer. That appeal was essentially….
The do-not-list recommendation from CADTH came forward in November 2016. It was then reviewed by the Drug Benefit Council in February of 2017, roughly, and the decision was made by the Ministry of Health, in March of 2017, not to list Orkambi. In the summer of 2017 — I’m just trying to make sure I have the chronology right — the issue of Orkambi became a more significant public issue.
There were a number of patients that had expressed concern, obviously — and people were concerned throughout the summer — particularly a number of patients who had received private coverage for Orkambi and then were seeing that private coverage withdrawn. They had started on the drug, and then they had seen coverage withdrawn. We made a number of changes. One of the concerns that Vertex, the manufacturer, and others had had was some information they’d felt they could bring to the table in the assessments of the common drug review of CADTH. They hadn’t been able to do so.
Working with other jurisdictions, British Columbia led this process. We expanded the types of evidence that they could submit in that process. It’s sometimes difficult to do the kind of reviews when you have a rare-disease drug, because the number of people that can be part of the clinical trial is, by definition, small. We made those changes. There was a resubmission by Vertex and, subsequently, a new decision by CADTH, the common drug review, to not list, again, in this year. That’s where we are now. In that case, decisions weren’t made at a particular time of year.
Obviously, decisions in British Columbia are made based on evidence-based information. The CADTH process is a clinical process and also assesses the value of the drug, the value for money — value of the drug as well. That’s the process they’re in. In British Columbia, since we had the CADTH process, I think only one drug that hadn’t received CADTH approval — a drug called Duodopa, which the member might be familiar with. That was approved by the previous government, but that drug had simply not been resubmitted for ten years in the CADTH process and had been approved in many other provinces. That was the one exception in the last 14 or 15 years, a really significant exception.
I say all this, and the member will know that we’re obviously very concerned. There is a full schedule for patients suffering from cystic fibrosis. We know what a debilitating disease it can be for people. I’ve certainly spoken to many people, in the discussion and debate about Orkambi, about those very questions.
The member will also know, of course — I’ve tried to be as open as possible in this forum, and I continue to be — that at least one patient, I think patient group, is currently suing me, suing Mr. Brown and suing the government around the coverage decisions here, which is their right. That’s a process that they’re going through right now.
The information that I’ve just laid out is our public outlook on what happened. It’s an exploration, a little bit, of what the process is. The process is something that will be approved. It comes forward, and then we have to assess — through the Drug Benefit Council first and then through the ministry — when coverage is provided. It’s not a particular time of year that that would happen. The immunization schedule, which is a different thing, is assessed in a more regular way, because immunization programs run that way. In general, we’re working all year round. The assessments can come when they’re ready and when CADTH does the assessment. It’s not a particular time of year.
That is a very long answer to that question.
N. Letnick: Thank you to the minister for his comprehensive answer to the question.
On the Orkambi, I think it’s important to provide some context for the listeners who aren’t familiar with the issue of cystic fibrosis. I have many, many letters describing individual cases. I’ll just pick one — a Ms. Lilia Zaharieva. This is from the Globe and Mail. I don’t have the date. I’ll find it later.
“The 31-year-old said her health has improved dramatically since she started Orkambi two years ago, initially paid for by private insurance, now” — as the minister has said — “under Vertex’s compassionate use program. In the year before she started the twice-daily pill, she spent 45 days on intravenous antibiotics fighting infections. She was weak, struggled for breath and had coughing fits that sometimes led to vomiting. ’Before Orkambi,’ she said, ’I felt like I was starved for air all the time. It was a terrifying way to exist.’
“Her lung specialist gave her two to five years to live. She says: ’I was ready to transition out of this world, thinking about how to wrap up loose ends in my life at 30 years of age.’ But her grim prognosis changed in September 2016.”
Because she was a UVic student, she had Orkambi through a health plan, but it did cost $250,000 a year. It treats the underlying cause of cystic fibrosis, rather than suppressing its symptoms.
It changed her life. Obviously, it was a miracle to her. She said: “I took a deep breath in, and it was nearly effortless.” However, in September 2017, she learned that the drug would no longer be covered under her student plan. She was, of course, asking for the government to look at funding it. The company that manufactures the drug gave her a 90-day free supply on compassionate grounds.
Dr. Elizabeth Dunn, PhD, biochemistry and molecular biology, would like to add to the discussion. She says 40 percent of CF patients in Canada are children. CF patients with genetic type 4, for which Orkambi is effective, spend 30 to 90 days in hospital every year without the drug. The cost to occupy a bed at B.C. Children’s, on a daily ward, is $3,300 per day, and the ICU is $4,300 per day. This means taxpayers spend between $99,000 and $300,000 every year just to hospitalize a single patient at B.C. Children’s Hospital before even considering the costs associated with doctors’ fees, services, diagnostic testing, imaging, pharmaceuticals, etc., to name a few.
Orkambi has been shown to substantially decrease hospitalization. It does not take long for savings like this to nullify the cost of the drug. Orkambi is scheduled to undergo further consideration at the national level, as the minister has said, by the common drug review, in the spring and summer.
My question. The government has, in other cases — the minister has pointed to one — not followed the recommendation of CADTH. The government does use the therapeutics initiative to review drugs. Did the therapeutics initiative give any indication, through the process, as to whether Orkambi should or should not be covered? I already hear…. But I’ll ask it anyway. Is the government currently reviewing whether Orkambi should or should not be covered in light of the court challenge that’s now in front of the minister?
Hon. A. Dix: As the member knows — I think I went over this, but I may not have made this point — on February 15, 2019, the pan-Canadian Pharmaceutical Alliance advised Vertex that it would not be entering into negotiations for Orkambi.
The member talked…. I put the issue of the case of Duodopa because we want to have all the information out there. We’re talking about hundreds of decisions and thousands of compounds. The governments consistently, over time, have followed an evidence-based approach to making these decisions, and the evidence-based approach that we use, collectively, is the CADTH process. They decided in July 2016, again in November 2016 and again, more recently, to recommend not to list Orkambi on formularies — not to recommend its listing on formularies. That decision was also made by the Drug Benefit Council and, of course, the Ministry of Health in March 2017 as well.
I think the member will know that one of the things that concerned me was to ensure that Vertex, on this drug, would have the opportunity to include non-randomized controls trial data as part of its resubmissions. We advocated for that. We helped make it happen. They did allow all of that information to come in, and they had the same recommendation: not to list.
I think we’re talking about a drug that would cost B.C. taxpayers, should we support it, in the neighbourhood of $90 million over three years, and those estimates may be low. To recommend a drug under those conditions, which doesn’t meet the evidence-based thing, would obviously require a political intervention, I would say, over the evidence. That has not been the approach of Ministers of Health for decades in B.C., and it’s not my approach.
However, I’d say one other thing. The Patented Medicine Prices Review Board has begun investigating the current price of Orkambi in Canada for being excessive. It’s unknown when that investigation will be completed, but I think it’s appropriate. There have been years when senior executives at Vertex made tens of millions of dollars. Their list price for this drug is $250,000 per patient per year.
This is an important question as well. So we have to also be voices, I think, to companies such as Vertex for fairer prices. The issue that faces Canadian jurisdictions is also facing other jurisdictions. The member will know that there’s a significant debate in the United Kingdom going on right now, and some very novel suggestions are being suggested by members of the United Kingdom government with respect to how to deal with Vertex in that discussion. I encourage him to review those.
This is a part of the challenge. We work hard to negotiate when drugs meet a clinical value. In this case, unfortunately for Orkambi, the common drug review has now consistently — on the original decision, on the appeal and now again — decided to recommend not to list the drug. That’s very difficult, I think. Obviously, this makes for challenging decisions for people. I know that many people who support and have friends and who are living with cystic fibrosis do not like that decision. I appreciate that and respect that.
We’re continuing to work together with them to improve other supports for people with cystic fibrosis all the time. I think the results…. The life expectancy of people with cystic fibrosis has been increasing dramatically in recent years, and that’s a tribute, to the whole community who are supportive around the disease and the individuals involved and the many doctors who provide enormous service. I’m very respectful of all that, and it’s our challenge to continue to do that. It’s also our challenge, I think, on these difficult decisions around prescription drugs, to follow the evidence, to respect the processes that we’ve set up and to ensure that we’re making evidence-based decisions.
N. Letnick: Thank you to the minister for that.
The Pacific Hepatitis C Network sent me a letter. I can’t remember specifically if I had a delegation or not. Daryl Luster, the president, talks about hepatitis C as a blood-borne virus that causes liver disease over time, but symptoms can be present and debilitating long before. Approximately 73,000 people live with chronic hepatitis C in British Columbia, a disproportionately large portion of the estimated 240,000 Canadians living with hep C.
Their recommendation to the government is that the government commit to the development and implementation of a hep C–specific plan to eliminate the virus in B.C. by 2030 and that the plan to eliminate hep C in B.C. include meaningful and robust community roles both in the development of it and the implementation. Will the government commit to such a plan?
The Chair: Minister.
Hon. A. Dix: Thank you, hon. Chair. I’m encouraged by your rapt attention here, hon. Chair, to all that I’m saying.
The answer to the question… Community-based organizations, particularly the Pacific Hepatitis C Network, for which the member is bringing forward their question, play a very important role — the member will understand this — in B.C.’s viral hepatitis response. They make connections between individuals, communities and health services. They provide education and public awareness. They provide support services of many kinds, including harm reduction and testing, and they bring the voice of lived experience, which is always important to policy-making.
The member will know, perhaps, that there was a hepatitis strategy in 2007. It’s that hepatitis strategy that we are in the process of updating. Happily, we’re close to that updating of that process. I was handed a draft strategic integrated approach, so we’ll hopefully have that released soon.
I should say that there’s very significant work being done in this area, especially building on the lessons learned from our response to HIV and the approaches aligned with World Health Organization guidance and global approaches, to eliminating hep C in B.C.
It should be said, also, that we’ve seen increasing coverage over the last number of years in very effective hep C drugs. That’s why we can say with some confidence that we’re able to eliminate hepatitis C. We currently cover seven different direct-acting antiviral drugs for hepatitis C. Those drugs will go a long way in helping us to do what we hope we’re coming close to doing as well with HIV/AIDS, which is coming close to reducing and, we could say confidently, making hep C an issue of the past, hopefully soon in B.C.
N. Letnick: Thank you to the minister.
The ALS Society has also written, through me, to ask a question of the minister. We had a delegation last week — I think it was last week, maybe two weeks ago — a very moving delegation.
One person, Brad MacKenzie, told his story. He’s currently 33 years old, diagnosed with ALS three years ago at the age of 30. Prior to that he lived a very ordinary and typical life for a young man of his age. He says: “I was born and raised in British Columbia. I spent my younger years planning for my future, and eventually I managed to work my way through an electrical engineering degree from UBC. Then one day I noticed some weakness in my left hand. Thinking nothing of it, I kept working, but gradually I noticed that this weakness wasn’t getting any better, and it was spreading to other parts of my body. After consulting with my doctors, I eventually got diagnosed with ALS.”
ALS is a terminal, degenerative neurological disease for which there is no known cure nor any effective treatment. It can happen to anyone, and he was diagnosed with ALS at 30 years of age. He was very brave to come and share his story with our caucus. I imagine he did the same with the government caucus.
Wendy Toyer, the executive director of the ALS Society of B.C., as well as David Taylor, would like to know if the government would consider partnering with the ALS Society of B.C. to increase capacity at the ALS Centre to host clinical trials and to foster clinical research. ALSBC has raised, through fundraising, $1 million to contribute and has established the ALS Centre of Excellence fund. They’re looking for the government to match that $1 million over the next five years to help people who have ALS.
Hon. A. Dix: Amyotrophic lateral sclerosis is, obviously…. If anyone has ever met…. I know members of the Legislature met with people living with the disease. It’s one of the most difficult diseases.
As members will know, it gradually paralyzes people, because the brain is no longer able to communicate with the muscles of the body. It is sometimes known, as the member will know, as Lou Gehrig’s disease because it afflicted the famous baseball player from the 1920s and 1930s.
I understand that recently Ms. Toyer, with the ALS Society, has submitted a proposal to the government. It’s fairly recent. I think it was at the time of the visit of the society here. Certainly, we’ll be reviewing that proposal and taking a look at it.
I expect to be meeting with the society myself again soon and following up on some of the work we’ve done over time. There’s significant work as well…. Some of those issues involve, of course, expensive drugs for rare diseases, but a lot of the issues raised by the society also involve issues of care, including home care and home support and other issues that people living with ALS face. Obviously, we would be very interested in the proposal by Ms. Toyer and by the society.
N. Letnick: Thank you to the minister for that.
Schizophrenia. Schizophrenia impacts many, many families throughout British Columbia. The B.C. Schizophrenia Society is looking to help fund, for families…. There was a presentation to the Finance Committee, which actually made their Budget 2019 consultation report. It says: “Stable funding to expand existing BCSS programming throughout the province, beginning with $2.75 million in the next fiscal year, to demonstrate a commitment to mental illness and family caregivers….” And it describes some of the areas that it would be in.
I’m just wondering if the minister or his staff are currently reviewing this recommendation in the Finance Committee report for sustainable funding for the BCSS?
Hon. A. Dix: This is an area that my colleague, the Minister of Mental Health and Addictions, has been working with. I would say that the society has received some significant funds from the health authorities and directly from the Ministry of Health over the years. I believe they’ve made a proposal to the Ministry of Mental Health and Addictions and the Ministry of Health late last year that was a proposal for $2.75 million. Those requests and the role of the society will be under consideration, and I’ll certainly pass on the representations of the hon. member to the Minister of Mental Health and Addictions.
N. Letnick: Perhaps, in addition to the answer for the next question, if the minister could also provide any timeline on the answer to the Schizophrenia Society — if we’re talking months or weeks or that kind of thing — it would be helpful.
Hemochromatosis is something I wasn’t familiar with. In my capacity as critic, I’ve now become a little more familiar. It is the most common genetic condition, and early intervention would prevent future chronic illnesses like severe tiredness, arthritis, diabetes, liver disease. There are ways to help prevent it. Prevention is as simple as a blood donation or phlebotomy. That sounds dangerous. People with hemochromatosis sometimes require phlebotomies weekly, biweekly or monthly, which requires them to go to the hospital instead of the schedule of the Canadian Blood Services. When the blood is collected, it is then thrown out.
Can the minister explain why blood that the Canadian Blood Services will take is on a regular schedule, but blood collected in the hospital is not?
Hon. A. Dix: I think there is some inconsistency between the question and the information I have. What I’ll resolve to do — because I think, in some ways, it’s a pretty technical question — is to make sure we get the appropriate information so that we’re not just guessing between ourselves. I’ll also be able to provide that response to the member, who can pass it on to the society.
I want to just note that we have an answer for the member for Cowichan Valley, who asked a question earlier. This is something that I hesitate to even present with the Minister of Finance in the House, because it’s actually good news for the first time in several days. But the Cowichan hospital…. As members will know, we are building a new Cowichan hospital. It’s an extraordinary thing, and I had the opportunity last year with the Premier to celebrate with the local community. It’s an enormous achievement for them that they’ve been advocating for, for a long time.
The member for Cowichan Valley talked about a stopgap measure to move administration folks out of the hospital to two 12-by-60 trailers that VIHA owns and then convert the space that they use to clinical space. This is necessary because, obviously, even though we’re building the hospital, it will take some period of time. This will create eight in-patient beds.
The cost is $1 million. We are working…. There’ll be a funding breakdown soon, but the funding will be provided by the foundation, by the regional hospital district and, of course, by the Ministry of Health/VIHA.
I’m happy to say, in response to the member’s question earlier, that we’ll be making progress on that issue and that I have a positive answer to her question.
N. Letnick: Alzheimer Society. Of course, we’re all familiar with the First Link program. It’s frequently funded through year-end dollars. I know that the minister is looking to move things to base funding, as opposed to year-end.
What’s the progress on the First Link program finding permanent funding?
Hon. A. Dix: I was delighted, a little over a week ago, to be joined by my colleague from Vancouver-Fairview in making an announcement of $2.7 million to the Alzheimer Society to support First Link for another year. As the member suggests, that has been year-end money, which has been the consistent pattern over time. In fact, over the years, the Ministry of Health, through the Provincial Health Services Authority, has provided $21.8 million to the society to support the First Link program.
In general, I agree with the member. I’d like to move that. I think I suggested this last year. I would like to move that program out of the process of year-end and into a more regular process, reflecting the fact that it is something that I would expect us to be supporting two years from now, four years from now and six years from now. As you know, that’s a budgeting challenge, but it also reflects, I think, the extraordinary role that the Alzheimer Society and this program play in the lives of British Columbians.
One of the interesting things that people may not know is that while Alzheimer’s disease and other dementias are associated with aging, there are thousands of people — 6,000 to 7,000 people in British Columbia — under the age of 65 dealing with Alzheimer’s and other dementias. I think the society plays a central role in providing information.
We had this discussion earlier with his colleague from Richmond South Centre. I’m a huge supporter of the program. We are going to continue to support the program as long as I’m the Minister of Health.
I’m sure members on the opposite side would agree that it would continue to happen should they ever form a government again. In any event, should that happen…. These are uncertainties. I like to put these things in the conditional tense at this point. I think that statement came out much stronger than I really intended it to.
In any event, it’s an extraordinary program, and I’m very proud to work with the society. I’d like to see that happen, and we’re working to see that happen. In the meantime, we continue to provide the funding well in advance so that the Alzheimer Society can have no doubt that they’re going to continue to run the program.
N. Letnick: Normally, I would bite on his comment about should we ever form a government again, but given that I only have five or six more minutes, I’ll just skip that and go straight to the next condition.
ME is a systemic neuroinflammatory condition, usually with an acute infectious onset, characterized by a marked reduction in functioning and a severe worsening of symptoms after even minimal exertion.
It is a devastating multisystem disease that causes dysfunction of the neurological, immune, endocrine and energy metabolism systems. The most typical symptoms include cognitive impairment; muscle pain; headaches; severe sleep disturbances; sensitivity to light, sound, touch, smell; muscle weaknesses; digestive issues; inability to tolerate an upright position; difficulty breathing; body temperature fluctuations; and post-exertional malaise — amongst other things.
Obviously, a very serious disease. There are several requests. Given the time, I’ll just ask two. One, would the government agree to developing a provincial strategy to address unmet health care needs for British Columbians living with ME? And two, would the government commit to timely implementation of diagnostic and billing codes for ME?
Hon. A. Dix: The Myalgic Encephalomyelitis and Fibromyalgia Society of B.C. Obviously, they were here this week, as the member will know. They had an event outside the Legislature. He and I were in estimates. He may have been able to visit with people from the society. I wasn’t. But the member will know that representatives of the society met with the representatives of the Ministry of Health. I think this is, obviously, a very significant problem for people. We understand and appreciate that and are committed to continuing to work with people dealing with the issue.
Ministry staff who’ve talked to me are not aware of any specific drug therapies that are being requested, related to ME, and none are currently under review by CADTH, just to be clear about that. While there are studies examining the use of antivirals for treatment of ME, the National Institute for Health and Care Excellence in the U.K. does not recommend the use of antiviral agents to treat ME.
Health Canada does note that there’s no cure for ME and that treatment deals with managing symptoms with the use of medications, specialized exercise programs, alternative therapies and lifestyle adjustments. Reviews by both Health Canada and the CDR, of course, are indication-specific. That means off-label indications are not considered by the CDR.
In B.C., the B.C. Women’s Hospital and Health Centre operates the complex chronic diseases program, where the goal is to provide patients with symptom-centred support and to emphasize treatments that account for patient preference and support self-care.
Just as an example, in the United Kingdom, the National Health Service’s main recommended approach is activity management. Over-the-counter painkillers and antidepressants can be used to relieve some symptoms of ME such as pain or difficulty sleeping. Those are some of the elements.
This is a struggle. It’s a struggle with respect to diagnosis. There’s a lot of frustration amongst people who are addressing and living with these chronic conditions. Some of that was expressed this week, and I’m very respectful of that. I think people in the Ministry of Health are as well, and we’re going to continue to work with the groups. But there are no…. I know there’s a desire for answers and for us to respond. There aren’t easy answers here, and we have to acknowledge, sometimes, those limitations and just continue with our commitment to work with people who are struggling with this and, obviously, to work with clinicians around this.
N. Letnick: I’ll switch now to people with diabetes. Something the minister has made very publicly known is that he is a type 1 diabetic. He probably doesn’t need any of his staff to answer any of these questions.
People who use insulin pumps require rapid-acting insulin. I understand the government has waived the deductible for low-income British Columbians, but the co-pay has not been removed for any British Columbians requiring rapid-acting insulin.
Fair PharmaCare will only pay a portion of the cost of this insulin, to a maximum price equal to the regular insulin, and requires the patient to pay the remainder. This is a concern, certainly an important one for British Columbia, for those living and managing the cost burden of diabetes.
Joan King, government relations for Diabetes Canada, says: “Regular insulin isn’t recommended for pump use in Canada. Rapid-acting insulin like Humalog is considered to be the best practice based on research.” So the government’s policy for coverage is outdated and not in keeping with our clinical practice guidelines.
The patient, in this case a constituent, who is looking to get…. And other people…. Patients would have to then pay out-of-pocket to access the medication that the guidelines suggest would be best for their care.
In a letter from the executive director of PharmaCare benefits branch, dated April 23 of this year, in response to a person that was asking about this rapid-access payment, the author says: “I’m happy to report, though, that we are actively reviewing the reimbursement policy for rapid-acting insulin. The timeline for completion of this review has not been established but is considered a priority.”
Could the minister provide a little more detail as to when we might hear back on this important decision for people who need this rapid-acting insulin for their pumps that are paid for by PharmaCare?
Hon. A. Dix: Like the hon. member, I met with representatives of Diabetes Canada. I think I’ve met with and attended an event by a group called Young and T1, which is a really dynamic group, as well, recently. I think I’ve attended about three diabetes events in the last couple of months.
One of the challenges with diabetes, for us, is if you look at type 1 and type 2 diabetes, you’re talking about probably in the neighbourhood of just under 450,000 people in B.C., which is getting close to 10 percent of the population. The overwhelming majority of that population group is for type 2 diabetes, of course. I think it’s just around 30,000 for type 1.
Last year, as the member will know, we expanded insulin pump coverage, which had first started for children I think around 2008. I remember attending an event with Premier Campbell at the time. So it would have been prior to 2011, in any event, in his constituency.
After the 2013 election, we made that a bit of an issue. The government extended that coverage to 25, because a lot of people were reaching the age of 18 and then got it to 25. Then, obviously, we expanded it to everybody. I think that was an important decision and one that made sense and made sense from a public health perspective.
We provide, each year, through PharmaCare support for medications and supply, coverage of about $80 million right now. Just to give a sense of the cost of the disease just to PharmaCare. That’s not the ancillary costs to the health care system of the disease.
There are a number of proposals now. I do recall that the day I announced the insulin pump expansion coverage, I started to get requests for the next phase in that, which are CDMs and other equipment. These are all proposals to be considered. I think it’s not exclusively for insulin pumps that one could consider such a thing, right?
If you were going to expand coverage to rapid-access and so on, it would have to be generalized, in my view, regardless of the clinical standards. There’s a debate about these types of insulin, but it’s one of the issues that’s before us. A number of years ago the government actually provided more management to the supply of blood glucose strips, for example, and actually reduced some of those costs in order to support other things.
These are all proposals before us. There are lots of them for type 1 and type 2 diabetes, including pharmaceuticals that are before us now that have received common drug review approval. We’re managing those and managing the diabetes budget. This is one of the proposals before us to consider for funding.
N. Letnick: Our time is up. To the minister and staff, it has been a great three days. I look forward to the next 11 months or so to prepare the next batch of binders so we can meet again on this hallowed ground and represent the people of British Columbia. You did a great job, as usual. To all the staff and to the minister himself, congratulations on a good estimates. Thank you very much.
Hon. A. Dix: I wanted to thank the opposition Health critic for really an exceptional job, not just with presenting his arguments and his questions but with managing his caucus team, who did an excellent job bringing community issues. I think we had somewhere between 25 and 30 MLAs participate, and that’s a real tribute to the generosity of the Health critic. I don’t recall, when I was Health critic, that same level of generosity, perhaps, to my colleagues. I appreciate the efficiency of the member for Kelowna–Lake Country.
I also wanted to give my thanks to the member for Richmond South Centre, the new critic for seniors, who did an excellent job as well. I thank all of the members of the House.
I thank Steve Brown, who is to my right, who many of you will know in this House is an outstanding Deputy Minister of Health — to all the team and all the people in the Ministry of Health up there in my office who have been helping us for the last number of days.
I’ve made a number of commitments to provide information to hon. members, and I would hope to do so in the next few days — certainly before the House returns.
With that, I’ve got a motion to move.
Vote 31: ministry operations, $20,698,339,000 — approved.
Hon. A. Dix: I move that the committee rise, report resolution and completion of the Ministry of Health and ask leave to sit again.
Motion approved.
The committee rose at 5:28 p.m.
The House resumed; Mr. Speaker in the chair.
Committee of Supply (Section B), having reported resolution, was granted leave to sit again.
Committee of Supply (Section A), having reported progress, was granted leave to sit again.
Mr. Speaker: Members, I’ve been informed that the Lieutenant-Governor is in the precinct.
Her Honour the Lieutenant-Governor requested to attend the House, was admitted to the chamber and took her seat on the throne.
Royal Assent to Bills
Acting Clerk:
Witness Security Act
Business Practices and Consumer Protection Amendment Act, 2019
Civil Forfeiture Amendment Act, 2019
Protected Areas of British Columbia Amendment Act, 2019
Environmental Management Amendment Act, 2019
Workers Compensation Amendment Act, 2019
Energy Statutes Amendment Act, 2019
Medicare Protection Amendment Act, 2019
Forest and Range Practices Amendment Act, 2019
Land Owner Transparency Act
Business Corporations Amendment Act, 2019
Coastal Ferry Amendment Act, 2019
Financial Services Authority Act, 2019
Ticket Sales Act
Miscellaneous Statutes Amendment Act, 2019
Police Amendment Act, 2019
Protected Areas of British Columbia Amendment Act (No. 2), 2019
Business Corporations Amendment Act (No. 2), 2019
In Her Majesty’s name, Her Honour the Lieutenant-Governor doth assent to these acts.
Hon. J. Austin (Lieutenant-Governor): Thank you, Kate. That represents a lot of work. [Applause.]
Thank you, all, for participating and for all your truly splendid work.
ÍY SC̸ÁĆEL. ÍY, C̸NES QENOṈE ṮÁ.
I would also just like to express my hope that you have some time this weekend to enjoy the Victoria Day long weekend, the day upon which we celebrate the official birthday of Her Majesty Queen Elizabeth II, and enjoy some time with your families and friends. I’ll look forward to seeing you all again very soon indeed.
Take good care. Bye now.
Her Honour the Lieutenant-Governor retired from the chamber.
[Mr. Speaker in the chair.]
Hon. M. Farnworth: I hope everyone has a great long weekend, and then we’re off for a week. We’ll see you in a week for the last four days of the session.
With that, I move the House do now adjourn.
Hon. M. Farnworth moved adjournment of the House.
Motion approved.
Mr. Speaker: This House stands adjourned until Monday, May 27 at 10 a.m.
The House adjourned at 5:42 p.m.
PROCEEDINGS IN THE
DOUGLAS FIR ROOM
Committee of the Whole House
BILL 19 — ENERGY STATUTES
AMENDMENT
ACT, 2019
(continued)
The House in Committee of the Whole (Section A) on Bill 19; D. Routley in the chair.
The committee met at 1:36 p.m.
On section 14 (continued).
G. Kyllo: Just before the break, we were having a series of questions around rate rebalancing. Is there anything under the rate rebalancing work that would be undertaken that would require rate rebalancing to be adjusted to match the actual cost delivery? Or does the B.C. Utilities Commission have the ability of applying rate rebalancing that may differ from the actual cost of service delivery to industrial, residential and commercial clients?
Hon. M. Mungall: There is nothing that requires BCUC, when reviewing a rate rebalancing application, to say: “Okay, everybody has to be at 100 percent cost recovery.” That’s not it at all. In fact, BCUC can acknowledge…. That is the exact situation that we have right now, whereas one class might be at 95 percent cost recovery and another class might be at 110 percent cost recovery. Generally, utilities regulators see the window of 95 percent to 105 percent as the norm.
G. Kyllo: As a bit of a follow-up, if there’s no requirement for the B.C. Utilities Commission to rate rebalance for 100 percent — or, I guess, to capture all of the costs associated with the service delivery for a particular sector — what is it that would drive the B.C. Utilities Commission to make the determination?
We certainly see, with different jurisdictions, when you have a look at maybe trying to relocate or encourage industry to come to a particular province or to a country, that they always look at the competitive advantages. One significant cost competitor is the cost of hydro. I think the minister referenced earlier, with major mines, a significant impact on energy. I think I heard a quote one time that up to 30 percent of the operational cost of a mine could be just energy cost in itself.
For a particular industry sector or a particular client, like heavy industry, would it be up to the B.C. Utilities Commission to make the determination whether they should provide a bit of a break, maybe, for the industrial sector, in order to make it more cost-competitive, or would that direction come from government? So just a point of clarification. Who really will set the tone and direction for the establishment of rate rebalancing, if and when that occurs?
Hon. M. Mungall: If I understand the member’s question correctly, he’s wondering if the government, or if BCUC, has the ability to, basically, set a direction on rate rebalancing. What kind of tone do we want to have with rate rebalancing? For example, making B.C. Hydro rates for an industrial class more competitive than other jurisdictions.
I’ll just go over the process. So first off, the BCUC wouldn’t be looking at a particular sector. They would be looking at a class. So it wouldn’t just be mining or oil and gas or film. They would be looking at a class of user.
Normally these are public policy decisions. They are not set by the B.C. Utilities Commission, and the B.C. Utilities Commission has never done that in the past. So by convention, it would be very much outside of the scope of B.C. Utilities Commission to say: “Okay, we want to give you this direction, B.C. Hydro, to have this type of rate cost recovery or these type of rates for competitive advantage.” Rather, that’s the type of decision that’s set out in public policy.
Right now, to give an example of that, B.C. Hydro will allow for a deferral in the mining sector, for example. If the commodity prices are down and we want to retain that particular company here, but they’re having difficulties meeting their bills at B.C. Hydro, B.C. Hydro can do a deferral until they’re better suited to pay their bills. That does happen right now, and that is a direction of public policy to allow for that to happen.
I would add that the way it is right now is that a utility applies to B.C. Hydro for rates and, with this bill, would apply for any rate rebalancing. BCUC can’t just decide out of nowhere. If we didn’t have this legislation and this particular section, the only thing BCUC would really be able to do is ask B.C. Hydro to make an application. It wouldn’t actually be able to just make a decision without an application before it.
G. Kyllo: In a previous answer, the minister indicated that a ratio of 95 percent to 105 percent is about the norm. We do know, from, I believe, the answers that were provided previously, that currently residential customers are paying about 94 percent. They’re getting, in essence, about a 6 percent reduction in the actual costs of service delivery, where commercial clients are paying 110 to 120 percent.
The minister was clear in saying that was an average. She’ll be providing me with the firm numbers, but that was an estimation provided. So it does appear that currently both residential and commercial ratepayers are paying outside of what the minister indicated would be the norms — the 95 to 105 percent.
I was wondering if the minister could provide clarity on what she indicated is the norm. Is that a norm in B.C.? Is that a norm across Canada? What, typically, would happen if an industry rate classification is operating outside of the norms? She’s indicated from the 95 to 105 percent. At what point in time would, I guess, either government or, in our case in B.C., the B.C. Utilities Commission, give consideration to wanting to reset the clock or maybe re-establish rates to be within the norm that the minister had provided?
Hon. M. Mungall: The range that I gave of around 95 percent to 105 percent in terms of the cost recovery ratio for a class of customers is typical throughout North America in terms of the regulators and what they approve.
My understanding from the member’s question is he’s also wondering what happens when you have a situation where, like in B.C., we’re around maybe 110 percent cost recovery for a commercial class and under 95, around 94 percent, for a residential class. Would the regulator come in and then want to bring things back within that more 95- to 105-percent range?
Again, there are a lot of regulators in North America, but generally not so. With this situation and with our bill, what would require that to happen would be an application by the utility. Like I said, for a regulator to review this issue or any other issue, they would require some type of application, dense with information, from the utility.
G. Kyllo: Okay. So there’s an understood kind of a range, I guess, for utilities across North America that has established this 95- to 105-percent range. I guess my question as a bit of a follow up is that where rates are outside of that range….
I would assume that the rates or the range is put there so that we do not see one rate class or classification of client paying significantly more than their fair share at the benefit of maybe another classification of ratepayer. I’m certainly not advocating for one side or the other. I’m just trying to understand what would actually drive a utility to undertake a rate rebalancing exercise.
It appears that at least two of our classifications of clients, both residential and commercial, are currently paying rates that are outside of the range that the minister has provided.
Can the minister, I guess, provide a bit more clarity on what the steps would be and what the prudent manner would be in which a utility would move forward in addressing this inequity of these particular rate classifications that are paying outside of the range that the minister indicated is a North American standard?
Hon. M. Mungall: I have some numbers for the member. What I’ll do first is I’ll explain, because he’s wondering what will drive a rate rebalancing application. Well, there are a few things. Ultimately, what it boils down to, however, is that the utility will determine if allocations between its classes of customers are — and this is a technical term — out of whack.
If they are not in line with what they believe they should be and what they believe is fair…. Of course, it’s not like the utility wouldn’t be hearing from its customers if that was the sentiment, right? For example, if commercial customers or industrial customers were saying, “Hey, we feel that we’re paying more than our fair share,” then the utility would obviously need to consider responding to that. Or there might be some other reasons that drive their decision.
Then they could take that to the B.C. Utilities Commission for review under what’s called a rate design application. That’s when BCUC would look at the allocation between classes and then, based on the information they receive, would make a decision. This would normally happen after an RRA, which is the revenue requirements application.
In terms of some numbers for the member, what we have are some actuals in terms of the cost recovery ratios. That was part of the RRA that was submitted on February 14, 2019. For fiscal 2014, the actual for residential cost recovery was 92.9. For what would be considered commercial, it’s 123.5. What would be considered industrial is 97.3. I’ll fast-forward to 2017, when it’s 93.2. So 123.6 for the commercial. Then industrial is 95.4.
We weren’t off in our original estimation by much. As you can see, the difference between 2014 and 2017 is quite low.
G. Kyllo: The minister, in her response, indicated that it would be left up to the B.C. Utilities Commission to make the determination of whether they felt they were being fair with respect to the rates that were being charged to different sectors or clients and, as well, that they identified what the rates should be.
The minister has confirmed today that for fiscal 2017, the residential rate was 93.2 percent, the commercial rate was 123.6, and the industrial rate was 95.4. So we have one specific class of clients — that’s the commercial users — who are paying 23.6 percent above the actual cost of service delivery of hydro for that particular classification of customer.
The minister also indicated that it would be left up to the B.C. Utilities Commission to determine. Now, clearly, at 123.6 percent, that rate of classification is far outside the range that has been provided.
The minister has also, in her previous comments, talked about having respect for the independence of the commission. I would say that when you have a look at the different B.C. Hydro customers across our province, they also want to see that there’s the independence of the commission and that the rates they’re paying are fair and equitable.
Can the minister share with us why this bill is actually restricting the ability of the commission to undertake a rate rebalance, which, I would assume, would be providing opportunity for the B.C. Utilities Commission to make a determination on what would be fair with respect to the rates that each classification is being charged?
Hon. M. Mungall: I want to make sure that we’re not leaving anybody with the impression that BCUC is not overseeing cost recovery ratios — or what I said earlier is called the rate design application. Rather, BCUC still is, and B.C. Hydro or Fortis make those applications to the B.C. Utilities Commission. What we’re doing here is actually moving a directive that the previous government made to BCUC and putting into legislation, in a more transparent way, who initiates the process for overseeing the rate rebalancing or rate design application. We’re saying — and staying in line with past practice — that it’s the utility that initiates the process, not the regulator.
G. Kyllo: By postponing the requirement for the rate rebalancing to a period of two years out, it actually ensures that certain rate classifications of users are going to be paying far more than their fair share, which is also clearly outside the direction that the minister has provided, as far as the range of 95 to 105 percent. So can the minister, I guess, share with us: should the final decision with respect to the rate rebalancing be left with the Utilities Commission, or should that determination be undertaken and set by public policy?
I’m not advocating for higher or lower for one rate class or the other, but it seems to me that government has a number of levers. They can increase taxation, or they can provide cost relief. And one cost relief for heavy industry, for example, and some industry sectors would be a lower cost of electricity. So when you have a look at the levers government can apply to have an impact on the economy and potentially even an impact on ratepayers, including the residential sector and affordability for British Columbians, government has a role to play in that. Or I believe they have a role to play in that.
Does the minister feel that the determination and establishment of whether one classification of client pays more than their fair share or less than their fair share is something that should be established and directed by government through public policy? Or is that clearly just left up to the B.C. Utilities Commission to make their own determination on what they determine to be the fair and appropriate rate for the different classifications of clients?
Hon. M. Mungall: What I think is that the B.C. Utilities Commission should oversee any type of application in terms of rate rebalancing, but it also has a further oversight role that is required for good public interest to be met. That’s exactly what this bill is all about. We’ve already gone through several sections — let them pass — about the BCUC oversight being re-established, and that’s something that this government has very much prioritized.
In this situation, I want to be very clear, for the member and for everyone else, that the BCUC would still be the regulatory authority over any type of rate rebalancing. But it’s who initiates the process, and it would be the utility under this bill. It’s been the utility for a very long time. The way that transpired, however, I would say, was less transparent than it should’ve been. That’s what we’re trying to correct here — to make that practice more transparent, through legislation.
G. Kyllo: Let me rephrase this. We currently have two different rate classifications or classifications of clients that are paying rates that are outside of the range that the minister indicated is a North American norm. She’s also shared with us that the B.C. Utilities Commission obviously has the ultimate say with respect to any rate rebalancing application that may come forward.
I’m assuming that rate rebalancing application could come from government. It does not necessarily have to come from industry. If that’s not the case, if the minister could just correct me. But we have two classifications of clients that are paying rates well outside of the North American norm, yet the bill that’s before us does not provide B.C. Utilities Commission the opportunity to review a rate application and actually undertake a rate rebalancing review for a period of two years. Or that’s my understanding. If the minister just wants to maybe provide a bit more clarification for me.
Hon. M. Mungall: I’m not too sure where the member is getting the two years. There’s no restriction on how frequently a utility can make its application for a rate redesign or a rate rebalancing. Sorry, not rate redesign — the rate design application that would therefore have the rate rebalancing in it. That can occur any time a utility wants to do that.
What I tried to provide the member with earlier is information on when that generally occurs. The rate design application generally occurs after a revenue requirement application. The revenue requirement application easier to understand…. I know a lot of these technical terms can kind of leave your head spinning, but the RRA is generally when a utility applies for its rate setting, which is what’s going on right now before the B.C. Utilities Commission.
Following that, they do a rate design application, which is when they would look at each class of customer, their cost recovery ratio. That can happen anywhere between five to ten years, and like I said, the RRA is happening right now.
In terms of who could initiate the process for a rate design application, it says right here in the bill that it would be done by a public utility.
G. Kyllo: Clarity, then. Thank you, Minister, for that additional clarification.
With respect to the rate rebalancing, is there anything in this bill that restricts B.C. Utilities Commission from undertaking a rate rebalancing review as it stands now or as presented in this bill?
Hon. M. Mungall: What this bill has in it is simply who initiates the process. The B.C. Utilities Commission always reviews any rate rebalancing. Always. It’s just who initiates it. In this case, what we’re saying is that it has to be the public utility to initiate it, not the B.C. Utilities Commission.
G. Kyllo: Okay. So it is, then, left up to B.C. Hydro, which, in my understanding, takes direction from the minister or the ministry with respect to making a determination on when a rate rebalancing review may be undertaken.
B.C. Utilities Commission, I appreciate, will review that application. But through this bill, by moving away the ability of B.C. Utilities Commission to actually undertake the review and putting that in the hands of the Crown corporation, who takes direction from government, I think what I’m hearing is that the B.C. Utilities Commission does not have the ability of undertaking a review on their own initiative.
If they see discrepancies or challenges where we have particular classifications of clients or customers paying far outside the North American norm, the B.C. Utilities Commission is handcuffed and unable to actually provide that fair review to appropriately reallocate charges to different bases of clients — industrial, commercial or residential — in order to be fair to British Columbians.
It’s taken a long time to get to this point. My clear understanding is that the B.C. Utilities Commission, which is supposed to have independence, which the minister has indicated should have that independence and the ability to make their own determinations on what is actually respectful to the different ratepayers…. That ability of undertaking that review directly is now being moved over and can only be directed from B.C. Hydro, which takes direction from the ministry.
Should the utility determine that we do not want to undertake a review for five or ten years…. I think those were a couple of the numbers that the minister mentioned. Is that the case? And, that British Columbians, especially these two particular rate classifications of clients, would be paying well outside industry norms for potentially another five or ten years?
Hon. M. Mungall: The directive that the previous government first put forward prohibiting BCUC from initiating rate rebalancing application, the rate design application…. It was first initiated by the previous government in 2008 and has been maintained by the previous government. That was done with an order-in-council and at the discretion of the previous government.
What we’re trying to do, as I said…. It’s not necessarily changing the process, it’s just how that process is in legislation or by law or how it actually comes about. We want to make it transparent, not just random OICs that get deposited after the fact. We want to make it clear not just to B.C. Hydro but to all of the public utilities. There are about 70 that B.C. Hydro regulates, including FortisBC, its electric utility, as well as its natural gas utility.
We want to make it just transparent and clear for all parties involved. That’s why we are putting this process that has existed for a long time, that’s been done via OIC since 2008…. We’re putting it into legislation now.
G. Kyllo: Well, I fail to see the difference. If previously…. And orders-in-council are not done randomly. They are very purposeful. When an order-in-council comes forward….
Previously, government did have the opportunity to give direction to B.C. Utilities Commission with respect to the rate rebalancing applications. But what we’re doing is we’re taking away the opportunity now for B.C. Utilities Commission to make that decision and direction themselves. They’re moving it to the Crown corporation, which takes direction from government.
Maybe I’m misreading something here. Could the minister maybe provide clarity? Is B.C. Hydro looking to undertake and request B.C. Utilities Commission to undertake a rate rebalancing exercise any time in the next two years?
Hon. M. Mungall: I don’t know that the time that any of the 70-odd public utilities that B.C. Hydro regulates is in the scope of questions for this bill. And I want to emphasize that there is not just B.C. Hydro that would be applying for a rate rebalancing. This bill applies to Fortis. It applies to numerous other smaller public utilities that are regulated by BCUC, so to single out B.C. Hydro solely is a bit of a misnomer. I will entertain the question, although I will just say that we should stay within scope of this bill.
In terms of when B.C. Hydro would be looking to do a rate design application, they are in the process of their RRA. Would it be in the next two years? They’re in the process of their RRA right now, and then they are moving to the IRP process, which we’ve canvassed extensively on how that all that unfolds. So the likelihood of a rate design application in the next two years is low. That being said, I’m not going to speculate going into the future in terms of B.C. Hydro’s approach to this issue.
G. Kyllo: I appreciate that there are other utilities that the B.C. Utilities Commission reviews. I think the numbers that we’ve largely been discussing are B.C. Hydro numbers, and we’re talking about the rate rebalancing exercise.
We have a classification of clients that are currently paying 23.6 percent above the cost. It appears that the B.C. Utilities Commission, the organization that has responsibility for ensuring that they’re being respectful to the ratepayer, that they’re applying rates to different rate classifications that I think are also fair, objective and defensible…. We see that those rates are already far outside the North American norm. Through this bill, the minister is taking away the ability of the B.C. Utilities Commission to undertake a review, if they should feel that that is necessary, and putting it in the hands of the utility — the utility which takes direction from the government.
I see this as actually undermining the ability of the B.C. Utilities Commission to determine when and if they should feel the necessary responsibility to undertake a rate rebalancing exercise. It is clearly within the scope of this bill that’s before us. We start talking about the disparity of rates that are charged to different clients, and these are significant overages.
I’m not advocating for one side or the other. I’m just trying to provide some clarity and understand the rationale for why the B.C. Utilities Commission cannot be trusted to make their own determination of when a rate rebalancing exercise is needed, to have a look at the different rates at different classifications that clients are paying. Why suddenly the B.C. Utilities Commission can’t be trusted with making that determination but B.C. Hydro, the utility, which takes direction directly from government, can.
Hon. M. Mungall: We have canvassed the process by which rate rebalancing happens. We have canvassed extensively how this impacts that process, in that it causes not BCUC to not oversee rate rebalancing, but rather, just who initiates the process. The member now understands that, he said earlier. If he disagrees, then he has the power of his vote to vote against this section if he thinks that this is inappropriate. I would remind him again, however, that this is not new.
His government, when the B.C. Liberals were in power, actually prohibited the BCUC from initiating rate rebalancing applications, rate design applications. They prohibited BCUC from initiating it themselves. How they did it was less transparent. What we’re trying to do is make this a transparent process for all public utilities. I have said that. I’ve now said it probably two or three times.
I think we need to move on here. I think the member has made his point multiple times. I want to congratulate him, however, for becoming a champion for the B.C. Utilities Commission. It was sorely lacking from his side of the House for 16 years.
The Chair: Member. And I’m sure the member will keep the questions moving on.
G. Kyllo: Yeah, absolutely, Mr. Chair. But I do still have concern about the B.C. Utilities Commission no longer having that ability, by putting that responsibility onto B.C. Hydro, which takes direction from government. And there’s no establishment of any timeline under which either B.C. Hydro or the government would actually ask for a rate rebalancing exercise.
It’s something that’s very important, because I think British Columbians need to know or should certainly be aware that this bill is actually taking away the ability of the B.C. Utilities Commission to determine when it would be appropriate to undertake a rate rebalancing exercise.
Fair enough. I appreciate the minister’s comments, and I’ll move on.
Would the minister ever direct B.C. Hydro to request a rate rebalancing exercise during her tenure?
The Chair: Member, I think it goes beyond the scope of the bill at this point. If the member could bring his question to more relevance with the section that we’re discussing.
G. Kyllo: Thank you, Mr. Chair. With all due respect, the bill removes the ability of the B.C. Utilities Commission to make the rate rebalancing exercise, to undertake that work. It’s now being moved over to B.C. Hydro, to the Crown corporation, and my question, I think, just falls with that. Now that the B.C. Utilities Commission does not have the ability of undertaking that direct review, I’m just asking if the minister has any intention or can see the ministry ever directing the utility to undertake that rate rebalancing exercise.
The Chair: I appreciate the member’s interest in this angle of questioning, and I hesitate very greatly to inhibit the opposition’s right to ask broad-ranging questions. I do hope the member can move on to a question that’s a little bit more fresh and more directly relevant to this section, please.
G. Kyllo: Okay. Thank you, Mr. Chair. I have just one further comment on this section.
It’s quite apparent by the lack of an answer that there certainly doesn’t appear to be any immediate or current direction. So I think British Columbians can anticipate that there will not be a rate rebalancing exercise in the near future.
The Chair: Does the member have a question, or shall we…?
G. Kyllo: That was just a comment on this last section.
Section 14 approved.
On section 15.
G. Kyllo: In the added subsection (2.22), why has the minister exempted the B.C. Utilities Commission from considering requirements (a) through (c) on energy supply contracts?
Hon. M. Mungall: What this section does is it allows the BCUC to streamline the process for an IRP. Say they’ve already canvassed a particular item. Rather than require the utility to redo all of that work — and it’s in a relative time frame, right? — they can pull from that previous process and use that information for their decision-making, rather than duplicate it.
Now, this already exists for all other public utilities, but it hasn’t existed for B.C. Hydro because the previous government moved B.C. Hydro’s IRP from being reviewed by BCUC to being reviewed by government. Now that we are giving back that authority to the B.C. Utilities Commission to be reviewing B.C. Hydro’s IRP, we also have to give it back the authority to streamline the process, if it wishes to do so.
G. Kyllo: Thank you to the minister for the response.
I appreciate that the process could be put back and moved back into the hands of the B.C. Utilities Commission, but I’m still failing to understand the need for the streamlining. Those specific sections, I think, are important and were obviously there for prudent reasons initially.
Can the minister provide any additional clarification on justification for the removal of those specific sections — again, requirements (a) through (c) — and if that recommendation came from the B.C. Utilities Commission or if that was something that the ministry identified on their own?
Hon. M. Mungall: The reason why we’ve identified (a) through (c) of subsection (2.21) as something that the B.C. Utilities Commission can exclude from review in its energy supply contract reviews…. They do this for all utilities.
What we’re doing with this legislation is making that applicable to B.C. Hydro, now that BCUC would be reviewing its IRP. Therefore, it would be able to take that IRP information that they already have and review that, rather than require B.C. Hydro to resubmit that information when they do an energy supply contract application. Again, we are treating B.C. Hydro as we treat every other utility with this. At the end of the day, it’s the B.C. Utilities Commission that has the discretion to request that this information be submitted again or not.
G. Kyllo: Was there input provided by the B.C. Utilities Commission with respect to the removal of those specific terms? Did that direction come from B.C. Utilities Commission? The minister referenced streamlining and efficiencies. Is this something that B.C. Utilities Commission identified as a streamline opportunity, something that they were looking for? Or is this something that the ministry determined without consultation with the B.C. Utilities Commission?
Hon. M. Mungall: As our government looks to rebuild government’s relationship with the B.C. Utilities Commission, we absolutely consulted with them on this legislation in full, including this section. From the B.C. Utilities Commission’s perspective, as well as our government’s, we saw this as a rather important but minor addition to the bill — the reason being that we are just giving the B.C. Utilities Commission the oversight, the opportunity to streamline a process, in the same way it does for all the other utilities that it regulates.
G. Kyllo: From the minister’s answer, just for a bit of clarification, it’s my understanding that the B.C. Utilities Commission actually requested that this particular section be taken out and removed. Or was it that the ministry identified and suggested the removal of these specific items and just consulted with B.C. Utilities Commission? There’s a very different meaning, depending on how that consultation was undertaken.
Hon. M. Mungall: Again, this is about allowing the B.C. Utilities Commission to make a choice on how it wants to conduct its processes. It is the exact same application that they do for other utilities and that would just now apply to B.C. Hydro. The reason why we have to make this change, to make sure that it applies to B.C. Hydro, is because we are now having the integrated resource plan go under the oversight of the B.C. Utilities Commission.
The hair that the member is trying to split does not exist. Rather, the B.C. Utilities Commission has been consulted on this legislation. They are looking to be able to do the exact same process that they do for other utilities as they do for B.C. Hydro.
G. Kyllo: If I can just reiterate, it’s my impression from the answer by the minister that it was the ministry that made the recommendation to the B.C. Utilities Commission, and they may have been in agreement with it or not. The question I had was: was this direction from the B.C. Utilities Commission to the ministry, or was it from the ministry to the B.C. Utilities Commission?
From the minister’s response, it’s my understanding that it was the ministry that actually has made the recommendation to B.C. Utilities Commission. So was the B.C. Utilities Commission happy, excited and in agreement with the removal, or the ability? Or did they have any objections or concerns?
Hon. M. Mungall: I cannot comment on whether the BCUC would be happy and excited. What I can say is that they expressed no concern. Of course, whenever they express concern, we take that very seriously, and we work with them on that. But in terms of this, I believe that they saw this as a minor change but a required change so that they could have the power to decide how a process ought to unfold.
G. Kyllo: Well, I’m happy to hear that. The minister has certainly talked about the independence of the B.C. Utilities Commission. It sounds like in this case that it is not where the ministry is giving direction to the B.C. Utilities Commission with a determination of what they can exempt from their review.
One final question, I hope, on section 15. Will these considerations be included in future long-term resource plans?
Hon. M. Mungall: The section that we’re dealing with is about energy supply contracts. The energy supply contracts are not a part of the IRP but, rather, are a result of the IRP.
Sections 15 and 16 approved.
On section 17.
G. Kyllo: Why has section 17 been made retroactive to June 14, 2012?
Hon. M. Mungall: This section of the bill is pretty much a housekeeping item, in the sense that BCUC had been making decisions about class of persons, but it actually wasn’t in the legislation. Now we’ve cleaned that up, and we’ve put it in the legislation.
The reason why it’s retroactive is because BCUC has been making those types of decisions, so we wanted to capture the time frame in which it was making those decisions so there would be no question that BCUC has had the authority to make those decisions.
G. Kyllo: Great. Well, I’m sure the minister will be happy to hear that that was my last and final question.
I want to thank the minister and her staff for their deliberations on all of these questions over the last couple days. With that, I’ll take my chair.
Sections 17 to 19 inclusive approved.
Title approved.
Hon. M. Mungall: I move that the committee rise and report the bill complete without amendment.
Motion approved.
The committee rose at 2:43 p.m.
Committee of Supply
ESTIMATES: MINISTRY OF
ATTORNEY
GENERAL
The House in Committee of Supply (Section A); D. Routley in the chair.
The committee met at 2:57 p.m.
On Vote 15: ministry operations, $490,716,000.
Hon. D. Eby: With me are Nicolas Jimenez, president and CEO of ICBC; Phil Leong, interim chief financial officer, ICBC; and Lindsay Matthews, VP, public affairs. I’m also joined by Richard Fyfe and Doug Scott, Ministry of Attorney General.
I don’t have any opening remarks, really. We’ve got lots to cover, and I’m happy to turn it over to my critics for questions.
M. Lee: Just by way of introduction, we’ve shared with the Attorney General’s office the general list of topics that we intend to cover over the time that we’ve been provided. Of course, we’re starting this afternoon on ICBC.
I’m not sure that, given what time we’re starting at right now, we’ll be able to complete that discussion this afternoon. We may likely go over to the Monday that we’re back, including areas that I would focus on, of course, which relate to minor injury and the CRT.
We’ll start off first with my colleague from Richmond-Steveston on general ICBC questions.
J. Yap: Good to be here for estimates debates. I appreciate the minister making himself available with staff from ICBC.
We’ll start off with a discussion on premiums. Minister, as you and, no doubt, members of ICBC are likely aware, when other jurisdictions and provincial regulators calculate the average cost of auto insurance for drivers, they do so on what’s known as a private passenger vehicle, or PPV, basis. This gives an average of what individual drivers are paying.
It is essentially calculated by comparing the premium volume of vehicles insured by private vehicles, typically around 87 percent, when premiums from fleet and commercial operations are removed, and dividing that number by the number of private passenger vehicles operating in the province.
It’s a metric that ICBC is well familiar with and have used to provide a calculation of the average premium paid, including both basic and optional insurance in their past rate applications to BCUC. Can the minister tell us: what is the average price drivers are paying for ICBC’s basic and optional auto insurance this year on a private passenger vehicle basis?
[S. Malcolmson in the chair.]
Hon. D. Eby: The number from ICBC’s annual report is $1,441, as an average. Staff are just trying to nail down exactly the calculation that they use to determine that. It’s not just basic. It includes optional insurance as well.
The member, in his question, suggested that other Crowns across the country used a particular model of calculating average insurance rates for the purposes of comparison. I disagree with his suggestion of how these are calculated.
Manitoba, in their June 15, 2018, dated 2019, general rate application benchmarking data, uses specific examples. They provide case studies to insurers across the country to quote on. Then they use those quotes to compare. So I can advise the member that for a 35-year-old couple with 15 years claims-free, that Manitoba found that British Columbia is $150 to $300 cheaper than the average in Alberta or Ontario.
For a 40-year-old couple with a 16-year-old child, claims-free, British Columbia was $2,000 to $2,500 cheaper than the average in Alberta and Ontario. For a 21-year-old driver, five years experience and claims-free, British Columbia was a remarkable $3,000 to $4,000 cheaper than the average in Alberta and Ontario.
In Saskatchewan, the most recent report looked at…. This is from the Crown Investments Corp. of Saskatchewan, “Utility Cost Comparison: Cross-Canada View,” annual costs from July 1, 2016, to June 30, 2017. There’s obviously a difference between a major centre or rural community and northern communities. What they try to do is choose comparator cities to get a sense of rates, on average.
For major centres, when they compared Vancouver, British Columbia, to Calgary and Toronto in terms of rates, they found that Vancouver was $600 to $2,000 cheaper, on average, than Alberta and Ontario.
For rural communities, where they compared Merritt, British Columbia, to Drumheller, Alberta, and Parry Sound, Ontario, they found B.C. to be $100 to $200 cheaper, on average, than Alberta and Ontario. And for northern communities, when they compared Fort St. John, B.C. to Grande Prairie, Alberta, and Kapuskasing, Ontario, they found British Columbia to be $1000, on average, cheaper than Alberta and Ontario.
Two helpful comparisons from Crown corporations in other provinces of insurance rates, finding B.C. consistently cheaper than Alberta and Ontario, both jurisdictions which are entirely private.
I do understand that the insurance bureau folks are advocating privatization, but this is one of the reasons, as I explain to the member, why we’re extremely reluctant to consider a privatization agenda. When we look across the country, we see that B.C. has expensive rates, but when you compare to the major private jurisdictions, they’re the only ones that are more expensive than British Columbia.
The Chair: Member.
J. Yap: Thank you, Chair, and welcome to the chair.
Thank you to the minister for that comparative answer, comparing rates based on analysis done in other jurisdictions. Can the minister tell us…? On December 14, 2018, in its news release announcing the latest rate increase of 6.3 percent, the news release stated that this represented an average price increase of approximately $60 per driver.
Basic mathematics would inform that if you gross up that number from 6.3 percent, the average price of a basic policy would be approximately $1,000. Could the minister confirm that that’s correct?
Hon. D. Eby: As I explained in my first answer, the $1,441 is the average for customers across ICBC. It’s not exclusively basic. It’s basic and optional. For basic insurance in British Columbia…. At the time of that press release, basic insurance was about $1,000. So the member is correct. A 6.3 percent increase on $1,000 gives you where the basic insurance rate is right now, which is $1,063, in terms of the average, for basic insurance for an ICBC customer.
J. Yap: Thanks to the minister for confirming that the average basic auto insurance premium is $1,000. Minister, in its latest rate application to B.C. Utilities Commission, ICBC stated that in 2017, the average price, on a PPV basis, was $913. So it’s close to the $1,000 that the minister has confirmed.
It also stated that the average price paid for both basic and optional was $1,516. In other words, if you deduct $1,000 average of basic auto insurance premium from the $1,516, that makes the optional coverage approximately $603 — $1516 less $913, which was the figure in the BCUC application. Can the minister confirm that the average price paid for optional insurance is $603?
Hon. D. Eby: That took a little while longer because there are some clarifications that I need to make, based on a misunderstanding that I had. The $1,000 and the 6.3 percent increase that I talked about was not, as I suggested to the member, the average basic rate. That is the base rate. The base rate for insurance is the number that ICBC starts at before they add in factors — geography, driving experience, and so on. That base rate was $1,000, and it went up 6.3 percent to $1,063.
The average basic insurance paid by British Columbians was $1,441. Now, there are people who pay below the base rate because they have a lot of years of safe driving experience and they live in a geographic area that’s lower risk. And there are a lot of people who pay more than the base rate. Certainly, when you look at the average, a 16-year-old with no driving experience who’s driving in an urban area is going to pay significantly more. When you look at ICBC’s customers and what they’re actually paying and you average it out, you get to $1,441.
I apologize to the member for the confusion that my earlier answer may have caused on that front.
J. Yap: Thanks to the minister. Would the minister confirm if the $1,441 refers to 2017 figures? Is that the average for that year?
Hon. D. Eby: I’m advised that these are unpublished annual report numbers for 2018-19.
J. Yap: Let’s explore this further. ICBC announced a 9.3 percent rate increase on optional insurance, phased in quarterly until September of 2018. That would make the average price paid for optional insurance roughly $660 as of September 2018. Can the minister confirm that’s correct?
Hon. D. Eby: Sorry. What does the member want me to confirm that’s correct? That ICBC announced that?
J. Yap: Just to confirm that the 9.3 rate increase that was announced on optional insurance, when applied and phased in quarterly until September of 2018, implies that the average price paid for optional insurance would be roughly $660 as of September 2018.
Hon. D. Eby: The staff here advise me that they don’t have the figure that the member is looking for. Typically, ICBC doesn’t release their average optional rates because they’re in a competitive marketplace with private insurers. We’ll have a conversation and go back and see whether we can appropriately release that information to the member.
Just to confirm, again, he’s wondering whether it’s $663 at the end of the final quarter of increases in the optional rate.
J. Yap: Yes. Number crunching would indicate…. Based on the percentage announced of 9.3 percent applied to an average of a roughly $600 cost of optional insurance would imply that as of September 2018, we would be looking at $660, approximately, for an average price of optional insurance.
Hon. D. Eby: I’ll definitely take that back and discuss it with staff. I will point out to the member a couple of things. One is that it depends on how much optional insurance people are buying, what their average increase would be in optional insurance and what, for ICBC’s customer base as a whole, the increase would be in optional insurance if there’s a year where people are buying more or less optional insurance. It’s optional by definition.
The second is that ICBC is price-competitive in the optional market. They are writing the majority of the policies. Private insurers are not even writing in some categories. They won’t even offer policies in some areas that ICBC is writing in, so they clearly see that ICBC’s rates are competitive. In other categories where private insurers are competing, ICBC is writing the majority of insurance for the province.
What that would suggest is that, at a minimum, private insurers are increasing beyond ICBC’s increases, or their products were already priced higher than ICBC’s even after the published increases.
J. Yap: I appreciate the minister’s additional context for his answer, and I do appreciate that ICBC is in a competitive environment with respect to optional insurance. However, just looking at the information that is available, we’re trying to get an understanding of the average premium relating to ICBC’s optional insurance product. Of course, it depends how much optional coverage is taken up by a particular customer of ICBC, but what we’re looking for is the average.
Based on our discussion, would the minister be able to…? I know he had offered to go back and get the numbers here today. Would the minister indicate that if, based on this arithmetic, we’re looking at an average basic insurance premium of, as the minister said, $913, plus the figure — we’ve applied the $600 plus the 9.3 percent increase — of $660, the total average premium paid would be approximately $1,573?
Hon. D. Eby: I’m afraid that, just in terms of the numbers the member is using — the $600 figure, and so on — staff will have to go back and have a look at the source of those numbers and what the numbers are for ICBC and make a decision about whether to release information related to optional insurance.
I’ve committed to the member that we’ll make that decision. We will do that. I’ll advise him on what we can provide.
J. Yap: Can the minister advise if optional prices have increased or decreased since September of last year?
Hon. D. Eby: As we’ve discussed, optional insurance is subject to competition. ICBC has, in some categories, increased the cost of optional insurance and in other categories has reduced rates in optional insurance. So yes, some rates have gone up in some categories, and some rates have gone down in other categories of optional insurance.
J. Yap: Can the minister indicate how much those optional rates may have increased or decreased on average?
Hon. D. Eby: This is the same question that I advised the member that we would have a look at and see if we could provide him with information without compromising ICBC’s competitive position in the marketplace.
The Chair: Member, are you moving to a new area?
J. Yap: Yes.
The Chair: Wonderful.
J. Yap: We’ll take a different approach here. Minister, according to the financial plan on page 18 of ICBC’s service plan for 2019, ICBC’s premiums earned will rise $578 million this year, from a forecast of $5.826 billion in 2018-19 to $6.404 billion for the fiscal year 2019-20. Is that correct?
Hon. D. Eby: ICBC publishes a financial plan and a summary financial outlook as part of the service plan. The member will find the relevant data in the document marked 2019-20–2021-22 Service Plan, February 2019. At page 18, there is a chart there that outlines a number of different categories of projections for ICBC.
In the service plan, the only actual numbers are 2017-18. It includes premiums earned as well as service fees, provision for claims, changes in estimates for losses, and so on. It discusses liabilities, net income and a number of other issues of interest to British Columbians.
One of the interesting pieces to many people on page 18 is the net income loss for ICBC. The members will see 2017-18 actual, $1.325 billion actual loss; ’18-19, a $1.18 billion actual loss; and then the ’19-20 budget, a $50 million projected loss. Now, having lived with insurance projections for a little while now, I take it with a grain of salt. But the trend and the significant savings here are real, and the reason for those savings is the significant changes that we’ve put in place.
The member asked specifically about premiums earned and the projections for premiums earned. This reflects increases in the population, increases in the numbers of vehicles as a result, and would include such things as additional premiums earned as a result of new categories — for example, ride-share, and so on. The member will see, in 2018-19, a forecast of $5.8 billion, $6.4 billion in ’19-20, $6.9 billion in ’20-21, $7.5 billion in ’21-22. There are a significant number of assumptions, especially as you go into the outer years, in terms of premiums earned and in terms of the financial performance of the corporation, a reality I’m sure the member will be well familiar with.
J. Yap: I appreciate the minister’s confirming, in his answer referring to page 18 of the financial plan within the service plan document, those top-line numbers on premiums that I had referred to in my earlier question, which, just through simple arithmetic, indicate a rise of $578 million year over year.
According to page 65 of the annual report from last year, ICBC’s net written premiums for the 12 months ending March 31, 2018, were $5.544 billion, and net basic premiums were $3.269 billion. Its net optional premiums were $2.275 billion. Can the minister confirm that those numbers are correct?
Hon. D. Eby: Can the member just confirm the page number that he’s looking at? We’re struggling to find his reference.
J. Yap: It’s page 65 of the annual report.
Hon. D. Eby: We found the data, we think. Page 97 is marked of the 2017-18 annual service plan report.
For basic coverage, net premium written, $3.268 billion and change. This is a 15-month period. Actually, I’m just going to read it out. For the 12 months ended March 31, 2018, for basic coverage, $3,268,865,000. For the 15 months ended March 31, 2017, $3,720,692,000. For optional coverage for the 12 months ended March 31, 2018, $2,275,314,000. Optional coverage for the 15 months ended March 31, 2017, $2,532,407,000.
The line item is for net premiums written. A premium is deemed written when someone comes in, buys an insurance policy, and the insurer writes it. So it might be a $1,200 insurance policy for the year. That would be recognized as $1,200 when that person comes in to get the insurance, but it’s billed out at $100 a month. So there’s a difference between net premiums written and net premiums earned. They only turn into net premiums earned when ICBC actually gets that $100 each month.
So you might write for a 12-month period but only have six months recognized in the fiscal year. The member will see that the net premiums written should exceed net premiums earned, because ICBC may write for someone and then they cancel their insurance because they move out of the province or they decide to change their insurance, these kinds of things. Or they might just stop driving their vehicle.
J. Yap: I appreciate the minister confirming some of the numbers that I had, including the net basic premium of $3.269 billion. The minister had the exact figure, but let’s round it up to $3.269 billion, which is the net basic premiums. Based on simple math, that accounts for roughly 59 percent of total net premiums earned that year, the total being $5.544 billion. Can the minister confirm that’s correct?
Hon. D. Eby: If the member divides the earned premium by the written premium…. We just did the math here, and we got about 59 percent. That’s rounding, so in that neighbourhood.
J. Yap: I appreciate the minister confirming that. The same page on the annual report shows that in the 15 months ending March 31, 2017, a year previous, ICBC’s total net premiums were $6.253 billion — net basic premiums of $3.72 billion and net optional premiums of $2.532 billion. Can the minister confirm that’s correct?
Hon. D. Eby: Again, from page 97 of the 2017-18 annual service plan report, for the 15-month fiscal period ended March 31, 2017: basic premiums written, $3,720,692,000; for optional, the 15-month fiscal period ended March 31, 2017, $2,532,407,000; and total, for the 15-month period ended March 31, 2017, $6,253,099,000.
J. Yap: I appreciate that from the minister. So that means that for the 15 months ending March 31, 2017, ICBC’s net basic premiums, $3.72 billion, also accounted for roughly 59.5 percent of its total net written premiums of $6.25 billion. Can the minister confirm that’s correct?
Hon. D. Eby: We just divided the premiums written, as in the report that I just outlined, same reference…. We just divided the premiums earned against the premiums written and came up with about 59 percent.
J. Yap: With that trend in mind, year over year of 59, 59.5 percent of total premiums, and turning to ICBCs current financial plan — page 18, as we’ve already referred to, of the current service plan — it shows premiums of $5.826 billion in 2018-19, rising to $6.404 billion in 2018-19, rising to $6.404 billion, 2019-20, an increase of $578 million.
With ICBC’s basic premiums accounting for roughly 59½ to 60 percent of total premiums, as confirmed by the minister, this translates into total basic premiums of $3.496 billion for 2018-19. Adding a 6.3 percent increase to that total revenue pool will generate — just simple arithmetic — $217 million.
However, we know that ICBC’s forecasts require premium revenues to rise by $578 million per year, which we’ve discussed previously. With $217 million coming from basic, that implies that an additional $361 million would be needed — that’s the difference between those two numbers — from optional premium rates.
With optional premiums accounting for roughly 40 percent of ICBC’s total premiums, as we’ve discussed, it appears we can expect ICBC’s optional revenues for 2018-19 to be $2.4 billion, in that range. Then a $358 million increase on ICBC’s optional premium base represents a forecast increase of roughly 15 percent, which is a sizable increase.
To be fair, we should account for the growth in the number of vehicles. The minister had referred to how there will be growth in the number of vehicles, which is forecast at approximately 1.9 percent annually. Adjusting that 1.9 percent from the 15 percent implies that ICBC’s optional customers will be facing about a 13.3 percent rate increase this year. Would the minister advise if this is correct?
Hon. D. Eby: There are some pieces that the member is right about. He’s right about the fact that there’s significant pressure on rates in British Columbia, and there’s significant pressure on rates across Canada. In Alberta, in Ontario — the two jurisdictions that are more expensive than us — and the Maritime provinces, Newfoundland, commissioning reports, changing rules, trying to get auto insurance prices under control….
The member’s math…. I understand he’s trying hard to get to numbers that ICBC is reluctant to release, which are the optional insurance rates. I can advise him his math is way off. And part of that are things like…. If you have a 1.9 percent increase in the number of vehicles, subtracting that from a projected optional rate increase, because both are percentages, is not going to get you very far in terms of what the actual revenue is for ICBC at the 1.9 percent increase in vehicles — assuming that member’s number is correct, which I don’t. I can advise that it’s not correct.
There is actually a fairly clear test about whether ICBC is pricing appropriately in optional insurance, and that’s whether or not they are writing more policies or fewer policies. Their market penetration is going up in the optional category. Not only that, as I advised the member, in some categories of optional, prices are actually coming down.
It’s just challenging to do what the member is trying to do. I’ve come to understand this myself. The business of insurance forecasting is one that is certainly a very challenging piece of work. I’m not sure what else I can do, except to say that the member’s math is not correct.
J. Yap: Let’s move on to another approach.
Optional rates, as we discussed earlier, were $603 on average in 2017, which means that drivers are facing an increase of roughly $80 per optional policy, on average. Can the minister confirm that’s correct?
Hon. D. Eby: The member has asked a few times about the average optional policy rate, and I’ve told the member that we’ll have a look and see if we can get him that number.
The Chair: Member, are you moving to a new area?
J. Yap: Taking a different approach based on numbers that we’ve discussed previously. Let’s try this, Chair, if I may.
The 6.3 percent basic rate increase, which we’ve discussed, would translate into approximately $60, based on an average of a $1,000 basic insurance premium. Combined with a roughly 13 percent optional rate increase — I understand the minister has to confirm this — if that number is confirmed, based on that percentage, it would translate into about $81. Adding $60 to $81 gives $140 this year in rate increases. Can the minister confirm that that’s correct?
Hon. D. Eby: No, just the opposite. It’s not correct. The member is not correct in his projections for optional rate change, and he’s not correct in asserting that the average basic rate is $1,000. I don’t assign any blame in that at all, because I made the same mistake in my first answer to him. Maybe I’ve led him to this place, so I’ll try to correct it.
The base rate — this is the rate that ICBC starts with when they start assigning geographic factors or experience factors or collision factors, and so on — was $1,000. It went up 6.3 percent to $1,063. That is not the average basic rate; that is the base rate that they start with for these calculations.
The average basic rate in British Columbia, when you look across the whole pool of drivers and you divide that pool of drivers by the basic premium, is $1,441. There are some drivers that are below the base rate because they have a lot of experience and they haven’t had collisions. And there are some drivers that are higher risk, so they’re paying more than the base rate. That’s how you get a different average basic number from base rate. I hope that that clarifies that aspect of what’s happening there.
J. Yap: I thank the minister for that clarification.
On page 18 of the 2019 service plan, ICBC posts the three-year financial plan. The top line shows ICBC’s premiums earned rising from $5.826 billion in 2018-19 to $7.569 billion in ’21-22, an increase of $1.74 billion over the next three years. Can the minister confirm that’s correct?
Hon. D. Eby: The 2017-18 actual premiums earned was $5.329 billion, the 2018-19 forecast for premiums earned was $5.826 billion, the 2019-20 budget for premiums earned is $6.404 billion, the 2021 budget for premiums earned is $6.967 billion, and the 2021-22 budget for premiums earned is $7.569 billion.
If you subtract the 2021-22 budget number of $7.569 billion from any of the previous years — keeping in mind that one is actual, one is forecast, and two of them are budget — you will get the differential between the 2021-22 budget year and that particular year, whether it’s an actual or a forecast or a budget. If that’s the formula the member is following, then he will be finding the correct result.
J. Yap: I appreciate the minister confirming that the numbers that I had referred to were correct and the math would reveal the number that I had indicated. Looking at ’21-22, comparing to ’18-19 reveals an increase of $1.74 billion forecast over three years.
The growth in the number of vehicles ICBC insures over this period of time is expected to grow 1.9 percent annually. Can the minister confirm that’s correct?
Hon. D. Eby: If the member looks at page 22 of the….
Interjection.
Hon. D. Eby: Oh, that’s unpublished. The member will potentially look at page 22 of this report when it’s published. He’s getting the advanced numbers here. The 2018-19 annual service plan report, when it’s published, will include the number of policies. So we don’t have a number of…. ICBC doesn’t count a number of vehicles. What they count are a number of insurance policies earned.
The numbers for 2017-18 are 3.833 million, and ’18-19 are 3.895 million policies.
J. Yap: I appreciate the minister’s reference there. Getting back to two questions ago, I referred to comparing the out-year premiums earned, 2021-2022, of $7.569 billion. Comparing that to the ’18-19 numbers, we get a difference, just simple math, of $1.740 billion. This represents, just simple math, a 29.9 percent increase over 2018-19. Can the minister confirm that’s correct?
Hon. D. Eby: On page 18 of the service plan of the Insurance Corp. of B.C., the member will find the premiums earned numbers: 2017-18 actual, $5.329 billion; 2018-19 forecast, $5.826 billion; 2019-20 budget, $6.404 billion; 2020-21 budget, $6.967 billion; and 2021-22, $7.569 billion.
If the member subtracts from that final year of 2021-22, the $7.569 billion, the number from some previous year, he will find the differential of premiums earned — projected — for that time period. So if that’s the formula he’s using, then that will provide that answer for him, keeping in mind that some of these are budget and forecasted out.
I shouldn’t use the word “forecasted” because that’s different. These are budget for future years, and one of those sets of numbers is forecast, which has greater certainty, and one of those columns of numbers are the actual numbers for 2017-18.
J. Yap: I appreciate the minister affirming the numbers. We’re in agreement on those numbers. As I had referred to in my previous question, the change — understanding that yes, we’re talking about projections over the three-year budget cycle period — amounts to the percentage I had referred to earlier, 29.9 percent.
Accounting for growth in the number of vehicles — let’s say that the growth will be in the range of 1.92 percent — the forecast, or the projection, calls for an increase in premium revenues over the three-year period to increase, let’s say, 25 percent. Would the minister confirm that that number, 25 percent increase over three years, is what the projection is implying?
Hon. D. Eby: I hesitate to read the numbers back into the record, but I also don’t wish for answers to be taken out of context with the numbers that we’re talking about. The member is referring to the Insurance Corporation of B.C. 2019-20–2021-22 service plan numbers for premiums earned. There are five columns.
What he is proposing is to subtract the final year column, which is the 2021-22 budget year, from a previous year to get a differential, or a delta, and then to divide that by the premiums earned number for that year, in order to determine a percentage change in premiums earned. I used to hate it when ministers would do this to me, but I would guess that where he is going is to say, “Well, it looks like there’s a 20-plus percent — 25 percent, 28 percent — change in insurance rates as a result,” because that’s how you’re getting to a higher level of premiums earned.
There are many different factors that go into the forecasted numbers for ICBC. Just to give the member one example of the sophistication of the projections, they look at something called rate group drift. This is where they look at the proportion of newer vehicles coming onto the market and projections about how many newer vehicles are going to be in the rate groups versus older vehicles. Newer vehicles attract higher insurance premiums than older vehicles do. That’s one example of factors that are considered in these numbers.
We also talked about a 1.9 percent growth in…. It’s not in vehicles. It’s in the number of policies written by ICBC. This will be in the upcoming service plan. It’s not yet published. You can’t subtract 1.9 percent growth in the number of policies from the percentage that the member’s formula produces, because they’re percentages of different things. A 1.9 percent growth in vehicle policies produces a different set of numbers than the formula that the member is attempting to use.
All of which is to say that if the member subtracts the final column number for premiums earned from a previous year and then takes that delta and divides it by the previous year’s total, he will get a percentage change. But it would be incorrect to suggest that that is a percentage change in the charge to British Columbians for the premiums that they would see at their broker’s counter.
J. Yap: I appreciate the minister confirming that generating a percentage of the delta based on a year that we would like to compare to the out-year does generate a notional percentage. The minister is indicating that there are a number of factors that go into premiums earned versus what’s actually charged.
What we’re trying to discuss here are averages. So on average, doing the delta and doing the number crunching, the ICBC service plan reveals a 29.9 percent change, increase, over the three-year budget period — over the three years.
To be fair, I had mentioned earlier that adjusting for growth in policies written, number of policies, the percentage increase in premium would appear to be one explanation for why the number is going up. I had made some assumptions and come up with 25 percent. It may be in the range of that. It may be lower, may be higher. But let’s say it’s in that range, 25 percent.
If we accept that this plan, the minister’s plan for ICBC, over the next three years…. The projection is for an increase over the three-year period to the premiums that I’ve referred to already and applying the percentage that would seem to be indicated. Applying that percentage to the average premium paid….
Coming back to the very first questions that we started estimates debates with, the minister confirmed that the average premium is roughly $1,440. We had a discussion about the average being approximately $1,500. So we’re in the range between $1,440 and $1,500 or so. Applying that 25 percent would appear to imply that over the three-year period, average rates are projected to increase from the current level of $1,440 to approaching $2,000. Would the minister confirm that this is what is being projected?
Hon. D. Eby: The member asked me to make a number of assumptions about his math. I think throughout, I’ve been raising questions about his math. So I won’t endorse his math or his number. What I will do is agree with him to some extent — to the extent that my goal as minister responsible for ICBC has been to get rates to about the rate of inflation. This is not a crazy goal. It’s a goal that is being enjoyed — actually, below the rate of inflation — in some provinces of Canada. Saskatchewan and Manitoba public insurers are offering rate increases at or below the rate of inflation. These are achievable goals, but we’re certainly not there.
ICBC is projecting rate increases within the rate-smoothing framework that the previous administration set up. It is challenging, and they would be a heck of a lot worse if we hadn’t made the changes that we’ve made. And we recognize that our work’s not done. There is a lot of work happening at ICBC to identify cost-saving factors on the insurance side.
We’re working with material damage providers. We’re having a look at the court rules related to automobile collisions. The member will be aware that we already made a change related to the use of expert reports. There are challenges to that, court challenges, so we’ll see how that turns out. Not everybody was thrilled by those changes, and an array of other changes.
The second piece is that we recognize that British Columbians do not all drive in the same manner. There are people who engage in high-risk activities while they’re driving. They drive while impaired, they get excessive-speeding tickets, they drive while distracted, and they cause at-fault collisions. Some of these drivers are being heavily subsidized by drivers that have longtime safe driving records.
This is something, actually…. I’m quite critical of the private in other provinces for driving those provinces to the brink of ruin and then attempting to come here and tell us how to run insurance in British Columbia. I don’t suggest for a moment that we’re perfect, nor do I suggest that we should be taking lessons from insurers in Ontario.
What they do well is recognize that there are different categories of drivers, and they have their rates set at differential levels, depending on a driver’s actual behaviours on the road. So if you’re causing at-fault collisions, they might not even write insurance for you, or if they do, it’s wildly expensive.
We can take a bit of a lesson from that and say: “We’re going to increase the differential between low-risk drivers and high-risk drivers to reinforce the message about safe driving and to reinforce the consequences of setting a record last year for the number of collisions on our roads.”
While I don’t agree with the member’s math, and I don’t agree with his $2,000 figure, it doesn’t mean that his point is lost. We have issues at ICBC, still, that we need to address, because I have a goal of offering British Columbians more affordable auto insurance than they are currently getting, in terms of year-over-year increases. We’re working hard on a number of initiatives to deliver that. I’m happy to go into detail on those initiatives if the member wants to canvass those.
J. Yap: ICBC’s financial statements show that private passenger vehicles account for 87 percent of premium revenues. Put in another way, private passenger vehicles will account for — just crunching numbers — approximately $6.85 billion of ICBC’s projected premiums in the out-year, ’20-21. ICBC’s service plan estimates that there will be 3.2 million private passenger vehicles on our roads in that year, 2021. So it’s just simple math. Taking the projected premium of $6.85 billion and dividing it by 3.2 million indicates an average of $2,068 annually.
This comes back to my first question on a per-vehicle basis. I understand that there are other comparatives that can be used. But just on a per-passenger-vehicle basis, the average premium — just simple math — works out to $2,068 projected for ’20-21. Can the minister confirm that?
Hon. D. Eby: I’ve tried to express to the member that this is not simple math. The forecast includes a number of complex calculations about rate, class, drift, about the number of vehicles on the road, new products added, competition in the optional market. It is not simple math, as the member keeps suggesting — that this is very simple math. It’s not.
The member is attempting to project a rate for ’20-21. He started at $2,000. He’s now in excess of $2,000. I assume that he’s talking about basic insurance here, although it’s not totally clear because the premium’s written number includes optional as well.
I mean, I take the member’s point, which is that there are increases in rates in the service plan projections. The rates are beyond inflation, and that’s where we want to be. So there is a bunch of work that we are engaging in with ICBC, and ICBC’s engaging in with their suppliers and others, to get costs down for British Columbians. It doesn’t stop at ICBC either.
The members, I know, are aware of our initiative around intersection speed cameras. There are some people who have been critical of this initiative. I think that if you see a giant sign that says, “If you speed through this intersection, you’re going to get a ticket,” and you decide to speed through it anyway, you deserve the ticket. Not only do you deserve the ticket, but that kind of reckless driving at intersections where, in some cases, there are tens of collisions every year just at that one intersection….
We think about Alphonsus Hui, the doctor who was killed at an intersection in Vancouver by somebody. I think he was going, like, 90 kilometres an hour. There are many examples of people speeding through intersections recklessly, putting other people’s lives at risk. What we’re trying to do is change behaviours on the road as well.
The Ministry of Transportation has a high-friction road treatment — I can’t believe I’m saying this — because people aren’t just stopping in time at high-risk intersections. We spray it on the road to reduce stopping distances, because people are driving too quickly and they’re not braking in time.
We have a telematics program that we’re currently working on with ICBC, to make sure that we can roll this out. That will help teach young drivers about the risks of sudden acceleration, sharp cornering, sudden braking and give them a score on their driving so that they and their parents can have a conversation about responsible driving and those habits can be put in place early — a voluntary program. If it’s successful, we hope to expand it, as other insurers have, as an optional program in other markets in North America.
We have to drive down the collision rate. We have to find increased efficiencies at ICBC. These are the things that are going to get rates under control.
I disagree with the member’s math. However, I don’t disagree with his premise that there’s more work to do.
J. Yap: In its latest responses to the 2019 rate application to BCUC, ICBC stated that in 2017, for customers purchasing ICBC basic and optional insurance, the average premium was $1,516. Can the minister confirm that that’s correct?
Hon. D. Eby: The $1,516 average basic and optional figure is correct for fiscal year 2017. This was given by ICBC in response to an intervener request. It includes basic and full optional insurance, as well as non-insurance costs — for example, annual licence fee and driver’s licence cost.
I’ll note, just for the member’s assistance, that these average basic and optional rates can vary quite significantly, depending on a person’s scenario. I’m concerned that that number…. Someone will hear that and they’ll think: “Well, that is nowhere near what I pay for insurance.” So for example, a 21-year-old driver with five years’ experience, claims-free, no secondary driver…. When Manitoba went and did their assessment of how ICBC compared with other provinces, they found an average rate of $3,596. So someone’s like: “Well, $1,516. That’d be great. I pay $3,596. I’m getting ripped.”
However, they found that if that driver was in Calgary, that driver would be paying $6,728. If that driver was in Toronto, that driver would be paying $7,706. If that driver was in Montreal, that driver would be paying $5,680.
The challenge of average figures is that they can be deceiving, first of all, in terms of what a customer actually pays at the broker, because their experience is weighted and their geographic location influences it, and so on. So someone says: “Well, that number has no connection to my reality.” It also can create a perception that drivers are paying less or more than they should, compared with other jurisdictions.
I much prefer the model where specific scenarios are compared with other jurisdictions — how much you would pay for insurance. We are far from perfect. We’ve got lots of room for improvement when you compare us with other provinces in specific scenarios of drivers, in the comparisons done by independent jurisdictions from us. However, we’re a lot better than Ontario and Alberta, which are the jurisdictions that people often compare us to and say: “Well, why aren’t we as cheap as those provinces?”
Actually, we’re significantly cheaper for drivers in terms of the comparisons that have been done.
J. Yap: I appreciate the minister confirming that the $1,516 figure for average premium paid in 2017 was the figure that was provided by ICBC. That’s ICBC’s figure, provided as part of the BCUC submission.
I appreciate the minister’s clarification about comparing that to what’s actually paid, because it obviously depends on individual circumstances that a particular driver being insured would face — geography, driving history, etc. I do appreciate that. However, that is the figure. It’s a real figure that was given in a Utilities Commission submission. It’s $1,516, average premium paid.
ICBC’s 2003 annual report showed that the average price of auto insurance in 2002 was $960. That was the figure. Deducting $960 from $1,516, simple arithmetic, reveals an increase in the average premium, according to ICBC, of $556. Could the minister confirm that’s correct?
Hon. D. Eby: Well, the member has challenged us; 2003 was a while ago. They are firing up the microfiche machine at ICBC to get those numbers. I’m teasing, of course. In 2003, as I was reflecting, I was 26, and I had a 1986 Volkswagen Golf. I probably was not paying enough for insurance, compared to my risk on the road.
What I can share with the member in terms of immediate numbers from that time period, from 2003 to 2017-18, is there’s been a 154 percent increase in claims costs, and basic insurances rates are closely related to claims costs, obviously. So that will give the member some indication of the increase in insurance rates over that time period and what that increase was based on.
I can also tell the member that in terms of the 6.3 percent impact and, actually, the impact of multi-year rate increases going back…. In September, we have the rate design rolling out that I advised the member about earlier, where lower-risk drivers are going to be paying less, and higher-risk drivers are going to be paying more.
I can tell the member that two-thirds of drivers are going to see less than a 6.3 percent increase, because they are lower-risk drivers. In fact, a quarter of drivers are going to see lower rates overall in terms of that rate redesign. Of course, one-third are going to see 6.3 percent or higher because they are higher-risk drivers, because it’s a revenue-neutral shift to reflect driving risk.
Unfortunately, I don’t have the early 2000s numbers here, but I will undertake to get those numbers to the member.
J. Yap: I do appreciate the reference the minister made to having to get the information. And it’s been awhile since I heard reference to microfiche, but I take the minister’s reference to how far things have changed. Some millennials viewing tonight’s estimates debate might well ask: “What is a microfiche?” They’re googling it as we speak.
I can assure him that we have looked it up, and the number, as the folks from ICBC will find when they get to the microfiches…. The annual report did show that the average premium was $960, the average price of auto insurance, which reveals, when you look at the ’15-16 number, an increase over the 16-year period, 2002 to 2017, of $556.
Today with the service plan of ICBC, which we’re debating in these estimates debates, the minister is projecting over the three-year budget cycle, through the out-year, an increase in premiums. We’ve discussed that we would agree to disagree on the methodology, but — simple math — the projected premium increase reveals that over the next three years, British Columbians could be facing — I understand these are projections — an increase in premiums, when you figure out total premiums in 2021 and divide it by the number of passenger vehicles insured, in the range of $2,000.
To the minister, would he agree that under the previous government, over 16 years, ICBC rates increased by $556, but over the next two years, the term of this government, rates are forecast to increase by about $500? Would the minister agree?
Hon. D. Eby: Well, I have some thoughts on the member’s question. When we took over responsibility for ICBC, in assuming government, we took over following three years of suppressed rates. That means the previous government did not increase rates sufficiently to cover the increasing expenses at ICBC. That rate suppression led to significant losses at ICBC.
In addition, $1 billion was taken out of ICBC’s reserves — $1 billion that should have been earning investment income currently for the corporation. And we were facing, in order to meet the anticipated costs of the corporation, a 40 percent rate increase in a single year.
We had to make some pretty dramatic changes in a hurry, and I’m very proud to say, because it is a step on our journey of where we want to go, that the 6.3 percent increase is the first year in a while, certainly in the last four years, that ICBC has had a rate increase that’s actually projected to meet the expenses increase at ICBC. In other words, they are projecting to be collecting enough money to cover their expenses. It’s been a while since that happened. And it wasn’t 40 percent; it was 6.3 percent.
I accept the member’s critique, because I feel it myself, that 6.3 percent is a lot for British Columbians and that our insurance is expensive. It’s not as expensive as Alberta and Ontario, but it’s expensive. It’s too expensive, and we need to find ways to get that rate down further. But I won’t accept the member’s critique that our government is responsible for the mess, frankly, that was left to us by rate suppression in the three years before as well as the books before the election about the state of ICBC compared to where ICBC actually was.
I’ll just note, as an interesting point of comparison, that in 2010, the average residential price in greater Vancouver was about $825,000. In 2017, the last year of the previous administration, that price was about $1.125 million for the average home in greater Vancouver. That’s a difference of about $300,000, or about a $42,000 increase in home prices per year.
It wasn’t just insurance; it was also in housing that the previous government dramatically increased costs for British Columbians. I’ll acknowledge that that is a pretty political answer. But to go from the second year of the previous administration through 14 years of their administration, and for us being in power now just over two years, to assign us responsibility for what was left of what used to be a money-making corporation for British Columbians — after the previous government was done with it, turning into a $1.3 billion money-losing corporation — in our first year is a bit much.
The Chair: I’m going to suggest we take a five-minute break. It’s been a while. We’ll come back in five.
The committee recessed from 4:39 p.m. to 4:45 p.m.
[R. Leonard in the chair.]
M. Lee: Just before the break, the Attorney made a number of comments which were far-reaching and perhaps beyond the scope of this committee stage. So I will resist the urge to respond in kind regarding the cause, for example, of rising house prices.
Let me come back to a part in the service plan on page 18. At this part of the section of the committee session, I’d like to just spend a little time focusing, with the Attorney General, on the net claims line on the summary financial outlook on page 18 of the 2019-20, 2021-22 service plan.
First of all, if I could ask…. Under the 2018-19 forecast, the figure that’s set out is $6.437 billion, in terms of the amount that is forecast for 2018-19. Could I first ask you what was the budgeted amount?
Hon. D. Eby: The 2018-19 forecast number is — the member has read it properly — $6.437 billion.
Just for clarity, because I need to clarify this myself, forecast is the most recent data that’s available for the fiscal year. It’s calculated during the fiscal year. It’s not quite a budget because some of it is actual, and it’s not quite actual because there’s still some of the year left to go. So this forecast number, quarters 1 through 3, is recorded and confirmed and locked down, but quarter 4 is not. It’s still projected. That’s why it’s called a forecast instead of an actual or a budget. The budgeted number for 2018-19 was $5.960 billion.
M. Lee: Thank you for that fulsome response. I appreciate the distinction. I also note, of course, that in the helpful management discussion on page 21, there’s explanation for why there was increased level — meaning the differential, presumably, of approximately $500 million between budget and forecast for 2018-2019 — that was just outlined by the Attorney General to date. It was caused for reasons that included the continued high rate of large and complex bodily injury claims, extension of time required to resolve injury claims and an increase in material damage claim severity.
Also recognition that 2018-2019 is the last year before product reform, which I would like to walk through with the Attorney General in terms of what the anticipation is when we look at the same line item, of course, for the 2019-20 budget, 2020-21, 2021-22.
Could I just first ask for any further comment from the Attorney General in terms of the reason for why there was an increase between what was originally budgeted for net claims incurred for this period, 2018-19, versus what’s currently being forecast?
Hon. D. Eby: The member was looking at the right place for an explanation for this increase, page 21 of the 2019-20, 2021-22 service plan, “Management’s perspective on the financial outlook” for ICBC.
The change is primarily due to claims costs that are higher in ’17-18 from higher average costs to, first of all, settle bodily injury claims, a high rate of large and complex bodily injury claims, an extension in the time required to resolve injury claims — the longer these claims go on, the more they cost — and an increase in the material damage–claim severity. Material damage is autobody repair, as a simplified descriptor. The cost to repair vehicles went up because the damage to the vehicles was more severe.
There was also anticipation that settling claims would be more challenging in the year that ICBC was expecting government to act on the CRT and on the limit on pain and suffering awards for minor injuries. However, it was significantly more challenging than even expected.
I’ll share with the member some statistics that are startling — unprecedented, certainly, in British Columbia and, perhaps, in Canada. Since March 2018 to the end of 2018, there was a 30 percent increase, in that period, in the value of settlement demands — a 30 percent increase in the value of those demands from plaintiff counsel — and the actual cost to close a file went up 20 percent in that period. That’s unprecedented, which made it difficult, obviously, to anticipate exactly how costly it would be to settle these litigated claims in the years that we did such extensive reforms on the government side.
That should give the member some indication. Obviously, we also saw, in the time period, an increasing crash frequency and increasing claims per crash. Neither of which are helpful indicators if you’re hopeful that your costs are going to go down, from the insurance perspective.
M. Lee: I see the reference to higher paid settlements. Was there any particular reason as to why it increased by 30 percent? Is there a review, in terms of this period, as the Attorney General mentions, between the end of March of 2018 until December? That’s a period of time which is very specific. Was there a particular reason that was causing this increase by 30 percent?
Hon. D. Eby: The big change in this time period was product reform, with plaintiff counsel recognizing that effective this past April 1, there were going to be significant reforms to how disputes with ICBC are resolved, going to the civil resolution tribunal for the vast majority — about 80 percent — of claims, instead of going to B.C. Supreme Court, and then an upper limit on pain and suffering awards of $5,500 — as well as other changes that are more nuanced but, in any event, historic changes.
The changes were projected to save the corporation — and, by extension, B.C. drivers and taxpayers — about $1 billion in a single fiscal year. So the anticipation was that in this final period under the old system, counsel would be trying to get as much as possible out of those claims. There was an increase in use of expert reports. There was an increase in demands, the amount of money demanded in settlements. If ICBC wishes to close a file — which is a fiscally responsible thing to do as an insurer if they can do it at a reasonable settlement level — they do that, because the longer a file stays open, the higher the cost goes over time.
These are the trends that led to it. The big, obvious piece that was anticipated, actually, in ICBC’s projections — but not to the extent that it was actually realized — was that product reform was going to drive increasingly aggressive claims from plaintiff counsel. It’s anticipated in part because other jurisdictions have had this experience as well.
M. Lee: Just to understand the explanation as well, just the companion piece to that, of course, is that the cost to close a file went up by 20 percent. So presumably, of course, with higher claims being sought in terms of settlement amounts, there would be fewer, a decrease in terms of the number of claims that would be closed out. But in terms of the cost to close a file, how does that interplay with the 20 percent increase?
Hon. D. Eby: In the period 2014 through 2017, ICBC saw a significant spike in claims over that fiscal period. It takes about three years for a claim to make its way through to what’s called the 84-day rule under the court rules where you have to…. I heard one plaintiff’s counsel describe it as….
Anyway, you have to tell the other side what you’ve got. At the 84-day rule, you’ve got to be like: “Okay, here are all our expert reports. Here’s the state of play for this plaintiff.” That’s when ICBC finds out how significant the injuries are and how significant the claim is that’s being made.
It may seem surprising that it takes three years to get there, but that is the state of our court rules currently, and ICBC has no insight until that period. It’s not a coincidence that we’re seeing these claims really start to materialize, that run-up from 2014 to 2017, in the period 2017, ’18 and ’19, because those are three years from the run-up. That’s when they’re hitting the 84-day rule, and that’s when claims that were believed to be smaller or moderate claims materialized at the 84-day rule to be catastrophic claims.
That is a very good example of how, over time, claims get more expensive and why there has been — at least, since I’ve been on board, anyway — a desire on the part of ICBC to close claims as quickly as possible. The member asked about the 20 percent cost to close a file. That’s the amount that the settlement is for, that 20 percent increase. It costs 20 percent more to settle a file in this fiscal period than it had in the previous fiscal period. That’s that 20 percent number. I hope that clarifies it for the member.
M. Lee: That 20 percent figure, presumably, is based on the length of time it took to settle that claim being longer. Are there other factors as to what drove up that cost?
Hon. D. Eby: The reason why it costs more the longer a claim is open is that each side spends more on experts as you get closer to the trial date. You spend more and incur more legal costs on both sides, so the cost of ultimately closing the claim goes up. It’s just a rule of litigation. The longer the thing goes, the closer you get to trial, the more money you spend in disbursements and the more it costs to close the file.
The 20 percent — and the 30 percent increase in settlement demands — is linked, in part, to that, but more closely to more aggressive behaviour by plaintiff counsel on the claims that they have in their portfolio of claims. The reason for that, we speculate, is anxiety about the changes that are coming in — the reduced income to the firm and the expectation that they have to get as much out of their remaining claims as possible under the old system.
It’s attributing a lot of motive. It’s hard for us to know. I would advise the member to take that with a grain of salt, because it’s speculation.
What isn’t speculation is that the value of demands, for what would have been a similar claim in a previous fiscal period, should have been about 30 percent lower than it was. In order to close the file, the cost was about 20 percent higher than it would have been in the previous fiscal period.
M. Lee: I appreciate the Attorney General giving the caveat about the grain of salt. I understand that.
Just because it’s sitting out there this way, I just wanted to ask the question. One explanation, of course, is that the plaintiff’s counsel is seeking greater settlements for the reasons that the Attorney General might surmise. Another reason might be…. This begs the question: was there any change, in terms of ICBC’s approach to dealing with settlements, during this period of time?
Hon. D. Eby: Yes, something did change. So ICBC in Q1 didn’t see a lot of change. In Q2, they started noticing an escalation in settlement amounts. In Q3, they recognized that there was a significant increase in settlement amounts — out of the ordinary, more than was anticipated and more than it should have been, looking at previous fiscal periods.
To recognize what was happening, there were a couple factors. One is that there were a bunch of newer adjusters. ICBC has increased the number of adjusters in order to be able to administer claims more quickly in order to, hopefully, encourage people not to go out and hire counsel. So if there’s someone that they’re dealing with that is immediately available, can assist them with their claim.
The downside of new people coming on is they’re less experienced. They produce guidelines for the new adjusters to ensure that the adjusters were applying consistent standards in settlement offers for similar injuries. However, they recognized there still needed to be discretion exercised because not everybody is the same, and it’s difficult for a new adjuster to do that.
They set up a system where more-senior adjusters were available, when more-junior adjusters needed to depart from the guidelines, to get authorization to do that. There was increased scrutiny when they departed from the established trends of settlement amounts for similar injuries. So yes, ICBC did react to get that trend under control.
M. Lee: Perhaps I could just get a comment. I know our time is running short here at this time, so we will need to come back to this discussion. Perhaps I could get the comment for the record, and we can go further from that.
There was a study, of course, that was commissioned, the ICBC litigation review study. Perhaps the Attorney General can just confirm the period of review that that was done for, and whether it overlapped with this period that we’re speaking to, in terms of the increase in litigation and settlement costs.
Hon. D. Eby: We’ll get the date range for the member for next time. It was earlier, though, than the reformed policy around settlement offers at ICBC. It was before that period. It was files pulled from before that trend was identified as well.
I’ve been advised that we need to wrap up by 5:15. I wonder if the member has any particular requests he wants to put in, in terms of detailed data or something like that, that we could be working on in the interim, before next Monday, to avoid me saying: “Oh, we don’t have that or….” It’s just an opportunity to say, “Here are some things,” and we’ll try to arrive prepared to answer questions he might have.
M. Lee: I appreciate that. We’ve had the great cooperation from the ministry. My colleague Richmond-Steveston, as well, in terms of being the lead critic for ICBC, liquor and gaming…. We’ve had two briefings, and we’ve had some follow-up material.
One point, though, because you’ve asked….We will continue the discussion next time around claims. I think I asked for this; I’m not sure that I received it just yet. It’s just the differences over historical complex claims. Obviously, there’s been a great buildup on this. There are a few things to note in the BCUC submission.
It would be helpful, as we come back on May 27, if there’s any further material to help guide the discussion regarding complex historical claims and how that’s been dealt with and any changes in approach, the assumptions and the qualifications around how that’s being forecasted and dealt with.
Hon. D. Eby: I’ve checked with staff, and they know what the member is referring to. So we will prepare that.
I wanted to thank Nicolas Jimenez, president and CEO; Phil Leong, interim chief financial officer; and Lindsay Matthews for their assistance here with us this afternoon.
With that, I move the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 5:15 p.m.
PROCEEDINGS IN THE
BIRCH ROOM
Committee of Supply
ESTIMATES: MINISTRY OF HEALTH
(continued)
The House in Committee of Supply (Section C); R. Glumac in the chair.
The committee met at 1:37 p.m.
On Vote 31: ministry operations, $20,698,339,000 (continued).
Hon. A. Dix: Just this morning I received a question from the member for North Vancouver–Seymour, with respect to wait-time information for children for treatment of eating disorders. I have some of that information, which I’ll also share with the member, but I’ll put it in the record.
For intake services, the referral to completion of assessment is ten days. That’s the target, and that’s the actuals. Assessment to out-patient treatment services — the target is 14. The actual is 17 this year. In-patient, the assessment to day treatment — the target is 20 days. The results are six days. And the assessment to in-patient — the target is 20 days. The result is five days. Those are obviously good results, and we’ll also share this information with the member for North Vancouver–Seymour.
With that, it’s over to my friends in the opposition.
S. Sullivan: I was very thrilled to be at the announcement on February 15 of almost $1 billion to move the St. Paul’s Hospital to a new site. I know many people in my riding and, certainly, the people who work hard for our health care who work in St. Paul’s Hospital are really excited about this.
The question I have is…. This is a big project. It’s not just a hospital; it’s a full campus, a real centre of innovation. Has the minister had any luck with convincing our other partners, especially the federal government, to get on board and to support this as well?
Hon. A. Dix: The member will know that the project cost for the St. Paul’s project was $1.915 billion, of which our share, as he says, is $1 billion. We’re working, obviously, closely with Providence Health Care, which is coming up with the rest of the money.
There are a number of things you can refer to when you talk about St. Paul’s. On this project, we’ve been waiting, and government has been working on this project since 2002. So this is, I think, an extraordinary achievement, both for the government and for the regional health authorities but principally for Providence Health Care and for the people of Vancouver and of British Columbia, who love this project, love this hospital, not just those that live in the member’s constituency and my constituency, not just those who are longtime supporters of Providence Health Care but people across B.C. who’ve been treated at this hospital, who’ve come from Dawson Creek and Kelowna and Kamloops and Vancouver Island and all of the other places in B.C. and have been treated there.
I think we’re talking about a hospital, the present campus, that needed to be replaced in 2002. So it’s wonderful that we’re moving forward with our partners at Providence Health Care. They are our partners on the main project, which is the hospital. When I referred to the $1.915 billion, that’s the main hospital project, looking to be finished by 2026 — 115 net new beds, 548 beds. As people know, when the project was discussed in 2015-16, that number was dramatically less than that. So discussions about what the project would’ve cost then are not particularly relevant. I think it’s a real achievement.
With respect to the federal government, there may be a role in the projects that are connected to St. Paul’s — in other words, other projects that are being brought forward by Providence Health Care. I’m sure the member would agree to see the development of a new St. Paul’s as fundamentally important, not just to the health care of the city but to the development of the city in terms of jobs.
In the broader health sector, I think it creates enormous opportunities. Clearly, Providence Health Care feels that that’s true as well. So there may well be, and we may have some optimism that there would be, a role for the federal government, not in the building of the hospital, as discussed, but in all of that which will go around the hospital, the campus that will go around the hospital. I think that, obviously, to say that that’s a significant opportunity for Vancouver is to greatly understate it. I’m sure the federal government, as well, would be very interested in building on this successful project.
S. Furstenau: I have a few questions for the minister. The first one is very specific to my riding and my constituency.
We are delighted that the Cowichan District Hospital has been approved. We’re very excited about that, but in the meantime, the challenges remain for the current hospital. The Cowichan District Hospital Foundation has put money forward in order to solve one of the highest needs, which is to make space for new beds by moving the administrative offices outside of the hospital so that that space can be used for beds.
The Cowichan District Hospital Foundation has not yet received confirmation from Island Health that this project will proceed in the terms that were outlined in the March correspondence between the foundation and Island Health. In addition, it’s the understanding of the foundation that the government is not going to contribute financially to this project. It will be the foundation and the CVRHD.
My constituents are of the view that there should be a contribution from the provincial government as we have the needs to be served at this hospital, which has been over capacity for several years now and, I think, is very rarely not over capacity in terms of beds.
I’m wondering if the minister is aware of this project brought forward by the district hospital foundation and if the provincial government can help to support it.
The Chair: Minister.
Hon. A. Dix: Thank you very much, hon. Chair. It’s really good to see you this afternoon. Thursday afternoon is my favourite time.
Talking about Cowichan District Hospital is also a positive thing to do. I know the member has been working supporting this project, and the hospital replacement is obviously critical on Vancouver Island. You don’t have to spend much time in the hospital to know that the staff does an extraordinary job in the existing facility but that the replacement is needed. The replacement is coming. We’re working on it together, and the business plan development is underway.
With respect to this issue — which hasn’t come to the attention of the Ministry of Health but would be an issue, presumably, between the foundation and Island Health — what I’m going to do is ask, and hopefully, we’ll get a response really quickly, to get an update on what Island Health’s intentions are. It wouldn’t come from the same capital funds that we’re replacing the hospital with, which is a provincial question. Should Island Health participate — I don’t know if they will or they won’t, but I’m going to get an update — that would come from their maintenance and minor capital funds.
S. Furstenau: Thank you to the minister for that. That will be helpful.
I have another, constituency-based. This is something that came into our constituency office. There was a case, in Duncan, of a Cowichan woman whose mother was suffering from dementia and living with an in-law who requested that she be admitted to a care home immediately. In this situation, the case manager offered a spot in Parksville, which is quite a distance from Duncan, and the in-law delivered her mother-in-law to the facility, against the wishes of the rest of the family. The problem with this situation was that the in-law did not have power of attorney to make this decision, and the case manager in the situation didn’t seem to require it.
I have a couple of questions around that. Is it typical that a person without power of attorney would be allowed to make a decision for someone else’s health choices? What is the process that’s in place? If this is not typical or not acceptable, is there a process to make sure this doesn’t happen in the future and to remedy this type of situation? Then the broader question about the placement of seniors in facilities that are close to their families — is that a priority? How do we make sure that that happens?
Hon. A. Dix: The particular case obviously involves privacy issues for everyone involved. The member may well done this already, but I’m not aware of it. I can commit, if she wants to share the details of the case, that we can go over it and assess that. There is a place to complain, of course, about health authorities and so on, which is to the patient care review board, and that process carries on if there’s a complaint to be made by somebody. But we can also review the circumstances, and I’d be happy to do so on behalf of the member’s constituent and on behalf of the member.
S. Furstenau: Thank you to the minister for that. Just to follow up, in terms of the power-of-attorney question, in a general way, would it be typically understood that the decisions around somebody’s health or placement would lie specifically with the person who has power of attorney over the person whom the decisions are being made about?
Hon. A. Dix: Obviously, this has been a positive evolution over time — the development of advance care directives to assist in people’s interactions with the health care system and ensure they have agency and voice when they can. When that’s not the case, of course, there are challenges.
Just to be clear, if you’re looking at these agreements, representation agreements name someone to make health care decisions if you become incapable. The advance directive itself, of course, provides instruction. But with health care treatments, you accept or refuse. The enduring power of attorney appoints someone to make decisions about your financial affairs, business and property, but not health care treatment decisions. So those are some of the distinctions.
Again, with respect to the member’s constituents, I’d be happy to look at the circumstances — whether mistakes were made or not made and what the circumstances were — and, I’m sure, respond directly. As always in these patterns, we require consent and all those other things to get into that. We’d be happy to get into the details of the case to see how all of those things applied in this case.
S. Furstenau: Thank you to the minister again.
Slightly different — the Emergency Health Services Act. My first question is actually just to make sure I have a correct understanding of this.
It has been brought to my attention that the Emergency Health Services Act, brought in, in 1974, makes it illegal for most of B.C.’s first responders or medical professionals to render care beyond “first-responder-level” industrial first aid while they are on the job outside of a hospital.Can the minister confirm that this is indeed the case of this legislation?
Hon. A. Dix: Essentially, the member is correct. The legislation allows paramedics to work as paramedics to their full scope when they’re working as paramedics.
That same person, if they were working in some other area — say they were, which is not infrequent, working in an industrial plant, working even as a firefighter — they would not, under those circumstances, be treating to that scope of practice. There are some nuances to that, but the member’s position is, essentially, the right one. That is enshrined in legislation.
S. Furstenau: My understanding is also that the act makes it illegal for any non–CUPE 873 member to transport any patient to a hospital. So what we’ve heard is that this is a problem because first-responders — like firefighters, police, search and rescue professionals — can’t provide this transportation to a hospital unless there is an agreement beforehand. Furthermore, no doctors or nurses can step outside of a hospital to render care while they are on a job.
Once again, if the minister could confirm that this is the correct understanding. Further to that, does the minister consider this act to be in the best interests of British Columbians?
Hon. A. Dix: First of all, it’s absolutely not related to the union. I disagree with that characterization. It’s related to the level of training and licensing.
For the first level of licensing for emergency medical response, you’re not allowed to transport. For the second level, where all ambulance paramedics are, you are. There are some exceptions in British Columbia in some remote areas, where others transport. Generally, it’s ambulance paramedics. In addition, nurses in certain high-acuity circumstances do work with paramedics and can play a role as well.
Essentially, it relates to the level of training and not to any membership in any union.
S. Furstenau: Thank you for that clarification.
The minister mentions that there are some exceptions, particularly, I would expect, in underserviced areas of the province and rural areas. Does he have examples of that? And in terms of getting those exceptions, is there a process for those exceptions to be brought in if a region has determined that they would need that kind of flexibility or those kinds of exceptions?
Hon. A. Dix: There’s one exception which is, I think, unique in the province. It is in Kitimat, where fire does all paramedic services. The other exception we’ve identified is in some First Nations communities, where your transport to the territorial border or the community be relevant.
If people would be interested in that, those are all worked out with B.C. emergency health services, if required. They’re, as suggested, very unusual cases.
S. Furstenau: On to a different topic now, cataract surgery wait times. This is more of a regional question. In 2013, the average time for somebody needing cataract surgery at the regional general hospital in Nanaimo was 27.9 weeks. It’s now 61.3. I’ve heard a lot from constituents who are quite concerned about this wait time. Can the minister give me any information about what’s being worked on to reverse this trend for cataract surgery in Nanaimo?
Hon. A. Dix: I have some regional data for the member about the last year, where we’ve made some considerable progress. We’ll certainly ask for some site-specific information and share it with the member.
As the member will know, under our surgical and diagnostic strategy, we’ve significantly increased the number of surgeries overall in B.C. Determinations about priorities are generally…. We have some priority areas, where we’ve funded for hips and knees and dental surgery this year, but other than that, those priority decisions are obviously made by health authorities and, largely, their medical teams.
On Vancouver Island, cataract surgery wait times have seen significant decreases in the past fiscal year. That year is 2018-19. The 50th percentile decreased by 22.2 percent. The 90th percentile decreased by 18.4 percent. I’ve asked them to get the data here. On Vancouver Island, we completed 511 more cataract surgeries in 2018-19 than the previous year, which is a 4.2 percent increase.
S. Furstenau: That’s very helpful as well. It’s good to hear.
The next topic I’ve got is inflammatory bowel disease. I’m sure the minister is aware of the devastating personal and health care impact of inflammatory bowel disease. About 25,000 British Columbians of all ages are struggling with IBD. It is a costly, non-curable, complex, lifelong disease, and because it often presents as young people enter adulthood, many of them are seeing their educations and their careers sidetracked. There are 1,500 new cases diagnosed every year.
My first question would be to the minister. Could he explain how the ministry and the health care system are tackling this challenging, chronic disease?
Hon. A. Dix: Obviously, this is a condition that afflicts many people in B.C. The association representing patients and, in part, clinicians has met with the ministry in the last few months to discuss initiatives that they would like to see taken. Those are, obviously, under review.
They’d like to see, just as an example to the member, the creation of a new centre at St. Paul’s Hospital. They had a fairly significant ask, it should be said, which I think was for $5 million. We haven’t approved yet, but that’s the proposal that they’ve made to make some advances in this area.
Obviously, it’s the health authorities in general that respond in this area and others to provide care. If additional resources are required, that is directed by clinicians in the health authorities making decisions about priorities. But people should expect treatment, and obviously the quality of primary care and other supports is critical to that. That’s why we’re trying to improve primary care for everybody.
There are some specific proposals, there have been specific discussions, and it’s something that’s under review.
S. Furstenau: Just in terms of those specific proposals and discussions that are coming forward, is there a timeline that can be expected, in terms of when the ministry would be engaging or coming up with decisions on that?
Hon. A. Dix: Of course, the timeline now is the provision of care now. This is a significant issue, and that care is being provided. There will be a discussion about whether that’s adequate.
What I think is being asked for is a form of centre of excellence in this area to drive the issue, and that request has been made, as were other requests. It’s the reason we met with the group, as we do frequently with groups of patients who have particular interests in the health care system. The members of the Legislature meet with them as well, frequently. But our ministry meets with them in a more substantive — not to say that our meetings aren’t substantive — and specific way, sometimes, about specific treatments provided by health authorities, not sort of general discussions.
The proposal was put before us. It’s quite an expensive proposal, and new. But it’s an issue that we take seriously, and we’ll be taking a look at it. Historically, such proposals have been funded at year-end. To a degree, we’re trying to move away from that area.
The member will know — I think the member for Kelowna–Lake Country will be asking about this later — that at year-end, for example, we funded the First Link program again this year for the Alzheimer Society, and that was $2.7 million, which has consistently been funded at year-end, over a number of years. Ultimately, I think it would be healthier and better for the society if it was in the base so we didn’t have this sort of tension that sometimes surrounds year-end funding.
I think what the request is for is $5 million in one-time funding to establish the centre, and I presume that there would be ongoing cost. That proposal for it came forward for the first time, so it was the subject of the meeting, as were other issues of the groups involved. There would be also operational or delivery issues, which really don’t involve the creation of a centre, necessarily. So that’s the ongoing work of the ministry, both with the group and on the issue.
N. Letnick: Welcome back to the minister and his staff. We have until 4 p.m., so just under two hours, subject to the bells ringing and all that kind of thing.
Interjection.
N. Letnick: Well, at least three or four questions.
Where I’d like to start, if it’s okay with the minister, is that yesterday my first question, actually, was to do with funding for health authorities. The minister and his staff were so kind as to give me a set of numbers on a health authority funding allocation sheet — this one here — which were different than the numbers I had from the budget book, in the estimates book.
I just want to refer the minister and his staff to where I got my numbers, and then we can find out why the discrepancy.
On page 29 of the Making Life Better Budget 2019 fiscal plan, it breaks down expenses by ministry, program and agency. Under Health, we agreed on the numbers. So $19.754 billion is forecast for ’18-19, and $22.161 billion is the plan for ’21-22. All good.
Then I went down to the bottom, where it says: “Service delivery agency expense: health authorities and hospital societies.” That’s where I got my numbers from. The budget estimate for this year was $16.292 billion, and for this year the budget estimate, based on the sheet I got yesterday, was $13.429 billion.
My obvious conclusion to that is the health authorities and hospital societies…. If I take the number in the budget and subtract the number on the sheet, the difference must be hospital societies. Can the minister please confirm that that’s correct?
Can the minister also explain to the public what comes under hospital societies? Is that one particular hospital society that we all know and love in Vancouver, or is that a number? The third question is: can we, in the future…? And it might not be within the minister’s control. It might be the Minister of Finance, but we can always ask. Can we not separate it out?
Something that big should, I believe, have its own line item on here so we don’t have to show health authorities and hospital societies. Or can the minister point me in the right direction as to where I would actually find health authorities separately in any of these two books? Because if it’s not, then I think it’s fair to the critic and whoever is going to follow me to have it clearly identified so we can track how much health authorities are getting.
Hon. A. Dix: This is an interesting question. The member is right. There are obviously additional things captured by that budget line in the budget book on page 29, and those include hospital societies, including Providence Health Care and others such as Louis Brier and Menno and others that are captured in that.
With respect to the health authorities, their budgets are captured in service plans. They do change throughout the year, so there’s a notional allocation, which I provided to the member. I think we should just provide these things. That number may change slightly in the course of the year based on changing priorities, possibly even inter-year changes in demographics, but they’re basically what people have to work to.
Then obviously in the public accounts at the end of the year, you see what the final result is of all of that. That’s the process now. Because the notional allocations come out later than the budget, the envelope in the budget…. So you see, in the budget, the notional allocations come out later. Sometimes the service plans are not published at the same time. That’s the reason for the difference. But I’ll most certainly reflect on ways we can provide more information to the public.
Really, these are their health authorities, and they should know and reflect on the differences year to year. What we’ll try and do…. This might be part of early briefings that we can provide the opposition, as well, so that we can share that information in the Legislature — kind of what our intentions are with health authorities — so that you can have a fair analysis of the budget on budget day.
Interestingly, these are issues that other Health critics have raised in the past, especially when health authority service plans used to be published, I think, in November or something like that, in a couple of different years, maybe in…. I don’t know. It could have been ’09, could have been ’10, something like that.
N. Letnick: Thank you to the minister for the answer. The way he puts his answers is extremely beneficial and helpful.
Having said that, I know he’s made a lot of progress since he was the critic, and is now the minister, in making sure that the public has access to the information in a timely manner. I don’t see any reason why, if the estimate is showing up in this document, on page 29, the estimate cannot be split up between health authorities and hospital societies, also on page 29, so that at the time the budget is released, people have a clear indication as to what the government anticipates will be going to health authorities versus the hospital societies.
Quite frankly, when I looked at the numbers…. I went out to the public, and I said: “What’s going on here? They’re not funding health authorities for year 2 and year 3.” That was not fair to the government. So I think it’s in the government’s best interest to make sure that the public realizes where the money is going, at least with these big numbers, at the time.
Of course, it does lead to a question when you combine health authorities and hospital societies together in this budget document. My question from yesterday still stands but in a different way. The funding increases now for…. The envelope for health authorities and hospital societies is going up in year 1 by 3.9 percent. In year 2, it’s going up by 2.4 percent. In year 3, it’s going up by 1.6 percent. So it’s not just health authorities any more; it’s health authorities and hospital societies.
Can the minister explain how these numbers decrease by such drastic amounts over the next three years when health inflation is going to be approximately — anybody’s guess, really — 4 to 6 percent?
Hon. A. Dix: I wanted to let the member know what things aren’t accounted for in 2020-21 and 2021-22.
That includes the ten-year federal agreement spending on seniors and mental health. That’s $166.35 million in 2021-22 and $197.02 million in ’21-22. The emergency transfer fund spending is $13.2 million in ’20-21 and $2.4 million in ’21-22. It does not reflect any additional funding for the new wage negotiations — for example, the nurses, the Doctors of B.C. Those are significant differences in the out-years that we’ll be seeing. And it does not reflect the opportunity, of course, to pursue additional funding from Treasury Board.
Those are all elements that make it different. What we’ll attempt to do in terms of the detail of the difference between other societies and how money flows through…. Some of it flows through the health authorities and health societies. I’d be happy, and I’ve asked staff, to prepare a briefing for the hon. member on that.
N. Letnick: Thank you to the minister for that. As you can probably imagine, looking at the numbers, it is stark. Any clarification at the time the budget is actually sent out next year would be appreciated, assuming, of course, the minister is in his role, which I have no doubt he will be.
With that, I will pass the questions over to my colleague from the Third Party.
A. Olsen: I just wanted to ask the question to the minister about the international medical graduate program. It’s an issue that was…. Well, it’s an ongoing issue, but it’s one that kind of flared up in my riding around Christmastime. Some questions were asked, so I thought I’d get them on the record here.
Just in the context of the return of service for the international medical graduate program, the formula and the criteria for determining where these IMGs go seems to favour rural areas rather than the areas of highest need. I’m just wondering if the minister can explain the criteria that determines which communities get IMGs placed in them, and whether or not there is an opportunity for areas that have a shortage of primary care physicians, in more urban areas, to be able to have some of these IMGs placed.
Hon. A. Dix: The member suggested that rural areas are favoured. I would submit that that’s not really a fair estimation of the situation — that both return of service and IMGs are often placed in rural areas because, obviously, there’s a need there. This is a historic need in the province. Frequently, in fact, on the return-of-service program, people go for three years, and then they move on, and then they’re replaced, in many small communities around B.C.
I don’t think it’s fair to characterize it as favouring rural B.C. It’s ensuring that services that are provided in urban B.C. in general are provided in communities where primary care is critical — where there isn’t the same level of acute care, for example, and there aren’t as many health care options.
That said, it is up to health authorities to determine what communities should be selected for this. There have been, I know, some discussions by doctors in the member’s riding, suggesting that their community would be appropriate — or even more appropriate than some of the other communities that have been selected by Island Health — to participate in the program.
This is especially true because in this sort of preliminary training, some of it takes place in the member’s constituency. So doctors are preparing that. Some of the IMGs would have liked to have stayed, in those circumstances, and then, based on the program, were asked to go elsewhere on Vancouver Island.
This is an annual process to define need, so decisions aren’t final in any respect, ever. There’s nothing precluding or guaranteeing these to communities under a certain size. These are decisions determined by the health authorities every year.
I would say that I would expect there’d be continued effort, of course, to support health care in rural B.C., and I’m sure the member would agree with that.
A. Olsen: Yeah, it’s certainly not suggesting that we not provide health care to rural B.C. That’s not what the intention of the question is.
In terms of taking a look at the algorithm or the formula, you run a situation through a set of criteria, it spits out a result at the other end, and then you make a decision against that. Depending on the weighting within that algorithm, you’re going to get certain results. I would suggest that certainly in this region, in this health authority, one of the significant weightings in the criteria is: is this a rural community? So it’s going to produce a result. Those results are ones in which you see these IMGs being placed in rural communities because the weighting of the formula, I would suggest — from what I saw of it, anyway — produces that result.
This isn’t necessarily a situation where I’m arguing that those rural communities don’t have needs. They do. What I am suggesting is that the urban areas have needs, and they’re different needs. We’ve got, as an example, a scenario in which we’ve got an aging population in my riding, but we also have an aging population of the primary care physicians in my riding. If that’s not factored into the algorithm, then you get to the cliff. At some point, they start to retire, and you’re not backfilling it, necessarily.
There are things going on in my riding where some of that is being solved. But I’m just wondering: is there a role that the ministry plays in working with the health authorities to ensure that the whole picture is being looked at, and that the formulas are, I guess, broadly applicable?
Hon. A. Dix: I’m not sure it’s the case that there’s an algorithm per se. I think that people assess the factors and make judgment calls generally at the health authority levels. The Ministry of Health participates in those. I’d say this. I think we’re seeing something that was unusual in the most recent round of negotiations with Doctors of B.C., which resulted in a very, very good, very positive result. I know the member for Kelowna–Lake Country has forgotten that 98 percent of doctors approved the master agreement.
Interjection.
Hon. A. Dix: Ninety-eight percent. I was a little disappointed, but we always like to leave a little bit on the table as well.
I think, in a general sense, what’s changed about the negotiations and changed about the discussions with family practice doctors this time is that, historically, it has always been an effort to incent to support rural areas. That has always been a challenge.
There’s a different imperative now, which is involved in all of our work in primary care — work that we’re doing with the South Island Division of Family Practice with respect to primary care networks here, the work that we’re doing, really, everywhere in British Columbia, and the work that PRA-BC is doing — the practice-ready assessment program, which is looking also at applying in urban areas. The new contract will assist us in that, I think, in the joint work that we’re doing with the Doctors of B.C., who will assist us in that.
The health authorities are very aware of that. The circumstances have changed in part because of some of the challenges that the member talks about in certain communities where there is a changing demographic of doctors and of patients, if you will.
The increased calls — that’s a significant challenge, I think, for doctors in communities — and, also, the increased costs in urban areas, which are changing and challenging health care practitioners in urban areas, who traditionally could operate businesses and now are challenged to do so in communities like the hon. member’s.
J. Thornthwaite: I have a question for the minister, but I’m not too sure whether or not it’s Health or AG. If it is, I’ll wait for the next week. Does the minister know that the Victoria Sexual Assault Centre does not get funding from the province, and they were threatened with closure because they can’t keep up with their $250,000 budget?
My question is to the minister, if it is a Health question. Is the ministry considering funding the Victoria Sexual Assault Centre?
Hon. A. Dix: Rather than having the member have a choice between the two, what I’ll do is I’ll seek some information about where their funding request would have gone, whether it’s gone there.
Regardless of whether it’s us or the AG or another ministry, we’ll seek to have that information and then forward it to the member if that works for the member.
N. Letnick: Thank you to the minister. I think we’re done with everybody else, so it will just be us again until four o’clock, subject to the bells ringing, and we’ll see how that goes.
Where we’ll continue, then, from yesterday is we’ll talk a little bit about biosimilars and then go over the particular drugs and advocacy groups that I outlined in the last question from yesterday, one at a time, if that’s okay with the minister.
Hon. A. Dix: I’m delighted.
N. Letnick: If time permits, then we’ll talk a little bit about B.C. emergency services. The minister already answered one of my questions on that to somebody else, so that will make that a little bit shorter, as well.
We’ll shoot for four o’clock, but you know how these things go. Sometimes you shoot for the basket, it bounces all over the place, and you end up winning the game. People go crazy. It’s an amazing world we live in where our priorities are.
I see the biosimilar team is right behind you now. Good. I can stop dragging the puck.
We met last year, a similar place, a similar time of year. We talked a little bit about biosimilars, biologics. We talked about the move in part of many countries around the world to allow for switching from biosimilars to biologics without the physician approving of the switch — in other words, making it a compulsory switch. There are all kinds of terms for it. A non-medical switch is probably something that’s used in the vernacular, as well.
I understand, given that the ministry has asked certain groups in the community to sign non-disclosure agreements, that the ministry is close to providing the minister with a decision, a recommendation, on this, which is good news. We can move on from all of these advocacy groups and drug companies trying to provide us with education on the matter. I’m looking forward to the day when we have made a decision on this. I think it’s an important piece.
Let’s just canvass a few questions. One is that we recognize, in the opposition, that there are some physicians that are not comfortable with non-medical switching, but there are others that are — just like there are some advocacy groups that are not comfortable, but there are some others that are, and there are some drug companies that aren’t. It’s not a perfect situation, but I’m sure the ministry staff have done their due diligence and will have something that the minister can tie his signature to, in some near future.
Can the minister comment on the concerns about unwanted immune reactions and higher rates of discontinuation post-switch? I’ll explain that a little bit. Sometimes, when people are moved over from a biologic to a biosimilar, there is some research that shows that a percentage of them don’t continue with the biosimilar. There’s other research that shows that their symptoms that they had, prior to getting the biologics, come back.
I’ll just stop there. I’ll go in bite-size pieces. Can the minister comment on those two issues?
Hon. A. Dix: What the member may be talking about is something that is sometimes called the nocebo effect, which is, effectively, the impact of a change that’s made. If you don’t have confidence in that change, it may have an impact on both the success of the change and your wish to continue. There have been some reports that have estimated that impact to be as high as the 10 percent range, for example. It’s a significant issue.
I think it highlights why we have spent so much time working with physicians and pharmacists. We’ll be spending lots of time, should we proceed with this, working with patients, as well, to ensure the success of the process. Because the more confidence everybody has in the change — the more confidence pharmacists and physicians and patients have — the more successful such a change could be, should it occur. It also indicates why, almost certainly, in any process where we’re moving to different coverage of biosimilars, that there would be some flexibility in the process to deal with real patient concerns or real patient needs.
All of that said, I think, in a general sense, what biosimilars have provided other jurisdictions is significantly more resources to cover more patients. This change, in many other jurisdictions, has been done successfully. But it’s a challenge, because it’s change. It’s why we were talking about it this time last year, and we’re still talking about it this year — if it were announced.
Should a change be announced, I can assure the hon. member as well that a full briefing will be provided to the opposition and to him, as Health critic, in advance, so that he can get a sense. Some of the answers, I think…. The more information that we provide on this kind of file, the better. If we are proceeding — and a lot of work has gone into this — that will require knowledge by everybody. Then we’ll have, hopefully, a common set of facts.
There still may be a debate about that fact, and everyone looks at facts differently, but I think it is important at some point to start making decisions so that we can act in the best interests of all patients in B.C. I think there are some enormous opportunities here.
I recommended to the hon. member…. There’s a video and a cartoon done by the opposition Health critic in Ireland, who I think represents Fianna Fáil, which is the second party in Ireland, making the case of what biosimilars could provide.
Here is something where we could really address problems in underfunding of certain prescription drugs in the health care system, which is really useful in real debate that takes place in those jurisdictions. We’ve seen others, such as Scotland and Norway and others, that have made significant progress. But we are not those jurisdictions, and we’ve had a different tradition in these areas. So that’s why we’re doing the work. But we’ll certainly be providing, in advance of a new decision, lots of information for members of the House as well.
N. Letnick: Thank you to the minister for that.
Is the minister thinking that should there be a reaction, a nocebo effect, the physicians will still have the ability to put someone back on a biologic? Yes, they get switched over — a non-medical switch to the biosimilar — but they have some kind of special authority process by which they can switch them back.
The second point is, and it’s rhetorical…. The minister availed himself of my invitation to work together on things that he believes would benefit from a bipartisan approach when he invited us to work on the medical colleges issue. Here’s another opportunity, should the minister wish to do, as he suggests, a briefing ahead of time, maybe even more than a briefing ahead of time so that he can get consensus on this very divisive issue. I think it would be another opportunity for the minister to show his statesmanship, as he has over the last year.
With that, I just want to do a mea culpa. I forgot about my colleague from Richmond. So after I finish with biosimilars, there will be the seniors for about 20, 25 minutes, and then we’ll come back to me.
Hon. A. Dix: I just wanted to say, apropos of nothing, how good it is to see the member for Richmond South Centre today. I wanted to just note, for the record, a press release dated April 12, 2019, with respect to the Victoria Sexual Assault Centre. It’s a government press release from the Minister of Public Safety and Solicitor General, and this would be of interest to the member for North Vancouver–Seymour. It’s a grant of $200,000 through the Ministry of Public Safety and Solicitor General and provides the organization with funding to help operating costs of the centre’s sexual assault clinic for the next two years. That’s in response to the question just asked by the member.
The member will know that any biosimilar change would involve a long lead-up, and I would absolutely be interested in the member’s response, because we’ll be…. Once we announce the direction, there would be a long lead-up, because this involves people and a lot of preparation. So there would be some opportunity for discussion. I’d be happy to engage with the hon. member through that period.
I think the work being done in this area has Canada leading, and I’m very impressed by that work. The member will also know that not long ago I switched. So there you go. I’m not saying that should give him any sign.
On his first question about what would happen should a switch occur…. You see, I was almost rising forward to answer that question, but that would imply, of course, that I was making an announcement today, which I’m not. But those issues — I’m happy to talk about with the hon. member and brief on, because those will obviously be significant issues for patients, for clinicians and others, should we proceed in this direction.
N. Letnick: One issue that I’ve always had trouble interpreting is the Health Canada recommendation regarding biosimilars and biologics.
It reads, “Health Canada recommends that a decision to switch a patient” from a biologic “to a biosimilar be made by the treating physician in consultation with the patient,” which is fine. Then they go on to say: “…taking into account…any policies of the relevant jurisdiction.”
The way I read this that first piece is that it’s a physician-patient relationship decision. But if the province of B.C. decides to take that away from the physician-patient relationship — in other words, to do forced switching or non-medical switching — then the second piece takes into account any policies of the relevant jurisdiction.
Could the minister confirm that I’ve interpreted this clause correctly? I know I’m asking the minister to interpret a federal Health Canada clause, but I’m sure the minister is capable of doing that.
Hon. A. Dix: I think the member’s reading from guidelines of Health Canada. I think he’s not wrong. I think they assiduously develop those words to allow for that.
Remember, also…. We’ll set aside biosimilars for a moment and talk about generic drugs, which were a debate in this place. Probably 22 years ago, there was a very intense debate.
Interjection.
Hon. A. Dix: Well, he can get some advice over there, right now.
There was a big debate about these questions. Of course, what happened wasn’t a change in what providers can prescribe, but coverage matters — right? Coverage matters.
I think it’s fair to say that the Health Canada process would allow for such a change. But I think it also emphasizes something that everybody who deals with these matters understands. The relationship between a prescriber — doctor or nurse practitioner — and a patient is an important relationship and needs to be respected.
N. Letnick: My last question, in two parts, to the minister is that there are some estimates that the potential savings of non-medical switching in British Columbia would be somewhere between $65 million and $360 million per year, which, of course, would allow for covering other drugs, improving patients outcomes or, actually, doing anything with the money in the budget of the province. But I assume the minister would like to keep it in his budget, and I assume the pharmacy folks would like to keep it in their budgets.
Can the minister comment as to what the potential savings are for British Columbia if the province moves forward with non-medical switching?
The second part of this question is that I hear there was an opportunity with some pharma companies to actually come in with a much better price tag than their list price. Can the minister comment as to why the province of B.C. did not take them up on their offer?
Hon. A. Dix: With respect to potential savings, in part, it depends on how many drugs it’s applied to and the existence of new entrants, because we will be expecting new entrants into the system. Those are significant questions. I think that the high end that the members suggests is well above, but I think the potential savings would be to British Columbia in the short run. But that potential is there.
It deals with the second question, really. Either we’re going to have this source of potential savings now and in the future — in other words, take steps that will benefit the health system today but also down the road — or we’re not. We’re either going to support biosimilars in that process or we’re going to try and make other arrangements that are temporary arrangements. I think, from a health system perspective — for future health ministers but mostly for future patients — ensuring that these alternatives exist is important to the health care system.
I suppose it might be in the interests of some to conceivably make offers that would make one abandon such an approach in the short run. But in the long term, I don’t think the beneficiary would be the health care system, and probably not in the short term either. It would lead to a different process, different fees — indeed, as between provinces.
The pCPA, together, has taken steps to encourage the development of biosimilars for obvious reasons that the member would support. More competition in this sector is good for payers. The entrance of biosimilars and more biosimilars in the sector is clearly positive, as reflected in the policy changes that were made in 2016 and ones that we’re considering at the present time.
L. Reid: Minister, welcome. I’m delighted to be back. I certainly canvassed with you, last time, the number of spaces for health care aides: 990 plus the 236. One of the questions that I left was whether or not the minister is able to put his hands on the number of graduates from those programs.
We also canvassed the number of school districts that were involved. I think the minister indicated that there were six plus an additional one. When I went back and checked, that only allowed for 12 placements, so it’s not that the school districts have embraced that wholesale. They’re taking two at a time.
Indeed, can I ask for the minister’s commitment, if you will, that there be some rigour brought to bear on whether or not we can more forcefully, more impactfully, work with school districts so that students graduating grade 12 actually have that 29 weeks of training under their belt? It would certainly assist the program.
A $10,000 fee for that training puts that out of the reach of many, many British Columbians. But if, indeed, it’s a credential they could graduate with, it would assist the ever-growing need. It would also be a kindness to students in our province.
Hon. A. Dix: With respect to graduations, that’s an Advanced Ed issue. I don’t think they track in programs — I don’t just mean this program but all programs — those numbers. We’ve certainly already raised that with them, and we’ll raise that with them again.
Just to give you a sense…. This issue was raised in the context of Interior Health this week. Interior Health recruits, on average, about 600 care aides a year. They expect to achieve that again this year. To that end, their ongoing efforts, including partnering with a training program…. This included public institutions offering training spots, which we’ve already discussed, and private institutions offering training positions.
Interior Health does go into local high schools to promote being a care aide, which I think is important. They’re also developing a dual-credit program with Okanagan College. An example of that is a student cohort in Oliver. This is fortunate timing. The member will know that it’s slated to graduate in June of this year, which is very exciting.
As I said to the member yesterday, the new collective agreement has also been positive. Most studies, including that by the B.C. Care Providers, have talked about the challenges of past actions with respect to collective agreements on the profession. Obviously, the improved circumstances, the improvements to successorship laws in B.C., the elimination of Bill 47 and others will have a positive effect as well.
We discussed a little bit the Alberta question. While there may be care aides in Alberta, can they move to British Columbia? That has not been, historically, a large source of employees in the past. Obviously, the efforts brought in by the previous government to raise standards for care aides mean that standards in B.C. are above Alberta and represent a bit of a challenge for that transfer. We can always debate those issues.
We heard that the B.C. Care Providers appear now not to support that as much as they did. That’s an interesting question. But I think there are things we can do, as I suggested to the member, to improve access and to take away some impediments that may have been placed, in an unintentional way, in the path of potential care aides by the measures taken since 2010. Certainly, we’re going to take a look at that.
L. Reid: I thank the minister. I appreciate what he’s saying about not tracking graduation rates.
If, indeed, the Ministry of Health is funding 1,226 spaces, can the minister tell me if those 1,226 spaces were fully subscribed?
Hon. A. Dix: The 990 are funded by Advanced Education. Of course, we topped that up by 236 and have been in recent years to address issues around demand.
The public institutions tend to be less expensive than the private ones, for obvious reasons. There’s a public contribution. The result is that they’re frequently oversubscribed. There may be cases where they’re not, but they’re frequently oversubscribed. They’re excellent programs that provide, certainly, an excellent path to employment.
The question, I guess, would be: “Why don’t you consider doing some more?” That’s something to look at. We also want, of course, to work with all of our partners, such as the Denominational Health Association, the Care Providers themselves, the Hospital Employees Union, the BCGEU and others who are involved in this sector and who can provide excellent advice and assist in meeting these demands.
L. Reid: So the minister is confirming that 1,226 individuals occupy those seats. The piece we don’t have today is how many actually graduated.
He made mention of the lovely presence of Boundary-Similkameen. The cohort was six students, out of 12 students altogether. I’m trusting that, hopefully, next year that could grow in number, because it seems like the need is going to continually grow as we go forward.
Would the minister be so kind as to provide an update on the operating budget of the B.C. care aide and community health worker registry for this year, and how it compares to the previous few years? Also, if he could give us a sense of the number of FTEs at the registry. It seems that the process is slowing down a titch.
Hon. A. Dix: Typically, it takes five days to respond to someone from a B.C. institution who has graduated. I think we had this discussion. I believe we also had it, but I’m happy to answer it again. I think it’s five FTEs at the registry, so five employees — or five FTE positions, some of them may be — as the member would know.
[J. Rice in the chair.]
The specific budget number I can get for the member. I’ll try and get it before the end of estimates today. They’re just going and getting that number. We were looking for other things today, but we’d be happy to get that number. Someone is getting it now.
L. Reid: The B.C. care aide and community health worker registry — lots of discussion about whether or not it’s transitioning responsibility for the registry to the new B.C. College of Nursing Professionals. Is that something that is still under discussion and/or becoming more of a possibility?
Hon. A. Dix: The member will know about our work on colleges and on the health professions in general. I think it was enormously successful. It was a great moment, actually, for health professions in B.C. when the three nursing colleges came together. We, as legislators, voted on that in 2017. The member will know we had done a review of health colleges, led by Harry Cayton. She’ll know we formed a committee to make decisions and come to consensus on that review, which involved the member for Kelowna–Lake Country and the member for Cowichan Valley.
Her colleague the member for North Vancouver–Seymour talked about counsellors and their desire to have a new college. There are other groups that are looking to pursue new colleges or to have professions join existing colleges. That review is taking place. It’ll actually have a fairly tight time frame, but it’s work that we’re doing collectively together. If the member has questions or thinks there are things that we should consider as part of that review…. I think, in some ways, the way it’s structured, a fairly unprecedented review but a really positive one where all sides of the House are working together to improve the regulatory system.
Some of that discussion, I think, will inevitably come not just to the colleges but to ambulance paramedics and other first responders, who have a different regulatory frame, and then care aides, who have now had a regulatory frame put in place in 2010. Then standards that were significantly raised in 2015, ’16 and ’17, which we had a little discussion about the other day, and were the subject of the intervention by the B.C. Care Providers this week.
Those are all issues to be considered — whether or not all of those different models, the 20 health professional colleges that we have, and then these other regulatory bodies — what the right model is.
It’s my view, at present, without prejudging the work we do, that we should work to amalgamate some of those so that we have larger numbers and stronger colleges to provide supports. The member will recall, because we were both in the House at the time, that part of the drive for the registry and the regulatory work for the registry came out of incidents and having a place to address incidents of potential abuse that took place. That was the sort of political drive that developed in the creation of the registry.
I give credit to all sides, actually, in the discussion for engaging in that. The registry has led to an increase in the standards in B.C. The member will know that higher standards sometimes present challenges when you’re trying to respond and move people through a system. But they also had the advantage….
We were hoping, obviously, that when people go through a training system, they’re going to be care aides for many decades. Getting the training right and giving people the supports when they start their professional careers is something that’s really worthwhile. I think that’s what inspired some of the changes involved. We can always do better, in terms of the administrative management of that.
L. Reid: Yes, Minister, I do recall that you and I were both present for the original Health Professions Act debate of many moons ago.
In terms of the opportunity, is it the minister’s ultimate goal that everyone who is engaged and working in the health sector, health care aides included, will form part of this new entity? Is that the ultimate goal over the timeline? Or simply, there are many options on the table yet to be addressed.
Hon. A. Dix: I think it’s fair to say there are approximately 20 health professional colleges today, after we reduced the number in 2017 with the amalgamation of the nursing colleges. There’s that situation, and how they function and how oversight happens and the frustration many people have in the public, on occasion — that was reflected in the report by Mr. Cayton — in getting responses and ensuring that the public interest is protected.
In addition to that, we have different structures for first responders, for ambulance paramedics — different regulatory structures. We met — and the member may have met — with ambulance paramedics yesterday, who were calling for their own college. They want a change from that structure to another structure. Of course, there’s that. Then there’s the care aide registry, which is another regulatory structure that ensures standards in B.C.
Those are the issues we’re reviewing. Again, Mr. Cayton and I…. I recommend his report to the hon. member, because it raises some of these issues and provides some of the alternatives. Aside from the fact that I think, clearly, in some cases…. We have a professional college in B.C. that has 87 members. When you think about that they’re self-funding that institution, which is not the case with the care aide registry, it means, in the case of that profession, exceedingly high — in the thousands of dollars — college fees for members of the profession, when it might be more reasonable for them to add that, at a lower level, to another profession, and both decrease fees and maybe improve regulation.
Those are some of the issues that we’re dealing with in the Cayton process, but there are many, many more — how we would structure that and how we would deal with different levels of risk of different professions as well.
Just to note…. Because I’ve talked long enough now, they’ve given me an answer to the member’s previous question, which is a good thing. The member will recall these sorts of things. The contract is about $600,000 a year for the registry.
L. Reid: The minister has certainly touched on the safety issues surrounding colleges and registries, etc. How many investigations have been undertaken, with respect to health care aides? Has anyone been suspended? Has anyone been removed from the registry due to misconduct?
Hon. A. Dix: Just a few statistics for the member. We can also share some of this information.
There are 33,506 registered HCAs that have recently confirmed they are actively working in B.C. Since the registry’s inception in 2010, 701 alleged abuse reports have been received from employers, with all reported HCAs immediately removed from the registry. Of those removed, 360 received temporary suspensions, and 341 were terminated by their employers. Of the 341 terminations, 123 HCAs were removed uncontested, 35 were returned to the registry by mutual agreement between employer and the union without investigation.
Investigations were initiated for 183. Of the 183 investigations, 178 have been completed since 2010, with 33 HCAs deregistered, 95 re-registered with conditions and 50 re-registered without conditions — meaning, clearly, that they were cleared. At 2018 year-end, there were five active investigations. So that gives a sense of the investigative side of registering.
L. Reid: I thank the minister. In terms of those who took their training in British Columbia, the costs to becoming a registrant under the registry is $800. That’s what the minister indicated the other day. Is that cost recovery?
Hon. A. Dix: The cost is $2,900: $2,100 is subsidized, and $800 is paid by the applicant.
L. Reid: That certainly is my question. If you’re taking the credential in British Columbia, approved by the government under the Ministry of Advanced Education, what is it the student actually garners from a $2,900 assessment fee?
What can possibly be done that costs $2,900 if you’re simply examining a transcript? That’s basically the information that I received the other day. For British Columbia trainable folks, there’s no accreditation process. It’s a public system in British Columbia.
For those ones that there is no additional work required, why is it that it’s $2,900 when the government has control of all the aspects, all the facets of that? If they’re trained in the private system, I understand their costs can be more. Trained in other jurisdictions, I understand the costs can be more. But when the government has control of all the aspects….
I trained in British Columbia, trained at a public institution in British Columbia. Why in the world does it cost $2,900?
Hon. A. Dix: I thought we were still talking about the international and the Alberta and other circumstances. If you’re a B.C. graduate, there’s no cost.
L. Reid: Excellent. Thank you, Minister.
Hon. A. Dix: I apologize. It’s part of the discussion we were having about people coming from other jurisdictions. That’s, I think, the point being made by the B.C. Care Providers in terms of trying to recruit from other jurisdictions, both international and from Alberta. Those are the real costs.
The challenge is, of course, that there’s dramatically more hours in British Columbia for their training than there is in Alberta, for example, and other Canadian jurisdictions. That was the decision British Columbia has made — not recently, but for some time.
Having that means that if you’re coming from other jurisdictions, whether internationally or Alberta, the assessment costs are higher. If you go through the B.C. system, the costs are zero.
L. Reid: I thank the minister for the clarification. Certainly, we touched on, and he has brought to the record that we’re the only Canadian jurisdiction with an operational care aide registry.
Is that registry going to be reviewed, an independent review, at any point to determine its effectiveness and value for money?
Hon. A. Dix: Well, we’re reviewing right now, I think…. Two questions ago I said that we’re reviewing, along with members of the opposition — so all three caucuses are represented — the Cayton report. We’re reviewing overall health professions and where they would fit, where new professions would fit and how other forms of regulation work.
There are different ones, obviously, for ambulance paramedics, for example. That’s worth looking at, because, really, that’s another regulatory structure we have. We heard from ambulance paramedics yesterday. We’d look at a college structure where care aides themselves…. Their voice would have to be heard, as well, in this.
The member talked about fees paid by professions. Well, fees are paid now by all the nursing professions and so on, and that’s a challenge in some areas of health regulation. The short answer is that things are reviewed regularly. Some of the questions we’ve talked about in the last couple of days that have been raised, questions that are procedural for people and how they experience the regulations are worth taking a look at.
Then, of course, we’re doing this review, really, together as a Legislature, members on all sides. That’s both an unusual way to proceed but, also, I think, one where I’m confident we’re going to set a standard for how we work together on issues to make things better for everybody.
L. Reid: I thank the minister. I wanted to spend a few minutes, if I can, on dementia care.
Certainly, the notion…. I believe it was the minister the other day who indicated there was a plan in place for a dementia village somewhere in the province of British Columbia, and I was going to recall it. Perhaps Vancouver Island?
Hon. A. Dix: Comox.
L. Reid: Comox, Vancouver Island. I was close.
The folks who come to my constituency office and many of my colleagues talk about dementia education, not just for those who work directly in the field but for families, for caregivers. Perhaps a moment or two on how that can be enhanced on a go-forward basis across the province. It certainly seems like individual British Columbians are being diagnosed at younger and younger ages each year, and the challenges that places on families who also have children in their homes is making some enormous conflict. Some behavioural issues are causing some violence in those scenarios as well.
For any insights the minister would choose to offer, I would be grateful.
Hon. A. Dix: I think the member will know that there are multiple aspects of this. There’s training for health care providers, in general, because I think we can all be better at what we do and learn more about what we do and learn more about how to address that. There was, for example, recently renewals of the PIECES education program through 2022, which enables health care provider education and strategies to enhance patient care for people with cognitive impairments such as dementia.
There’s, obviously, the ongoing work of the Alzheimer Society and the First Link program, which is an enormously valuable resource. I think it’s a valuable resource because it’s provided by the society, and that’s not limited to Alzheimer’s. It’s Alzheimer’s and other dementia that the society represents. I think the program is extraordinary.
We have, of course, developed our own guide to dementia care in B.C., which assists people in addressing and interacting with the health care system.
Obviously, other jurisdictions are working on some of these issues as well. There was a federal act, of course, respecting a national strategy on Alzheimer’s disease, which was passed. It was, in that case, a private member’s bill that passed. There is federal, provincial and territorial work on dementia.
Our focus, obviously, is on British Columbia. That’s where the principle health care systems are in place, and we are expanding — I think we discussed this; I won’t repeat all of the things we said — dementia village proposals, not just in Comox, although we were very positive about that. I think the public response to the dementia village proposal in Comox was overwhelmingly positive.
We want to pursue that in other jurisdictions, in particular in Vancouver Coastal Health, I think, in time, and in particular, continuing our partnership with Providence Health Care, which is, I think, going to soon be a Canadian leader, even a world leader, in the providing of dementia care.
Obviously, no matter how many dementia villages we build now and how much change we make now in new institutions, we also have to ensure that long-term care, in general, has a more inclusive approach, a more open approach to addressing issues around dementia — and all dementias, including Alzheimer’s disease.
There’s the long-term-care level. There’s our work with the Alzheimer society. There’s the work in training across the health care system and, I think, all the work that we can all do. We can all be better teachers and better citizens in opening up about this.
Since I became Minister of Health, one of the most moving things is how many people have come to me and talked to me about this issue: what it means to them; what it means to their family; in many cases, that struggle, that moment that people have been avoiding, of telling their family members — or maybe not at all, maybe being discovered in circumstances that don’t work for people, where they’ve delayed and delayed and delayed communicating with family members and everyone wondering what’s wrong and all that meant for connections. That’s something we can all do.
Finally, I think we’ve got to provide more supports for caregivers. That’s been a key part of what I’ve tried to bring to this ministry as Minister of Health — supports for respite care and supports for caregivers. These will not be less important five years from now. They’ll be more important five years from now. I believe that the things we’re doing now will set the stage for things that we have to continue to do over the next years, as this issue becomes more and more prevalent in our communities.
L. Reid: I thank the minister for his comments. I simply wanted to place on his radar, if I might, the number of families — and I’m sure that it’s present across the province — who are, in their 50s, being diagnosed. They have children, some of them in elementary school, some of them in secondary school. There doesn’t seem to be specific resources yet for that population. Perhaps, continuing the discussion next year, we can decide how best to go forward.
In terms of comparability, would the minister be able to tell me how he believes British Columbia fits in, in terms of the other provinces in Canada, in terms of comparisons to the other ten provinces for dementia care?
Hon. A. Dix: I just want to mention, as well, because the member will certainly be active as critic, two prototype projects that we’re doing in Northern Health, which are called alternative dementia housing projects — one in Kitimat and one in Vanderhoof. They intend to combine best practice in dementia care with a housing model that enables aging in place. These things are happening around the province, too, and some of the most important innovations are occurring in the Northern Health Authority.
The member will know…. I don’t have the comparative information the member asked about. But the federal government has established a ministerial advisory board on dementia to address national issues. The member will know a couple of B.C. members of the advisory board. One is Jim Mann, who, many people will know, is an outstanding British Columbian, a retired executive, an entrepreneur and, of course, a dementia advocate who is well known to many members of the Legislature. The other is Daniel Fontaine, who’s the chief executive officer of the B.C. Care Providers. They are attempting to develop and work on national issues, and part of that is establishing national comparators, I’m sure.
I don’t think we have, with respect to dementia policy, one of those sort of grids that you see with all the provinces. But I think we’re making some progress here, and my goal is to continue to make progress. I hope that they do in Nova Scotia, but whether they do not, we’re going to make progress in British Columbia.
L. Reid: The minister mentioned a dementia facility in Vanderhoof. Is there a timeline for when that facility might open?
Hon. A. Dix: Northern Health is working on those proposals. They’re very high priorities for Northern Health now, so they’re in the development stage now. They’re working with communities. I’m very excited about the proposals there.
Amongst the proposals on dementia care, I think that dementia village proposal, the one we’re doing in Comox, requires a significant people of course, when you’re doing a major project. But I think what’s happening in Northern Health that’s interesting is smaller communities providing prototypes that aren’t the same as long-term care, in some cases, and may be defined as assisted living but provide dementia-friendly housing. I think these are the kinds of projects we need if we’re going to address the differing needs of people from different parts of the province in dealing with dementia care.
L. Reid: Just to learn when they might open.
Hon. A. Dix: I don’t know, but I’m sure…. What I’ll ask our CEO of Northern Health, Cathy Ulrich, to do is arrange a call or a discussion, depending on what works. We’ll talk to Cathy — who, you’ll know, is an excellent CEO and very engaged on this issue, at least in my personal experience — or the appropriate people at Northern Health to call or arrange a call with the member to brief her on the two projects.
L. Reid: I thank the minister for his comments. Very much appreciated.
N. Letnick: Thank you to the minister. We are going to canvass the B.C. emergency health services for a few minutes. Just to advise the Minister — I think he just got advised — that the AG estimates are now moved, so we are free to stay in this room until the close of day — or earlier, if we want to get time off for good behaviour. We’ll see how the questions and answers go.
Interjection.
N. Letnick: I’m happy to discuss health for decades.
What I’ve done is… We’re going to talk about B.C. Ambulance for a short time, go back to the town of Sidney, which was in the first binder of questions from yesterday that I passed over because of time issues, and then continue on our adventure through drug policy in British Columbia. I’ve also put out a call to my colleagues who I cut off in the first day of estimates after their time was up — that if any of them had any other local questions to ask, to show up at 4:15. So we’ll see if any of them show up.
Interjection.
N. Letnick: Well, you know, I respect the minister’s time. There was a stopwatch.
We’ll see if anybody shows up to ask questions. I’m going to go through the rest of my questions, and if the time runs out, then so be it. On to work — so our colleagues who are working on the emergency health file can depart.
I have a letter from a David Brown and Betty Brown. It says: “I have had two serious heart attacks which would have been fatal if not for the quick response of dedicated paramedical first responders. I am aware that this essential group of medical professionals are not considered valuable enough to warrant equal pay with firefighters or police. I’m requesting an explanation for this. I’m also requesting your most up-to-date information regarding what the government is committed to doing to rectify this situation.”
Hon. A. Dix: I think I understood in the first question a question about collective bargaining. So I’ll say what the member was expecting me to say. Not yet. There’s a famous historical quote that ends with not yet.
The member will know that we’re negotiating with CUPE Local 873 right now for a new collective agreement with ambulance paramedics. Those negotiations are ongoing. Obviously, the member will understand that we’ll leave those negotiations to the bargaining table. I think this is the first time…. We’re very hopeful — and there’s lots of work to be done, of course — that we’ll come to a collective agreement.
Successive governments have had challenges in doing that in the past, I think it’s fair to say. I think we’ve got a very good relationship with CUPE Local 873, with the ambulance paramedics. I think the person who is no longer in charge of the Ambulance Service but who’s a senior vice-president of the Provincial Health Services Authority…. Linda Lupini has had a big impact on that, as well, in her time in leading the Ambulance Service. I think the relationships, long difficult, have been made much better.
Some of that work happened before I got here, and some of that work has happened since I’ve got here. I wanted, in particular, to pay tribute to Linda, who I think is an outstanding leader, and has been an outstanding leader, and who has made a huge difference.
I wanted to say just a few things. I agree with Mr. Mann. Was it Mr. Mann? Maybe I’m reading my….
Interjection.
Hon. A. Dix: Mr. Brown. Sorry. It was Jim Mann I talked about. Yes, Mr. Brown. I agree with him that ambulance paramedics do extraordinary work, and it’s really vitally important work.
That’s why we’re adding new full-time positions and have added new full-time positions since July of 2017, when I become Minister of Health. As of January 2019, we’d added a total of 119 full-time and part-time paramedic positions, of which 111 are full time and eight are part time, for a total of 119 FTEs.
To give you a sense of where they are, Vancouver, 14 FTEs; Nanaimo and area, 30 total full-time positions, which includes 24 in Nanaimo, two in Ladysmith, two in Qualicum Beach and two in Parksville; four in Williams Lake; six in 100 Mile House; four in Fort St. John; four in Dawson Creek; three in Castlegar; three full-time paramedics in Trail, which is an important area that needed that; 16 new permanent full-time paramedic positions in Kelowna, plus four in West Kelowna.
I’m leaving the best till last here: two in Lake Country, for a total of 22 positions; 18 paramedic positions in Kamloops, with those two new ambulances there; three full-time positions in Chase. Four additional paramedic positions were also regularized in July 2018 for the fixed-wing air ambulance based in Fort St. John. This brings the total for new positions in Fort St. John to eight.
I think we’re seeing some impact from that. I think one of the issues that members raised, for example, in Kamloops and Chase was the tendency for Chase ambulances to go in for calls in Kamloops and then not be providing coverage in Chase.
We’ve seen improvements in all those areas since these changes were brought in, led by our outstanding team at BCEHS. I think it’s fair to say the additions that we’ve made to the budget in successive years, and then again this year, are going to continue the work of helping build an ambulance service.
I’d add, finally, that the role of community paramedicine…. We’re celebrating 99 communities for community paramedicine — again, in that case, a proposal brought in by the previous government.
All in all, I think you get this, when you talk to ambulance paramedics, both the extraordinary challenges of the moment. The opioid crisis, in particular, has affected everyone’s lives. You see that reflected, as well, in issues around time off on occasion. We’ve made changes — as the member will know, passed by the Legislature — to provide and to improve WorkSafe protections for ambulance paramedics and other first responders as a result of that.
Obviously, challenges and staffing challenges. People have talked on occasion about the very issues Mr. Brown talked about with the challenges of having a full-time position in the Lower Mainland that everybody faces with the housing affordability crisis that exists in Metro Vancouver.
With all of that said, I think we’re making exceptional progress in that the relationships, in general, between paramedics and the BCEHS are improved and that the work being done by ambulance paramedics, the response-time work, and everything else is improving. That doesn’t mean there aren’t significant challenges occasionally, staffing challenges on a daily basis. But I think the service is doing well.
N. Letnick: Thank you to the minister for that fulsome answer.
We have the Auditor General’s report on emergency services, and I just wanted to focus on one thing. Our colleague from the Third Party discussed the ability for people outside of hospitals to actually perform medicine, or paramedicine work, so I won’t canvass that, because it’s already been canvassed.
The recommendations at the end intrigue me. Some of the preamble was that the Auditor General found that: “…BCEHS collaboration with fire departments had not resulted in a coordinated approach to emergency health services across the province. Emergency health services provided by fire department first responders were not subject to medical oversight by BCEHS, BCEHS and fire departments did not share data with each other, and consent agreements with some local governments were not in place.”
When I was in local government, I served three terms as a municipal politician. I always wondered why firefighters and ambulance went to all these calls together, thinking: “Is this a really good use of taxpayer dollars to send all this equipment and people power to these calls?”
Obviously, that was a very key concern of the Auditor General and her office as she was looking at this: “In May 2018, BCEHS changed the way it notifies first responders of medical events, as part of its introduction of the clinical response model, intended to better prioritize responses to life-threatening events.”
Since I left municipal council and became an MLA, things have now changed.
“According to BCEHS, under the new approach, it notifies first responders of the most urgent events, notifies first responders of less urgent calls only if BCEHS estimates that an ambulance will take more than ten minutes to respond,” and: “First responder notifications across the province have dropped by 40 percent in aggregate.”
In further background, she says some local government representatives told her office that “agreements have not been signed because of a fundamental disagreement on the role fire departments should have in providing pre-hospital care. Some fire departments would like to work beyond first responder licence level. The BCEHS model of service delivery is one where first responders provide care at the first responder licence level, with BCEHS staff providing care above that level, and the consent agreements that are in place reflect that model.”
Then the last piece I want to read from her report is in her recommendations. “Because of these challenges, as well as the different levels of government involved, support” — I underline support — “from the provincial government” — that’s where you come in, hon. Minister — “may be needed to improve coordination.”
This is my only question out of the report. What role does the provincial government believe it needs to play in making sure that patients across the province get the best possible care from our emergency health services and also in delivering the best value for tax dollars, in terms of municipal tax dollars as well as provincial? As the minister has frequently said, there is only one taxpayer.
Hon. A. Dix: I have to say that Thursday afternoon is my favourite time, and I think it’s going well.
I think the issues the member asked about are very challenging issues, and they have been for a long time. We have extraordinary ambulance paramedics in B.C., in partnership with extraordinary services provided by firefighters. They are different levels of government. There are sometimes dynamic tensions, clearly, at an institutional level — and, occasionally, at a personal level or an organizational level — between representatives of the groups, and I think we’re making progress.
I should say, first of all — and the member for Boundary-Similkameen will know this as well — sometimes these issues are differently felt in rural communities, and what they mean is differently felt in rural areas. We’ve been in touch on issues that are specific about that and that are a little different than some of the clinical-response-model questions that we have in urban areas such as Kelowna or Vancouver.
On the clinical response model, I’d say the member is right. It came in, in May. We have made some adjustments to that. One of the things that the B.C. emergency health services is working on with local fire departments is better data sharing so that we understand where we are in the work we’re doing together and the results of response. We share information so that the anecdotal information that sometimes comes forward from one side or another is replaced by shared understanding. We’re working very closely with fire departments, particularly in Metro Vancouver but elsewhere, on improving both the response model and our joint model.
Finally, I’d say that I think it’s really important, and I think this is happening out there, that ambulance paramedics and firefighters — who work on the ground, hand in hand, all the time every day — work together and continue to work together, and maybe work together a little bit better as professions. I think some of the issues are professional-level issues; some of the issues are institutional issues.
I feel that we’re going to make some progress in the next little while. The Auditor General is not wrong that we can do better, that there can be a better relationship and there can be better coordination. I think that’s clear. We’re taking steps to see that that happens. In some cases, there are some municipalities that take a different view than others about what they want the role of fire to be and the level of training they want. Our goal is to work with everyone to make sure that we’re making progress on these issues.
L. Larson: On that note, Minister, I’m not sure whether I have actually discussed this particular rural area with you as it relates to these call-outs, the colour-coding call system that has been in place since August 2018. I have very specific rural areas that have rural fire departments — Osprey Lake, Arras and Hayes Creek departments. The areas they cover are 45 minutes to an hour from an ambulance, especially in the winter months.
They’ve been told to step down and not attend a bunch of these. But in January, they had a call, and then they were told, no, it was a medical one and they weren’t to go — the fire department. They went anyway, because they live there. They knew that the man’s driveway was two kilometres long — fresh snowfall. If they had not gone, the paramedics would not have been able to get to the patient. They ended up literally using their equipment to transport the paramedics to the house and bring the paramedics and the patient back down to the road. More than an hour it took for the ambulance to even get there. It was coming out of either Summerland or Princeton.
They have a very good working relationship, the local fire departments — rural fire departments — and the ambulance paramedics that come out. All winter this is the case. They had another call a few weeks later, a similar situation. They went anyway, knowing the terrain. They literally had to bring in equipment to plow a space for the helicopter to land with the paramedics.
I’m concerned that this blanket coding is being…. I know that it really needs to be done in the more metro areas and the highly populated areas. But I’m very concerned about the patients who are caught in this trap here. Also, my fire departments are stepping over the line in that they have been told to stand down and not attend. Yet in these two instances alone, without their attendance, those lives would have been lost.
I’m hoping that in looking at this new colour-coding call-out system, you can look at a different way to apply it to areas where the ambulances are not ten minutes away, in order for the fire departments to feel comfortable in being the first responders.
Hon. A. Dix: Thanks to the member for her question. I think we have…. I know the particular case the member refers to. She’s raised it with me before.
As I understand it, in this area, this is an E-Comm send-on. E-Comm will ask you: “Do you need an ambulance?” You say that you need an ambulance, and given the terrain and everything else, the BCEHS, under those circumstances, will automatically call fire. So you go E-Comm, ambulance, fire. I think that’s partly…. That may not have been the case in January or when the incident happened, but it is the case now.
I think it reflects that the working relationship that the member talked about…. Sometimes these things are resolved. This case was brought to the highest levels of BCEHS. They responded to it. I believe that changes have happened either as a result of the incident or as a result of the issue, in any event, that people are talking of.
N. Letnick: We’re done with B.C. Ambulance and emergency health services.
We’re going to start with spinal muscular atrophy. This is item 9(g).
“Spinal muscular atrophy is a genetic condition that can affect anyone. It’s a rare, genetic, life-threatening, debilitating condition for which there is no cure. This life-limiting neuromuscular disease has never had the benefit of a treatment until now. Biogen Spinraza has been developed and is the only treatment that has ever been proven effective and come to the market for SMA.
“Spinraza was approved by Health Canada. However, the original recommendation from CADTH was only to approve treatment for a small subset of type 1 patients. After a resubmission and appeal by Biogen, CADTH has offered a broader coverage, however, still only encompassing type 1 patients and type 2 patients up to the age of 12.
“This narrow selection of patients recommended for reimbursement is a devastating blow to the entire SMA community and its supporters, who have been waiting decades for a chance to slow the progression. The remaining patients affected by SMA outside of this CADTH recommendation will steadily progress and eventually die from the disease.”
This is a letter from Carrie Hill from UVic.
I also received other correspondence, including one from Heather Lam from Prince George, amongst others. They’re asking the provincial government to approve reimbursement of this drug for all patients.
Hon. A. Dix: Obviously, this has been an issue that we’ve looked at very significantly over time. This is the drug nusinersen called Spinraza, which is the commercial name. It’s obviously a breakthrough drug. It’s also, it’s fair to say, one of the most astonishingly expensive drugs on the market as well. It’s $750,000, the list price. We obviously negotiate these questions, but the list price is $750,000 per person in the first year and $375,000 thereafter.
Last fall, as the member will know, we began to cover SMA type 1 patients on a case-by-case exceptional basis. This is the most severe form of the disease and the most common genetic cause of infant mortality. So while there are not a lot of people, in absolute terms, dealing with the disease, it is also a significant genetic cause of infant mortality. For other SMA patients with the less severe forms of the disease, the common drug review completed their review or resubmission by Biogen in February of 2019.
The recommendations support coverage of other SMA patients, including patients who are pre-symptomatic and included patients who were SMA type 2 and type 3.
It should be said…. I have the common drug review recommendation in front of me. As the member will understand, I get advice on these questions. These decisions are essentially made at a ministry level for good reason. The recommendation was for patients who have a series of conditions, so the recommendation didn’t cover type 1, type 2, type 3 in the way patients are sometimes characterized by clinicians, I think it’s fair to say.
At the moment, the ministry, along with a number of other provinces and territories and the pCPA, which is the pan-Canadian Pharmaceutical Alliance, are reviewing the coverage decisions. We hope to complete this fairly soon. That decision as to how to apply the common drug review recommendation will be informed, in an evidence-based process, by experts and clinicians, and will also involve the interests, of course, of patients.
N. Letnick: Thank you to the minister. He’s right. It is a devastating disease, obviously. We have many devastating diseases that we’re going to canvass now over the next few minutes.
Perhaps I can take a step back and ask the minister: what is the progress in coming up with a Canadian — if not a Canadian, a British Columbian — rare disease strategy? As I said yesterday, I can just imagine the minister up at three o’clock in the morning, lying in his bed thinking, “Do I fund this drug, or do I fund that drug? Do I fund this process, or do I fund that process? Do I fund this piece of technology, or do I fund this?” within the limited budget that he has. Yes, it’s increasing by 3 or 4 percent this year, but it’s still a limited budget, and it will never, ever meet all the needs of all us frail people, who, over time, get through the rusty years, if we’re lucky.
There are always going to be more demands on our ability to pay than what, I think, all of us would like to see paid for. As the minister has said, these are expensive drugs. If you spend $1 million on a drug in a year or two or three, that means you have $1 million less to do something else. I just can’t imagine what it feels like for the minister to make those decisions. But I also can’t imagine what it must be like for parents, for people with children with this disease, or other people who have very rare diseases that they know there’s something out there for that they can’t afford personally but, with the help of their neighbour, through government, they could actually get a hold of.
I don’t need the minister to go through the process. I’m very familiar with the process of Health Canada approvals and then the Patented Medicine Prices Review Board and then CADTH coming in and the Canadian drug implementation advisory committee input, then pan-Canadian Pharmaceutical Alliance, and then provincial review and whether or not there’s reimbursement. But I do understand that there is some work being done on a rare disease strategy, if you can update us as to what that work is.
Hon. A. Dix: The member talked about areas where he thought that British Columbians could work together. I think this is one of those areas.
I’m going to talk a little bit about the issue, because we are obviously dealing with this on an everyday basis and considering and facing, I think, what one could only describe as extraordinary cost pressures over the next number of years.
We’ve had estimates of annualized cost pressures four years from now that are two-thirds of the value of the PharmaCare program for drugs as it exists today. It’s a very significant cost pressure, and it’s, of course, enormously challenging. On the one hand, the decision…. Some pharmaceutical companies, which had never paid that much attention to the rare disease drugs for market reasons, are now seeing and viewing strategies to pursue that, setting prices high. They both offer, as the member suggests, enormous hope for some people but also a huge challenge for the system. We’re talking about challenges in the billions of dollars for Canadian provinces in general.
We haven’t talked about the whole debate about a national pharmacare plan, but Eric Hoskins, who’s the former Ontario Liberal Minister of Health, is leading that process for the federal government. He did an interim report at the time of the federal budget, I believe, in March, which described the direction they thought they were going in.
I can tell you that the first and second and third issue I raised with him when I met with him, which our officials raised with him, is this very issue. I was glad to see that addressing expensive drugs for rare diseases was one of the key criteria he saw having been dealt with in the plan.
It seems to me that because of that inflation in prescription drugs, which has been levelled somewhat by lowering prices for generic drugs and some of the changes that have happened over time…. We’ve done that. We’ve maxed out what we can expect by lowering the costs of generic drugs.
We talked about biosimilars. That has some potential, as well, to do so. But there’s also another series of drugs that are not for rare diseases that are before us to be funded and, in some cases, CADTH-approved that are before us that are expensive as well.
We will expect, and I believe it will be significant, inflation in pharmacare budgets everywhere in Canada over the next number of years. I also believe that here in British Columbia we may be able to sustain that. We’re a relatively wealthy province, and we can sustain that.
I think there is a role for the federal government. I think the role should be here, as in many other places, in assisting the province and patients who might be denied access to drugs that are approved and meet the standard of approval for financial reasons. There’s a role for the federal government in that. That’s why in all of our discussions around a national pharmacare plan, I talk about this first.
We need support from the federal government. They’ve talked in their most recent intervention on the matter in the interim report…. I have a lot of confidence in and respect for Dr. Hoskins, but they talked about changing and developing a national formula and so on. Well, to date, much of what the federal government has done in this area is to increase costs, not decrease costs.
They didn’t accept the changes that they promised by January 1 of this year in the way we set prices through the Patented Medicine Prices Review Board. They didn’t accept the changes that they themselves were supposed to proceed with in that regard, and those are important changes.
What I invite the federal government to do…. I am delighted they want to be involved, and I encourage them to be involved. I’m a supporter of national pharmacare, but what I am really a supporter of is making sure people who need drugs and who may be denied access to drugs in the next few years, denied access to the very hope we would want for all our children and all our fellow citizens, will be denied access because we haven’t succeeded in this process.
I am committed to pushing the federal government to be involved. I think it’s important that they’re involved and that they invest in this issue, not just in saying, “Oh, with our $900 million in contribution to prescription drugs, we should run the $13 billion in pharmacare systems” — we collectively do a reasonably good job of that now — but that they involve themselves with investment. If they’re committed to national pharmacare or improved national pharmacare, then we need to see that.
The one point I’d make is this. After the Romanow report, there was a long period where there was discussion of national pharmacare. That largely ended in 2008. There was a financial crisis. Governments didn’t have the resources, and the subject just fell off the table. What happened was pharmacare programs kind of continued on as they had. The previous government had made some changes with the Fair PharmaCare system in ’02. Generally, we just carried on at that time.
B.C. has long been the leader in evidence-based policies. Some of the people behind me are some of the people responsible for that. The therapeutics initiative and others have been responsible for that.
If we miss the opportunity this time, there will be consequences for pharmacare programs in Canadian provinces. If the federal government doesn’t step up or we don’t step up together to address some of these issues together, there will be consequences for that. The idea that, “Oh, it doesn’t succeed. It was an election issue, and we’ve moved on past that,” is not what I think is a responsible position. That’s why I am engaging, in every possible way, to encourage them, especially on this issue of expensive drugs for rare diseases.
I would encourage all members of the House to join in an effort, on behalf of those patients who need these drugs, to say to the federal government that they have to be involved now. Regardless of what the fallout of a national pharmacare debate is and all the politics around it, we need them involved to help us and join with us to ensure that people, in the future, have the coverage they need.
N. Letnick: Thank you to the minister. We did canvass national pharmacare last year in estimates. That’s why I didn’t bring it up this time. I think, if I recall correctly, my admonition last year was that we would also support a national pharmacare program under the right conditions.
Obviously, we’d have to look at the details of it. I’m sure the minister would be in the same situation. We wouldn’t want a national pharmacare program forced on the provinces and all the money coming out of the provincial government with nothing from the feds. There’s that debate. I’m glad to see that the rare disease drug issue is still front and centre.
The minister did bring up the therapeutics initiative. When it comes to approving drugs for British Columbia — not evaluating whether or not they’re effective down the road but the initial approval as to whether or not a drug should be listed in our formulary — there’s the process that I just outlined before. Does the therapeutics initiative play any role in the final decision of the minister to approve or not approve a drug? I’ll just stop there.
Hon. A. Dix: Under our system in B.C., it’s the Drug Benefit Council that plays that role. The therapeutics initiative, as the member knows, is an independent organization. It carries out research and evaluation.
I think it’s fair to say it has both saved lives, many of them, and saved money, lots of it, in its time. It’s made up of physicians, pharmacists and other researchers. It operates at arm’s length from government and independent from the pharmaceutical industry and other vested interest groups.
The TI does not make drug coverage formulary decisions for B.C. PharmaCare. For some drug reviews, they may provide evidence-based clinical reviews of drugs to supplement other inputs, and they certainly do that. When these reviews are prepared, they represent one of many other inputs to our drug-review process, which includes inputs from physicians, patients and care providers.
The Drug Benefit Council takes this into consideration, all these inputs into account when providing their recommendation to the ministry. Ultimately, in the ministry and behind me — just to introduce the assistant deputy minister, Mitch Moneo, and director Eric Lun — I think we have some of the leaders in Canada, some of the leaders amongst the pCPA. People in Canada look towards B.C. Pharmacare’s team and staff to do some of this work. We receive significant support from the therapeutics initiative.
I think the TI plays a really valuable role, not just in drugs, not just in the area of prescription drugs and their utilization. I think it’s really important not just to have drug approvals, but to make assessments over time. The therapeutics initiative has long played a remarkable role in B.C. I’m very proud that we’ve increased its funding and that it continues and has a very successful agenda for the future.
I really encourage the hon. member to go out to UBC on one of his off days, which may not be very often, and meet with Dr. Wright and the team out there because I think they’re some of the most outstanding people working in these areas in the world.
N. Letnick: Thank you to the minister. Representatives from the TI actually came and visited me, so it saved me a trip to UBC.
Hon. A. Dix: There you go. Fantastic.
N. Letnick: The reason why I’m asking, because the minister brought it up, is with all this process throughout the country for drug approvals, do we really need to invest in another group or part of another group to review the work being done in a national way, like by CADTH and others?
What the minister, I believe, said is that yes, they do provide some input into the process, prior to drugs being added to the formula or not added to the formula. I don’t imagine it’s a big chunk of what they do. I’m not saying: “Do we need to give them $2 million or $3 million or $4 million?” In the scope of a $20 billion budget, that’s not a lot of money.
Hon. A. Dix: Every dollar counts.
N. Letnick: The minister beat me to my point. If we’re having difficulty finding dollars to do certain things, do we really need to be paying for the TI to do something that somebody else is already getting paid to do?
The minister can respond when he answers my next question if he wishes, or just leave it there as rhetorical. I’m sure I’ll get another visit from the TI pretty soon, based on that.
“Rivaroxaban” — I’m sure the minister will pronounce it better than I am — “is an important part of the treatment for atrial fibrillation, including the safety and quality of life for the patient, and therefore should be covered by PharmaCare.” This is a letter provided to the minister back in July of 2018 by the member for Parksville-Qualicum.
I wanted to know: has anything happened since the minister has received that letter? What I’m saying is, is the drug now covered by the ministry, or is it still only on special authority approval?
Hon. A. Dix: I was trying to think of how to limit my remarks appraising the TI to the time we have remaining, which is approximately one hour and 45 minutes.
Interjection.
Hon. A. Dix: My colleague the Minister of Social Development is challenging me to do that. In any event, I would say, and there are important discussions….
People know, I think, on these cameras we can see everybody in the room, so that’s a good reminder to everyone in the room that you can all be seen. Currently the Government House Leader is having a discussion with the opposition Health critic, and the two of them are engaging in a full and free form of debate, here in the Legislature. Now they’re talking more specifically. They’re probably talking about me.
In any event, it’s good to just say, about the TI, a couple of things. First of all, a lot of what they do is post-market and post-approval, and that’s very important. The second thing they do, in an extraordinary way, is education to doctors, in terms of prescribing decisions. This is a huge value to have, given the number, the hundreds of people, who work for pharmaceutical companies who engage with a very small number of doctors in B.C. Having an independent education about the value of prescription drugs is of huge importance. Both of those are significant things the TI does. I can tell you that their success is extraordinary.
With respect to rivaroxaban, it’s only covered for special authority, as the member suggests. The coverage decision is based on a recommendation by the common drug review and the Drug Benefit Council. Based on those reviews with respect to clinical effectiveness, the reviews were that it was not inferior but not superior to warfarin, based on the incidence of stroke or systemic embolism. With regard to cost-effectiveness, it’s way more expensive in the short run. That’s why it’s a second-tier drug.
Also, there are currently no reversal agents for the side effects of uncontrolled bleeding associated with rivaroxaban treatment, while there is a reversal agent for warfarin.
That’s the reason why the coverages exist, and it’s parallel to other provinces. Currently there are no plans to change PharmaCare coverage of the drug for the moment.
With reluctance, because this was kind of our place — and with the inspiration provided by a direct order from the Government House Leader — I move that the House rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 4:16 p.m.
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