Orders of the Day

Hon. M. Farnworth: To think we only have one more day of this fun. In this chamber, I call committee stage, Bill 45, Taxation Amendment Act.

[2:45 p.m.]

Committee of the Whole House

BILL 45 — TAXATION STATUTES
AMENDMENT ACT, 2019

(continued)

The House in Committee of the Whole (Section B) on Bill 45; R. Chouhan in the chair.

The committee met at 2:46 p.m.

On section 2 (continued).

T. Stone: We’re going to start off our deliberations in committee stage today, in section 2 here, with another proposed amendment that we have.

To refresh everyone’s memory quickly, we moved an amendment on this when we were in this section last. The amendment was ruled out of order. The issue that we’re trying to address here is to ensure that there is as much certainty as possible with respect to the funds that are generated from vaping products’ PST — that those funds find their way towards supporting awareness, prevention and support. So we understand the rationale for the previous amendment being out of order.

This one that I’m proposing provides for an amendment that essentially would require the revenues to be put into a fund that already exists. Unlike the last amendment, where we were suggesting the creation of a new fund, this amendment deals with the funds being allocated into an existing fund. The existing fund is called the health special account.

While it doesn’t provide for as much certainty and transparency on how much funds are raised and the clear dedication of those funds to vaping education, this amendment is the next best thing, we think, because it would still require those funds to be put into an existing health special account, and the accountability on this account is dealt with as part of the estimates process in the annual budgets.

I will pass that amendment forward now.

Hon. C. James: To the member, thank you for the amendment just received. I will speak against the amendment. I will suggest that the amendment is, in fact, out of order. As with the previous amendment, it is directing government, directing tax revenue, to the health special account, which has very clear parameters around what money is and isn’t used in that account.

[2:50 p.m.]

The Chair: Member, thank you for proposing this amendment. It seems like this proposed amendment should be debated under section 5, rather than under section 2. Why don’t we wait until we get to section 5, and then we will deal with it. Would that be okay?

Interjection.

Sections 2 to 4 inclusive approved.

On section 5.

T. Stone: I would like to move an amendment to this section.

[SECTION 5 be amended by adding the following section:

Payments to Health Special Account

5.1 (1) Notwithstanding section 2 of the Health Special Account Act, revenues paid into the consolidated revenue fund under sections 34 (11), 35 (8), 36 (11), and 55 (3.6) of the Provincial Sales Tax Act shall be paid into the Health Special Account.]

On the amendment.

T. Stone: We would urge the government to seriously consider this as a thoughtful, practical amendment that addresses the concern that I think we all have, and that’s ensuring that the revenues that are generated from the vaping PST go into this fund, where there will be a transparency on those revenues as part of the annual estimates process.

Again, and in closing my comments on this amendment, we just want to make sure that every penny available from the vaping products PST finds its way into funding those very necessary awareness, prevention and addiction support programs in every middle and high school across British Columbia.

We think that this is a reasonable compromise, versus our last proposal, that would ensure that these funds go into this special health account, from which at least there is some transparency around the total revenues collected and how they’re disbursed on an annual basis as part of the annual budget and estimates process.

Hon. C. James: I will be speaking against the amendment. As I said earlier, but I’ll say again, under this section I believe the amendment is out of order. It directs tax revenue.

I want to speak to the member’s point around accountability, because we canvassed this in the last discussion we had. In our full afternoon previously, we talked about accountability, and we also talked about the fact that the ten-point plan is just being developed.

The Health Minister has announced it. We have talked and agreed that the most important part of that plan is developing it with youth — that youth have to be engaged, that they have to be directing the plan, that if we are going to be effective in education on ending vaping for youth that we need to do that by engaging the youth.

[2:55 p.m.]

None of that program has been developed yet, because it needs to engage youth, because we want to make sure their voices are there. And as always, the costs of a program, the amount of money being spent on a program, are part of a minister’s responsibility.

I would expect the opposition…. I would expect members to be asking those kinds of questions. That’s exactly the kind of accountability that occurs in this Legislature, so I couldn’t agree more. As I said two days ago in our debate on this same issue, I couldn’t agree more about the importance of addressing the issue of accountability — being accountable for the program, ensuring that this is implemented well.

I think that was the strength of our second reading — the fact that we all agreed in this House on exactly that, and I believe that accountability will be there.

S. Bond: While I appreciate the minister’s comments, I’m not sure why there is such an incredible reluctance here. This is a new tax. There is widespread, unanimous agreement in this Legislature that we need to do something about vaping. And the way — one on the ten-point plan or however many points were in the plan — is a fiscal taxation piece.

This is about transparency. This is the fiscal amendment. It’s not about the effectiveness of the program. We care about all of that, and we’re going to hold the government accountable, especially my colleague from Kamloops–South Thompson. This is about fiscal transparency. I have no idea why this minister is reluctant to put the revenue from a tax that’s created specifically related to vaping and vaping products and components…. Why is it so incomprehensible that those funds could not be put in a designated line item which requires transparency?

Our concern is this. There will be programs created. There is no doubt about that. We will be holding the government to account for the effectiveness of those programs — the thoroughness, how they’re implemented. What we want is for British Columbians to know exactly where that money is going. When it gets rolled into the general revenue, the consolidated revenue fund, we will not know specifically where that money is being utilized. These are extraordinary circumstances. There is unanimous agreement in this Legislature about moving forward on a tax. I can assure you that rarely do we find that to be the case.

We’re very concerned about the tax burden on British Columbians, but in this case, we’re prepared to support that tax. All we’re asking the minister to do is to create a designated place for that revenue to go so that British Columbians, members of this Legislature, health professionals, families can see exactly what the government is doing with the revenue that is designed to deal with the issue of vaping and, in particular, youth health and youth dependency.

From my perspective, it’s practical. There is an existing fund. We didn’t win, obviously, on the one where we thought it should have had its own dedicated fund. But there is another option here, and it is time for us to look at exactly what this money is going to do.

So, obviously, I think the motion is reasonable. It doesn’t demand anything of government in terms of how it’s spent. This is a transparency motion, for heaven’s sake. It is about laying out where the spending occurred and making sure that every single penny collected will be dedicated to dealing with this issue, which is so critical and such an issue in many jurisdictions around the world.

The Chair: Members, the Chair heard the debate on this proposed amendment. We allowed the debate, but it’s the Chair’s ruling that it cannot be allowed to go to vote for the following reasons. The amendment directs tax revenue to a purpose not recommended by message of the Lieutenant-Governor, as required under Standing Order 67 and equivalent provisions in B.C.’s Constitution Act.

The amendment, in my opinion, is out of order in the hands of a private member.

Amendment ruled out of order.

[3:00 p.m.]

S. Bond: Then we’re going to try another way, because this matters. And while we might want to debate the logistics of where this should happen, we believe that there needs to be transparency. We believe that there should be a requirement for the Minister of Finance to report out. We’re not talking about the programs today. We want them to happen. We’re not talking about how effective they will be or who’s going to design them or what the youth panel looks like. We’re talking about taxpayer money.

I am going to move an amendment. I will table it. I have copies of it for the minister and for the Clerk’s table. Let me just read it first. The heading reads: “Revenue and Spending Report Required.” It would be an amendment. It would be section 5.1. I will read what the amendment says. And to be clear, we’re not directing the government to do anything other than report.

[SECTION 5 be amended by adding the following section:

Revenue and Spending Report Required

5.1 The minister must, in respect of amounts that are paid into the consolidated revenue fund under sections 34 (11), 35 (8), 36 (11), and 55 (3.6) of the Provincial Sales Tax Act, lay a report before the Legislative Assembly detailing

(a) The total revenues collected, and

(b) Spending on the administration, operation and delivery of education and prevention services intended to reduce the purchase and use of e-substances and e-vaping devices, represented

(i) as a percentage of the revenues reported under subsection (a), and

(ii) in dollars.]

On the amendment.

Hon. C. James: While I appreciate that we’re having a conversation about accountability — and I come back to the accountability piece again — I will be speaking against the amendment.

[3:05 p.m.]

I believe that for the PST Act to include programs and services that are still being developed…. We don’t know the timing of those programs to be developed. They’re being developed through education, through health care.

When we have accountability measures, there hasn’t been an estimate where I haven’t been asked by members around tax revenue and particular things. There has not been an estimate where I have not been asked about program spending by members. Certainly I think that accountability is there, as it was for the previous member when the previous member was a minister, as it was for the previous government when they were in government.

Accountability is there. Accountability is critical. I do not believe this amendment fits, nor do I believe that it’s necessary when you have the existing mechanisms in place for accountability.

S. Bond: Well, I appreciate the minister’s explanation. But let’s be clear. This is not about putting programs under the Provincial Sales Tax Act, and the minister well knows it.

This is about an expectation that money raised from a vaping tax — that that information about how much is collected and how it is being spent is made public. What’s ironic in this discussion…. This is about the health of our children. We have unanimous agreement in this House about increasing a tax, creating a tax, increasing it.

I can harken back my thinking to a tax we disagree on. We disagree aggressively and significantly on a tax called the speculation tax. Yet when we came to the minister and asked the minister to lay a report before the Legislature on the speculation tax, which does virtually the same thing…. In fact, the amendment would be in line with the amendment that the government accepted regarding the speculation tax.

Section 141(3) requires the minister to “lay a report before the Legislative Assembly.” We worked through this with the spec tax. We disagree with the speculation tax. We fought the speculation tax. We’re still fighting it. We’re still hearing from residents in those areas.

Today we’re in a different circumstance. We’re here to say: “We will support this element of a plan.” But make no mistake about it, it is the fiscal element. It’s not about who’s going to write the programs or who’s going to be on the youth committee. It’s about saying to British Columbians: “How much money did you get, and how did you spend it?” And the minister would lay that report annually in front of the Legislature. That is exactly what this minister agreed to with the speculation tax. How is this different?

In fact, this should be even more compelling for the minister, unless she’s going to be reluctant to explain where that tax money went by rolling it into the consolidated revenue fund.

All we’re asking for, which is not unreasonable, is a transparency mechanism around the dollars — not the programs, not the people, not the working group. What we would like to see this government agree to is a transparency measure where the minister provides a report. “Here’s what we took in, and here’s how we spent it.”

As I said, we managed to work our way through this with the speculation tax — a tax we’re opposed to. The minister agreed to that amendment, yet with this one, somehow there’s no willingness to actually to lay a report. This is about a report. It’s about saying: “Here’s how much we took in. Here’s what we did to help kids. Here’s what we spent it on.” What are the administrative costs? How is this money going to be spent?

I can understand the minister is facing some challenges. There is a tight budget situation. We continue to see the situation around the budget deteriorate. But there is no reason this minister cannot say yes to a transparency measure that outlines where this money is going, instead of simply rolling it into the consolidated revenue fund and relying on reporting out program by program.

This is a fiscal amendment. It is a taxation amendment. The minister agreed to this type of approach when it came to the speculation tax, and we would urge the minister to rethink her decision to speak against this motion, particularly when this one involves the health of the young people of British Columbia.

Hon. C. James: I’ll just make a couple comments before I again speak against the amendment.

[3:10 p.m.]

There are opportunities, through estimates, as the member knows very well, to ask those kinds of questions. There are many opportunities to be able to talk exactly about those questions.

This is a program that is being developed, that we are going to develop with youth. It has not been developed. There are programs and services that support stopping smoking or stopping vaping that will be outside the ten-point plan that will be part of Health’s budget or part of Education’s budget.

This is a wide range of approaches, as wide as we need it to be to discourage youth from vaping. There will be every opportunity for the members to ask those kinds of questions.

With that, I speak against the amendment.

J. Thornthwaite: I would like to rise and support my colleagues on this side on the amendment to Bill 45, Taxation Statutes Amendment Act, to ensure that “the total revenues collected” and “spending on the administration, operation and delivery of education and prevention services intended to reduce the purchase and use of e-substances and e-vaping devices, represented….” And they must be “a percentage of the revenues reported under subsection (a),” in dollars.

I agree with my colleagues that this is a transparency measure. It will ensure that the dollars will go to education, prevention. And why it is so important that this dedication is identified — the reason why it is, is because we have an addiction crisis in this province.

The B.C. Liberal caucus today just got a presentation from the B.C. Centre on Substance Use. In amongst the presentation, they talked about the challenges facing our recovery system and our addiction system. At a systems level, there are a lack of standards, oversight and regulation. There’s a lack of coordination between providers. There is timely, equitable access to approved care that is not appropriate.

With regards to service delivery, they requested the implementation of evidence-based practices and transparency and quality assurance evaluations and outcomes monitoring. These are all the things that we are asking for.

Addiction is rampant in this province, in this country, on the continent, and we are very, very worried about youth and their addiction to vaping. Where that’s coming from is from the nicotine. We had a presentation in North Vancouver that was put on by school district 44 as well as Foundry on the North Shore. They had a presentation by Dr. Milan Khara. He’s the physician lead on the smoking cessation clinic at Vancouver General Hospital.

The reason why North Vancouver brought him over to speak to parents — and it was a packed room, and this was back in March — was because Seycove School — you probably heard it in the news; it was national news — was infamous because they had closed some of their bathrooms to prevent kids from vaping.

What he said is that education is needed for kids in elementary school. The B.C. Centre on Substance Use also reiterated that today and said that we need to develop prevention and early intervention resources for youth in K to 12 — kindergarten to 12 education — plus supports for students and families.

For children and youth, their brains are still developing. So the use of these addictive substances like nicotine is even more grave than in adults. Kids are self-medicating for anxiety and depression.

The Chair: Member, we are debating the amendment, the proposed amendment.

[3:15 p.m.]

J. Thornthwaite: What I’m trying to do is emphasize the importance of us concentrating on the addiction of the nicotine in vaping products and that the dedicated funds that my colleagues have alluded to in this amendment are going to prevention and education funds. We want to make sure that this is transparent. In other words, so we know where the money is going because right now we don’t know where the money is going. Is it going to general revenue? What exactly is it going to?

Dr. Milan went on to talk about his clinic. This is the other thing I wanted to mention. They do have nicotine replacement therapy, for instance, for adults at Vancouver General Hospital, but currently they do not have the resources to help children. Right now — this was way back in March — they are very, very worried that they are going to run out of the resources to be able to do anything for children. Not only that, but there are no standards for dealing with nicotine addiction in children.

The Chair: Member, the Chair doesn’t want to interrupt you in your debate. You have the right to do it, but those points were established under second reading already, so we know the impacts of that. If you could kindly speak to the amendment, that would be appreciated.

J. Thornthwaite: Okay. Thank you, Mr. Chair. Then I’ll summarize and just say that I really do want to emphasize how important this amendment is with regards to transparency and us, all of us, and British Columbians knowing where the dollars are going to. Because the education and the prevention and the help with the youth addictions is of utmost important here in British Columbia.

D. Davies: I just kind of want to follow up a little bit also with my colleague for North Vancouver–Seymour, speaking to Bill 45 and the amendment that my colleagues have presented, to paint a picture on why we value this amendment on making sure that there’s accountability to all of the parents across this province, accountability to our educators, our health care people, that have recognized that this is, indeed, the health crisis that it is.

I’m just going to read one little quote here. It’s from the B.C. chief medical officer, talking about how vaping is quickly emerging as a significant health issue in British Columbia. “Vaping is turning back the clock on decades of effective anti-smoking efforts and creating a new generation of young people that are now going to be addicted to nicotine.” That’s from the B.C. chief medical health officer.

When we start looking at…. I’m speaking to this from a couple different angles. First of all, I’m a parent, a father of a teenaged daughter who attends middle school. She is around this vaping already far too much than I’d like to admit. I’m also speaking to this as the Education critic for the official opposition. I’ve got so many people that have reached out and contacted me — teachers, parents, members from the BCSTA — which, of course, have all come out in full support of, first of all, where the government is going on vaping.

Again, going back to this amendment, we need to make sure that these funds are accountable and that we can go to parents, we can go to our teachers and say that there will be resources available. There will be resources that government can say we have provided to educators, resources they can use in the classroom.

My colleague from Kamloops–South Thompson said, I believe, the day before yesterday when we were in here talking about this, that this is more than just buttons, brochures and posters. This needs to have a real, impactful effect on our young people and teachers can be trained and given the tools that they need to deliver this in the classroom. Medi­cal health officers, locally, within each of our regions, need to have the tools and resources that they need as well.

[3:20 p.m.]

If this is just going to come out of a general revenue fund, I don’t think that is doing a service at all to the province of British Columbia or doing a service at all to the citizens of B.C. that really want to see the government taking leadership on this to show that here is where we have put the dollars to curb this epidemic that is coming right now.

That is the full intent of this amendment that has been moved by my colleague: to have government show the residents of this province that they are doing their level best to curb this epidemic, which is still in its infancy. We still have time to stop this before my son, Noel, who is eight, hits middle school. I really believe that we can stop this. But it is going to take leadership by the government.

I think part of that leadership is demonstrating — showing, proving — to the citizens of B.C. that we have invested, I understand, upwards of…. I believe it was $2½ million in PST to be collected and that we can show that those funds have gone to dissuading our young people from starting this horrible epidemic of vaping.

I’m not going to talk too much more. I just wanted to make sure that from, first of all, a father’s perspective and, secondly, from an education perspective…. Again, sitting as a former teacher, there have been lots of programs that governments over the years have rolled out that have just been posters, buttons and such. They don’t work. We need to really show that government is grabbing the bull by the horns and providing adequate money to go to our programs that will train our teachers up.

If we look at smoking, it’s taken 60 years of anti-smoking campaigns to get people to quit. This is a great opportunity by adopting this amendment to put it out there that government is doing everything it can to make sure that the funds are being designated to stop this.

We’re not here…. Well, I won’t be here 60 years from now. But whoever is in this place 60 years from now is not talking about, “Oh, we finally got this vaping epidemic over,” 60 years later. I think we have the opportunity to do this within the next few years before my son gets into middle school. I think that is absolutely going to be incumbent upon the government adopting this amendment, putting their money where their mouth is and showing the residents and the citizens of B.C. that the money is going to get our kids off of vaping. That is what I want to see.

That’s the intent of this motion. That’s why I want to see this motion, and I’m sure everybody out there — teachers, parents, health professionals — also agrees as well.

T. Stone: I, too, would like to take a few moments to speak in favour of this amendment, which, again, as with our previous amendments, we think is reasonable and practical.

To refresh everyone’s memory or just bring everybody back to what we’re actually talking about here through this amendment moved by my colleague from Prince George–​Valemount, what we are simply suggesting as a practical amendment to this legislation would be to add a reporting requirement in relation to the revenues that are generated from this tax.

What we’re suggesting here is nothing different than the reporting requirement which was added to the Speculation and Vacancy Tax Act that was adopted by this Legislative Assembly quite recently. That reporting requirement was incorporated into that legislation via an amendment from the official opposition that used language almost identical to what we have suggested in the amendment that we have before the House here today in the context of the Taxation Statutes Amendment Act that we are in committee stage on.

It is a simple requirement that

“The minister must, in respect of amounts that are paid into the consolidated revenue fund under sections 34 (11), 35 (8), 36 (11), and 55 (3.6) of the Provincial Sales Tax Act, lay a report before the Legislative Assembly detailing (a) The total revenues collected, and (b) Spending on the administration, operation and delivery of education and prevention services intended to reduce the purchase and the use of e-substances and e-vaping devices, represented (i) as a percentage of the revenues reported under subsection (a), and (ii) in dollars.”

[3:25 p.m.]

It’s a reporting requirement. We’re not telling the government…. We’re not trying to suggest through an amendment here that the government should spend the dollars that are raised through this vaping products tax, that the government has to spend those dollars on specific programs or in specific ways. I mean, that would be the ultimate transparency. We would have liked to have seen a provision like that.

We tried that through an amendment earlier. The government said no to that. We then thought, well, the next sensible ask of government would be to require the funds collected from a vaping product’s PST to go into an existing account, the special health account — again, not telling government how to spend the money. We’re just saying, for accountability and reporting purposes, have those funds diverted into that special health account. The government said no to that.

We’re left with one final fallback here, in the name of accountability and transparency, to suggest through this amendment that the government consider agreeing to there being a reporting requirement on the total revenues collected and what the government chooses, at their sole discretion, to spend those dollars on. No direction being provided here. Discretion remains completely with the government.

I would remind members, and I’ve said this many times, that while the Finance Minister, through this entire process — second reading and into committee stage…. I completely take her and her colleagues at face value. I say very authentically that I believe that they’re trying to do the right thing through this broad action plan. They’re trying to respond to the youth vaping crisis that we have in this province.

But words are cheap. Actions are what are really needed here. While we have a ten-point action plan, which sounds great and certainly covers a lot of bases, what we’re trying to say and what we’ve been saying all along is that the education component of this — the prevention, awareness and addiction support component of this, particularly as it relates to students and youth in our middle and high schools — cannot get lost in the mix here.

We will leave this Legislative Assembly in a little less than a day from now. If this bill passes, if it receives the support of this Legislative Assembly, it will become the law of the province. We will then head off back to our constituencies. We won’t be back in this chamber again until February of 2020.

My worry, and the worry of members of the official opposition, of many parents, many educators, many health professionals, is that the intentions that the Minister of Finance has eloquently stated in her comments in second reading and in committee stage — her intentions to bring life to the actions in this plan — may start to wane, may get lost. It may start to fade in people’s memories.

We all know that there are significant budget pressures that this government has. We want to make sure that in the context of these budget pressures, we not lose sight of how important it is that as many resources we can muster as possible are channelled into education, channelled into those awareness, prevention and addiction support programs for youth.

In summary, we believe that this is an important accountability and transparency measure. We believe that there is no direction being provided to government in terms of how the funds are collected, how they must be spent. We therefore hope and expect that this amendment, unlike the previous two, will not be ruled out of order.

[3:30 p.m.]

We want to ensure that there is transparency and accountability on the revenues that come in and where those dollars are spent, because at the end of the day, this is about our kids. It’s about our kids’ health. It’s about doing everything that we possibly can to invest whatever is necessary in those education programs.

If we can incorporate an almost identical reporting provision into the Speculation and Vacancy Tax Act earlier in the life of this parliament…. That was not contemplated by the government. It wasn’t included in the initial act. It was an amendment that was brought forward. If we can do this, provide this kind of reporting requirement, for the Speculation and Vacancy Tax Act, surely to God we can do it here and now with respect to the Taxation Statutes Amendment Act in the context of the anti-vaping action plan that, certainly in concept, is supported by all members of this House.

Hon. C. James: Seeing no further speakers, I suggest we call the question on the amendment.

[3:35 p.m.]

Amendment negatived on the following division:

YEAS — 36
Cadieux	de Jong	Bond
Wilkinson	Lee	Stone
Coleman	Wat	Bernier
Thornthwaite	Paton	Ashton
Barnett	Yap	Martin
Davies	Kyllo	Sullivan
Reid	Morris	Ross
Oakes	Johal	Rustad
Milobar	Sturdy	Throness
Tegart	Stewart	Sultan
Gibson	Isaacs	Letnick
Thomson	Larson	Foster
NAYS — 42
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	Furstenau
Weaver	Olsen	Glumac

[3:40 p.m.]

[J. Isaacs in the chair.]

Section 5 approved.

On section 6.

S. Cadieux: Just a few questions on this section relating to the tobacco tax increase. Can the minister please outline the expected revenue additions for this fiscal year and next fiscal year with relation to this?

Hon. C. James: So $6 million for this fiscal — as you remember, it’s a quarter and starts in January — and $25 million per year.

S. Cadieux: Given the Q2 update yesterday and the additional $40 million reduction in tobacco tax revenue, polling to a total of $50 million already at this point during the year, are the numbers that the minister is quoting for expected revenue from this new tax for quarter 4 and for next year…? Does that take into account that reduction?

Hon. C. James: Yes, it does.

S. Cadieux: Can the minister confirm that this is the third time the tobacco tax has been increased since Budget Update 2017?

Hon. C. James: An increase in ’17-18 budget, in ’18-19 budget and now in ’19-20 budget.

S. Cadieux: Could the minister put into context for us just the overall…? This most recent increase, now, here, that we are contemplating, is that done to bring the tobacco tax in line with the new PST rate overall?

[3:45 p.m.]

Hon. C. James: There are a couple of things that certainly get looked at. One is tax rates in other provinces and what shift is occurring in other provinces as tax rates go up. There’s also, of course, the regular increase to ensure that we continue to discourage smoking. Obviously, the price falls with inflation, so continuing to ensure that the tax is increased on a regular basis, as happened with previous governments. The previous government increased it seven times over their time.

So this is, again, part of that regular increase to ensure that we capture those pieces and, as I said, the changes that happen — inflation, but also other provinces and the changes they are making.

S. Cadieux: I have no issues with increasing tax rates on cigarettes. I’m not a smoker, don’t agree with it, so that’s not my concern. But I am concerned overall as to the purpose of this particular increase. The minister had the opportunity to increase the taxes already with the 2019 budget and is choosing to do so again midway through the year. I am curious now whether or not the purpose of that is to bring the tobacco tax in line with the tax on vaping or whether it is a tax grab, as such, to make up for lost revenue in other areas.

The minister opened the door here on the number of things that are considered. What tax rates have gone up in other provinces that necessitated this particular increase?

Hon. C. James: Just to confirm for the member, this wasn’t related to making sure it matched the vaping tax. The taxes are much higher, as we’ve talked about on the first day of debate, on cigarettes and tobacco than they are on vaping. Again, we had not made the change in the beginning of ’19-20 budget. We felt this was an opportunity, when we were bringing forward the changes in vaping, to do our increase in ’19-20.

Again, it’s not a particular province where the tax goes up and, therefore, we react. We look and use that comparison of taxes across the country — look at the rates that are there, look at our rates and look at what opportunity there may be. Alberta, for example, just announced an increase in their taxes in their budget. But it’s not one particular province. It’s the comparison of utilizing that as one tool.

S. Cadieux: Great. The minister, hopefully, will indulge me here as this is obviously a new file for me, and I’m getting all up to speed on the various pieces of the Finance portfolio. Can the minister tell me what the current tax rates or the comparable tax rates are in other provinces on tobacco at this time?

[3:50 p.m.]

Hon. C. James: I’ll run through the western provinces, which tend to have a similar kind of approach around tobacco — differences in Ontario and Quebec, where they have more of an illegal market and more of a challenge around the issue. B.C., with the increase, will be at 29.5. Alberta increased to 27.9. Saskatchewan’s at 27. Manitoba’s at 30. That’s the western provinces, where there’s the biggest comparison.

Sections 6 to 8 inclusive approved.

Title approved.

Hon. C. James: To finish off debate on committee stage, just a thank-you to all members in the House. A special thank-you, as we started this bill with the member from Kamloops South, for his interest, his passion and his drive in making sure this issue came forward. I think we have shown once again the importance of…. Where the values are similar, we can come together and bring forward action that I believe is going to make a real difference in this province.

I think the tax piece, as I mentioned at the beginning, is simply one piece of a ten-point plan, one part of a strategy that I think we’ll need to make sure we’re implementing well. I think I heard that loud and clear, and I think we all agree on that in this House. We all want to make this successful, and it’s going to take everybody’s efforts to be able to do that.

With that, I move the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 3:52 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

BILL 45 — TAXATION STATUTES
AMENDMENT ACT, 2019

Bill 45, Taxation Statutes Amendment Act, 2019, reported complete without amendment, read a third time and passed.

Hon. C. James: I call Bill 42, Fuel Price Transparency Act, 2019, in this House. If I could just ask for a couple of minutes of recess, we’ll ensure that the minister is here.

Mr. Speaker: Yes. We will take a five-minute recess.

The House recessed from 3:55 p.m. to 4:03 p.m.

[J. Isaacs in the chair.]

Hon. K. Conroy: I call committee stage on Bill 42, Fuel Price Transparency Act.

Committee of the Whole House

BILL 42 — FUEL PRICE
TRANSPARENCY ACT

The House in Committee of the Whole (Section B) on Bill 42; J. Isaacs in the chair.

The committee met at 4:05 p.m.

On section 1.

Hon. B. Ralston: I’d like to begin, because I think this may be helpful in the discussion, to move the amendments to section 1 that are in the possession of the Clerk.

[Section 1, in the definition of “administrator”, by deleting the text shown as struck out and adding the underlined text as shown:

“administrator” means the person administrator designated under section 3 to administer this Act or, if none is designated, the minister;.]

[Section 1, by adding the following definition:

“utilities commission” means the British Columbia Utilities Commission continued under the Utilities Commission Act.]

On the first amendment.

J. Sturdy: Madam Chair, we haven’t seen any amendments.

The Chair: Members, the amendment is on the order paper.

Members, would you like a five-minute recess to review the amendment? The House will recess for about three minutes.

The committee recessed from 4:06 p.m. to 4:09 p.m.

[J. Isaacs in the chair.]

J. Sturdy: For clarity here, are we doing the amendment first, or are we just working through the proposed bill?

The Chair: We will do the amendment first, and section 1 of the amendment, so the definition of “administrator.”

J. Sturdy: Could you perhaps just give us a sense of what the objective was here of changing the definitions, please?

[4:10 p.m.]

Hon. B. Ralston: The preamendment text referred to “person,” which is a legally defined term which is slightly narrower, potentially, than “administrator.” That’s why the term “person” is being proposed to be deleted, substituting “administrator.”

P. Milobar: To be clear, though…. So that clears up the administrator piece. The other addition is to better define so that people understand that when “utilities commission” is referenced, it means the B.C. Utilities Commission. That’s independent of the changes to “administrator,” correct?

Hon. B. Ralston: Well, they’re both amendments to section 1. The reason for being very specific about it is just so that it’s clear what is being referred to. But B.C. Utilities Commission is not a legal person, arguably. So as a matter of legal prudence, the decision has been made to, in the proposed amendment, delete the word “person” and add “administrator,” which would be broad enough to include the B.C. Utilities Commission.

P. Milobar: I understand that part of it. I guess my clarification question is…. By changing “person” to “administrator” and, at the same time, adding in a definition of the “utilities commission” as a separate piece of the amendment, it is not guaranteeing or enshrining that the administrator is actually the B.C. Utilities Commission. It’s simply adding further definition — the B.C. Utilities Commission as one definition — and it’s clarifying the definition of “administrator” from a “person” to “administrator.” Is that correct?

The Chair: Members, just for clarity, we are on section 1, the amendment just related to “administrator,” at this point. The “utilities commission” will be the next amendment.

Hon. B. Ralston: Just for clarity for the Chair then, these are both proposed amendments to section 1. So your ruling is that we are treating them as separate, individual amendments?

The Chair: Correct.

Hon. B. Ralston: To return to the member’s question, that would arise out of consideration of the next amendment, which would be adding the definition of “utilities commission.” So I’ll reserve my answer till then if that’s not too obtuse.

First amendment approved.

The Chair: Now we’re moving on to the second part of the amendment, referring to “utilities commission.”

On the second amendment.

P. Milobar: Sorry for any confusion on my part around the sections and the amendments. Just to clarify, then, again, that this amendment around utilities commission is strictly adding a definition of “utilities commission” into the definitions. It does not actually link or guarantee that the administrator is, in fact, the B.C. Utilities Commission?

Hon. B. Ralston: Yes, that’s correct. This amendment, if it passes, would be linked with the proposed amendment to section 3, which gives the option to designate the Utilities Commission as the administrator, which I believe is the concern of the member. I think he certainly signalled that in debate at second reading.

The Chair: Minister, would you make the motion to move section 1, referring to “utilities commission.”

Hon. B. Ralston: Okay, thank you. I would move, then, that section 1 be amended.

Second amendment approved.

On section 1 as amended.

[4:15 p.m.]

J. Sturdy: I really did want to begin our assessment or committee stage of this bill by talking about some of the more general concepts and the general objectives of this bill. Given the rhetoric that’s been going around over the course of the last year or more — quotes around fuel prices, looking at options for fuel prices, opportunities for the province to step in, monitoring prices and taking steps if necessary, etc….

I wonder if the minister could help me understand the goal of this act. What would be the minister’s definition of success of implementation and, ultimately, success of this act, if it is to pass?

Hon. B. Ralston: The question doesn’t relate to any of the specific definitions contained in section 1, but I will recapitulate some of the comments that I made at second reading. The goal of the legislation is to create a level of transparency to British Columbians that hasn’t existed before.

The intention is to allow the Utilities Commission, which will be, I expect, the designated administrator, to collect information that will shed light on how gas companies set their pump prices and make it available to the public and consumer watchdog. So it’s an effort to make the price points, the data points that go into the ultimate price of gasoline at the pump, more transparent and make that available to the public.

J. Sturdy: Is it fair to say that there is an additional objective aside from transparency, and that is to reduce fuel prices? That certainly seemed to have been part of the conversation and part of the comment that had been ongoing for some period of time, certainly from the Premier’s office.

Hon. B. Ralston: Certainly, I think British Columbians are fed up with high gas prices and unexplained volatility in gas prices. Certainly, the Utilities Commission spoke of an unexplained 13-cent-per-litre cost that people in British Columbia are paying at the pumps.

[4:20 p.m.]

It is our hope that prices will come down, but it’s certainly not guaranteed by this legislation. It remains to be seen what the impact of this bill will be, if and when it becomes legislation, upon gas company price-setting. We will see. We are optimistic that increased transparency may lead to a moderation in price increases, but it may not. That remains to be seen as to how companies react to the legislation.

J. Sturdy: In April of this year, the Premier said: “If the price increases persist through the summer, we’ll look at other options.” Then he said in April: “We’ll see how it goes through the summer, and then if there’s an opportunity to have the province step in and help, we’ll do that.” There are a number of other quotes. Is this legislation one of those steps?

Hon. B. Ralston: It is a step in that direction. But whether it will have the effect that the member refers to remains to be seen. We’re optimistic that a more transparent price-setting array of data that becomes public will have an impact on price-setting, but we don’t know that. Certainly, it is a first step, and no subsequent steps have been predetermined at this point.

J. Sturdy: Is there a timeline that the minister could share with us around the regulation and the assessment? What could the public expect to see as a result of passage of this legislation?

Hon. B. Ralston: I think it would be little imprudent to set a firm timeline, because what we expect to do is designate the B.C. Utilities Commission as the administrator. They will have their own administrative internal timeline as to how this process will be set up, assuming the legislation passes. So it would be premature to say just when the legislation and the receipt of data would begin and when it would be sufficient to draw any conclusions that the Utilities Commission or others might wish to draw from it, although the role of the Utilities Commission will not be to analyze the data. It will be merely to collect the data.

J. Sturdy: I think I heard the minister say that…. Aside from being premature to speculate on the timeline, are there other steps that the government may be considering taking? Or will there be no real further action until there is data to act on?

Hon. B. Ralston: I’m not in a position to reveal other government plans. But certainly, as far as this legislation is concerned, assuming that the bill is passed and the Utilities Commission begins to collect the data…. Then we will have a look at and be able to analyze the data, along with members of the public, and draw conclusions. If further action is required, then there’ll be a discussion and, perhaps, a decision at that point.

But as I’ve said, there are no predetermined subsequent steps. Although the member may wish me to state that, I can’t state that, because that would not be factual at this point.

J. Sturdy: In terms of the definition, the minister has referred to the B.C. Utilities Commission on a number of occasions. Can the minister confirm that it would be the BCUC that would be appointed as administrator? If not, what other options would be out there for the minister to appoint as an administrator?

[4:25 p.m.]

Hon. B. Ralston: The legislation, as it’s drafted and assuming it’s passed, will require an order-in-council to designate an administrator. That would be a decision of the cabinet. Certainly, it’s my intention — my firm and strong intention — to recommend that it be the B.C. Utilities Commission that becomes the administrator.

J. Sturdy: Has the minister consulted with the B.C. Utilities Commission about the potential for their appointment as the administrator? Could the minister share with us what the commission’s thoughts are on that and maybe what kind of consultation did take place?

Hon. B. Ralston: I have not had personal discussions with any members of the B.C. Utilities Commission, but there has been discussion at the staff level. I understand that the Utilities Commission, I’m advised, is aware of the legislation and making preliminary plans as to how the legislation would be implemented and what steps they would have to take in order that this legislation have life breathed into it and some of the recommendations that they would make about what data might be collected. They are considering the possibility that the legislation will be passed and are prepared to take it on.

J. Sturdy: The act suggests or states that the responsibility for information collection falls to the minister in the absence of the designated administrator. I don’t know what the circumstances would be for that to happen, but the question does beg: which minister or which ministry would be the responsible ministry in the case of an absence of a designated administrator?

Hon. B. Ralston: The act would not come into force until it was proclaimed by order-in-council. It doesn’t come into effect on royal assent. Technically speaking, the minister, but it would be the one designated in the Constitution Act as responsible for the legislation.

[4:30 p.m.]

My recommendation would be that it would be either the Minister of Energy, Mines and Petroleum Resources or myself as the Minister of Jobs, Trade and Technology. That’s not a decision that that has been made yet.

J. Sturdy: Yeah, we were curious about that. It struck us that the Minister of Energy, Mines and Petroleum Resources is a natural fit here. Although, when we’ve looked at some briefing materials from the ministry…. I have here one from April of this year that summarizes the end of the….

[R. Chouhan in the chair.]

This is a Ministry of Energy, Mines and Petroleum Resources briefing note for information prepared for the deputy minister with the issue of gasoline prices. It summarizes the situation in the province and has a discussion, and it concludes that there appears to be no gouging between wholesale and retail gasoline prices in the Vancouver market. You can see a consistent correlation between the two prices, going back to April 2017, using public information. I guess it doesn’t surprise us, particularly, that that ministry is not necessarily leading this particular initiative.

In terms of the data that is going to be collected, can the minister describe to us the range of that data to be collected?

Hon. B. Ralston: The detailed section, which will deal with the proposed data and submissions, is in section 5, but I can give some examples of types of information that could be collected. It would be refined fuel imports and exports, including volume, source, destination and mode of transportation; the capacity of primary fuel terminals, upgraders and refineries; the sale prices of fuel throughout the supply chain, wholesale and resale. Those are only examples. We can deal with this, perhaps, in more detail in section 5.

J. Sturdy: Can the minister confirm the list of activities defined in this section as reportable? Is that a complete list under “reportable activity”?

Hon. B. Ralston: Subsection (b) of that definition, which reads as follows, “…a prescribed activity in relation to reportable fuel,” gives the discretion to add additional activities to that list by order-in-council.

J. Sturdy: Does the minister have a sense of what type of additional activities may be considered?

[4:35 p.m.]

Hon. B. Ralston: Subsection (b) would enable other activities to be added, providing that they’re consistent with subsection (a). It’s really as a matter of caution, simply in case there’s something that has been omitted or occurs to the Utilities Commission as being desirable in order to have a thorough reporting or what they may deem to be an appropriate reporting. It simply gives the opportunity to add, if there’s a necessity after examining and making some analysis of what would be the most appropriate activities to report.

J. Sturdy: Given that, as we look through the reportable activities, some — in fact, a significant portion — may be outside of the jurisdiction of British Columbia, is there a mechanism to require information from outside of British Columbia, or is this just internal to this province?

Hon. B. Ralston: If a business has a substantial presence in British Columbia, that would give jurisdiction to require reporting. But if, for example — and I think, probably, this is what the member may be thinking of — there were a foreign refinery, the purchase would be reportable in the hands of the wholesaler who bought the product, assuming that that wholesaler was in British Columbia. That would be the way in which the price for that particular delivery would be able to be reported.

J. Sturdy: Will the minister comment on whether information related to government policies and taxes are included in the definitions under fuel data?

[4:40 p.m.]

Hon. B. Ralston: The issue of taxes on fuel is a matter of public information. In fact, the Ministry of Finance has a tax bulletin that’s published — I’m not allowed to use props, but I do have one here before me — which refers to tax rates on fuels. Anyone can quickly find out how much those costs are in their region, and they can easily determine where that money is going to. The lack of clarity is at the oil and gas company level, where their price-setting is not transparent. All the taxes on fuel are well known, well established and available publicly.

J. Sturdy: Are not, though, certain taxes variable in terms of a taxation on the price of fuel at the pump, be it GST or PST on fuels? So they would change. The rate would be consistent, but the actual number that a consumer was to pay would be variable.

Hon. B. Ralston: Just looking at the fixed taxes as some examples. For example, the dedicated motor fuel tax for TransLink in the Vancouver area, or what they call the south coast British Columbia transportation service region, is 18.5 cents per litre. That’s a fixed cost per litre, not a variable cost.

[4:45 p.m.]

In that region, there’s a dedicated motor fuel tax, 6.75 cents a litre, and a provincial motor fuel tax, 1.75 cents. Then that’s totalled. The carbon tax is added at this point, 8.89 cents. So there’s a total provincial tax — I believe members may have referred to this in their second reading speeches — of 36.89 cents.

It is then, at that point, that the goods and services tax is added, and that is a percentage tax. It would be added onto the retail price, calculated on the retail price at the pump. In that sense — I think what the member is referring to — that is variable.

J. Sturdy: How will the low-carbon fuel standard be considered here? Is it the inputs to the standard? Is it the complete blended product? How does that factor into this?

Hon. B. Ralston: The focus of the legislation is to focus on areas that the BCUC, in its report in August and its supplementary report in November, wasn’t able to achieve clarity on, notwithstanding the examination that they did. That would be, largely, the wholesale price and the retail prices at different levels of the price chain.

In terms of low-carbon fuel standard, the reporting requirements would be set by order-in-council, and that’s not a decision that I’m able to predetermine at this point. I have the member’s point that he would wish that that would be examined, but that would be something that would be considered in due course.

Section 1 as amended approved.

Section 2 approved.

On section 3.

Hon. B. Ralston: I have an amendment standing in my name on the order paper to section 3. I would move the amendment to section 3 that is in possession of the Clerk. Perhaps I can read it. The amendment to subsection (1) — I’m proposing this to be a single amendment, but subject to the ruling of the Chair.

[Section 3, by adding the underlined text as shown:

Administrator

3 (1) The Lieutenant Governor in Council may, by regulation,

(a) designate the utilities commission or a person to administer this Act, and

(b) restrict or impose conditions on the exercise of powers, or the performance of duties, under this Act by the administrator.

(2) If the administrator is a corporation, the administration of this Act is a purpose of the corporation.

(3) If the administrator is constituted or continued under another Act, subsection (1) (b) of this section applies in relation to any powers and duties under that other Act as they relate to the administration of this Act.]

Those are the proposed amendments to section 3.

On the amendment.

[4:50 p.m.]

P. Milobar: On 3(1), the change where it highlights the Utilities Commission…. We’ve heard the minister say that it would be the minister’s intention to have the Utilities Commission take care of this. We’ve also heard the minister say that cabinet will decide whether this is the minister in charge of this act or not or which minister will be in charge of this act or not.

Just to get absolute certainty, and I know the minister has already answered this, this by no way guarantees that the Utilities Commission is, in fact, the administrator of this act. In fact, it could just be a person appointed as an administrator instead.

Hon. B. Ralston: My intention is to recommend that the Utilities Commission be the administrator. They’re the logical body with the expertise, the skill. They’ve already been consulted. But the member is technically correct that this does not legally guarantee, in the sense of complete certainty, that it would be the Utilities Commission.

P. Milobar: Could the minister clarify for me, then…? I’m confident that the Utilities Commission would qualify, if the Merit Commissioner were to take a look at their appointment, as the administrator. But if it is indeed a person, would that person need to go through the process around the Merit Commissioner to make sure that it was an appropriate person, in the eyes of the Merit Commissioner, to become the administrator?

Hon. B. Ralston: This is a designation by order-in-council, not a hiring by the public service commission.

P. Milobar: Okay, thank you. I’ll take that to mean it could be a pure patronage appointment, if cabinet so desired.

On the addition of the administrator, in section (3), it says: “If the administrator is constituted or continued under another Act, subsection (1) (b) of this section applies in relation to any powers and duties under that other Act as they relate to the administration of this Act.” I want to jump to the phrase “if the administrator is constituted…under another Act.”

Could the minister point to what other act this administrator could be constituted under?

Hon. B. Ralston: At the outset of constituting an agency — in this case, the B.C. Utilities Commission…. That would be at the legal initiation of creating the Utilities Commission. The term would be it was being “constituted.” The word “continued” — if it were merged or became part of another body, then it would be continued under another act. That’s a requirement, I think, of prudence and caution in case there are legislative changes that are unanticipated at this point.

Certainly, the intention is clearly to have the Utilities Commission as the administrator to administer this particular statute, assuming it passes.

[4:55 p.m.]

P. Milobar: Okay, thank you. That makes sense on the “constituted” part as it relates to the BCUC. I’m still a little unclear, then, on the part of “or continued under another Act,” as it relates to if it’s an individual person.

What would be the other act that a person appointed as administrator would have already been working under and, therefore, that this act is continuing on with as a person?

Hon. B. Ralston: The staff has been advising me of the legal complexity of the term “continued.” I think I may be able to better explain it by an example that they have offered. Take, as an example, the Oil and Gas Commission. It was constituted in 1999. In 2008, new legislation, the Oil and Gas Activities Act, was passed. That act continued the Oil and Gas Commission under the new act.

This is simply to make sure that the administrator — in this case, the Utilities Commission…. We want to make sure that it continues under another act, if that’s what takes place, if there’s any legislative amendment.

Amendment approved.

Section 3 as amended approved.

On section 4.

[5:00 p.m.]

Hon. B. Ralston: I move the amendment to section 4 standing in my name that is in the possession of the Clerk.

[Section 4 (2), by deleting the text shown as struck out:

(2) The administrator must administer provisions of this Act

(a) in accordance with any general or special directions of the minister, and

(b) subject to paragraph (a), so as to promote

(i) the competitiveness of the market for reportable fuels, and

(ii) public confidence in the competitiveness of that market.]

On the amendment.

Hon. B. Ralston: I would describe it as more of a housekeeping amendment. I think it’s more for grammatical clarity and would ensure that any direction the minister gives will apply to the powers the administrator has under any other enactments to the extent that those powers relate to the administration of the act. That’s the purpose of the proposed amendment.

P. Milobar: I can appreciate it may seem to clear up some of the language. But when read in conjunction with (a)…. “The administrator must administer provisions of this Act (a) in accordance with any general or special directions of the minister” was the original. That would make the reader tend to feel like, okay, there’s only the odd section that the minister may be able to give special direction to the administrator; i.e., the administrator shall do as I say for that provision if I’m the minister.

This amendment seems to make it very clear that although we have an administrator, the administrator must administer this act with any direction that the minister tells them. Is that essentially saying to the minister that all the other sections of this bill at a certain point are somewhat irrelevant if the minister decides to direct the administrator that they shall do or interpret any and all provisions of this act, with this change of wording?

[5:05 p.m.]

Hon. B. Ralston: The striking of the words “provisions of” is on advice from legislative counsel that if that language were to be included, it may…. Not certainly, but it might in some way be interpreted to limit the discretion of the minister to act in accordance with particularly (a) and (b), but in subsection (a), “any general or special directions of the minister.” Really, it’s to eliminate any ambiguity from the powers of the administrator.

P. Milobar: If I’m reading this correctly, then, what we have is a piece of legislation that, frankly, appears to be somewhat rushed, introduced near the end of the session, with section 4 that gives overriding ability for the minister, whoever that minister may be…. We don’t know yet, because this bill doesn’t actually spell out the minister in charge of this bill and this act. We know who’s shepherding it, but we don’t know who is…. Everything will done by order-in-council.

According to this section, regardless of what the administrator may or may not want to do, they must follow any general or special directions of whoever the minister in the future is deemed by cabinet to be in charge of this, in an effort to promote confidence and transparency to the public. Oh, and the administrator can be a patronage appointment. And this is somehow supposed be a section that’s supposed to instil confidence throughout this bill and that reports out that there is not political interference in the background.

I’m hoping the minister can maybe shed some light as to (a) why this has been so rushed after 18 months of nothing, anyways, happening and (b) why there was so little actual clarity as to who the minister will be, why this has all been left to order-in-council and why we need clauses that give ministers overriding authority to direct an administrator to do what they are told to do by the minister. If they don’t, the minister has absolute discretion with an order-in-council to remove them and make another patronage appointment.

[5:10 p.m.]

Hon. B. Ralston: Any direction from the minister would have to be consistent with the act and, in particular in this case, subsubsection 4(2)(b), so we couldn’t issue a direction that was contrary to the legislative intention and the clear wording of the act.

Perhaps I could give an example, because the fuel market, I think, is very fast-moving. The member for West Vancouver–​Sea to Sky gave an example in his riding of demonstrations at gas stations by citizens who were concerned about the price of fuel.

If it were a decision of the minister, it would allow the minister to obtain reports. If, for example, government heard specific concerns from residents about prices in a particular municipality, the government could direct the administrator to look further into the issue.

In the case of…. I know there are very specific concerns about the price there, where the requirement is not to pay the 18.5 cents tax to TransLink. But nonetheless, the price is the same as those municipalities immediately to the south of Squamish, where they are required to pay it. So that, I hope, is an example that might illustrate the use to which, if it was the wish to provide that direction….

P. Milobar: Just to that point with 2(b)(ii), “public confidence and the competitiveness of that market,” as the minister just referred to, there’s no real clear definition of what threshold public confidence is anywhere through this bill. We’ve had the federal Competition Bureau look at B.C. and say there has been no price fixing. We’ve had reports. We’ve had internal ministry reports or the Ministry of Energy and Mines saying there’s no price gouging.

But you can always go to any coffee shop in this province and find people that are not happy with the gas prices. I’m personally not usually thrilled with the gas prices myself. So it’s a pretty open-ended trigger for any minister to be able to use, to say: “Well, public confidence is such that we require the administrator to do X, even though the administrator has reported Y. We are demanding, administrator, that you do this, or you shall be replaced.” That is the case of this section. I’m not misreading that.

The minister has the ability, do they not, under this act — whoever that minister turns out to be, once we find out from the order-in-council and the cabinet meeting who got tapped on the head to be the one in charge of this and in charge of the administrator….

[5:15 p.m.]

That minister would have the ability, with this section, to direct the administrator to, essentially, give special directions to the administration on any of the sections of this bill to make sure that certain directions are followed and certain directions of reporting are done.

When I say “direction,” I don’t mean in terms of the act. I mean guidance to potentially make sure reports reflect a certain narrative that the minister or the cabinet may deem desirable at the time, regardless of which government. Let’s keep in mind that this is a bill that will live through governments and ideology. This opens the door for any minister of any government to do that. Is that correct?

Hon. B. Ralston: I want to thank the member for his question. Any general or specific direction would be public, and the minister would be accountable here in the Legislature and in the public. Certainly, if, for example, there was a general or special direction that was objected to, that would be the subject of public comment or debate in the usual way that political opinions are debated here in the province. Ultimately, that’s our system. The minister is accountable to the Legislature and to the Crown.

P. Milobar: I recognize it’s not part of this section, so based on the minister’s answer there, I can wait for the minister to point out which section would require the minister to make public any direction to the administrator. I don’t see that anywhere in this act, that it’s a requirement that if the minister directs the administrator…. I would have thought it would have been in the section we’re debating with the amendments right now.

[5:20 p.m.]

So if it’s somewhere in section 4 that I don’t see, either in the amendment or the main piece, or if it’s in a future section, I look forward to that being pointed out. I may have just missed it. It’s entirely possible, based on the previous answer.

Hon. B. Ralston: The member is correct that there is no further provision in the act that would legislatively mandate that any special or general direction be public.

But in the example that I’ve chosen, or in anything of any consequence, it seems to me inconceivable that it would not have public implications and, therefore, be revealed publicly. Were that not the case, ultimately, it would be subject to the provisions of the Freedom of Information and Protection of Privacy Act, although one, I would acknowledge, I cannot predict the outcome of any particular application. But nonetheless, as the member knows, the ambit of that act is quite broad.

J. Sturdy: Does the minister anticipate that this is a permanent role of the administrator? Once the administrator is appointed, whoever it happens to be, is there any sunset on this, or is this expected to be a role that will last in perpetuity or until otherwise terminated?

Hon. B. Ralston: Assuming that the act passes, yes, it would come into force and be in existence. But I think, as the member knows, the Legislature can’t fetter future decision-makers who may just have a contrary view and decide that they don’t wish to continue with this legislation. It could be repealed or modified in any way that the Legislature saw fit.

J. Sturdy: But what would anticipate that this would be an ongoing role for the administrator — that they would be regularly collecting data for any length of time? Or will that be determined through the directions of the minister and the regulation, when it’s eventually published?

Hon. B. Ralston: I think that the frequency of reporting will be better addressed by questions on section 5, “Periodic submissions.”

Amendment approved.

Section 4 as amended approved.

On section 5.

[5:25 p.m.]

J. Sturdy: I’ll just repeat the question, then. What’s the anticipation of the frequency and the length of time for a requirement? Would there be a fixed time period? Or would this be something that B.C. Utilities Commission, or whoever the administrator is, would be required to continually collect and then publish for an undetermined period of time?

Hon. B. Ralston: This section would allow the government, by order-in-council, to make regulations requiring the submission of a range of information about the fuel market on a regular basis and in a timely manner. It could be, for example, monthly, but that would be a matter that would be determined, and I would expect that it would be advice from the administrator, who will be the Utilities Commission. Certainly, that’s my expectation.

On their advice, there could be different frequencies of reporting, depending on the subject matter. For example, refinery capacity is a relatively fixed and known number, which would not vary unless there were renovations or upgrades to a refinery, say, or a closure of a refinery. But the wholesale and retail price — obviously, that’s the very subject of the act. To focus it would perhaps require more frequent reporting, and that would be a matter that would be determined upon advice.

Section 5 approved.

On section 6.

J. Sturdy: Is there a process or a criteria for a specific submission outside of the declaration cycle? Can the minister provide some specifics to that? And why would such a request be made?

Hon. B. Ralston: This is an authority, in addition to the previous section, “Periodic submissions.” But it’s envisaged that this use of this power might arise, or could arise, where the administrator could request additional information. If there is something unusual in one of the regular periodic submissions or an unusual spike of gasoline prices in a particular region, the administrator may specify how the submissions might be made and the format for such submissions. I think that’s what is envisaged by requested submissions.

Sections 6 and 7 approved.

On section 8.

J. Sturdy: Can the minister describe to us the process for making records available in a public format? Will they be processed? Will they be changed? Will they be analyzed? Or will they be made public in a raw format?

[5:30 p.m.]

Hon. B. Ralston: This section is not about publication. This is about the obligation of someone who is reporting to retain records that would support the submission that has been made. It also relates to subsequent sections of the act — that should a need arise to audit those records, they are available.

Section 8 approved.

On section 9.

P. Milobar: Just a couple of questions. As I said, I’m sure this won’t take the minister by surprise. I’ve said it in interviews, and I’ve said it in second reading.

The concerns that I’ve had and that I’ve heard from people around this section really relate to 2(b). So 2 says:

“The administrator may publish fuel data, or other information or records, acquired under this Act if the administrator is satisfied that (a) protected information will not be disclosed, or” — and that’s always the problematic piece in these bills — “(b) the public interest in the protected information that will be disclosed outweighs any potential harm to responsible persons, having regard, without limitation, to the importance of (i) the competitiveness of the market…and (ii) public confidence in the competitiveness of that market.”

Again, “public interest” is a broad term. “Public confidence” is a broad term. Really, this clause is worrisome, not just in regards to worrying about big oil and oil retailers and even the smaller oil retailers out there but in regards to broader public context, once it’s set into one act or other acts moving forward.

The question I have is: was this section around publication and, specifically, 2(b) run by the Privacy Commissioner for input, and was there any feedback from the Privacy Commissioner?

[5:35 p.m.]

[J. Isaacs in the chair.]

Hon. B. Ralston: The focus of the legislation is to make transparent the pricing mechanisms of oil and gas companies. What this particular section does is create a test for the administrator, a weighing mechanism where the administrator would be required to weigh the public interest against any potential harm to responsible persons. So it creates a test for the Utilities Commission to consider in order to decide whether or not to release any protected information.

P. Milobar: I understand that that’s what this section is for. It’s for protecting information. It defines trade secrets. It defines protected information. If defines how an administrator may publish or not and all of that stuff.

But the minister did not answer the question. The question was pretty straightforward: did this go through for a referral, for comment, from the Privacy Commissioner for input?

[5:40 p.m.]

Hon. B. Ralston: I want to thank the member for his question. The legislation, as is the case in the ordinary process of considering and drafting legislation, was reviewed by the office of the chief information officer. The report that I’ve received was that it was determined that consultation with the Privacy Commissioner was not required in this case. That conclusion is based on consideration of privacy, information access and impacts upon FOIPPA. That’s the Freedom of Information and Protection of Privacy Act.

P. Milobar: Well, I ask that question because in section 4, which is “Accountability of the administrator,” we’ve established that the administrator will need to do anything that the minister — whoever the minister to be named later is — decides that they should do. And in (2)(b)(i) and (ii), that wording on the accountability and the provisions that the minister can direct the administrator on is the exact same wording of (2)(b)(i) and (ii), as well, as it relates to release of confidential trade competitive information.

That is why there are worries around the Privacy Commissioner — but more than just worries around the Privacy Commissioner side of things and FOIPPA, because this seems to try to override the provisions of what can or can’t be released based on some interpretation of public confidence and competitiveness.

However, I guess we know it didn’t go through the Privacy Commissioner for review. We know that the bill can be at the political whim of the minister directing a patronage-appointed administrator, if the minister so chooses.

[5:45 p.m.]

Has there been any discussion or worry that the companies…? The best data collected is data that’s freely given and a free flow back and forth between industry and the administrator and a trust that’s built up over time and people feeling like the information is not going to put their business at risk because it’s suddenly a political whim to release information that otherwise is not getting released.

Almost all legislation like this, inevitably…. If one party does not want to start being forthcoming with data because of concerns, they get challenged when they refuse, and they get fined under administrative penalties. It gets challenged and goes through the courts to make sure that, although the intention of the government was to pass legislation, it is yet to be seen whether it always holds up or not. We’ve seen provisions within legislation on a wide range of topics undergo that scrutiny on all governments.

I guess the question is: how much concern is there within government, within the AG’s office — or whoever would vet this from the legal side of the world — that provisions that essentially say to industry, “Although we tell you in one paragraph your information will be held confidential, we tell you in the very next paragraph ‘Unless we decide otherwise,’” will actually stand up to any rigour with a court challenge as to why a company may start to refuse to divulge information from fear that that information will actually be released to the detriment of their business and the advantage of their competitors?

[5:50 p.m.]

Hon. B. Ralston: The BCUC, the B.C. Utilities Commission, is a sophisticated public body that has vast experience in administrative law. Frankly, I would expect, and their record would demonstrate, that they will consider carefully any aspects of public interest or commercial confidentiality that are raised by those who want to make representations. The tribunal follows all of the standard rules of administrative law, including the duty to be heard and a duty of fairness.

One of the great things about our system is that we are governed by the rule of law. Should anyone be dissatisfied with those decisions, there are provisions under the broad administrative law decisions to take that to the courts if that’s the wish of the party concerned. So I’m fairly confident that there will be a rigorous and fair assessment of the concerns that the member has.

J. Sturdy: Is the BCUC going to be the sole arbiter of who makes the decision as to what to publish or not? Can the minister override that decision?

[5:55 p.m.]

Hon. B. Ralston: Just referring back to subsection 9(2), it’s the administrator, and the administrator only, who may publish fuel data or other information or records. That’s within the discretion of the administrator solely. Of course, the administrator would have to administer the act in accordance with the purposes that are set out and within the definitions.

J. Sturdy: Is there a provision for the decision of the administrator to be challenged?

Hon. B. Ralston: Yes. As I said earlier, if someone were dissatisfied with the decision, it’s open to them, in our system — the rule of law and the general principles of administrative law — to take the issue to the courts and have it litigated there.

J. Sturdy: And if it was found there was a harm done, where would the liability lie?

Hon. B. Ralston: It would be imprudent on my part to speculate about what remedies — in the event of a matter heading to court in an administrative law context — the court might offer. I’m not able to really give an opinion on that. I think that would really be up to the court. I’m not going to offer a legal opinion here about the range of alternatives that a court might consider.

I think the important thing is that the BCUC would hear those people who are affected by the legislation. It would have a duty to do so. They would consider the interest in the submissions made in accordance with the act. They’re very experienced at doing that, and the public has good reason to have confidence in this expert quasi-judicial body.

If it were required or thought necessary by an applicant or interested party, they would be able to resort to the courts, as is the case with any person in a system governed by the rule of law, as we are.

J. Sturdy: Would there be a situation where the minister might override the administrator in terms of the publication or release of information?

[6:00 p.m.]

Hon. B. Ralston: There is no power in the act to override a decision made by the administrator — in this case, the expected administrator is the BCUC; so to override a decision made under this section, under the powers that are granted to the administrator under subsection 9(2).

J. Sturdy: Will the minister or the government have access to the information prior to its publication?

Hon. B. Ralston: Under section 9(2), the ability of the administrator to publish fuel data or other information as is set out in those powers cannot be fettered — that is the legal term — by the minister. The only qualification on that would be — and I feel that I am obliged to point this out to the member — under subsection 4(1). “The administrator must report to the minister as the minister requires.” But it’s not intended as a feature of the scheme or the legislative process or the decision-making process. The substantive powers and the discretion rest with the administrator — in this case, the BCUC — to administer the act in conformance with the objectives that are set out.

J. Sturdy: So I take that to mean that the minister or government could have access to the data prior to publication if they so choose.

[6:05 p.m.]

Hon. B. Ralston: Let me turn back to section 9. This really gives to the administrator — in this case, the BCUC — the power and discretion in subsection 9(2) to publish field data as they deem fit and in accordance with the balancing that is required in subsection (2).

The other power is really a supervisory jurisdiction of the minister to make sure that the act is administered in accordance with the principles that are set out in the act. So if the minister, whoever she or he might be, deemed that there was a requirement to make sure that the act was being followed and the purposes were being met, that would leave an option open to the minister under that provision.

Section 9 approved.

On section 10.

J. Sturdy: In terms of audits, who would be responsible for those audits and at whose expense?

Hon. B. Ralston: That would be up to the administrator. But under subsection 10(b), there is an opportunity to promulgate or pass regulations that might assist that process if required. That’s what it says — if applicable.

J. Sturdy: So that would be up to the administrator to determine what type of audit, who would be responsible for that audit and who would pay for that audit?

[6:10 p.m.]

Hon. B. Ralston: Yes. The general answer is yes, unless that was contrary to regulations that were passed pursuant to subsection 10(b).

J. Sturdy: I’m not sure if this is an appropriate place, but it reminded me that there wasn’t really a place to talk about the overall cost of providing this or funding this bill. Is there a sense, for budget purposes, what would be expected going forward, in terms of…? I take it that there would be a fund associated with this to administer the objectives of the bill.

Hon. B. Ralston: There is discussion at the officials level with BCUC about what the costs might be. Then, once those are clarified, assuming the legislation passes and BCUC takes on this role, whatever ministry the administration of this act falls into, then that would be included in the ordinary budget process that the member is familiar with.

Section 10 approved.

On section 11.

J. Sturdy: Just one question on this. That was: why did the minister feel that it was necessary to include, in this act, specificity around the ability to enter into a private dwelling? It seems a bit out of context. I would have thought that it would have been able to be dealt with in terms of seeking the records and the information that the administrator is looking for. I’m just surprised that it shows up here as a specific allowance to enter into a private dwelling.

Hon. B. Ralston: There is a very high privacy value attached to a private dwelling. I think there is an expression in English law, “An Englishman’s home is his castle,” which extends back centuries in the common law. So this is really to limit the power of inspectors to enter a private dwelling. As you read through it, you’ll notice that a warrant would be required to enter a private dwelling, and that’s for the reasons of the protection of those value of privacy that attach to a private dwelling of an individual.

Sections 11 to 15 inclusive approved.

On section 16.

[6:15 p.m.]

J. Sturdy: With regard to the fine or the penalty associated with contravention of any one of these sections — $1 million a day or a term of not more than six months, or both — is that a standard or is that a…? How does that fit in the scheme of penalties?

Sorry. I recognize that I might have skipped in here, because offences are covered through till 18, and the issue of more than once a day and separate fines, etc., is covered under section 18. I apologize if I’m mixing things up here.

Sections 16 and 17 approved.

On section 18.

J. Sturdy: As per my earlier question with regard to the size of the fine, is that in the context of a standard penalty around an offence like this?

[6:20 p.m.]

Hon. B. Ralston: I would note that the fine is expressed as not more than $1 million, so that would be in the discretion of the court, were there to be a conviction. Similarly, there would be no obligation to imprison someone. It would be an option for the judge. So there are provisions.

The member has asked whether there are similar provisions in other acts. The example that’s been provided to me is the Greenhouse Gas Industrial Reporting Act, a similar act in the sense of requiring reporting, where there is a potential for a fine of up to $1.5 million and a similar provision about continuing offences as well. That’s a fairly recently passed statute, and this would be very similar in the range of penalties that are set out in the legislation.

Sections 18 to 22 inclusive approved.

On section 23.

J. Sturdy: It certainly is clear in this section that this is an enabling piece of legislation, that very much just about everything is set by regulation. Obviously, there’s tremendous discretion here for the Lieutenant-Governor-in-Council. I think we’re looking at this with anticipation. Could the minister give us some sense of when we would expect to see the issuance of these regulations?

Hon. B. Ralston: This bill and this topic, the concern of British Columbians about high gas prices, is a matter of urgency for the government in the sense that people are following this issue, concerned about it and looking to get some of their questions answered through this bill, through greater transparency. But we’re working at the official level with the BCUC, so I’m not able to give a timetable as to when the regulations would be passed, certainly.

But I expect that the government will act with due dispatch in order to bring this bill into existence and breathe life into it, given its priority in the goals of the government on the affordability file. British Columbians are certainly concerned about affordability, and the cost of gasoline is a major component in household budgets. So the degree to which — and I’ve obviously qualified that in some of my earlier answers — this will have an impact on those prices…. We want to move quickly on it.

Sections 23 and 24 approved.

Title approved.

Hon. B. Ralston: I move that the committee rise and report the bill complete with amendments.

Motion approved.

The committee rose at 6:25 p.m.

The House resumed; Mr. Speaker in the chair.

Reporting of Bills

BILL 42 — FUEL PRICE
TRANSPARENCY ACT

Bill 42, Fuel Price Transparency Act, reported complete with amendments.

Mr. Speaker: When shall the bill be considered as reported?

Hon. M. Farnworth: By leave, now.

Leave granted.

Mr. Speaker: When shall the bill be read a third time?

Hon. M. Farnworth: By leave, now.

Leave granted.

Third Reading of Bills

BILL 42 — FUEL PRICE
TRANSPARENCY ACT

Bill 42, Fuel Price Transparency Act, read a third time and passed.

Hon. M. Farnworth moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:28 p.m.