Orders of the Day

Hon. M. Farnworth: In this chamber, I call continued second reading debate on Bill 38, Climate Change Accountability Act, and in Committee A, Douglas Fir Room, I call continued committee stage on Bill 41, Declaration on the Rights of Indigenous Peoples Act.

[R. Chouhan in the chair.]

Second Reading of Bills

BILL 38 — CLIMATE CHANGE
ACCOUNTABILITY
AMENDMENT ACT, 2019

(continued)

B. Ma: I’m pleased to be able to resume my place here in the chambers to talk about Bill 38, intituled Climate Change Accountability Amendment Act. This act, of course, as I was talking about before we took a break for lunch, is an act that helps us get to a cleaner B.C. It’s based on the work of CleanBC, which is our climate action strategy. I won’t rehash the information that I provided before, but I do want to re-emphasize that CleanBC is an exceptionally important climate action strategy, not only because it reduces emissions by electrifying our transportation system or increasing the emissions efficiency of our buildings but also because it works to transition our economy away from fossil fuels and transition our economy towards a greener future.

Economic transformation is probably the most important thing that we need to do as a government, that we need to do as a jurisdiction, that the entire world needs to do in order to actually tackle climate change. Technology isn’t the problem. It has never been the problem. We have had electric vehicles for decades. We have known for almost a century what we were doing with the fossil fuel industry and what we were doing with greenhouse gases. We have known for what seems like forever what was necessary to actually save us from this future that we are now currently headed towards together.

Our economic and financial system is captured by the fossil fuel industry, and I say this extremely seriously. It’s not just B.C. We see it across Canada. Canada was economically built on resource extraction. I think that it’s important to acknowledge that, and it’s important to respect and be grateful for what resource extraction has done for our country and be grateful for what petroleum products have brought to civilization. But just because we have come from a place where fossil fuels have been embedded into our economic and financial system doesn’t mean that we need to continue forward in that way. We have to transition.

[1:40 p.m.]

We have seen…. I have seen in my time as an MLA here how captured our entire system is by this industry, how it influences the way that individuals see their options for prosperity in certain parts of the country. We have seen the way that it limits the kinds of choices that governments feel like they can make. I have learned about how many wars, how many regime changes, how many sanctions have been placed on countries around the world, based on whether or not they will or won’t play ball in terms of fossil fuel and gas and petroleum exports — in particular, with the United States.

This is something that we all need to grapple with as we go forward into actually meeting our climate targets, because it’s not just about emissions. Emissions on their own won’t release us from the grasp of the fossil fuel industry.

I come from a generation…. I’m a millennial, an elder millennial, probably on the earlier end, in terms of the years that millennials are considered to be millennials. I remember when we, as a generation, sounded the alarm on intergenerational inequality — not just financial inequality, not just on wealth and income, but also on climate and the environment.

As a generation, we were told to shut up. We were called “lazy, entitled, naive.” We were told to stop whining, to go get a job. “Come back to the table when you have more experience. Then talk to us about what’s going on. Go out and work really hard, and stop being lazy. Give up your avocado toast and your lattes, and then everything will be fine.”

You know what? That’s what we did. We went out, we got jobs, and we put our concerns aside for a while. We lived in smaller homes, rode our bikes, took public transit, composted and recycled, and it didn’t fix the problem. It did not fix the problem, and now we are back. But this time, we won’t stay silent, and you can’t get rid of us.

We are in your workforce. We are in your streets. We are supporting people who are even younger than us and encouraging them to speak up, not sit down. We are also in your city councils, and yes, we are in your legislatures. Not that many of us, mind you. Out of 87 MLAs in the B.C. Legislature, only three of us are millennials, despite making up the largest voting bloc today. We make up only less than 3.5 percent of the people who sit in this House and make laws for future generations.

We’re demanding action on climate change, and we’re demanding accountability with our leaders, with community members. We’re organizing people together to fight for our future. This bill, Bill 38, is exactly the kind of bill that I left my career for in order to run to be an MLA — so I could stand in this House and support the incredible work of the Minister of Environment and climate action, the incredible members of the Third Party and all of the colleagues that I know sit in this House who support climate action.

I came here to support this work. So I’m really proud to be able to vote for it. But I also have to say that it is not enough. B.C. is leading the continent on climate action, yet it is still not enough, not only because B.C. needs to do more but also because the rest of the world needs to do more. Canada, the States, China — all of the different countries around the world need to be pulling together in order to do exactly the kinds of things that we’re striving to do right here under the leadership of the Minister of Environment and Climate Change.

I know that the minister knows this to be true, because I have seen him fight every single day to make us better — make our province better, to encourage the country to be better — and to show himself and our province to be a leader on the world stage.

I’m very pleased to be able to support this bill, and I look forward to helping all of my colleagues in this House continue to be better as we move forward into a better future.

[1:45 p.m.]

S. Furstenau: I’m delighted to be speaking to Bill 38 today, the Climate Change Accountability Amendment Act. I’d just like to follow on my colleague the member for North Vancouver–Lonsdale and her passionate words just now.

What she reminded me of is one of our incredible policy staffers in our office, Claire Hume, who often frames our work on climate as a “yes, and.” There is so much to do. It is such a complicated and, seemingly at times, intractable issue. But what we have to do is adopt a stance of “yes, and.” Yes, the bill is not perfect yet, and we’re going to keep doing better. Yes, other regions haven’t come on board to do their part, and we’re going to keep showing them how.

I appreciate the member’s passion and her words. I also want to acknowledge how much I appreciate Claire for guiding us as well in her “yes, and” stance that she takes.

I will start my comments today with an overview of the broader climate change context within which Bill 38 is situated before turning to its main policy components. From there, I’d like to speak about Bill 38 as an example of good governance and compare it also to the work being done on both vaping and LNG, before finishing with a few remarks on how it relates to the future of our province. It may seem a little off-topic at times, but I can assure you that if you stick with me, I’ll bring it back to the important task at hand: a second reading debate on the Climate Change Accountability Amendment Act, 2019.

As my colleague from Oak Bay–Gordon Head stated in his speech, climate policy rhetoric is nothing without transparent, accurate, timely and publicly accessible data, and political promises are worthless without legislated accountability. “Trust us” is not a good climate policy. It is my sincere hope that the transparency and accountability mechanisms in this bill, if passed, will last well beyond this current government and set an evidence-based foundation from which future climate policy can be built.

I can only begin to describe how desperately this bill is needed. To that end, I’d like to remind everyone of the major reports that have been published just in the last year alone. To start, there was the 2018 IPCC special report, in which the world’s leading climate scientists warned that there are only a dozen years for global warming to be kept at a maximum of 1.5 degrees Celsius, beyond which even half a degree will significantly worsen the risk of drought, floods, extreme heat and poverty for hundreds of millions of people.

A few months later, Canada’s Changing Climate Report was published by the federal government. The report noted that northern Canada is warming at twice the global rate and highlighted B.C. as being particularly vulnerable to drought, glacial loss, severe wildfires and sea level rise, which will salinate farmland.

Shortly after that, we had the report from the UN Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services that stated, in stark terms, that we are in the midst of an extinction crisis, with a million species likely disappearing within decades. The consequences of this will be devastating for ecosystem stability and food production.

Then we got the report from the UN special rapporteur on extreme poverty and human rights. Professor Alston said that the world is on course for climate apartheid, where the rich will buy their way out of the worst effects of global warming and the poor will suffer. “Even under the best-case scenario, hundreds of millions will face food insecurity, forced migration, disease and death…. Staying the course will be disastrous for the global economy and put vast numbers of people into poverty,” he wrote.

Then this summer the province quietly released their strategic climate risk assessment for British Columbia. In it, severe wildfires, seasonal water shortages and heatwaves were the three highest-ranked risks facing the province in terms of severity, magnitude and likelihood. Ocean acidification, glacier mass loss and long-term water shortages also topped the list.

Just last week, the Climate Transparency analysis of G20 nations found that Canada is in the top three countries furthest off track from meeting their emissions targets. Our per-capita emissions are 18.9 tonnes. The G20 average is 7.5 tonnes.

[1:50 p.m.]

We talk a lot about being environmentally conscious in B.C. and in Canada, but the data tells a very different story. Politicians have a moral responsibility to think further into the future and govern not just for their term but for their children and their children’s grandchildren. This is the moon shot of our of our generation. Let’s talk about some of the policy logistics that will help us land it.

The main components of Bill 38 are as follows: a requirement for government to set an interim emissions target on the path to the legislated 2030 target, which is 40 percent in greenhouse gas reductions below 2007 levels. This is similar to the interim targets set for 2012 and 2016.

The bill will have a requirement for government to set separate 2030 sectoral targets following engagement with stakeholders, Indigenous peoples and communities throughout the province. This will make sure that the responsibility to reduce carbon pollution is effectively distributed across B.C.’s economy and between ministries. The Minister of Environment alone cannot tackle this challenge.

A requirement for government to table an annual report on actions taken to reduce carbon pollution along with their costs and how they will achieve the government’s legislative emissions reductions targets.

The annual reports will outline the latest emissions data and projections as well as actions planned for future years and the effect they are expected to have. It will also include a determination of climate risks our province is facing along with risk reduction policies and any mitigation or adaptation plans.

The bill will have a requirement for government to establish an independent advisory committee that will be modelled on the Climate Solutions and Clean Growth Advisory Council now that the council has fulfilled its mandate.

The committee will be made up of members from diverse areas of expertise in regions of the province and can provide advice to the minister on policies that can lead to further reductions, progress towards targets, opportunities for sustainable economic development, opportunities for climate mitigation and adaptation, among other matters related to the act.

Lastly, this bill gives government the ability to set more detailed targets and other environmental standards for publicly owned buildings and vehicle fleets to help reduce emissions, improve environmental performance, save money and support innovation.

The Climate Change Accountability Act as currently written already includes legislated greenhouse gas reduction targets as well as a requirement to collect data for tracking emissions. But our targets are set ten years apart, and data is published on a two-year delay. Combine that with the four-year government mandate, and you create a situation where political parties spend the first two years blaming their predecessors for bad results and the next two years saying they are just getting started while making promises they can only fulfil if you vote them back in.

Then before you know it, the ten-year target is within sight, but by that time it is too late to substantively change your emissions trajectory. Bill 38 aims to cut through those excuses by shortening the time scale and increasing transparency. For example, by including interim targets again, we’ll be able to evaluate our progress prior to 2030. If it shows we’re on track, great. That adds credibility to government so they can continue their course.

If not, they will be responsible for correcting the trajectory prior to the end of the decade. By reporting emissions annually, the public will get a better sense of where emissions originate, which policies are working, which are not and how all of the above align with the next year’s fiscal forecast.

The existing act also already has a provision that allows the minister to establish sectoral targets, but it is written as an option. Section (4): “The minister may, by order, establish greenhouse gas emissions targets for individual sectors” instead of a requirement. So it has gone unused.

The practice of using sectoral targets to help guide reductions is well established. New Zealand; Victoria, Australia; Germany; and the U.K., for example, all have variations on the policy. New Zealand and Victoria, Australia, in particular, are good policy proxies for B.C. because of their comparable population size.

A commitment to set sectoral targets was also included in the minister’s mandate letter and the 2017 NDP platform. So its inclusion in Bill 38 should come as no surprise.

[1:55 p.m.]

Ultimately, this bill is about basic good governance. It says that governments should follow the law. Government should ensure every industry operates in accordance with the law, and government should report back to British Columbians with accurate, timely data about the progress taxpayers are funding.

To understand why such a basic fundamental bill is so noteworthy and so important, one must consider the state of governance in the fossil fuel area, a political economy so intertwined that the roles have evolved to favour those who stand to gain the most. It is the politics of accommodation. It pivots on the threats of competitiveness, bends to meet demands of fossil fuel interests and is willing to sacrifice all else for their profit. The concentrated power of business as usual exists just to justify the short-term concentration of benefits among the few, even as it comes at the cost to the many and leads us all toward an increasingly catastrophic outcome.

As academics Thomas Princen, Jack Manno and Pamela Martin write:

“Burning fossil fuels has social and environmental consequences that must…be taken into account. These are real costs spread throughout society and borne mostly by those who never profit directly from fossil fuels.”

They continue:

“Decisions considered to be the subjects of debate are limited to conserving energy, keeping the prices affordable, siting infrastructure, encouraging discovery and development of new sources and cleaning up the messes — but never the decision about whether to extract in the first place…. Given the environmental and societal consequences of fossil fuel dependence, energy decisions should be determined by a logic other than one based solely on industry profits….”

Instead, ensuring that every British Columbian has the conditions to live a healthy, fulfilling life in a flourishing, supportive environment should be the government’s most important responsibility. Again, to paraphrase Princen, Manno and Martin, just as tobacco went from being medicinal and cool to lethal and disgusting, the delegitimization of fossil fuels recognizes that a substance once deemed net beneficial can come to be deemed net detrimental.

In the context of Bill 38 and government’s response to climate change, I think it’s worth considering how they respond to other public health threats. Let’s look at vaping. With vaping rates skyrocketing amongst teenagers, parents, teachers and governments are rightfully concerned. Decades of anti-smoking progress in the face of concerted and relentless lobbying efforts from the tobacco industry are being reversed. As we all well know, in addition to vaping-related lung disease, the longer-term impacts of nicotine addiction can be dire. Just last month B.C.’s provincial health officer confirmed the first probable case of vaping-related illness.

Less than four weeks later, government unveiled an ambitious and comprehensive suite of policy, regulatory, educational and taxation measures to address the issue, with the Minister of Health, the Minister of Education, the Minister of Finance, the B.C. Lung Association and the Canadian Cancer Society standing united in their efforts to protect British Columbians from this health risk. That is good governance in action, and I applaud government for their decisive plan to protect youth.

It is challenging, however, to see their vaping reaction stand in such stark contrast to their endorsement of the LNG industry. Reports from the Intergovernmental Panel on Climate Change have made it painfully clear that climate change is the largest public health challenge that we face, with only a few short years to steer away from catastrophic outcomes by dramatically reducing our greenhouse gas emissions, starting now. Yet every member of the B.C. Liberals and the B.C. NDP voted in favour of a fossil fuel project that plans to drastically increase our emissions from 2023 through the year 2060, not only permitting their expansion but subsidizing them every step of the way.

[2:00 p.m.]

LNG Canada, a project set to become the single biggest point source of emissions in our province, will pollute until after our children have retired. It will pollute the province our grandchildren are born into.

I appreciate there are important distinctions between smoking and fossil fuels that allow government to act definitively. For one, it is easier to make a connection between someone vaping and that same person ending up in hospital with acute lung disease. The immediate cause and effect is clear. That said, government also takes the nicotine addiction aspect of vaping seriously, declaring it a public health hazard, with plans to regulate its content level, going forward. Nicotine, much like fossil fuel combustion, has a longer lag between the use and the connected harm. Even still, government strives to regulate nicotine because of its future damage.

Industry lobbying efforts are also important aspects of these files. In one, we are discerning enough to recognize that there are some legitimate uses for the product while also maintaining they should not be used excessively throughout society. We trust the guidance of medical professionals who confirm that vaping can be a helpful smoking replacement or cessation tool, and we trust our gut when industry tells us that cotton candy–flavoured, bubble-gum-pink vaping products peddled by models on social media are not aimed at attracting youth buyers. Taking both into account, we tailor our regulations appropriately.

With climate change, however, we seem to, at best, be lacking the urgency required, and, at worst, be working on both sides of the issue. Where government’s choices in response to vaping have been complete and absolute, geared to taking us to a place where our children are not put at risk, the government’s climate response is to build a credible road map and then allow for a growing oil and gas sector.

Which brings us back to the importance of good governance. Instead of the politics of industry accommodation, we need a new governance story that recognizes interdependence — a belief that my well-being is directly related to your well-being, to the well-being of the river, the forest, the salmon, and to the well-being of children, and an understanding and acceptance that what we do to the world, we do to ourselves. Even if we can physically survive after the last orca or the last caribou or the last steelhead has gone extinct, when life around us withers and dies, so, too, do we.

We are immensely fortunate to live in British Columbia. It is, quite literally, one of the best locations on the planet from which to navigate the climate-related challenges ahead. We have access to boundless renewable energy, fibre and water like no other jurisdiction in the world. We have incredible potential to create clean, renewable energy and a forestry sector that could be sustainable.

Transitioning to a carbon-neutral world doesn’t mean going back to the Dark Ages. It means transitioning to a cleaner, safer, more sustainable society where economic, social and environmental concerns are central in all of our decision-making. I applaud the work by local governments around the province and across the country that have recognized that now is the time to take action on climate change.

In particular, it’s heartening to see the recognition that climate action is not limited to reducing emissions or levelling up renewable energy. On Sunday, it was reported that 50 mayors and councillors from across Canada have signed the Victoria call to action, a promise to build communities that can react to climate change.

Recognizing that helping our communities become more connected, creating a greater sense of belonging for all citizens, ensuring that our neighbourhoods are places where we know that we are looking out for each other and where we work to deepen our empathy for each other, engaging in decolonization and building equity — all of these are essential aspects of climate action. And the outcomes not only benefit our biosphere. They benefit each and every one of us in our day-to-day lives.

[2:05 p.m.]

Climate change is the result of an imbalance. Human activity has resulted in an overabundance of greenhouse gases in our atmosphere, which is undermining the very delicate balance of our global climate system. But there are other imbalances that we can and must address in this time of transformation: the imbalance of inequality, the overabundance of isolation in our communities, the hollowing out of neighbourhoods while housing becomes a commodity to invest in instead of homes to raise families in.

We have so much to gain. The shift that we can — that we must — take can be the vehicle to deliver a more just, equitable and healthy society in which we put the health of our planet, the health of our communities and neighbourhoods and our own health at the centre of our decision-making.

To capitalize on these possibilities, we need to start planning beyond the next election cycle. We need to focus on building a new economy that works for all of us, not just the privileged few.

That’s what Bill 38, ultimately, is about. It is the foundation for what comes next.

Deputy Speaker: Seeing no further speakers, the Minister of Environment and Climate Change Strategy will close the debate.

Hon. G. Heyman: I want to thank all of the members of the House, in all three parties, who rose to speak to Bill 38, the Climate Change Accountability Amendment Act, and the important issues that led to the introduction of this bill.

I want to reflect on some of the comments. The Leader of the Third Party spoke about the non-partisan nature of all of us, as leaders and politicians in this province, coming together to address climate change, to develop a plan and to be willing to be transparent and accountable about the effectiveness and the truth of the measures that we both outlined and then act on to meet the challenges, to meet our targets and to meet the particular steps along the path. I agree with the Leader of the Third Party.

I think it is important to acknowledge and thank all of the members of the Third Party for their work with our caucus and with me, in particular, to develop our CleanBC plan, to discuss an appropriate response to climate change and to discuss the kind of role we can play here in British Columbia.

We’ve demonstrated, I think, that we have discovered in our two caucuses that while we may disagree on elements of a plan, maybe even disagree on issues — as has been highlighted by the remarks of the member for Cowichan Valley — we don’t need to let that stop us from finding common ground and the ability to agree on a suite of actions that will make a difference, that move us forward while we continue to discuss and resolve areas of disagreement. That’s critically important and should be something that we think long and hard about in this chamber, about how we can work together.

I also want to thank all the speakers. Particularly, I want to thank the two millennial members of the New Democrat caucus who both spoke passionately about their own feelings and beliefs about the challenges that they see ahead of them, for what I hope will be many more decades of their lives, and the concerns of the people in their constituencies, as well as the people in their generation. The real threat, the real existential threat that they feel, not just in terms of the challenges we face today from droughts or wildfires or rising sea levels or impacts on our forests or wildlife or fish but their worry about the scientific reports about how rapidly the threat is escalating and how much more rapidly it will escalate if we do nothing. I take those seriously.

I know that I have been impacted by meeting with young people, particularly teenagers, who came and met with me both individually and in a joint meeting with the Premier, who participated here in Victoria in the climate strikes — the increasing climate strikes and the increasing number of young people and their allies from older generations who are making their voices heard and thinking that this issue is so critical that they have to stand for it and have to be seen to be standing for it.

[2:10 p.m.]

It was the passion, the articulation, the urgency, the reality of the issues facing teenagers, ranging from 12 to 18, that I met with and the Premier met with — who asked us hard questions — that I know for me, and I’m sure for the Premier, led to our conviction that we needed not just a plan and not just to say we have a plan and not just legislated targets, but a demonstrated willingness to be held accountable for what we do every single year to move our plan forward and to demonstrate that we would be willing to be transparent if our plans needed to be amended, if they needed to be shifted, if they weren’t being successful in a particular area or if we were backsliding.

In my opening remarks, I noted and acknowledged, and I will acknowledge again, that one of the reasons that B.C. is seen as a leader in climate action, and particularly through carbon pricing, is because the government of Gordon Campbell introduced a carbon tax in 2008. It showed that we could affect emissions, that we could bring down emissions and that we could still develop a sustainable economy while we appropriately priced carbon. Many corporations have been shadow pricing carbon for years because they understand that’s necessary.

I acknowledged that that work was begun. I think that’s something for us to celebrate, because it indicates, I hope, that in this chamber, we can reach agreement and move together on this most critical issue of our time, this climate emergency that is recognized by citizens across Canada.

I will say I listened carefully to the speeches of the members of the opposition. I don’t personally think it’s good enough to say there is nothing new in this bill or that all this bill does is to continue the work that was already in place from a previous government. The fact is that under the government of Christy Clark, from 2011 onward, climate action in this province stalled. In fact, it slid backwards.

That is what happens sometimes in political cycles. What this bill is about is ensuring that if governments make choices to deprioritize this most critical issue of our time and cease to move forward on the plans that we’ve announced, the plans that people depend on, we will be reporting regularly in detail on exactly how we are failing to meet our commitments. It’s important for accountability, but it’s also important to keep us on track.

That’s what this bill is about. It’s about using the tools we have to better reach our targets by ensuring that we have guidance and mileposts through interim and sectoral targets. It’s about demonstrating leadership in the public sector by doing what we can to bring down emissions very, very explicitly — not just buying offsets, though those have a role, but actually specifying requirements and targets.

It’s also about reporting, in a detailed manner every year, on what we plan to do every single year for three years going forward; the specific measures and the funding we put in place to meet those measures; then looking backward at the previous year and one year further back, for which the reporting is verified, to say exactly how successful we’ve been or where we may need to recalibrate; and also to ensure that the advice and commentary of an independent council is reported transparently to the public.

That won’t always be easy for this government or any government, because it is not possible to be perfect, but it is possible to act with goodwill. It is possible to reflect on how we’re doing, and it is possible to show British Columbians that we’re doing everything we can to meet our commitments in this most important challenge. That’s important.

We’ll have an opportunity at third reading to look at the elements of the bill in some considerable detail. But I would say that this bill is important for a number of reasons.

[2:15 p.m.]

It tells those young people and others who want to see concrete action that we not only have a target, that we not only have a detailed plan to meet that target, but that we’re willing to report regularly and be held accountable for how we are doing — whether we are keeping our promises, whether we are meeting the challenge that they demand that we meet.

Comments were made that we only have a plan for 75 percent. We are working on the rest of the plan, and our commitment is to detail the rest of that over the course of the next 13 months. What this bill says is that if we fail to do that, we will be accountable for that. That is not different from the Gordon Campbell plan, who also came forward with a plan to say how 75 percent of the targets would be met. So people knew how we were starting as we continued to develop the work.

We are seeing success. We had a target of 10 percent of new car and light duty vehicle sales being clean energy vehicles by 2025. This month, in 2019, we met that target six years early. That’s what having a plan means. That’s what having financial measures to address that plan means. That’s what it means to be accountable and take seriously our commitments, and we intend to do that with every element of our CleanBC plan.

The member for Kamloops–North Thompson said that I said, in a speech to municipal leaders, that B.C. is only responsible for 2/10 of 1 percent of global emissions. That’s true, and the reason I said it was to make the point that we still have a responsibility to do our part. In doing so — through carbon pricing, through emission reduction and through building a diversified, modern, low-carbon economy while reducing emissions across society — we can show the rest of Canada and the rest of the world that we need to take action, that we can take action and that we can prosper economically through a new diversified economy while we do that.

I see we’ve been joined in the gallery by a number of students. I’m happy to see young faces here for the closing of debate on second reading of a bill that will affect your lives, that will affect the lives of other students. We are serious in this government about doing everything we can to meet the climate challenge. This bill says that we’ll be accountable to you and to every British Columbian for how we’re doing.

With that, I move second reading of Bill 38.

Motion approved.

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

Bill 38, Climate Change Accountability Amendment Act, 2019, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. G. Heyman: I call second reading of Bill 39, the Miscellaneous Statutes (Minor Corrections) Act, 2019.

Interjection.

BILL 39 — MISCELLANEOUS STATUTES
(MINOR CORRECTIONS) AND STATUTE
REVISION AMENDMENT ACT, 2019

Hon. D. Eby: Glad to hear the Leader of the Third Party is very enthusiastic about this bill.

I move the bill be now read a second time.

Bill 39 makes minor corrections and housekeeping amend­ments to various statutes. They are all meant to be straightforward, non-controversial corrections and minor in nature. The contents of the bill, when read, reflect that. I say “meant to be” because we have had some very interesting discussion and debate about commas, semicolons, and so forth, in this place on this bill, and the Leader of the Third Party often leads the discussion.

The office of the legislative counsel gathers minor corrections as part of the routine statute revision process. The result of that work is what we have in this bill. The office of legislative counsel, I should note, takes great pride in the work that they do, and it serves this House very well. I’m certainly very proud of the work that they do.

The changes in the bill are presented before the Legislature so that this Legislature can approve all changes to statutes, no matter how small or minor they may appear. In other words, there is a very important principle here that people cannot simply go in and change the law. They have to have the approval of the Legislature before any changes may be made, no matter how apparently minor. The changes need to be done with the authority of this House to ensure that B.C. statutes are orderly and correct — a goal, I would hope, of any administration in this province.

P. Milobar: It gives me pleasure to rise to Bill 39, the hard-hitting Miscellaneous Statutes (Minor Corrections) and Statute Revision Amendment Act.

[2:20 p.m.]

As we heard from the minister, I look forward to committee stage, where we will delve deeply into the difference between round brackets being switched out with square or box brackets and other similar punctuation and formatting changes that are being made. I would note that a lot of these are actually very serious acts that these changes are happening in. I’m not trying to make light of things like the Adoption Act and Adult Guardianship Act and those of that nature, but certainly, this bill is one of the few times where it’s really as minor as the title would indicate.

As I say, I look forward to the committee stage, where we will get into all of the machinations that are the world of punctuation.

Deputy Speaker: Seeing no further speakers, the Attorney General to close the debate.

Hon. D. Eby: With some regret, I move second reading.

Motion approved.

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

Bill 39, Miscellaneous Statutes (Minor Corrections) and Statute Revision Amendment Act, 2019, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. D. Eby: I call Bill 40, the Interpretation Amendment Act, 2019, second reading.

BILL 40 — INTERPRETATION
AMENDMENT ACT, 2019

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

This bill responds to the very clear message from British Columbians that they wish to end the practice of changing our clocks twice a year. This summer we had the biggest response to a public engagement in the province’s history. Over 220,000 British Columbians responded to a survey asking how they felt about our current practice of changing the clocks and whether they’d prefer to be on daylight saving time year-round. The results were clear. Ninety-three percent said they want to stay on daylight saving time, or DST. This support was consistent across all regions of the province, all age groups and nearly all occupations. It’s as clear a message as we could expect to receive.

It’s important to note that a majority, albeit a smaller one, also indicated that it’s important to align our time observance with our neighbours to the south and the north. Overall, 54 percent said that was important or very important. The industry groups we heard from, including the Vancouver Airport Authority and the B.C. Chamber of Commerce, were also very clear on this point.

Operating at a different time zone from our neighbours to the north and south could create uncertainty and unnecessary confusion for business, consumers and travellers. That’s why the change proposed would not come into effect immediately. Instead, it would happen by regulation so that we can synchronize our time change with those in Yukon and in neighbouring U.S. states on the Pacific coast: Washington, Oregon and California.

I should note that the States require approval of the U.S. Congress to make this change, so the timing is not in their hands. But passing this legislation now will leave us ready to respond at the appropriate time.

I should also point out that this bill does not make any changes to provisions in the Local Government Act and Community Charter that permit areas of the province to observe Mountain Time. Essentially, that’s the Peace River region and the East Kootenays. That’s been a long-standing practice, following a plebiscite in the areas bordering Alberta in the 1970s.

We’re continuing the practice of letting those areas determine whether they wish to observe Mountain Time. The bill would create a new name for our time zone, Pacific Time, and would remove the regulation-making authority that’s currently in the act that permits us to move to daylight saving time for part of the year.

Pacific Time is the simplest and clearest way of expressing the new time zone. It effectively becomes our new standard time and will be seven hours behind Universal Coordinated Time, which used to be called Greenwich Mean Time. That seven hours’ difference is the same as what we currently observe during daylight saving time.

The practical effect of this change is that in winter months, sunrise and sunset will be an hour later than they are currently. We recognize that this will be an adjustment for some. With a later sunrise in mid-winter, schools, for example, may want to look at their starting and ending times. But the biggest change will be for people who have great difficulty adjusting to disruptions in their sleep. For most of us, changing the clocks is simply a bit of a nuisance, but for some people, it can cause significant problems and disrupt their health for a period of time after the actual date of the change.

For all these reasons, I think we’re doing the right thing in responding to this clear message from British Columbians and ending the practice of changing our clocks twice a year. I look forward to hearing from other members of the House on this bill.

L. Larson: Thank you, Minister. After two years and three private members’ bills, I am pleased to finally be able to speak to second reading of Bill 40, the Interpretation Amendment Act, 2019.

[2:25 p.m.]

This is truly a non-partisan issue for the people of British Columbia. Changing our clocks twice a year affects all of us, regardless of age, economics, cultural diversity, urban or rural. For some, the effects are more than just the effort of switching. For some, there is a very real physical and mental impact.

For all of you with small children, you know that it will take at least a week of adjustment before everyone is sleeping and eating again on a comfortable household schedule. For seniors, either living at home or in care facilities, just adjusting meal times and medications is stressful. While experts cannot agree on which time zone is the best for our health overall, all agree that switching itself causes the greatest health and safety concerns.

Seventy-nine percent of the world’s population does not adjust their time twice a year. Many of the 21 percent of jurisdictions who have done time switching are now enacting legislation to just stay on one time zone. The choice is generally daylight savings time, as most are in the northern hemisphere, where dark winter evenings are more likely on standard time. I’m sure our weather plays a big role in the desire of most to have more daylight in the evenings of our warmer seasons of the year.

The European Parliament, in 2018, backed a review of time-shifting related to daylight savings time. European lawmakers called for a commission to launch a full evaluation of their current systems. In North America, discussions on the time-shifting have been going on for many years, and several jurisdictions have now moved into proposed legislation. Florida passed the Sunshine Protection Act, which will make daylight savings time their year-round time zone. Washington State and Oregon have legislation in process to stay on daylight savings all year round.

The community of Grand Forks, in my riding, was the first to bring forward politically to the UBCM a resolution to stay on daylight savings time all year round, and two years in a row, it was supported by the UBCM membership. In Kamloops, local citizens Bob Dieno and Tara Holmes started an on-line petition a few years ago to stop the time changing. Their survey results were similar to the B.C. government survey this past summer, with over 90 percent supporting stopping the practice, and 75 percent of those wanting to stay on daylight savings time. They had over 25,000 who responded to their local initiative.

Now we have the results of the government’s own survey that confirms that the people of British Columbia want to keep daylight savings time all year long, with or without, in some cases, the rest of the west coast moving in that direction. I understand the common sense that would suggest the entire Pacific Time zone all move in unison, but I have no doubt that if British Columbia moves into daylight savings time in the spring and no longer falls back, the other jurisdictions will either move quickly to follow suit or adjust accordingly.

We all experience different time zones when we travel for pleasure or business, and we adapt. Twice a year, we have been disrupting our lives with this time switch without tangible benefits for anybody. While those who work a standard day shift or something similar manage to catch up on a missing hour, think about those who work on a 24-hour clock and how all their lives are affected.

In closing, I will again suggest that British Columbia make the coming spring forward the last time change, even if other jurisdictions are not following immediately. I do not believe that commerce and travel will grind to a halt between B.C. and those south of the border if we are not unified. Technology will continue to manage our lives, as it does now when we switch the time twice a year. After all, Saskatchewan ended the practice of time changing in 1966, and they’re still part of Canada. Planes still schedule flights to the province, and football games still happen on time.

I want to thank the Premier for following through with the provincial survey, and the Attorney General and the staff who have put this bill together. I look forward to Bill 40 moving to committee stage.

[2:30 p.m.]

A. Weaver: I rise to take my place in the second reading debate on Bill 40, Interpretation Amendment Act, 2019. This bill proposes to enable government to permanently set the province of British Columbia on daylight savings time, but without prejudicing some of the existing law within local government and acts which enable certain jurisdictions to change between mountain time and standard time.

[J. Isaacs in the chair.]

I’m rising to speak in opposition to this bill for a number of reasons. First and foremost, I would argue that the process which led to the public feedback into this is fundamentally flawed. Two, I don’t think the evidence has actually been explored thoroughly as to why we would shift to daylight, as opposed to standard, time. Let me first say that in politics, it’s often very useful to actually remember what we’ve done in the past. Too often, societies repeat the same issues that we’ve done time and time again.

We only need go back to the Second World War, when the United States went to daylight time during the extension of the war, to conserve energy, and then went back immediately following the war. We also know that in the U.S., when the OPEC crisis was on, it was decreed that they would stay on daylight saving time during the OPEC crisis. However, 11 months into what was going to be, I believe, a 16-month period, they switched back to standard time, because of the complaints and issues that I’ll raise in a second.

More importantly, in 1968, Great Britain went down the path for three full years of actually only having daylight saving time. Then they switched back in 1971 for the reason that I’ll articulate in a few moments — they were seeing, sure, a decrease in the amount of accidents at night, but an increase in the amount of accidents in the day — for safety issues, and people complaining about the fact that they no longer were waking up and seeing any sun.

Right now in the province of British Columbia, we actually have three time zones. We have where we stand here today. We’re standing, presently, on Pacific Standard Time, which is basically coordinated universal time minus eight hours. That’s on the day we’ll be debating the bill. When the bill was introduced, we were on Pacific Daylight Time, which is coordinated universal time minus seven hours.

Fort St. John and the area around there — Dawson Creek, etc. — stay on Mountain Standard Time throughout the year. So there’s always a time difference between Fort St. John and Vancouver in the winter months, but not so much in the summer months, when they are on Mountain Standard Time and we’re on daylight saving time.

To throw a wrench into it, Cranbrook and the areas around there have mountain time, but they still continually switch between mountain daylight time and Mountain Standard Time. The reason why I raise that is that right off the bat, evidence suggests that any argument that we need to be consistent within neighbouring jurisdictions clearly doesn’t hold up to scrutiny, in that we’re not even consistent in our own jurisdiction.

More importantly, when we look right now, what would happen on December 21 of this year…. Let us suppose we were not…. Well, if we’re on standard time, as we are now, on December 21 — that’s the shortest day of the year — in Victoria, sunrise would be at 8:02 in the morning. If we were on daylight saving time, sunrise would be at 9:02 in the morning. If we’re in Prince George, Pacific Standard Time, sunrise on December 21 of this year would be at 8:27. If we were on Pacific Daylight Time — or Pacific Time, as referred to in this bill — sunrise on December 21 would be at 9:27 in the morning.

Now, this is precisely the reason why these failed experiments, which occurred in the U.K. and in the U.S., to stay on daylight saving time were reversed. People would wake up, particularly in places like Prince George or Victoria, their kids would go to school, and it would be pitch black, not even simple twilight. There would be accidents, and there would be children getting hurt, and complaints. One of the reasons why we know that there will be complaints is because the reason why we set standard time is to ensure that the solar clock actually matches with our internal clock. There’s a reason why we use standard time.

[2:35 p.m.]

For example, coming back to my illustration on December 21. On December 21 of this year, noon in Victoria will occur at 12:11, coinciding with the maximum solar altitude. There’s a reason for that. It’s because our bodies have adjusted over millennia to understand that in the morning, we wake up in the sun; at noon is when the high sun is there; and at evening, our sleep cycles take us to sleep. If we stayed on daylight time, it would be the high sun at 13:12, an hour later, which is inconsistent with our own internal body clocks.

Deputy Speaker: Thank you. Member, may I pause for a moment?

M. Stilwell: May I seek leave to make an introduction?

Leave granted.

Introductions by Members

M. Stilwell: Joining us in the House today is an award-winning Canadian comedian and performer. He doesn’t have as many awards as I have, so hopefully he can step up his game the next time he comes here to visit. He is the host of CBC’s The Debaters, which has his participants debating top Canadian topics such as are forks better than spoons, or was Darth Vader a bad father?

I often draw inspiration from Steve’s shows as we debate here in the House, just as he will be gathering some information here today to formulate some of his future stand-up performances. I believe he actually keeps me around as his friend because our political conversations give him a wealth of material to draw from.

For the record, forks are better than spoons. I think all British Columbians need to know that.

Would the House please make my friend Steve Patterson feel very welcome.

Debate Continued

A. Weaver: Well, I am very pleased to know that we have The Debaters coordinator there. I’m looking so very forward to this upcoming Saturday’s debate, where we actually have: “Be it resolved that this House approve going to daylight savings time or staying on standard time.” I think there could be some very good comedy framed around that, in which I’m sure members in this House would be delighted to participate.

More importantly, the fundamental reason why this process has been flawed is that you don’t ask British Columbians in the height of summer, when they’re sitting on their patios sipping their pina coladas and their margaritas, saying, “Oh, isn’t it glorious to have this evening sunshine,” when they’re not actually thinking at the same time, “What about that loss of morning sunshine?” because it’s sunny all the time…. You don’t ask them: “Do you want to stay on daylight savings or not?”

In essence, that was the question. There was no option there for staying on standard time, the option that I suspect we’ll see the European Union go, the option that actually makes sense from our internal clocks and actually the option that makes sense in terms of the solar altitude being overhead at noon in as many jurisdictions as possible.

It is no surprise that government had so many people signing up, because they were given one option in the summer, when they’re enjoying their late evenings. Who wouldn’t want to have lots of late evenings? The information was not provided to the people of British Columbia about many of the negative aspects of doing it — the effects on our internal clocks; the published research on seasonal affective disorder; the fact that we know, historically, there have been safety issues with children going to school; the fact that historically, this failed experiment has been done in the U.K. for three years and twice in America already. Each time, because of complaints, it’s reverted back to the process.

Now, I’m not arguing that we should continue with the switch from daylight savings to Pacific Standard, because that, too, is an artificial construct. What I’m arguing is that if we’re going to move forward with this…. We don’t need this legislation to do that because already, government has the ability, through regulation, to switch us permanently to standard time if they wish to do so. This legislation only allows us to potentially give government a decision as to whether they want to move permanently on daylight time.

[2:40 p.m.]

Given that I would argue, fundamentally, that year-round daylight time is simply the wrong approach; and given that the existing legislation already allows government to move, through regulation, on permanent, year-round standard time, which I would have no problem speaking in favour of; and given that it’s clear that people in British Columbia don’t like the switches; it seems to me that this legislation is entirely unnecessary, and if enacted, only gives government options of doing something that we know, historically, we’re just going to turn around.

I look forward to three years from now, if this bill passes and we follow it on this path, to pointing to Hansard and saying: “Look, I told you so.” Everyone is complaining now because Johnny and Jill going to school at eight in the morning are going through in pitch-black, walking around, and their first accidents are happening. The public outcry is going to be there. We’re going to either revert back to standard time, or we’re going to revert back to a switch.

Standard time would be my preference. I think standard time would be the preference if people were given the information on which to make an informed decision, other than just giving them one option in the midst of summer when we all enjoy our summer evenings.

For that reason, I’ll be voting in opposition to this bill. Thank you for your attention.

T. Shypitka: It brings me great pleasure to stand in line here and debate Bill 40, the Interpretation Amendment Act, 2019. It’s great to have this debate on what seems like such a simple bill — one page — yet there are a lot of complexities to it.

I applaud the government for trying to come up with a solution to standardize a time and coordinate in a concerted effort with the United States and some of those Pacific Time zone areas in the northwest of the U.S. to coordinate and concert an effort to bring a standardized time without moving our clocks twice a year.

It is a bit of a discomfort to some. I know my family. Your kids get up for school in the morning, and you get that extra hour of sleep, or sometimes you get an hour less. I know even my dog has a hard time with the moving of the clocks. In the fall, he’s looking for his meal at seven o’clock. He’s going to have to wait another hour, and he’s drooling all over the floor.

It is a bit of a complex issue. I want to speak to that complexity a little bit because we have a bit of a disconnect in this province. As the member of the Green Party, the leader of the Green Party stated, we actually have three time zones in B.C. I’m glad he did his homework on that. I don’t think a lot of people understand that.

Yes, we have a Pacific daylight savings time zone that switches twice a year. We have a Mountain Standard Time, which stays flat for the whole year. Then we have Mountain daylight savings time.

The leader of the Green Party forgot to mention that Creston was actually on Mountain Standard Time as well as the Peace. So there are lots of bits and pieces throughout the province, and I don’t think general populations throughout the province understand it.

For an example, I can travel 40 minutes and drive through three time zones in the province of British Columbia. A lot of people scratch their heads, and they don’t understand that. I think that’s what happened here. I think my problem with….

The bill, in general, is a fine one, and, like I said, it’s a simple and a short one. But it’s how we came upon this, where we are today. The member, the leader of the Green Party, stated that it was flawed.

Well, I’ve got a bit of a beef with the bill as well. It’s just more or less housekeeping on it, how it was surveyed and how it was done. The province and the Attorney General has said himself it provides clarity to British Columbia. Well, maybe for those in the Pacific Time zone region. But for those of us that live in Mountain daylight savings time, not so much.

A survey went out. People took part in a survey on how they wanted to address the time zone. Of course, the whole province was included, and that’s great. Unfortunately, when the results come back, the survey that they participated in doesn’t reflect how they are going to be addressing time zone changes.

People in my riding, as well as the Columbia River–Revelstoke riding, the two ridings up in the Peace and the half a riding, actually, in the Nelson-Creston area — so there are actually 4½ ridings in B.C. that are affected by this — are a little perturbed that they seem to be excluded. This is kind of part and parcel of a lot of things that happen in B.C. We’re stuck in a…. Not stuck; we’re strategically and beautifully located in the southeast corner of the province.

[2:45 p.m.]

Sometimes, our connection to Alberta is a lot stronger than the connection we have with the rest of British Columbia just because of commerce, our access to health care, wildlife, land access issues. We do a lot of trade with Alberta in numerous ways.

I wanted to take the House down a little bit of a historical road here to tell you how we came up and why we are where we are right now. There was a referendum in 1972. It was held in British Columbia on August 30, and it was simultaneous with the general election of that year. The actual referendum only took place in four electoral districts and part of a fifth, like I stated — two in the Peace, two in the Kootenays and a half in the West Kootenays. The purpose of the vote was to determine which areas favoured following Mountain Time rather than Pacific Time and whether to follow daylight savings time or not. All areas chose to follow Mountain Time.

The referendum was the result of events in Alberta, where, in 1971, Alberta voted to enact daylight savings time. Areas in the Peace River and the southeast were economically tied to Alberta, as I stated, and hence were also on Mountain Time. The question in the referendum was: “Are you in favour of Pacific Standard Time, including Pacific daylight saving time, as it is applicable now throughout the prov­ince?”

Only four ridings and part of the fifth, as I mentioned, took part in the referendum. The two ridings in the northeastern part of the province were North Peace River and South Peace River. The two ridings in the southeastern part were, as I mentioned, Columbia River–Revelstoke and Kootenay. Residents of Nelson-Creston east of an imaginary line running through Kootenay Lake and the Kootenay River that bisected that riding also took part.

The results of the referendum are fairly substantial, as I’m looking down the line here. For the record, Columbia River voted 62.56 percent. Kootenay East voted 62.11 percent. Nelson-Creston was a little bit more 50-50. They were 50.61 percent. North Peace was 68.77 percent, and South Peace was 68.87 percent. Many people took part in the poll. I believe there were about 33,000 that took part, so it was a pretty wide spectrum of people that took part in it.

The result of the referendum was Mountain Time being used instead of Pacific Time in places that rejected Pacific Time, which had been provincewide at the time. Hence, the boundary between time zones in British Columbia ended up being different from the provincial boundaries.

The northeast is on Mountain Standard Time, as the leader said, year-round, without daylight savings time. In practice, this means that time there is identical with Alberta in the winter and the rest of B.C. in the summer. The southeast is similar, with most of the applicable areas on Mountain Time and following daylight savings time. The Creston area is exceptional, ignoring daylight savings time. This puts that town in a situation similar to the northeast.

Since the time referendum, the issue has flared up in Cres­ton politics at least twice. At least two referendums have been held, neither of which succeeded in changing the status quo. In 2014, residents of Fort Nelson voted in favour of switching from Pacific Time with daylight savings time to year-round Mountain Standard Time.

Does everybody understand that? It’s not as clear as a lot of people would think. I think that the real issue for me right now is to bring some clarity to the House. I like the fact that the leader of the Green Party did some homework on it. As I mentioned, you forgot Creston on the Mountain Standard Time.

Interjection.

T. Shypitka: Well, no, Creston is the same as the Peace. I can drive through three time zones in literally 40 minutes where I’m at. It’s really complex. I really wanted to bring that forward.

I wanted to say that going forward, we have these surveys. We really need to think before we act. We need to ask all of British Columbia where they stand on issues and consider the fact that there are three time zones in British Columbia.

I don’t know how many times I have people flying in and out of Cranbrook going: “You’re on Alberta time?” Sure, I guess that’s a definition of sorts. But no, we’re British Columbians.

There are three different time zones in B.C. I really wanted to make sure the House was aware of this. It may seem trivial to a lot of folks here but really is not so trivial where I live, because we feel disconnected a lot of the time because of this issue.

[2:50 p.m.]

With that, I’d like to support the efforts that the government has done. But I will be taking this back to my regional areas.

As the leader of the Green Party stated, municipalities do have that authority to change their time zone, as they see fit, within the boundaries of that region. I will see what my region says, and I’ll be coordinating with the north and see if there’s a buy-in to do something concerted that way. But first and foremost, the residents of Kootenay East will be well represented in bringing forward some kind of a consistent language on the time zone.

With that, I’ll take my place.

R. Kahlon: It’s my pleasure to stand and speak on behalf of this bill that’s in front of the House.

I want to thank the member for Boundary-Similkameen for her consistency and persistence in advocating for this.

It’s amazing to think that about 240,000 people participated in the consultation to have this bill come forward. It just blows your mind at how many people are fired up and engaged on this topic.

I remember when the member across the way first raised this. There was an article in my local paper. My first phone call was from my partner, who said: “You need to support this.” Then the second call was from my brother-in-law, who said: “This needs to happen.” I felt right away the pressure at home. It shows you how much it affects people in their day to day.

I really appreciate the efforts made to consult the general public to ensure that we heard from British Columbians on what they felt was an important matter. Obviously, we try to address many important issues that happen in the province and that people are facing day to day. Sometimes you forget that these issues that might seem small to some are actually a very big deal to many.

I appreciate the leader of the Green Party for sharing his concerns. You know, I did hear from a few groups who were concerned. They didn’t want us to go about changing this without being aligned with other jurisdictions.

My understanding is the Premier has had conversations with the leaders from Oregon state, from Washington state and from California. There is an interest in those jurisdictions to move this conversation along. It takes a little bit more time for those jurisdictions to move as opposed to, say, here in B.C. It is my great hope that we see those jurisdictions move with us so that we can see alignment when it comes to the film industry and many other pieces that we collectively want to advance.

It’s my pleasure to take that moment to stand to support Bill 40 and the Interpretation Act. I think we’ll close debate and let the Attorney General take it from here.

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

Hon. D. Eby: I did want to note that I was remiss in my opening remarks to recognize the work of the member for Boundary-Similkameen on this bill, a commitment of hers for many years. The Premier has a great interest in this as well.

I want to thank all members for their comments on the bill.

With that, I move second reading.

[2:55 p.m.]

[Mr. Speaker in the chair.]

Hon. M. Farnworth: I ask leave to make an introduction.

Leave granted.

Introductions by Members

Hon. M. Farnworth: I see they are leaving the gallery, but there are currently 86 students from Cedar Drive Elementary School in my riding. Cedar Drive is one of the best elementary schools in the entire province. They’re here with their teacher, Nadine Darts. I would hope the House will make them all really welcome.

[3:00 p.m.]

Debate Continued

Second reading of Bill 40 approved on the following division:

YEAS — 80
Chouhan	Kahlon	Begg
Brar	Heyman	Donaldson
Mungall	Bains	Beare
Chen	Popham	Trevena
Chow	Kang	Simons
D’Eith	Sims	Routley
Ma	Elmore	Dean
Routledge	Singh	Leonard
Darcy	Simpson	Robinson
Farnworth	Horgan	James
Eby	Dix	Ralston
Mark	Fleming	Conroy
Fraser	Chandra Herbert	Malcolmson
Glumac	Cadieux	de Jong
Bond	Polak	Wilkinson
Lee	Coleman	Wat
Bernier	Thornthwaite	Paton
Ashton	Barnett	Yap
Martin	Davies	Kyllo
Sullivan	Reid	Morris
Stilwell	Ross	Oakes
Johal	Rustad	Milobar
Sturdy	Clovechok	Shypitka
Hunt	Throness	Tegart
Stewart	Sultan	Gibson
Isaacs	Letnick	Thomson
Larson		Foster
NAYS — 3
Furstenau	Weaver	Olsen

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

Bill 40, Interpretation Amendment Act, 2019, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. M. Farnworth: I call second reading of Bill 43, Election Amendment Act.

[J. Isaacs in the chair.]

BILL 43 — ELECTION
AMENDMENT ACT, 2019

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

This legislation acts on the Chief Electoral Officer’s recommendations for changes to the Election Act and provides the most significant update to voting administration in more than two decades.

British Columbia has changed a lot since the act was last repealed and replaced in 1995. Our population has increased by about 1.2 million people. Technology has become more affordable and widely available. Voters are increasingly looking for voting options that provide flexibility and choice.

In 1996, just under 6 percent of votes were cast at advance voting. In 2017, 30 percent of voters found it more convenient to vote on one of the six advance voting days. Between 1996 and 2017, the number of ballots cast by voters outside of their assigned voting place or using a mail ballot or voting in a district electoral office increased by 225 percent.

Voters in B.C. have the benefit of more days of advance voting than any other province. Also unique to B.C., voting away from your assigned voting place is allowed at any voting opportunity, including on election day.

The Chief Electoral Officer’s report from May 2018, with recommendations for legislative change, is persuasive in making the case for voting modernization. I will not go into detail and repeat the evidence that was provided in the report, but it is worth highlighting that the Chief Electoral Officer states that the procedures for advance and absentee voting were not designed to handle the volume of voters using those voting options today.

[3:05 p.m.]

The modernized voting administration model enabled by this bill enhances the existing voter-centric approach to elections administration, recognizing that this bill will better facilitate the many different voting options British Columbians currently enjoy.

The bill also changes the terminology for referring to the last day of voting during a campaign period. General voting day may once have been the day that nearly everyone voted, but that is increasingly not the case. The bill would change the term “general voting day” to “final voting day” to practically and symbolically emphasize voting accessibility and choice.

This bill makes changes to allow Elections B.C. to better serve voters during the entire voting period and to efficiently handle the various other voting options. Ultimately, British Columbians can choose from any one of seven days of voting or choose from a menu of other options to meet their needs. As an example, this bill removes restrictions on who may vote by mail or vote in a district electoral office.

A critically important element of voting modernization is permitting the use of electronic voting books, ballot printers and vote-counting equipment. It is important to be clear that this bill would not permit Internet voting. It would also not permit the use of electronic voting machines to cast ballots. The bill preserves the requirement that voters mark a paper ballot, which continues to be an important measure for transparency and voter confidence.

Instead, the technology allowed by this bill is limited to types that have been used successfully in other Canadian provincial and local elections and here in British Columbia for referenda and plebiscites. What will be different for voters is that once fully implemented by Elections B.C., the vast majority of voters will see the following changes of voting opportunities where technology is used.

Voters would line up and be served by the first available election official, instead of going to an assigned table.

Election officials would search voter registration information electronically and, for those that need to register, use a computer to create a voter registration record. Election officials would use the electronic voting book to record that voters had been given a ballot, which makes it possible to update the record of voter participation in real time.

Voters would be given a ballot and be given directions on how to fill the circle next to their preferred candidate’s name. Voters attending a voting place other than their assigned voting place would be given a custom-printed ballot with the candidate names for the correct electoral district, instead of a write-in ballot.

After marking the ballot, the voter would put it in a secrecy sleeve and insert the ballot into a vote-counting machine set up on top of a ballot box. In the event that the ballot marking cannot be read by the machine, the election official would notify the voter so the voter can mark a new ballot if the voter wishes to.

Overall, the process will still feel very familiar to voters, but these changes would greatly improve efficiency while maintaining integrity and voter service. Perhaps the biggest change for voters is that the process will be the same regardless of where they vote — at their assigned voting place, at another voting place within their electoral district or, indeed, in another electoral district altogether. The technology will enable a custom-printed ballot and real-time strike-off in the voting book, so the process for the voter is simplified, regardless where they vote.

Another benefit of the modernization changes is that the vast majority of ballots can be counted at the close of voting. This is because far fewer people will need to vote by the current absentee ballot procedure, which requires counting at the final count some days after the polls close.

I should also note that some areas of the province will continue to vote using the current paper-based process. These will include areas that are geographically remote, where Internet connectivity is not reliable and some site-based mobile polls. Overall, Elections B.C. estimates that around 90 percent of voters in the province will eventually vote using the updated process.

In acting on the Chief Electoral Officer’s voting modernization recommendation, this bill will give Elections B.C. the tools they need to serve voters better and build on our province’s strong tradition of making voting convenient and accessible for British Columbians.

I’m pleased to announce that the bill acts on another priority recommendation of the Chief Electoral Officer — the creation of a list of future voters. The legislation for federal elections adopted last year establishes a provisional registration concept similar to what is proposed in this bill. Many other provinces have also adopted similar measures to improve voter registration rates for young adults.

In contributing to this national trend towards supporting youth participation, this bill would allow youth aged 16 and 17 to apply to be added to the list of future voters. Just like with the actual voter list, B.C. residents who are already on the federal register of future electors can be automatically added to B.C.’s list of future voters. Most importantly, the amendments would result in youth aged 16 and 17 on the list of future voters being transferred to the voters list so they’re ready to vote at age 18.

[3:10 p.m.]

In a time of declining voter participation rates, it is critically important to support youth engagement in our formal democratic process. Being registered is the first step towards voting and, I hope, towards a lifelong habit of voting.

The bill would also address the Chief Electoral Officer’s two other priority recommendations. An up-to-date, accurate voters list helps serve voters more efficiently. The bill would improve the Chief Electoral Officer’s ability to maintain the voters list by obtaining addresses and related information from a provincial identity information services provider.

The Chief Electoral Officer has had the ability to obtain information from drivers’ licenses to update voter registration information for two decades. But this single source of information is not enough to maintain a fully accurate list, particularly in regard to current addresses of voters. As an example, currency of non-drivers’ information on the voters list is lower than that of drivers.

As well, the Chief Electoral Officer noted that B.C. has one of the shortest campaign periods of any Canadian jurisdiction, which is a challenge when faced with an unscheduled or snap general election. As requested by the Chief Electoral Officer, the bill would extend the campaign period for snap elections by between 4 to 10 days as needed to maintain Saturday as the final voting day in the voting period. Elections B.C. needs to secure district electoral offices and voting places, hire and train staff, print ballots, and provide information and support to the public and to election participants alike.

It is also of interest to political parties and prospective candidates to have a bit more time to make sure that they get their nomination papers to Elections B.C. on time so that they are ready to run. These details are crucial for a well-run election. Again, this change would apply only to snap general elections, not the regularly scheduled elections that everyone can prepare for well in advance. Those campaign periods will remain 28 days long.

The bill also acts on a large number of other Chief Electoral Officer recommendations, ranging from minor administrative and housekeeping amendments to more noteworthy policy changes. For example, nomination contestants would be required to file a financing report, similar to what a leadership contestant or a candidate files. This will help to ensure compliance with political contribution limits, which apply to nomination contestants as well as to political parties and candidates.

Deposits paid by candidates, as part of their nomination packages filed with Elections B.C., would be returned when candidates filed their election financing report, instead of being dependent on obtaining a certain percentage of the vote in their districts.

The Chief Electoral Officer would be given the authority to issue a notice to an advertiser, either on on-line platforms such as Facebook or Google or traditional media, to produce information and records in order to support the Chief Electoral Officer’s role in upholding the election advertising rules. The Chief Electoral Officer would also have the authority to apply to the court for a notice to produce information and records in support of an examination of a potential contravention of the act.

My remarks on the content of this bill have been necessarily at a general level, given the volume of amendments in this bill. I look forward to canvassing the bill’s provisions more specifically during committee stage. I’m pleased to provide this legislation for members’ consideration, and I hope they will join me in supporting this initiative to act on the Chief Electoral Officer’s recommended changes to the Election Act.

J. Yap: I’m honoured to take my place in the second-reading debate on Bill 43, the Election Amendment Act, 2019. It is timely, just over a week after Remembrance Day, that we undertake this review and look at amending the Election Act. Because these processes are so critical to ensuring that we have the democratic system that British Columbians enjoy, we need to ensure that these are the best possible systems to give British Columbians confidence in their election system. I’m pleased to be able to take part in today’s debate.

This bill, as mentioned by the Attorney General, reflects the findings and recommendations of the Chief Electoral Officer’s 2018 report. That was in May of 2018, when Dr. Keith Archer, B.C.’s Chief Electoral Officer at the time, published this report, with recommendations for this House to consider in looking at amending and improving B.C.’s election legislation.

[3:15 p.m.]

All of us want the secure, reliable and, obviously, fair elections that are paramount to our democratic system. We need a system that will provide that, to not only maintain but strengthen our democracy. As mentioned by the Attorney General, there are four priority recommendations that were in the report and that are now going to be brought into the legislation. I’ll just briefly touch on them.

The first was the priority to facilitate more participation in the electoral process, to get more people to vote. It almost seems that with every election, whether it’s a local government election or the recent federal election, there is a level of anxiety in communities, in society, about: will people come out to vote in numbers that should reflect the fact that we all have the privilege of living in a democracy and should, as part of our duty as citizens, exercise our right to vote? Always, in every election, at whatever level of government, it seems to be a topical issue.

We have seen fluctuation over time in the voter participation rate. Certainly, in the demographic of younger voters, it has been an issue of concern for most observers that it would be a good thing for our province, for society, if more people, and especially younger people, decided to engage and exercise their right to vote. This bill will seek to support that by allowing early registration of youth who are 16 and 17 years of age, to encourage those new voters to become engaged and, when they turn 18, to exercise their right to vote.

The other priority that is going to be reflected in this legislation is the need to provide Elections B.C. with the tools to continuously and accurately update the voters list. As we heard from the Attorney General, Elections B.C. does have the ability to do that currently, through databases, including ICBC. But it’s important that if there are other avenues for providing the information to keep the voters list updated, that would be an appropriate thing. This bill will seek to provide Elections B.C. with the ability to do just that.

We also will see the recognition that as technology advances — we all face this in communities around the province, the continuous march of technological change — there’s no reason that our democratic process should not look at the impact of technology that can help our democratic system work in a more efficient and effective way.

The minister mentioned that at this time we will not be considering Internet voting or electronic voting, that it will still be paper-based. I think it goes without saying that, sure, we want technological advancement and the best possible technology, but we also need to ensure that our voting system can be relied upon, can be trusted and that British Columbians can have confidence in it. As we have heard anecdotally, in other jurisdictions where there is electronic voting, where there’s no paper ballot, there have been issues. I think it’s appropriate that we step carefully into the world of non-paper-based voting systems.

[3:20 p.m.]

The technology that is being contemplated is really to be able to generate ballots that look like regular ballots, pre-printed ballots that voters would be able to use and be able to go to any voting area in the province. The voter would feel like they are voting as they would have in the old system at their home voting area or poll. That is one of the proposals: to use technology.

We can talk about this system. There’s so much that goes into ensuring that the system works. The minister mentioned about how…. We would electronically transmit the ballot to create a ballot where the voter is seeking to vote, and it would feel like they were in his or her home riding casting the vote. But not every part of the province will have high-speed Internet and be able to transmit the image so that the ballot can be printed. So there will be additional systems that would have to be part of this, including telephone technology to facilitate this. Overall, this should lead, when it’s fully up and running, to a more efficient and effective system that voters can embrace and have confidence in.

The fourth major priority is to look at adding additional days to the election period, to add them to the writ period, so that we would be able, should it ever be necessary, to handle a non-scheduled election or a snap election. That is simply to recognize that with a general election, there is a huge amount of logistics that has to happen in a very compressed period of time. The Elections B.C. folks will have to get organized, to rent space around the province, to hire people, to train them, to print ballots and to get organized in a very compressed period of time. I think it is reasonable to expect that if we want to have an election system that runs in an efficient way, in an effective way, in a cost-effective way to taxpayers, it probably makes sense to consider adding to the election period.

From our initial review, the bill does not depart from the report of Dr. Archer. It is basically a reflection of the recommendations, not just of the major priorities — those four priorities that I referred to — but in the other areas that were referred to and that the minister had touched on. I’m pleased to see that the hard work of the Chief Electoral Officer has been honoured and that the government has responded with bringing forward this bill. Our democratic processes need to be continually improved to meet new challenges, such as what we had mentioned earlier — voter engagement — and to benefit from new opportunities, including the advance of technology.

I mentioned that the Chief Electoral Officer will, with this bill, have enhanced access to voter data to ensure that the voters list can be as accurate as possible and as up-to-date as possible. The Chief Electoral Officer will be able to list future voters by pre-registering 16- to 17-year-olds. This is something that is already happening in other jurisdictions. As mentioned, with the federal voters list, that is already the case.

This will be of great interest to those members and future candidates who are in areas with higher-density residential areas. It will put into the act the requirement that those voters living in strata title properties would have to give reasonable access to candidates and their representatives who might want to access strata properties to be able to canvass and spread communications and look for support.

[3:25 p.m.]

I’m sure that all members who live in, perhaps, more urban areas, where there are a lot of strata properties, will find this to be a good change that is being considered.

The amendments to the act will also bring nomination contests into the financial reporting that’s required of successful candidates and of leadership candidates. So where there is a nominations contest at an electoral district, the unsuccessful candidates will need to provide financial reporting, which will be a new requirement.

There also will be changes with this act to require third-party advertising reporting. Third parties that spend $500 or more in advertising — that is, political messaging — will be required, in this act, to provide a report so that their involvement is disclosed.

Now, just a few more comments. I mentioned earlier about the technology that will be used. Well, some of the technology, actually, is familiar to many British Columbians who vote in municipal elections, local government elections. A machine, which is the scanner, will read the ballot that had been filled in by the voter. That is not really brand-new technology. It’s existing technology. But with the provincial election, the amendment act will allow counting machines to read the ballots. Obviously, that would lead to a more efficient, faster count, and results would be known a lot quicker and in a way that will save taxpayers in terms of the time cost and the salary cost, which the current manual system requires.

In the report, Elections B.C. had done a cost-benefit analysis, which, I was intrigued to see, shows a projected savings to the province if we go, with this amendment act, to this new world of using technology and the changes proposed. We’ll certainly be looking forward to those savings hopefully being achieved in due course.

One of the aspects of this act will be the transfer of a lot of the responsibility and decision-making power away from regulations and into the hands of the Chief Electoral Officer. We’ll look forward to the opportunity to discuss this, to canvass this in committee stage debate as we go through the bill. But generally, on behalf of this side of the House, we’re pleased to see the government take the report of the Chief Electoral Officer and that the government has come forward with Bill 43. We look forward to further canvassing, in detail, this bill at committee stage.

With that, I’ll take my place.

S. Furstenau: I am pleased to rise today to speak in support of Bill 43, the Election Amendment Act. I think that this is a step that…. We’re seeing our province moving into the 21st century in a lot of ways with electronic tabulators, which have been operating at the local level for a long time. The province has been a bit slow to the uptake on that. So it’s great to see the modernization of these rules that will help reduce barriers to voting.

It’s interesting. My first election was actually at the local level. Electronic tabulators were used for that election but not for the election at the MLA level.

[3:30 p.m.]

I’m also happy to see the commonsense changes introduced, such as extending campaign periods during snap elections; updating voters lists with the same data that the Ministry of Citizens’ Services uses; and also some language changes which are welcome additions to this bill, that make elections more self-explanatory and commonsense, in terms of the language.

What I’d like to focus on is the aspect of this bill that moves to see registration of voters at 16 years old. We are, as a caucus, very supportive of this. Of course, it’s well known that we’re also very supportive of the next step, which would be to extend the vote to 16-year-olds in British Columbia.

[R. Chouhan in the chair.]

I just want to speak a little bit about a student in my riding. He was a grade 8 student in 2018 at Quamichan. At 14 years old, Simon Minkow collected 400 signatures asking the government to lower the voting age in B.C. to 16. Simon did a great job of pointing out that other jurisdictions have already done this, including Brazil in 1988, Austria in 2010, Argentina in 2012 and, most recently, Scotland in 2015.

As the most recent example, Scotland is interesting for us to look at, because before the voting age was lowered to 16 in Scotland, only about a third of the citizens of Scotland approved of the notion of allowing 16- and 17-year-olds to vote in the election. However, after the first election in which 16- and 17-year-olds were able to vote, the support in Scotland amongst the general population to maintain the vote for 16-year-olds rose to 60 percent. That was a doubling of the support in Scotland after one election where 16- and 17-year-olds were able to vote.

This reinforces what we know from research about youth voting, which is that the younger you are when you vote in your first election, the more likely you are to be a participant in future elections. Young voters turn into lifetime voters. Having the opportunity to ensure that while students are still in high school, there is the opportunity not just for registration — and I applaud the government for moving to this step — but the opportunity for students to learn about what it means to vote in their first election….

I’m a high school teacher, and most of my students couldn’t vote. Some of them would have turned 18 just in time for elections, so they did vote. But as a teacher, I took this responsibility very seriously. I would invite all of the candidates into my classroom so that my students could meet those candidates, could get information about the party platforms, could learn about what was happening in their ridings and what the issues were that were being debated in the election. Then they would do research, and they would come to their own decisions about how they would vote if they could — or, in the case of some of the 18-year-olds, they would go out and vote on election day.

That engagement at that very early age means that we’ve just established a lifelong habit that when election time comes, you become an engaged citizen. You participate in your democracy, and a democracy only matters if there’s participation in it. Anything that we can do to increase engagement, to increase participation in democracy and particularly to engage youth in our democracy, I think, is absolutely essential in our role here as legislators.

I also want to point out…. If you look at the movements in the last few years, there are two in particular that I’d like to point to. One is after the Parkland shootings in the United States. The youth from that school mobilized literally millions of people in the United States to rise up and demand that there be better legislation on gun control in the United States. They were able to bring that issue to the forefront and to lay it out starkly and clearly for the important issue that it is, unlike any other group or any other demographic in the United States.

Then we have the youth climate strikers. Inspired just over a year ago by one teenage girl, this has turned into a movement of millions of youth around the world who are calling on all of the decision-makers, including us, around the world to make decisions that put them and their well-being at the centre of our decision-making.

[3:35 p.m.]

They have mobilized a movement on climate action unsurpassed by any other time in history. These have been youth under the age of 18, for the most part. They have inspired not only other youth; they’ve inspired older youth in their 20s and 30s. They’ve inspired all of us. They’ve inspired their grandparents.

This is an example of what engagement in the world around looks like in these incredible youth. So the notion that it would be too risky to allow 16- and 17-year-olds to vote…. I think that myth has been laid bare very clearly in the last few years. All we have to do is recognize the extraordinary achievements of 16- and 17-year-olds around the world in moving political issues to the forefront of an agenda that adults in their 20s, 30s, 40s, 50s, 60s, 70s, 80s and 90s had not managed to put at the forefront of the agenda where they belonged.

I would say that young people like Simon Minkow are the rule, not the exception. If we spend time listening and recognizing the incredible value and perspective that young people have, we would recognize that extending the vote to 16- and 17-year-olds is a logical step for us to take. I hope that this is, indeed, a first step that we’re going to see from the government and that it will culminate in the next and proper step, which is to extend the vote to 16- and 17-year-olds.

I’m delighted at the changes that we’re seeing. Our caucus is in support of this bill, and I look forward to the next amendment act on the elections.

Deputy Speaker: Seeing no further speakers, the Attorney is now to close the debate.

Hon. D. Eby: Thank you to all members for their comments on this important legislation for British Columbians and certainly to the House Leader for the Third Party for her comments about youth participation.

With that, I move second reading.

Motion approved.

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

Bill 43, Election Amendment Act, 2019, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. C. James: I will call committee stage for Bill 37, Financial Institutions Amendment Act.

Deputy Speaker: The House will be in recess for five minutes.

The House recessed from 3:38 p.m. to 3:46 p.m.

Committee of the Whole House

BILL 37 — FINANCIAL INSTITUTIONS
AMENDMENT ACT, 2019

The House in Committee of the Whole (Section B) on Bill 37; R. Chouhan in the chair.

The committee met at 3:46 p.m.

On section 1.

S. Bond: We’re pleased to be able to take some time with the minister and her staff to walk through the committee stage of Bill 37, some amendments to the Financial Institutions Act. I think we had a constructive discussion during second reading, which I always appreciate, with the minister.

My co-critic and I intend to walk through a variety of sections. I’m wondering if the minister — and she’s usually very good about this — would mind if, at this point, we just asked a couple of general questions about the consultation process before we get into the technical nature of the bill. I see her nodding, and we very much appreciate that.

Can the minister just confirm and outline for us the consultation process that was undertaken with stakeholders prior to the legislation? We did talk yesterday a little bit about how it started and has actually crossed two governments. So we were very pleased to see that work continue.

So perhaps a little bit of the context and if anything changed between the 2015 consultation process and what happened as it worked its way through what is, essentially, phase 2.

[3:50 p.m.]

Hon. C. James: I’ll start off, as I often do, by introducing staff who I have here with me today: Tara Richards, who’s our assistant deputy minister in the policy and legislation division; Kari Toovey, director of the financial and corporate sector policy branch; and Sally Reid who is the senior policy adviser for the financial and corporate sector policy branch.

As the member suggested, we had a good discussion at second reading to talk about, in fact, the importance of work that happens between governments — work that needs to continue on and consultations that have occurred. I think this is one of those examples of continued good government, which was…. The consultation paper, as the member has said, was released in 2015 — out for consultation, out for feedback. Then the consultation feedback was released. There was a paper released on the consultation feedback.

There were more in-person consultations and more discussions on the feedback that had been received. Then a 2018 paper was released with recommendations — again, more feedback and more follow-up. Usually that would have then been released — the consultation document from 2018 would have been released — but the stakeholders were pushing for legislation. They wanted the legislation to come in. They felt there had been a good discussion between 2015 on. So the feedback and follow-up then led to the drafting of the legislation and the legislation to be introduced.

The member asked: was there any change in the kinds of groups and organizations? No. In fact, it was about the same kind of people who were giving feedback and consultation. Obviously, all the sectors involved in this bill were part of that consultation.

S. Bond: Thanks for that answer. We appreciate it.

The other piece that was, I think, handled slightly differently…. After the first round of consultation, the feedback that was provided was published. It was made public. I know that after phase 2, it doesn’t appear that the input that was received was made public. Maybe the minister could just provide us with her rationale. I think that certainly the minister has argued, and we would agree, that transparency is very critical. We’d just be interested in the minister’s thinking about why that information wasn’t made public.

Secondly, if there were any…. As I noted yesterday in my remarks, and my colleague’s also…. My co-critic mentioned that credit unions, in particular, have been very invested in this discussion, from 2014 onward, and have done some excellent work in bringing forward ideas. Were there any major shifts in what would have been heard in phase 1, let’s call it, 2014-15, and then the phase that was certainly undertaken by the new government when they continued the process? Any major shifts in thinking from either the credit unions or the insurance groups related to the feedback that they provided?

Hon. C. James: Sorry, I should have made it clearer. That’s the mention I made about wanting to move to legislation — was the reason that the feedback was released. Because it was 2018 by the time the consultation paper…. Then we moved into 2019, and we got the legislation in place. We certainly can release…. I’m happy to share the consultation that happened. I’m happy to share those documents. But it was a matter of timing and getting the legislation on board, which is what people were looking at.

There weren’t any major shifts in the kind of discussion that was occurring. There was some discussion around deposit insurance that happened with credit unions around what was happening at the federal level, what was happening at the provincial level and what was necessary. But for the most part, it was the same kind of feedback received.

S. Bond: Before we move on to section 1 in the definitions section, which my colleague will cover, I think it’s fair to say that there certainly looked to be consistency between what we saw in the 2014-2015 information and the feedback that we received.

[3:55 p.m.]

Would the minister characterize the overarching response from either insurance groups or from credit unions as generally positive, with one or two suggestions for adjustments to the bill? Certainly, that’s our impression of it. Would the minister confirm that that’s how she and the ministry feel about that?

Hon. C. James: I think that’s a good description. Certainly, there was positive feedback. People were pleased, for the most part, for the changes that were being made, and they were, in fact, things that they’ve been asking for from the beginning.

S. Cadieux: These amendments in section 1 in the definitions certainly seem to streamline the framework for extra­provincial credit unions. But, as we know, there are no provinces at this point with reciprocal frameworks.

Has the minister done any work with regard to advancing those frameworks for extraprovincial reciprocity?

Hon. C. James: I think I’d describe this, perhaps, as an easy, straightforward way to describe proactive work.

Other provinces haven’t expressed interest. We certainly reached out, but other provinces haven’t expressed interest. But from our perspective, putting in the extraprovincial credit union reciprocity agreement gives us the opportunity, if another province was interested. There is now a federal framework, so it may make this not necessary. People may want to utilize the federal framework. But we saw it as proactive work.

I think B.C., as we talked about in second reading, really has been a leader when it comes to credit unions. We have a large number of credit unions so we felt that it was good to get this work done. But at this point, other provinces haven’t expressed interest.

S. Cadieux: Given the prospect — and certainly, the work seems to be underway for credit unions expanding — what are the minister’s expectations regarding the growth and scope of practice of B.C. credit unions specifically?

Hon. C. James: I think we have the structure in place. Coast Capital, as the member will know, led the way in some ways as wanting to look at the federal infrastructure as well.

We have put in place requirements, though there’s a structure through the regulator, a structure that people have to follow if they’re looking at the federal area. There are requirements around voting for members. I think the democratic process within a credit union is very clear, and it’s often why people are members of credit unions. There is, again, a very clear structure to be followed around a vote to be able to look at expansion.

[4:00 p.m.]

We haven’t, at this point, had other credit unions come forward to express that interest. But because we’ve seen one move ahead, I think it is possible and it is important for us to be able to have those regulatory structures in place, so there is a clear process that has to occur if someone else does express interest.

S. Cadieux: When we see these first movers with the size of the institutions in British Columbia already, it is likely that we’ll see others move for competitive reasons, as well, over time. But I appreciate the answer.

Moving on, in subsection (b), in (b) the non-equity shares appear to be phased out from the definition of “depositor” in 2020. Can the minister explain this process and how it will impact depositors?

Hon. C. James: Non-equity shares, which have been offered by credit unions, are really a part of the past in many respects. They were used before life insurance products became very common on the market. Credit unions don’t issue them anymore. They’re no longer eligible. They don’t offer them, but we recognize that there needs to be a period of windup because there may still be non-equity shares out there, so we want to make sure that those are covered. Non-equity shares won’t be included after January 2020.

Again, they haven’t issued them for years, so it’s not really a change in that respect, but we will ensure, through this, that the existing shares are covered. It tends to be older clients of credit unions who may still have those shares, and we want to make sure that there’s not a gap there for those individuals.

S. Cadieux: Do we have an estimate on the number of depositors that non-equity shares would affect at this point in time, and the windup will affect?

Hon. C. James: We don’t have a specific number, but the credit unions’ feedback is that it’s very, very small — that’s how they’re describing it — because they haven’t been issuing them for years. But they still expect that there are a few out there, and we want to make sure those people are covered.

S. Cadieux: Per subsection (c), societies will now qualify, I believe, as insurance companies, but extraprovincial non-share corporations do not. Can the minister explain the operational difference between the changes and what delineates the two types of entities?

[4:05 p.m.]

Hon. C. James: This section, or this definition, talks about two different kinds of societies that provide insurance. I’ll just walk through the history. I think that’s the easiest piece.

Pre-1991, they were called grandfathered societies, and those are societies that are exempt from most of the provisions that are in the act. Those are small societies, like sports associations, and they will continue to provide insurance. They’ll continue to be exempt. They’re small organizations, and they would be considered grandfathered societies.

Then there’s a second type of society called deemed business authorization societies. Those societies are deemed under the act, and the provisions in the act apply to them. What this change does is basically say there’s no requirement for them to be deemed under the act. They will be called insurance providers, and all provisions will apply to them. There are some sections that give them the opportunity to request to be exempt from a part of the act, but otherwise, all provisions in the act would apply to them.

Sections 1 to 3 inclusive approved.

On section 4.

S. Bond: This section talks about false representation in the use of names and words.

I’m wondering if the minister can give us a sense of whether or not she anticipates there are going to be any changes to the way that the enforcement is done. We’re looking at a broader scope here, and we’re wondering whether or not there would be additional resources or whether the enforcement pattern would somehow be changed or enhanced.

[4:10 p.m.]

Hon. C. James: This section just, in fact, puts back the use of terminology that was inadvertently removed in 2012. So it corrects that.

It doesn’t actually expand the provisions in this piece. They are also under section 252. They already exist. What this does is make it easier for the regulator. It defines it. They were there before, in 2012. They’re put back in now, in this section, to make it easier for the regulator to enforce. That’s what this section is about.

Section 4 approved.

On section 5.

S. Bond: Can the minister provide, in section 5, what the rationale for the section is and, perhaps, in that description, let us know if this affects the operations of the FSA in any way?

Hon. C. James: This really is about a more efficient operation and more efficiencies throughout the authority. It allows information, personal information that people are providing, to be shared with the superintendent rather than the authority itself. That just provides, as I said, some administrative efficiencies within the organization.

S. Bond: Thank you to the minister. So does this allow for the superintendent to delegate the reception of information under this section?

Hon. C. James: The act actually requires the information to be submitted to the superintendent. So it’s not a delegation piece. It actually requires that through this section.

Section 5 approved.

On section 6.

[4:15 p.m.]

S. Bond: Can the minister explain what their reason was for adding this provision? Did something occur? Were there circumstances that led to the addition of the discussion around the Supreme Court and the ability to basically deal with a dissolution by a court order? Did something lead to the addition of that provision? Or why was it added?

Hon. C. James: This language is added, consistent with Alberta and Saskatchewan. Basically, nothing has occurred here in B.C. that would cause us to bring it forward, but we wanted to make sure we were consistent with the other provinces. It’s simply looking at laying out the specifics for the court to look at, and it mirrors the language in Alberta and Saskatchewan.

S. Bond: If we’ve looked at other jurisdictions…. I’m not sure if we would know this for British Columbia. Do we have a sense of how many inactive companies require court-ordered dissolution that have not yet dissolved? How big a challenge is this? Do we know what the situation is in B.C.? Have we looked at what the trends would have been in other jurisdictions?

Hon. C. James: We certainly believe that the issue is not unique in any of the provinces. In fact, they’re all in the same kind of place, of having this be a very, very rare occurrence. It’s so rare that we don’t contain annual numbers because it doesn’t happen annually. It’s a rare occurrence, and we believe that’s pretty common across the provinces.

Section 6 approved.

On section 7.

S. Bond: This deals with provisional liquidation. Could the minister describe for us whether or not this process is different from the current system and, if it is, give us some sense of what that might look like and why changes would have been necessary?

[4:20 p.m.]

Hon. C. James: This is a new provision. This provision just gives the authority tools to intervene more quickly. This is, again, a kind of consumer protection, an ability to protect policyholders. This provision is very similar to the provisions — again, as the previous one we talked about — in Alberta and Saskatchewan as well.

S. Bond: When the discussions took place with the credit unions and other organizations, was there any feedback about the addition of this particular new provision?

Hon. C. James: This provision mainly applies to insurance companies. There are already structures in place for credit unions. So it’s mainly insurance companies that are impacted by this. And the insurance companies were comfortable with this provision because, again, it mirrors the work they do in other provinces and the clauses in other provinces as well.

Section 7 approved.

On section 8.

S. Bond: In section 8…. This establishes a shorter process for amending financial institutions’ business authorization. Typically, we appreciate shorter processes, but perhaps the minister can advise how this makes the process shorter in terms of the existing practice. So maybe give us a sense of what that looks like in terms of shortening the length of time for that financial institution’s business authorization, for making an amendment.

[4:25 p.m.]

Hon. C. James: This is a piece that I think is welcome because it’s about reducing burden and reducing cost to financial institutions. Currently they have to apply for new business authorization for any change. They have to pay the full application fee of $2,500 and go through the process. That then has to be reviewed by the authorities. So they have to go through that process.

What this will allow is that the authority can actually issue a business authorization change as long as they meet the criteria. It doesn’t soften any of the criteria that is still required to make sure that all of the policy is followed, but it allows the authority to do that, which reduces the burden, and they wouldn’t have to pay the fee.

S. Bond: Just, then, to reiterate what the minister has said, it allows them to immediately and independently issue that business authorization, and it reduces the cost in order to do that.

Hon. C. James: The member is correct. They would still have to make an application, but the authority then could go through the process, rather than them having to go through the process of a new fee each time that they put in for the business authorization.

Section 8 approved.

On section 9.

S. Cadieux: This section deals with capital liquidity requirements for the institutions themselves.

Can the minister explain how this section would apply differently between a larger institution, say a Vancity, and a smaller institution like Kootenay Savings? Will there be flexibility, and how will that be built in?

Hon. C. James: This, as the member knows, provides rule-making for the authority. What it provides through rule-making is the flexibility. Exactly as the member has described, there are different-sized credit unions. There are different requirements. So this will provide the authority with the ability to use a range of numbers, for example, which again can be applied depending on the size and depending on the unique circumstances of each individual credit union. So, yes, this does provide that ability through rule-making for the authority.

S. Cadieux: I would assume, then, that with the flexibility of the regulation-making authority we’re giving, that that should give the institutions some comfort that there will be the ability to know ahead of time what the expectations are for a credit union of their size and let them discern from that what the expectations are for them in managing their business, and these things are not going to be something that is flexible on a regular basis. They’re going to be able to plan and manage in relation to that.

Can the minister confirm, then, that assuming criteria (a) through (d) is met in (2.1), that the institution is free to do business otherwise, then, without interference from the FSA?

Hon. C. James: The member is correct. The other piece I’d add, though, as well, which I think is an important context, is that the rule-making is also done in consultation with the credit unions. So the rule-making process involves them, as well, through that process. I think that’s an important piece to add, along with the certainty, as the member has talked about, and the notice and the ability.

[4:30 p.m.]

There is also a transition period that would be in place. When rules are put in place, there is also a transition. In case there are any changes that need to occur, there’s a time period that’s allowed to be able to make those changes as well.

S. Cadieux: Thank you, Minister. Can you confirm or elaborate on the process? Is there going to be transparency around how that process and that consultation takes place? When will the institutions know what that looks like and how long they can expect those processes to take — how long those transition periods would be, etc.?

[J. Isaacs in the chair.]

Hon. C. James: The rule-making authority is set out later in the act, and we’ll get to that when we get to those sections. But there will be the ability…. I know we went through — I think it was only three weeks ago — the B.C. Securities Commission legislation. It’s very similar to that legislation. There will be regulations that will define the timelines for consultations, so it’ll be clearly laid out, around timelines for consultation, and also transition. The transition period will also be part of the consultations. Those will be determined through regulations as well.

S. Cadieux: I appreciate that, Minister. Can you explain to the House, then, if those regulations are going to be written to prescribe all of that, why they’re being done in regulation rather than enshrined in the act for transparency purposes, considering they are pretty important to the institutions’ understanding of how they are going to interact with that regulatory body and what the expectations they can have of fairness in that process?

Hon. C. James: Again, you see this in many acts, as the member knows. This, again, mirrors the B.C. Securities Commission act as well. The framework for the rule-making is in the legislation and the details are done in regulation, which gives the ability for the kind of consultation flexibility that you may need.

[4:35 p.m.]

There may be consultation that suggests a specific that would work now that may change in a year. The credit unions may want part of their consultation, for example, to say: “There may be a shift we want here. Maybe we want a longer period of time, or maybe we’ve learned that we need more time or more specifics in this particular area.”

Putting it in regulation gives the chance for that to happen and ensures, again, that the consultation can actually be lived up to. Whereas, as I think the member knows, bringing legislation back for those kinds of changes takes a little bit longer and has a little less flexibility. So it’s really to honour the consultation and to honour the consultation process.

S. Cadieux: B.C. credit unions are the only financial institutions in the country that are constrained by a capital penalty on corporate and commercial lending that is greater than 30 percent of their overall loan portfolio. So that does severely restrict their ability in lending to a variety of businesses, potentially homebuilders or other institutional customers.

Does the minister expect to see any changes to ease these restrictions on the credit unions as a result of the rule-making authority now being granted to FSA?

Hon. C. James: Yes, the authority will have the ability, through rule-making, to discuss this issue. Certainly, I know the member will have heard the same conversations from credit unions as we’ve heard. I expect this will be a topic of discussion. I expect it will be part of the consultation and the work, through rule-making authority, that will occur with the authority.

There are some jurisdictions that do have, in fact, hard caps. There are some jurisdictions that have gone that direction. But certainly, I know that there’ve been conversations with the credit union about putting in place more modern approaches which, perhaps, would make a change to the commercial cap.

So yes, I certainly expect that that will be the conversation around rule-making. I expect it’ll be the discussion on the table.

S. Cadieux: This will not be a surprise to the minister, but the credit unions did strongly recommend the removal of the “at all times” language. The continued inclusion of the language — as I sort of referenced in my second reading remarks — is inconsistent with the other jurisdictions across the country and deeply problematic, at least from one legal perspective, in terms of…. If there was a liquidity event and a credit union needed to draw on reserves, they, in fact, are going against the rules that are being put in place “at all times” if they’re accessing that liquidity held at Central 1.

Therefore, it could be that the result might be that the credit union’s credit facilities are rescinded, because they have now accessed those statutory deposits first instead of the liquidity of…. So it disincents credit unions to continue to hold their liquidity collectively through that Central 1 system, which has been really effective in British Columbia for a long time.

[4:40 p.m.]

As noted, I would like to move the amendment standing in my name on the order paper to this section.

[Section 9, by adding the underlined text as shown and deleting the text shown as struck out:

9  Section 67 is amended

(a) in subsection (1) by striking out “at all times” and by adding “and the rules made by the Authority” after “the regulations”,

(a)(b) in subsections (1), (2) and (3) by adding “and the rules made by the Authority” after “the regulations”, and

(b)(c) by repealing subsection (2.1) and substituting the following:

(2.1) Whether or not a credit union is otherwise complying with the regulations and the rules made by the Authority, the credit union must obtain the Authority’s written consent before engaging in the activities referred to in subsection (2.2) if the amount of the capital base of a credit union does not comprise any of the following percentages of the calculated value of the credit union’s risk weighted assets:

(a) a prescribed percentage;

(b) a percentage within a prescribed range of percentages;

(c) a percentage set out in the rules;

(d) a percentage within a range of percentages set out in the rules.

(2.2) For the purpose of subsection (2.1), the credit union must obtain the Authority’s written consent before engaging in the following activities:

(a) prescribed activities;

(b) prescribed activities

(i) in prescribed circumstances, or

(ii) that have or may have prescribed consequences;

(c) activities set out in the rules made by the Authority;

(d) activities set out in the rules

(i) in circumstances set out in the rules, or

(ii) that have or may have consequences set out in the rules.]

On the amendment.

Hon. C. James: I’ll perhaps give a bit of history, because I think it’s helpful to why this discussion is here. I think it describes the kind of good conversation we had as well, I would say, at second reading from members from all sides of the House.

It’s important to note that the words “at all times” have been in the legislation since it was put in place in the ’90s. It’s been there since 1996.

Certainly, during the review, the credit unions raised some concerns in a variety of areas. Mainly, their concerns centred around whether the regulator was going to enforce compliance with section 67. For those two people who may be watching…. I should be a little more optimistic, perhaps. Section 67 talks about requiring financial institutions to ensure that they have adequate liquid assets and capital base. I think, as the member has pointed out, that’s done well around the strength.

Again, I think this is just important context. In 2017, FICOM, which was the regulator then — now FSA — sent a notice to the industry to clarify the effect of section 67 and the words “at all times.” That notice read that it was “FICOM’s position that a credit union did not need to seek FICOM’s approval before accessing its deposits held at Central 1 if a crisis occurred.” So this was coming from the regulator.

“However, as soon as a credit union recognizes and determines that it may require access to those deposits, the credit union must immediately notify FICOM.” Again, that was kind of the process to go through. “The notification should include the rationale for access and a remedial plan to bring the credit union’s deposits to the levels prescribed” by liquidity requirements and regulation.

They went on to say: “Any draw on deposits that brings a credit union’s deposits below the statutory minimum constitutes a breach of the legislation and may result in FICOM taking regulatory action.” Again, I think this piece is important. “In determining whether and what action can be taken, FICOM will consider the necessity of the draw on the deposits” — so they will take into account the draw — “and the robustness of proposed remedial actions to bring the credit union deposits back to the statutory minimum.”

With that clarification that went out from FICOM at the time, no amendment to the legislation was proposed as part of the review, given the regulator’s authority to be able to use its discretion. It had the ability to use its discretion when enforcing the provision. But certainly, we understand the importance. We recognize the importance of credit unions having access to their credit limit at times of stress.

With the concerns that have been raised by the credit unions, it’s important to know we will be supporting the amendment. But we also think it’s important to recognize that removing the words “at all times” doesn’t change the requirement for credit unions — that they still will be required to look at their assets. They’ll still be required to have a capital base to be held in accordance, of course, with the regulations. That’s a critical piece that I think is important to note. So while we’ll support the amendment, we also believe that there still needs to be further analysis and discussion between the authority and the credit unions.

We think that the clarification around how they can best access their statutory liquidity is helpful. We think it would be good to have that kind of conversation, so we’ve certainly committed to doing that regardless of whether the amendment went forward or not. We’ve committed to that work and to encourage the authority and the credit union to work together. But we’re fine with the amendment.

Introductions by Members

N. Simons: It’s my pleasure to introduce a group of students from Pender Harbour Secondary, home of the Sakinaws, and three of their teachers: Dave Stoddart, Emily Walls and Tulani Pierce. I’m just glad that they’re here. They took two ferries to get here, and they’re going back. They have to take two more to get back.

[4:45 p.m.]

They are lucky to be here to witness this scintillating debate on the Securities Act.

I was wrong; it’s not the….

Interjections.

N. Simons: It’s the Financial Institutions Act.

Anyway, members from the opposition are asking questions of the Minister of Finance. The Minister of Finance is providing responses. I believe an amendment was proposed, and that’s being discussed a little bit.

I’m just really glad you’re here. The House might remember that I spoke about two young men who helped an old fellow who was stuck on the side of the highway. Nolan Johnston and Jakob Thornton are here as well. I’d just like the House, also, again to recognize this class and their teachers.

Thanks for being here.

Debate Continued

S. Cadieux: Thank you to the minister. I appreciate the preamble to your explanation. I understand that. I think the removal clarifies for everyone that the interpretation will remain the same — and understood that additional conversations are going to happen on an ongoing basis for a lot of reasons with this new regulator and the new regulation-making authority. But I do appreciate the minister’s consideration of the amendment.

S. Bond: I want to add some comments to those of my colleague and thank the Minister of Finance. As we had the discussion here in the legislature about the need to have legislation that reflects best public policy, I know that the minister listened carefully to the arguments that were made by members of the opposition, but also listened to the feedback of credit unions in British Columbia.

I think that when there is a bill on the floor of the Legislature — and the fact of the matter is that generally speaking, the sector thinks it’s good news. When there are those opportunities to tweak that legislation and to make sure that it reflects what, at the current time at least, is best practice, and it enhances the understanding of everyone, I think that’s an important thing to recognize. I know this is a minister who often takes away the thoughts and comments of members of this side of the House and seriously considers them.

Today I know that the credit unions will be very pleased to know that the government is going to support that amendment — an amendment made by the opposition, but supported by the Minister of Finance after some careful deliberation. I think the other thing that’s encouraging to hear, and we’ve heard it throughout other sections as we move throughout the bill…. We appreciate the minister saying that she’s going to continue the dialogue with credit unions, insurance groups — whoever’s impacted by this bill. Because it’s complicated.

The language…. You know, reading it on the paper is one thing. It’s when you bring it to life — how it’s implemented and the way that that is done is incredibly important. Certainly, on behalf of those that have spoken to the minister from the credit union side and from members of the opposition, this is an encouraging circumstance when we actually have the government take the amendment seriously and provide an opportunity for those changes to be made.

With that, we certainly look forward to the government’s support and ongoing discussion about the implementation and the impact of taking those words out. I think the minister was very clear with what that means. Again, I think it’s an important step when the House can, across the aisle, actually bring that issue together and see an amendment like this move forward.

I’m certainly supportive of the amendment. I appreciate the minister’s time and careful thinking about the request.

A. Olsen: I wanted to acknowledge the work that has been done on the floor here of the Legislature today — and yesterday, the comments from the members of the official opposition. I’m in here now because those comments captured our attention as we were watching the debate.

[4:50 p.m.]

Certainly, we’re very thankful for the well-reasoned and thoughtful debate that was brought forward by the members of the official opposition. Certainly, as a caucus, it had us thinking about the points that were raised and the consideration. I was fully prepared to ask some further questions about it, but I’m glad that it’s been resolved.

I think the students who are here from Pender Harbour high school are witnessing what is the functioning of their democratic process. I appreciate that from the Finance Minister, from the members of the official opposition, the critics.

I’m quite proud to be sitting here right now.

Hon. C. James: Just to close off discussion. I don’t want to get ahead of ourselves, but there was an amendment from the opposition and an amendment from government coming forward with this legislation, good discussion around the policy issues. As the member from the Third Party has said, I think it shows strong, good work that happens in this Legislature — that may not see the headlines, that may not get all the attention but that is, again, good government. We talk about often…. They are not the top headlines, they’re not the primary pieces, but they are critical to the good government that needs to occur, regardless of who is in government. I think this is a good statement about that.

Amendment approved.

Section 9 as amended approved.

Section 10 approved.

On section 11.

S. Cadieux: I was just hoping the minister might indulge and explain something to me here, because maybe I’m not following. What constitutes an inactive deposit? What is this section referring to? I thought I understood that if there hadn’t been a deposit or withdrawal within a certain number of months, the account was dormant and would have to be reactivated in order to be active. Does this mean that the credit union has to redeem the share that was related to that account? If the share was $5 and the deposit was $40, the credit union has to pay the depositor $45? If the minister could just explain. Maybe I’m not following what the intent of the section is.

Hon. C. James: This section deals with inactive accounts. The member is quite right. This allows credit unions to close those inactive accounts. The challenge comes with the shares because the shares cannot be transferred to cash and, therefore, cannot be transferred into the inactive accounts. Therefore, credit unions — this was an issue raised by the sectors — are stuck with those on the books.

[4:55 p.m.]

What this allows for is that those shares can be transferred to cash and can be transferred to the Unclaimed Property Society, who deals with these issues, and the credit unions don’t have to keep them on their books.

Section 11 approved.

On section 12.

S. Bond: This is certainly an interesting piece of the bill, and we look forward to a bit more clarity. The section we’re talking about deals with on-line sale of insurance. Could the minister, first of all, just provide some clarity? Does the added provision just deal with the marketing of on-line insurance or the actual sale?

Hon. C. James: This section deals with both.

S. Bond: Thank you for that answer. Section 12 requires the marketing of on-line insurance products to be subject to regulation. Does that include car insurance in its scope?

Hon. C. James: This excludes car insurance.

S. Bond: Well, thank you to the minister. This is obviously, then, a very timely discussion. We’ve heard that government intends to move, albeit more slowly than I’m sure many people would choose, toward allowing ICBC to sell on-line insurance. Once this piece is in place in section 12 of this bill, is the minister aware of what else needs to happen to allow that to take place? Does this, in and of itself, allow ICBC to sell on-line insurance?

Hon. C. James: I can understand, given the discussion, that the member would relate this issue to ICBC and car insurance, but in fact, it’s not related at all. ICBC has their own infrastructure. They would have to put their own pieces in place. This does not apply to ICBC.

S. Bond: In the event that ICBC were to transition to an on-line sales component or renewal of auto insurance, how would this act interact with the work that needs to take place at ICBC? As the minister points out, separate governance structure and all of those things…. Is there a place of interaction between this piece of legislation and work that would take place or would happen at ICBC, or are they completely isolated from one another?

Hon. C. James: There is no connection at all. It’s a completely separate issue at ICBC. ICBC could take a look at the process that will be here within the act if this act passes. That may inform them, but it’s a completely separate process. They have their own board. They have their own structure. They would have to bring forward their own requirements around that.

S. Bond: I appreciate the minister and her staff allowing us to have this discussion.

I guess the last thing is: what about other insurers? Obviously, ICBC has its own set of circumstances. What about in the case of other insurers?

Hon. C. James: Just for clarification, are you speaking about private car insurance? Or are you speaking about a broader…?

Private car insurance. We’re going to check to make sure. We think it’s excluded, but we’ll check to make sure.

S. Bond: Thanks. I appreciate that. So probably broader, but specifically, yes. Private car insurers — would they be covered? But also, maybe, a sense of the scope would also be helpful.

[5:00 p.m.]

Hon. C. James: Just to give you a rough idea, any other kind of insurance would be tenant insurance, travel insurance, warranty insurance, home insurance, life insurance. Those would be covered under this section.

Section 12 approved.

On section 13.

S. Cadieux: Could the minister, just for clarification, explain why this section is being substituted? Has there been an issue? How is the decision here going to be decided? Who makes that decision? Is there a…? What actually changes with this section? It seems kind of obvious, but why change it, then?

Hon. C. James: This came forward from the regulator as well as some of the consultation that occurred. It was a request to really look at a broader definition of “contract.” No list is exhaustive, but just to make sure that there were more examples…. A brochure was the example that the regulator looked at. As the member can see, it just expands beyond the word “contract,” so it isn’t limiting but, in fact, is broader, to be able to make that judgment.

Section 13 approved.

On section 14.

S. Cadieux: Credit unions under this are now going to be required to file a market code of conduct with the regulator. So this does add a regulatory burden to the credit unions that’s new. I expect that the minister is, but I’m asking the question anyway. Is the minister mindful of how that regulatory burden impacts the ability of B.C.-headquartered financial institutions to compete with, for example, banks that are exponentially larger than them?

[5:05 p.m.]

Hon. C. James: I’m certainly always cognizant of the additional burden, but I think in this case, credit unions, for example, are in the process right now, through their national organization, of developing codes of conduct, close to finishing the development. So they’re going to, we presume — these are the discussions — adopt the national code of conduct. They may want to look at some variation that fits for British Columbia, but we don’t expect that it will be onerous at all. We think that, in fact, that national code of conduct will be adopted by most credit unions, and that will take care of the requirement that’s there.

For the insurance companies, there are existing standards already, and the regulator is, in fact, going to adopt the national standard that’s there and apply it to insurance companies.

S. Cadieux: Thank you for that, Minister. Credit unions are now going to be required to have a regulator-approved third-party complaint resolution process as part of this. What problem is this trying to solve? Was this informed by other jurisdictions? Were there examples of situations where we have credit unions active in the province that were not resolving complaints effectively?

Hon. C. James: This is part of…. I talked about the proactive work before. This is, again, a proactive piece and part of modernizing the act itself. If you look at market conduct, that’s a critical piece in modern acts when it comes to ensuring that there’s a framework there around consumer protection. This hasn’t come forward because of any case. There aren’t any examples. Credit unions are very good corporate citizens. But again, as part of the proactive approach — making sure that there is some kind of resolution process, making sure that a piece is in there….

Credit unions are also expanding the products that they offer. They had a much smaller range of products a decade ago than they do today. So this is, again, just a good practice when it comes to market conduct and consumer protection.

S. Cadieux: Will this be similar to all of the other things we’ve been discussing — that it’ll be a consultation process with the sector in terms of how this is going to look — or is there an anticipated procedure for escalating complaints? What kind of certainty can be provided to institutions regarding complaints escalated above their heads, so to speak, or above their action, to the regulator?

[5:10 p.m.]

Hon. C. James: This sets out a process for the credit union to develop their own conflict resolution, their own complaint resolution process. That’s what this defines. They will do that development.

Later on in the act we get into a discussion around an ombud’s service. They can belong to the ombud’s service, which gives a chance, very similar to Saskatchewan. It’s similar to the Saskatchewan model. It’s the ombudperson piece, still to be developed, but that service would be a place where a third party could go.

They can still always go to the FSA, the regulator. That’s a structure that’s in place now. That won’t change. But this gives the credit unions a chance to have, again, good practice. If you’re looking at most organizations, they have some kind of conflict resolution process or some kind of dispute resolution process or complaint resolution process. We’re saying to credit unions it’s a good idea to put that in place as well.

S. Cadieux: No argument on that it’s good business practice. I expect that the credit unions do have those policies in place, largely. Perhaps some will need to make them a little more robust or what have you. But moving to the requirement of a third-party overseer or complaint resolution service will add costs. That will be a change for this sector.

Is there any assurance that that cost, again, won’t be unreasonable or something that leads to the credit unions being at a disadvantage, again, to the big banks — especially when we’re talking about some of the smaller ones?

Hon. C. James: Certainly, that’ll be part of the conversations with credit unions. I think cost-effectiveness will be a key piece they would put on the table. Centralized support, I expect, would be a key piece. There’s, as I mentioned, an ombudsperson through the federal banking system. They may want to look at that kind of model and how cost-effective that is.

Those discussions are all still to occur and will occur with the sector. This isn’t something that would be imposed on the sector. It’s a discussion on the sector to look at what is cost-effective, what’s the best process and what’s independent, so that they can also stand up and talk about the independent process that’s in place for them as well.

S. Cadieux: I guess, understanding that they’re going to have some control over the process of this, does the minister have anything on which to base the model of the expected volume of complaints that the credit unions are going to be dealing with or that this process that they’re going to put in place for the third-party oversight is going to process?

Clearly, there must be more than just “it’s good business to have a process.” There must be an understanding of comparison to some other system. The minister mentioned Saskatchewan has an ombudsperson. Is there a volume, a size, an expectation of the size of the problem or the potential problem?

[5:15 p.m.]

Hon. C. James: Again, very similar to the process we talked about before, very, very few complaints, very minimal. In fact, they’re not keeping yearly numbers because the numbers are small.

I think part of that, probably, is also the structure of credit unions. If you take a look at credit unions and the democratic structure they have in place around you being a member and owner of a share in the credit union, there are many steps for members to already take when it comes to disputes or challenges around votes or meetings — those kinds of things. I think, because of those steps, it certainly has seemed very minimal. So we do not expect this to be an onerous task to take on.

S. Cadieux: That’s good to hear, because I think — given the fact that, certainly, “complaints” is not a defined term in the act — the ability for the credit unions to have some control over that, in terms of their business, is important. I mean we can certainly all, I’m sure, think of a time when we’ve looked at Yelp and seen the kinds of complaints that are put out there for businesses which are completely unreasonable or would be a complete waste of time for a system to be in place to deal with in an escalating sort of process.

So I think it’s good that there is going to be some discussion and some control given to the credit unions in the process, but certainly, again, I understand the desire to have a regulated process.

Sections 14 to 18 inclusive approved.

On section 19.

S. Bond: We’re trying to keep this moving. We know it’s exciting for those viewing at home. When the minister said that there were probably two people watching, my co-critic said it was probably her parents. I don’t know. I’m sure my husband is busy doing something, so he’s probably not watching. The minister may have a couple of fans as well.

Section 19 is once again talking about information on line. There’s been…. Part of this bill is about modernization, and the minister was very clear about that. As we take a look at something that’s been in place for a long time, what do we need to do?

This section, section 19, actually talks about financial documents and statements. This requires financial statements that are filed with the commission now to be put on line on a financial institution’s website. It’s a requirement that, again, aids in transparency. We think it’s an important step. But is there any way that monitoring is done of that, or is it just on the goodwill of the expectation of the organization?

Did the minister and the ministry take a look at whether or not, currently, institutions post documents on line? Is there already a practice in place, or is this something new that will be a new requirement?

Hon. C. James: Certainly, credit unions that we’re aware of already post on line. So this is something they’re already doing. This just confirms it in the act, but it is a practice that credit unions do already. Many of us who belong to credit unions know that you get the notice and you know that things are then…. They give you the website, and they put things up. Things are already on line.

[5:20 p.m.]

S. Bond: Does that include smaller institutions? One of the things we’ve talked about in the two days that we’ve been discussing the bill is the diversity of the institutions themselves. Some are very small. I think we used the Vancouver Firefighters Credit Union as an example, 1,500 members. Vancity has half a million.

Is it more onerous for smaller institutions? Is it something that’s part of practice, and in essence, this just codifies what is already done in practice?

Hon. C. James: Credit unions are already required to have these reports on paper copy. This is just moving on line. We believe that most credit unions have already moved there. We understand that even the Firefighters have a website. So I expect that that has already occurred.

S. Bond: I do appreciate that. I think the point being made is just that as we look at changes in practice, we want to make sure that institutions have the capacity to do that and, particularly, that smaller institutions are not inadvertently overly impacted. So I appreciate that.

Again, the minister doesn’t expect to have to use any sort of onerous enforcement. There will be an expectation. There is a paper copy, and the job, then, is simply to post it on line.

Hon. C. James: That’s correct.

Sections 19 to 24 inclusive approved.

On section 25.

S. Bond: As I understand it, currently — well, when we had FICOM — FICOM approval is needed only for transactions that involve corporate structural changes — for example, a merger — or that raise concerns about conflicts involving transactions with related parties.

So as we read this section 25, the new provision potentially gives authority over all transactions. Perhaps the minister can confirm that. But the scope has not yet been specified. Can the minister tell us how she will ensure that as the FSA looks at this, the prescribed jurisdiction in this regard — when it comes to which transactions, all transactions — and as we move from FICOM to FSA, the jurisdiction will not be too onerous?

There’s a significant difference here. We’re talking about all transactions, where it looks like, under FICOM, it was much more restricted. So again, just a way to provide some assurance to institutions that this isn’t going to be overly broad with FSA interpretation.

[5:25 p.m.]

Hon. C. James: This really is looking at very large transactions. Just process-wise for the member, the specific transactions are going to be developed in regulation and, again, developed in consultation with the credit unions. So they will have the opportunity to be able to talk about it.

Just to give you an example, one of the major transactions could be an agreement for Central 1 to act as a central credit union for another jurisdiction, for example. If that ever occurred, that might be a critical piece because that could cause risk to our existing credit unions in our province.

That could be the kind of transaction that might want to be looked at by the regulator. It would be transactions that would cause significant risk to either our sector of credit unions or an individual credit union themselves. Those are the kinds of transactions. We don’t expect it’ll be a huge list, but we think it’s critical enough, for a couple of those examples that I shared, that it’s important to have it written in there and developed in consultation with credit unions.

S. Bond: I think that response, certainly initially, will provide some degree of certainty and less concern with the credit unions. In looking at the section, the issue is prescribed activities and the definition of them. As the minister points out, that will be dealt with in regulation. I think the key point is that it will also be dealt with after consultation with the credit unions. I think that is certainly what we were seeking. It was to make sure that there is some consultation about the scope and more certainty.

The other issue, and perhaps the minister will at least…. I’m sure this is intended, but I want to be sure that it’s clear to the credit unions that in the discussion, they will look at the process and the criteria for getting activities approved. Now the minister has made it clear that it will be focused and it will be major, looking at major risks to either the entire sector….

The question is: what is the process, then, and how does that get carried out? I’m sure the answer is that it will be part of the discussion, but I think it would be important for the minister to provide that certainty for the credit unions.

Hon. C. James: Yes, those will be part of the consultations. I think the process is just as important as the specifics that go in there. So yes, that will be part of the consultations.

S. Bond: Thank you for that. I pretty much assumed that was the answer, because that’s been appreciated throughout this entire discussion, both by the credit unions and by us — that there is an ongoing dialogue here. That’s an important thing.

Perhaps my last comment on this section, before my colleague moves on to another section, is…. I think what we would hope the outcome of that discussion would be is a clear criteria of review for institutions. I think that’s what’s intended here. But I think there’s just a sense that it’s very broad and it’s subject to interpretation. What we would like to see — and I know that the credit unions would — is a sense of a clear criteria that’s outlined to make it straightforward. I think the minister has already committed to that.

Hon. C. James: Yes.

Sections 25 and 26 approved.

On section 27.

S. Cadieux: With this section, what are the implications for credit unions that are already doing business extraprovincially? For example, if a credit union is doing loan syndications, which some of the bigger ones do, if they are, for example, going in with a lead bank from Toronto on a development based in Toronto, does this have to be approved by the financial authority?

[5:30 p.m.]

[R. Chouhan in the chair.]

Hon. C. James: I think just a bit of clarification. This section applies to credit unions and insurance companies that are based elsewhere and want to operate in British Columbia. It doesn’t apply to our British Columbia credit unions, and we don’t have right now any credit unions from other jurisdictions that are operating in British Columbia. So it’s the other way around.

Section 27 approved.

On section 28.

S. Cadieux: Has the minister examined any changes with respect to 100 percent deposit insurance? It’s roundabout-related to this section, given that we’re talking about some not being eligible. Some have argued that the 100 percent deposit insurance encourages unnecessary risk-taking by the credit unions because of some of the deposits that they may get as a result of that.

I realize the legislation is largely silent on deposit insurance, but in this case, we’re talking about when an entity wouldn’t be eligible. Has the minister thought about or examined any other potential changes with respect to deposit insurance?

Hon. C. James: This follows along with our other discussion about what this covers. This section allows for deposit insurance to be available for B.C. residents if a credit union or insurance company, someone from an outside jurisdiction, came to operate here. So it protects B.C. residents from someone from outside coming and operating in British Columbia. It allows that deposit insurance for B.C. residents.

S. Cadieux: Does the minister expect or suppose that, through the legislation, the authority could make changes to the extent of deposit insurance coverage beyond what is discussed here?

Hon. C. James: It’s not a discussion that has come up, and it certainly isn’t something that we had a lot of feedback on during the consultation, either the 2015 or the 2018 consultation as well. It doesn’t prevent that discussion from occurring, but it’s not been something that’s been raised.

S. Cadieux: I’m getting my head wrapped around the minister’s last answer — the one prior.

[5:35 p.m.]

Does section 28…? This is applied to credit unions that are taking deposits outside of British Columbia. For example, because of the 100 percent deposit insurance that is in play with credit unions, a lot of corporations wanted to place deposits with credit unions in British Columbia to access the insurance, even though they didn’t do any other business with those credit unions. They weren’t otherwise credit union customers, except for those large deposits to access or be guaranteed insurance on those deposits. That means that some of the credit unions may have seen that as an easy way to grow their balance sheet, rather than growing their retail customer deposits, which are and should be much more of their bread and butter in their makeup.

The reason, of course, is that if there is a sign of trouble with a credit union, the first folks to leave are the corporate deposits. They’re astute. They know, and they get their money out. That could result in a liquidity crunch for a credit union, especially a smaller one. If the corporate deposits are from corporations outside of British Columbia with a credit union inside British Columbia, does the guarantee apply, or not, to their deposits?

Hon. C. James: I’ll get back to the member’s question, but just to be clear, this section actually is talking about credit unions from outside British Columbia operating in British Columbia. We don’t have any of those right now. Just to make that clear.

Back to the member’s question, any deposit in B.C. is covered, regardless of where the deposit comes from. I think that answers the member’s question.

Sections 28 to 30 inclusive approved.

On section 31.

S. Cadieux: On 31, Minister, this section establishes a new restricted insurance agent regime, which could apply to extended warranties, we understood, at least from the briefing. This could include cars or other major items but could feasibly include any product that required a warranty. Is that correct? Am I correct in that interpretation?

[5:40 p.m.]

Hon. C. James: Again, these are pieces where the work still has to be done, the specifics have to be done through regulation. The member is quite right. This section could be broad, but right now, it’s based on a model in Alberta, Saskatchewan and Manitoba, and it’s really focused on incidental sales of insurance for larger-ticket — things like credit insurance warranty, large warranty insurance. That’s the focus.

Certainly, those will be discussions that’ll occur through the regulations. But the member is quite right. It is broad, at this point, with the definitions to come on the specifics.

Sections 31 to 42 inclusive approved.

On section 43.

S. Bond: Section 43 actually talks about rule-making powers. As the minister can imagine, this is an area that does cause concern and a number of questions to be asked.

Perhaps we can start with…. When we look at this from an overarching perspective, how is the FSA restricted from either applying a one-size-fits-all type of approach to regulations or applying OSFI-like rules to the credit union system? Has the minister given some thought to how the FSA will be restricted from, especially, a one-size-fits-all approach?

Hon. C. James: I think this is an important piece in this section, in particular, because I think it speaks to the uniqueness of credit unions and insurance companies and other organizations mandated under this legislation. But those pieces are specifically in the legislation to allow for that difference. I think that’s important.

For example, subsection 201.1(3) talks about making different rules. That’s, again, part of that protection — to make sure that it’s clear within the legislation that it provides for not one-size-fits-all but, in fact, a different kind of approach.

[5:45 p.m.]

I think the other section that’s important to look at in this is 201.2, which, again, talks about: before making or amending or repealing a rule, the rule has to be published for public comment. Again, that provides an opportunity for people — credit unions, organizations — to be able to raise their issues and concerns. They have to get approval of the minister — again, another check and balance — and they have to comply, obviously, with procedures and requirements.

I think that together both of those pieces address, exactly as the member has raised, the need for the flexibility, the need for the legislation to point that out. It’s not simply that we’re saying that that’s valuable to look at. We’ve actually included that in the legislation to provide for that kind of flexibility and that kind of uniqueness that is so special for the credit unions in our province.

S. Bond: Thank you for that. I think it is important to point out that, ultimately, the minister also has the opportunity to provide that lens before the approval of the rule is put in place. I think it’s an important issue to raise here in the House, and I know the minister is very sensitive to the fact that there are diverse numbers and types of institutions across the province.

Maybe we could move to the dispute mechanism. Is there a dispute mechanism? What is the avenue for resolution when the financial authority makes a ruling and then, perhaps, the credit union and the board are in disagreement? Or does the financial authority itself have the absolute power to make that decision?

Hon. C. James: A rule has the same effect as a regulation. It can’t be appealed, once a rule has been approved. It goes through the minister. The minister has to approve it. It doesn’t have an appeal, just as a regulation doesn’t have an appeal.

If the authority decides to put in place an order in relation to that rule, that order does have the ability to be appealed. That can just be appealed. That’s already in the act. It’s already in place now. They do have the ability to appeal that order if it’s in place.

S. Bond: It’s reassuring that there is that process.

Credit unions face very stiff competition — I know the minister and the ministry are aware of that — from large banks. They have significant scale — an opportunity to deal with issues in a way that smaller institutions do not. One of the things that has been expressed to us as a concern is disproportionate fees or regulatory burdens. We’ve heard stories in this Legislature. And I think every MLA that has a credit union, whether you’re in a small community…. They make a difference. I think it’s the issue of proportionality.

Can the minister tell us what she anticipates will be done to ensure that fees are kept at a minimum, particularly so that it allows appropriate competition? When you think about it, it’s kind of, in many cases, a David and Goliath circumstance. So we want to make sure that there is a recognition that an overburden of regulation or of fees related to the changes in the bill may significantly impact some of the smaller institutions. Could the minister just speak to us about how she sees that being managed?

[5:50 p.m.]

Hon. C. James: I think it’s just important to note that this section doesn’t relate to fees, and there aren’t any fee increases contemplated. But the process that occurs for fees is that fees are set out in regulation. Those fee requests have to come to Treasury Board, they have to be approved by Treasury Board, and they have to be approved by cabinet. There are steps, certainly, in place, as they’ve always been in place through this process.

S. Bond: Many of the details will be worked out after the passage of this act, and we do assume that it will pass. Does the minister have a sense of the timing for the creation of the FSA rules and guidelines under this section? How long does the minister anticipate that will take? She’s been very open to ongoing discussion and input — so maybe just a general sense of the timeline she anticipates.

Hon. C. James: This section, I think, as the member has rightly pointed out, is critical — critical to the authority, critical to credit unions — and deals with liquidity and some of those other important issues that everyone wants a conversation on. We haven’t set a timeline, because, again, it’s based on consultation. You don’t want to prejudge the consultation. But I would certainly say that I think all parties recognize that this is a priority. All parties want those rules in place. They want to have that kind of certainty. So it is a priority for the authority as well.

I would expect that once this is enacted, if that occurs — if this goes through and the legislation passes — this will be one of the first priorities to be dealt with through the consultation process.

S. Bond: Does that include, also, new capital and liquidity guidelines, that there’s the same approach to that — again, having consultation? Or is there a different approach to those two things?

Hon. C. James: It’s the same process.

S. Bond: Can the minister tell us whether there will be major changes to the deposit insurance methodology?

Hon. C. James: Again, that would be part of consultation, so I don’t want to prejudge what they may or may not decide. But that will be part of rule-making. Therefore, it has to go through the consultation process.

S. Bond: So there’s nothing predetermined when it comes to whether or not there would be changes. Again, that would come as a result of part of that broader consultation.

[5:55 p.m.]

Has the minister taken any steps to set up advisory groups or panels for the FSA, the minister’s office, obviously especially with respect to new regulations? What will that look like? Are those groups already in place? What does the minister intend? We want to be sure that….

I think it’s been a really healthy process to see the degree of involvement, particularly of the credit union sector, and I think we just want to ensure that there’s a reasonable venue and avenue for that to continue. So perhaps the minister can give us a sense of what that might look like.

Hon. C. James: Those discussions are going on right now around what would be the best structure. As the member mentioned, there are a variety of options they could look at and advisory committee structures, but those discussions are occurring and will occur with the credit unions as well.

S. Bond: Thank you for that answer. I think it would be great if the minister could at some point give us an update on what those groups, bodies, would look like and how that process is going to work, considering there’s been really constructive discussion on everyone’s part. We’ve certainly appreciated the very positive approach that the credit unions have taken. They’ve been very clear about their support for the bill and where there needs to be a few tweaks. We’d hope that would continue.

I’m sure the minister can understand that there may be some concern about the enforcement of rules. This is a section that really enhances the regulator’s ability to make and enforce rules. Perhaps the minister could give some assurance — and I think it’s important, on the record and publicly — about her perspective on fair enforcement of the rules and the regulator’s ability to make them. It’s a pretty critical piece of the success of the changes.

What are the minister’s expectations? Obviously, we hope that it would be that they’re fairly enforced, but maybe give us a sense of her view of the ability to create the rules and then enforce them. What gives certainty to the industry that they will be treated fairly?

Hon. C. James: I think the first step in all of this…. I’m a big believer in doing the work, the proactive work that is necessary so you don’t get into a lot of the challenges, as the member was pointing out. I think the consultation is the key piece, from my perspective. We’ve talked a lot about the good work that’s gone on with the credit unions. That’s work that’s happened not only with the people in this Legislature but, in fact, with staff and with the authority and the transition of the authority and through the consultation process with staff from the Finance Ministry as well.

I think consultation is key, from my perspective, if we’re looking at a fair enforcement of the rules. That’s one of the first steps — clear consultation — so when the rule comes out, there aren’t any surprises. There have been discussions. There are not always going to be agreements necessarily. There may be different policy directions that the authority wants to go and the credit unions want to go, so I don’t want to leave the impression that there will always be agreements. But consultation, good discussion, good dialogue, an ongoing understanding and communications I think are critical to enforcement of rules.

[6:00 p.m.]

Transition time. I think, again, an ability to be able to have some transition time — I talked about that earlier — is one of the key areas so that if there are changes, you have time for the organizations to be able to adjust.

Ministerial approval. I think that’s key around enforcement of rules. Again, where does the accountability sit — with the minister and the importance of that?

And that the orders are appealable — I think that’s another really important piece, that if something comes out that hasn’t gone through those steps or doesn’t have to go through those steps, there’s an opportunity to be appealed.

My hope is that…. I think this sector and the financial sector have done a good job of this kind of consultation and this kind of work. I’m very optimistic that that’s going to continue and that it’ll be a very good relationship, and we won’t see a need for some challenges around enforcement because, in fact, people will have worked together to put the rules in place.

S. Bond: I think approaching it from that perspective is hopeful. I think we certainly support that approach. Time will tell.

In the event that there is dissatisfaction with an interpretation of the superintendent…. The superintendent interprets a rule. Industry looks at that and thinks: “Well, that’s not what we anticipated” or “We don’t really think that’s fair.” Is there a mechanism for an appeal? How would there be a venue for there to be a discussion about that in the event that the superintendent interprets a rule and there is a sense of disagreement? Is there an appeal mechanism?

Hon. C. James: As I mentioned earlier, a rule has the same effect as a regulation, so it’s not appealable. But the member talked about interpretation. Often interpretation comes through orders, and people may interpret things differently in an order. That’s why I think it’s critical to remember that orders are appealable. They do have an appeal process, and that’s in place. People can follow that.

That would be likely where the interpretation issues might come in. That is appealable, so that’s a clear process that’s in place already.

S. Bond: Just to follow that through for a moment. Ultimately, the superintendent interprets a rule, issues an order. At that point, then, the order is appealable, and part of the rationale for being concerned about that order may be that it was interpreted incorrectly. Do I have that accurately?

Hon. C. James: Yes.

S. Bond: I appreciate that clarity.

We talked a little bit about prescribed transactions earlier. I wanted to just…. The legislation introduces a provision that requires regulatory approval for prescribed transactions. That is yet to be defined. You know, we certainly are aware that in the past it has taken the regulator what seems to be a fairly lengthy period of time — some would describe it as unreasonable — in terms of approving those transactions that are largely business as usual.

We understand that in the case of something that might bring more significant risk or be more major, there could be a rationale for that. But what we want to ensure is that this isn’t going to slow down important business transactions that could essentially hinder credit union competitiveness.

Is there a sense how that would be managed? We want to be sure that it doesn’t slow down or continue what some people have perceived as an unreasonable length of time to deal with what should be considered business as usual.

[6:05 p.m.]

Hon. C. James: The regulations, we presume, will actually set out timelines. There’ll actually be timelines defined and in place. As there is with most transaction approvals, there likely will be an opportunity for the authority to say that they need more time if they reach the time limit. But there will be timelines outlined, which I think will help with that certainty.

S. Cadieux: With respect to deposit insurance again, but in a different context, the credit union system recommended splitting the boards of the deposit insurer and the regulator. This is the recommended international best practice. But despite the fact, again, that this is the case in most other Canadian jurisdictions, the recommendation hasn’t been adopted in this legislation. Could the minister discuss for us why that’s the case?

Hon. C. James: The one single entity, when it was put in place, was really put in place to be able to pool resources, to look at efficiencies, to be able to provide that support. That hasn’t changed, from the regulator’s perspective. The integrated line of sight provides some strength.

In fact, other jurisdictions…. Ontario, for example, right now is looking at creating one entity. They’re actually looking at that pooling of resources, pooling of expertise, efficiencies that can be found. So we didn’t see any change or any issues raised that would have us contemplate looking at two regulators.

S. Cadieux: Also as a part of this section, the Financial Services Authority may deem a financial institution a domestic systemically important financial institution — I don’t even know how you pronounce the acronym — under the section of 201.4. This does require consultation with the institution in advance. What does the minister anticipate that consultation looks like around this particular aspect?

[6:10 p.m.]

Hon. C. James: I’m not sure there is an acronym. I’m not sure anyone would want to remember that acronym for that description.

There isn’t any defined process for consultation. But just to give the member the reassurance and the example, currently Central 1 has been designated as a domestic systemically important financial institution. That was done in consultation with Central 1. This is looking at what would make sense and what would strengthen the sector. That consultation did occur, and they were designated.

I think, again, we haven’t specified what the consultation process would look like. This is a good example of how it’s already occurred in a way that made sense for both the organization and Central 1.

S. Cadieux: Thank you, Minister. Certainly, I think, in that context, it’s understandable, given that they’re the repository for all the others.

The act uses very generic language in relation to this, in terms of what could lead to that designation of “domestic systemically important.” I think that the language being that generic does lead to some concern about…. How can the institutions know that this won’t be an overly onerous process, in terms of that conversation around being designated as such? How can the sector be assured consistent and open communication between the Financial Services Authority and the regulator and the institutions, all as a part of this process, with, at this point, it being quite open in terms of the process?

Hon. C. James: I think it’s important to note that the criteria are based on global standards. This isn’t criteria that were created. It’s based on global standards. I think, again, this section talks about “one or more of the following factors.” I think that’s, again, important. It talks about the interconnectedness with other financial institutions — so not a single source — and the size, the business and the complexity of the financial institution.

I think the other piece that’s important to recognize is that this is a significant step for the regulator — not for the credit union but, in fact, for the regulator — to go through this process. It would be a very large process for the regulator to take on. Therefore, they also don’t look at this lightly. To go through this process would be a significant consultation. There would be significant effort on the part of the regulator, which provides some comfort, I think, again, to credit unions.

The section, as I said, is based on international standards. So it would not be a surprise to the sector as well.

S. Cadieux: Can the minister confirm that the Financial Services Authority rules can be overridden by regulation?

Hon. C. James: Yes, they take precedence.

[6:15 p.m.]

S. Cadieux: In that context, then, can the minister confirm: is there an equal consultation process in the event that the minister, by regulation, overrides the FSA?

Hon. C. James: It still requires cabinet approval, of course. I think it would be rare that there wouldn’t be any consultation or any discussion around that process, but it would require cabinet approval through that process.

S. Cadieux: Then, in that case, if this is the mechanism by which the financial institutions are to believe there is some sense of oversight of the rules and regulations and, essentially, an opportunity to appeal if they don’t think something is fair, does the minister anticipate overriding the FSA as a means to conclude a dispute on a rule made by the Financial Services Authority?

Hon. C. James: Certainly, cabinet has that ability. They have the ability to finally approve, to make those changes and to have something go through.

I think it comes back to the previous conversation we were having with the member about what is good practice and what is good prevention work. I think, if the steps are followed, if the good consultation occurs, if there’s the ability, then, for the minister to make an approval and go through that process — the ability for credit unions or others to lobby from that regard, to be able to make their voices heard before those steps occur — it would be a very rare occurrence, from my perspective, to ever get to that place. I think that’s why the consultation needs to be so clear, and is clear, for the opportunity for credit unions to take part in this process.

Sections 43 and 44 approved.

On section 45.

S. Bond: Section 45 actually talks about the publishing of records. Though its use may be limited, this section appears to contemplate a wide-ranging ability to publish information collected from financial institutions. Can the minister describe for us what information she contemplates might be collected?

[6:20 p.m.]

Hon. C. James: This relates to insurance companies, specifically to insurance companies. It would require that the list of information would be available publicly. This is to actually bring B.C. in line with Alberta and with federally regulated insurance companies. They are required now to provide this information and put it on line. So this brings B.C. in line with that.

S. Bond: When the discussions took place over the number of years with the credit union, was this something that they noted and made comment on or were comfortable with?

Hon. C. James: This relates mainly to insurance companies, but certainly there were questions around what the list of information would be. That list will be developed through regulation, again, with credit unions, with insurance companies. So they’ll have a chance to be able to develop that list and look at what the information is.

S. Bond: Was there any contemplation…? Did the minister contemplate whether or not there could be a consultation provision written into this section? And I don’t mean when we’re talking about regulation, but when we’re talking about the prescribed information and what decision might be made, the authority may decide to publish something. Did the minister or the ministry consider building a consultation piece into this section?

Hon. C. James: I think the process will provide for the consultation and the development of the list. I think consultation is, as the member knows, as we go through this bill, written throughout around the facts, so it’s not in individual sections. But because the list will be developed through consultation, there isn’t a requirement for consultation to occur whenever anything goes public, because they will have been part of developing that list, and the regulator will then have the authority to be able to make the determination about putting that list out public.

S. Bond: Thank you to the minister for that clarity. I’m just thinking about how I worded this question, but I think the best way to ask this question is: when prescribed information is going to be published, what kind of communication…? I again used the word “consult,” so let’s take that out of the picture.

[6:25 p.m.]

What kind of communication will take place — or will any — between the FSA and the institution prior to having their prescribed information posted? Will there be notification, conversation, some type of conversation?

Hon. C. James: The way the federal process works is that the regulator has a website, and yearly, they update it. So the organizations know that each year at a certain time, the information is going to be updated. That’s the kind of model we expect that will be looked at, so, again, there’s a regular time. People will know that it’s coming on the website. We expect that that’s the process they may look at here as well.

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

Motion approved.

The committee rose at 6:26 p.m.

The House resumed; Mr. Speaker in the chair.

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

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

Hon. M. Farnworth moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 1:30 tomorrow afternoon.

The House adjourned at 6:27 p.m.