Orders of the Day

Hon. M. Farnworth: I call continued second reading debate on Bill 14, Ministry of Housing statutes amendment act.

[R. Chouhan in the chair.]

Second Reading of Bills

BILL 14 — MUNICIPAL AFFAIRS AND
HOUSING STATUTES
AMENDMENT ACT (No. 2), 2020

(continued)

T. Stone: I do appreciate the opportunity to continue my remarks on Bill 14. I will say, at this point, that I am the designated speaker for the official opposition on this particular piece of legislation.

I ended, just before the noonhour, listing off the names of real people that are experiencing real financial distress and anxiety as a result of soaring strata insurance costs. I think that’s important for us to always remember — that there are real people involved here. These are hard-working men and women. These are retirees. These are all kinds of different British Columbians in communities across this province who have been impacted.

I talked about Paul in Chilliwack, Bob and Susan in Kelowna, Jack in Coquitlam and Wendy in Delta. I talked about the financial stress that’s been faced by Chris in Chilliwack, Marilyn in Richmond, Leanne in Penticton and Monica in Vancouver.

There are a couple more that I wanted to enter in for the record, and then I’ll move through the different sections of this bill. I want to acknowledge a note that I received from Joseph in Surrey. He had this to say: “The condo owners in our building had to pay a special levy of almost $2,000 above our regular strata fees. A majority of the owners in our complex are in their 70s, 80s and 90s. We just can’t afford this.” That’s, again, a note from Joseph in Surrey.

Jacqueline in Kelowna. She sent us a note, a pretty detailed email, including copies of her insurance premium statements from last year and previous years and the most recent one that she received. This is a very well-maintained condo in Kelowna. It’s about 20 years old. They’ve had no significant insurance claims of record in those 20 years.

Jacqueline and her husband have lived in this building since 2005. Their premiums have gone up from $58,000 and change to $326,000 — an outrageous increase in the strata insurance premiums that they have to pay. Their sewer backup and water damage deductible went from 10 to 50. Flood went up to 50 from five. And on and on it goes. They simply can’t afford these added costs.

The last example that I’ll read into the record is one from my own community in Kamloops. Again, a relatively new building. We’re talking a building of less than five years old. No major claims. No claims at all. Certainly, nothing that would provide a rational explanation for the increase in their costs. They have seen their annual premium go up from $26,000 to $113,000. The water damage deductible has gone up from $5,000 to — get this — $250,000. Likewise, for floods and sewer backup deductibles.

Their condo strata housing complex has opted to address this in two ways. Every unit owner is being hit with $100-per-month increases in their strata fees — so 1,200 bucks for a 12-month period — as well as a one-time $1,200 hit in the form of a special assessment. So Peter and his neighbours are looking at, this year, an additional $2,400 of cost that they weren’t planning on that has just hit them in the side of the head like a 2-by-4. People cannot afford these increases.

[1:40 p.m.]

Now, we in the opposition have been quite alive to this issue. The first media reports of there being issues in British Columbia’s strata insurance market actually came out a year ago. In July of 2019 there were news reports of strata complexes, strata corporations and strata owners receiving renewals, insurance renewals, with huge increases, as I have talked about. That’s a year ago. It certainly appeared to accelerate and further intensify through this last winter and into 2020.

We decided, as an opposition…. Part of the role of a responsible opposition is to actually put some ideas on the table from time to time, to suggest some solutions, to urge the government to take specific actions to address challenges that we see facing British Columbians. So we did exactly that. We’ve done that at a series of steps along the way.

We introduced a private member’s bill in February of this year that contained a number of proposed solutions, a number of actions. The government didn’t call that bill for debate. They didn’t call that bill for debate, but we proposed a bill that, certainly modest in its contents, was intended to provide some initial steps that the government could take, recognizing the challenges that were unfolding in front of so many British Columbians.

We called upon the government, in addition to those measures in that private member’s bill, to create a water damage prevention program. Again, I read into the record before 12 noon today that one of the key findings of the B.C. finance authority report that looked at what is going on in the strata insurance market in British Columbia…. One of the key findings that they came back with, which, frankly, I don’t think has surprised anyone who lives in a townhome or a condo, was that over half of all of the claims that are hitting strata units and strata corporations relate to water damage, most of which is preventable with appropriate maintenance and upgrades being made.

So we thought, “Let’s be thoughtful here. Let’s propose some legislative changes, some legislative actions, and let’s suggest a water damage prevention program,” again to help homeowners and strata corporations invest in the maintenance and upgrades to prevent water damage events from happening in the first place.

The types of upgrades that we’re talking about here that could be funded through this kind of a grant program would involve things like installing automatic water shutoff valves, hard-wired water leak detection systems, steel-braided hoses, low-flow toilets, laundry and washroom floor drains, recessed sprinkler heads and protective sprinkler guards, just to name a few. But this stuff costs money.

When we put this idea out there, we suggested that the government could fashion this water damage prevention program. They could fashion it or model it on the HAFI program that exists, the Home Adaptations for Independence program, which we’re very proud of in the opposition. We created it when we were in government. That program is all about ensuring that people have the financial wherewithal to make investments in mobility-related upgrades so they can remain in their homes longer and do so with as high a quality of life as possible.

That program provides between $5 million to $10 million of one-time funding per year. Those kinds of dollars would go a long ways to assisting folks who live in condos and townhomes to be able to afford the kinds of upgrades that are needed to prevent water damage events from happening in the first place. But again, the government has driven right past that idea.

We hear today about a $12½ billion projected deficit here in British Columbia. We hear about all of the things that the government is proud of doing in stepping up to support British Columbians in need. They trumpet their investments roundly, right across the board.

[1:45 p.m.]

Here we have half of the population of Metro Vancouver and one-third of the population of British Columbia suffering under the weight of unexpected, unrealistic, high additional insurance costs, and the government is missing in action. The government wouldn’t even embrace a simple suggestion like a water damage prevention program.

We thought…. Again, we pride ourselves in the opposition of being resourceful. We pride ourselves on being collaborative. We pride ourselves on bringing forward solutions. We thought we would try again, so we wrote a letter to the Premier. It was dated June 16. We sent the letter to the Premier with a number of commonsense, practical, achievable steps that could be embraced very quickly by the government, that would begin to provide some relief to British Columbians facing this significant challenge.

We called for the implementation of a temporary tax holiday on the 4.4 percent insurance premium tax that’s applicable on strata property. Let’s leave those dollars in the pockets of townhome and condo owners. Let’s leave those dollars in the pockets of people who live in strata housing across British Columbia.

That 4.4 percent insurance premium tax, by the way, is applied on about $300 million of estimated revenue that comes in from strata insurance premiums. That’s according to the B.C. Financial Services Authority report. Just providing a temporary tax holiday on that piece would leave potentially upwards of $13 million in the pockets of people who live in strata units and strata corporations. No interest on the government’s part in that idea.

We suggested that we extend, on a temporary basis, the property tax deferment program. Everyone is aware of this program at the present time. You can defer your property taxes or a portion of your property taxes if you’re over 55 or if you are a surviving spouse or if you are a person with a disability. A very, very successful program that we’ve had in British Columbia for a number of years. Why not extend that program to provide some relief for people on their property taxes? Again, no interest in the government in that idea.

We proposed a wide range of additional changes to the Strata Property Act, the regulations, involving every­thing from the contingency fund to how depreciation reports are handled to requiring some level of mandatory education and training for strata councils, mandating certain types of supports that need to be there from the Ministry of Municipal Affairs to the strata corporation world. A whole bunch of ideas. Most of that has been passed by, by the government.

We suggested that perhaps it was time to, again, do another review of the B.C. building code and look at implementing new requirements focused on the prevention and the severity of water damage events. No mention of the building code in any review whatsoever in the government’s program to this point.

Quite importantly, and I really want to underscore this point, we also called for a requirement to be put in place for the B.C. Financial Services Authority to make public the data and the information that it’s gathering from insurance companies to better understand the current climate of rapidly rising strata insurance. Imagine that. Some transparency. Now, let’s let British Columbians see what the calculations are, what the numbers are that go into the calculations that, supposedly, according to the insurance industry, are driving the costs of insurance into the stratosphere. But no commitment from the government in their action plan to enhance transparency of that data and that information to ensure better accountability. No commitment from government to do that.

We held a town hall as well, a virtual town hall — the opposition leader and I did — a few weeks ago. We had hundreds of people online with us. This was a non-partisan event. It was promoted by a number of the different condominium owners associations and, certainly, folks that have approached us, as an opposition, with concerns that are specific to them.

[1:50 p.m.]

We held a really good discussion. We did a lot of listening. Many of the stories that I read into the record earlier reflect the feedback that we received in that town hall.

The most disappointing piece at this point, I think, would be this. As I said earlier, there were signs that this strata insurance crisis was building a year ago. We brought forward some ideas for government’s consideration in February. We then followed those up with a series of more ideas. We’ve put some ideas on the table that would actually provide relief for British Columbians. For the most part, with only a few exceptions, the government has opted not to embrace any of this.

I mean, where is the sense of urgency? I heard it again today from the Minister of Housing, as she stands in the House here — in introducing this bill, in second reading. She talks about how it’s so important to get on with actions that are going to help people with these added costs. Yet there’s nothing in this bill that actually does that.

She talks about how critical it is to understand that these are just first steps — that there’s more work to do, there’s more consultation to do, there’s more engagement to do. Well, we’ve known about this problem and government has known about this problem for a year. People need the help now, not months and years from now.

The Finance Minister, back in February — I believe in responding to the private member’s bill that I had introduced in this House — was really pressed on: do you really understand the urgency of the situation, and if so, when can condo and townhome owners expect some action? When can they expect a plan? When can they expect some relief?

The Finance Minister’s response was: “I hope in the next month we’ll be able to have some ideas, but again, it’s going to be determined by conversations we have with the industry and with strata owners.” Well, fair enough. That was five months ago. I am absolutely alive to the fact that we’re still in the middle of a pandemic, but the operations of government continue. It’s taken five months from that comment to get to the point where the government has finally brought forward some ideas.

This should’ve been done sooner. The government should’ve brought forward an action plan much sooner than the last couple of weeks. As I said, it’s not like this issue just happened, has just popped up over the last couple of weeks. The government’s known about it. It’s been building. The government has waited this long to actually take some action, and the action that they’re taking isn’t actually going to make much difference for those folks who are most impacted.

There are a few items in the NDP’s plan that may make a difference from a long-term perspective — the requirement for proof of insurance on an information certificate, contribution requirements to a contingency fund, requirement for a strata corporation to inform owners and tenants of any material change in insurance coverage, a cap on an owner’s liability for events or claims that happened in their units where there’s no negligence involved and a few other things. Fair enough. Those are, perhaps, worthy points of discussion and areas to look at changing for the mid- to long term.

Again, the fundamental question with this piece of legis­lation is: how is this going to make life any better? What in this bill is actually going to make life better for British Columbians? The answer is that there’s not much. What the government has come up with provides no financial relief for thousands of British Columbians hit hard. There’s nothing in this bill that will keep money in the pockets of condo and townhome owners.

There’s no water damage prevention program. Even the Finance Minister, back in February, had this to say about the importance of preventative maintenance. She said: “What can we do on the prevention end and how can we work with the industry and strata owners to make sure we come up with a solution that’s really going to work?” Well, the water damage program was an attempt to suggest something that was fairly practical that would address that. We offered a whole bunch of ideas.

[1:55 p.m.]

There are a few items that we are particularly concerned about and that we will be canvassing in committee stage on this bill. The first involves the deferral of depreciation reports. The NDP, the government, keeps saying that this is to close a loophole that exists in the legislation. The reality is that all they’re doing through this amendment, through this bill, is moving the ability to defer depreciation reports into regulation. The ability to do so will still be there in section 12(a).

It does beg the question: what will those regulations look like? Will the ability to defer a depreciation report apply to all stratas? Will it apply only to certain types of stratas — again, recognizing that a duplex is very different than a condo unit, which is very different than a bare land strata? Will it take into account the size of the overall strata complex, the type of structure that it is, the location of it, the age of it, the claims history of a building? We don’t know. None of those details are included in this bill. They’ll come later.

The government says that it’s willing to change the current requirement for full replacement cost coverage. On the surface of it, that might make sense under certain circumstances. But again, what would those circumstances be? Is the government suggesting that a new minimum replacement value would be 50 percent of the cost of the building or 80 percent of the cost of the building? We don’t know.

The challenge here is that there are strata corporations all over the province that are making some pretty important decisions around special assessments, one-time assessments, increases in monthly strata fees and whether they continue to try to shop around for a better policy that might be out there that has been elusive to this point. How many more sleepless nights? We don’t know, because those details aren’t included.

Contingency reserve funds. Section 6 of this bill enables stratas to access contingency reserve funds to obtain and maintain insurance if that item “…has not been put forward for approval in the budget or at an annual or special general meeting….” Again, fair enough.

But it’s been quite amusing — that is probably a good word — to watch the Housing Minister on the one hand talk about how important it is for preventative maintenance to take place. How important it is for strata corporations to be investing in upgrades and so forth. Make sure that they’ve got the contingency reserves that they need. And then to come along and say: “Hey, but go ahead and use your contingency reserve fund to pay for your current year’s insurance requirements.” As if it’s like this is a money tree that’s just going to regenerate automatically by itself every single year.

What do you do in year two when you have drained your contingency reserve fund the previous year? We have asked that question to the Housing Minister. No answer. I know the reason is because she doesn’t have a good answer to that. It’s not a panacea to just encourage strata corporations to go and raid their contingency reserve fund. That might buy you one month or one year.

As I said earlier, the government took a year to get to this point. It was cold comfort for strata owners to read in the government news release, when they announced this bill, that a whole bunch of the sections of the bill actually won’t come into force on the day that this bill receives — should it receive — royal assent. There’s a whole bunch in this bill that is dependent on further consultation and engagement. What does the government have to consult and engage on? What do they need to do here?

There’s a whole bunch more work apparently coming. And 14 of the 16 sections in this bill are dependent on the development of regulations at a later date or on consultations that the government plans on doing — which, again, could take months or, potentially, years. People just don’t have that kind of time.

[2:00 p.m.]

This bill is not a solution to the problem at hand. This is an empty bill. I said in this House a few days ago that, again, you don’t have to take my word for it. The Minister of Finance had this to say back in March: “Bringing forward a bill that does nothing to address the pressures that are being faced does not make a good solution.” I couldn’t agree with her more. Only she and her colleagues have brought a bill to the floor of this Legislature that does exactly that.

It doesn’t provide any relief for British Columbians. It doesn’t purport to solve the challenges that people are facing. It holds out this promise of further engagement and consultation, which is going to take months and months more to do just to kick the can down the field. That is absolutely not good enough.

I will end on this note. We are very proud, as an opposition, that we brought forward a private member’s bill. We brought forward a whole bunch of ideas in letters to the Premier. We’ve been advocating as strongly as we possibly can, with the resources we have as an opposition, to hopefully light a fire under the government’s butt on this one. Unfortunately, we are where we are, with a really empty bill.

But I can assure you, Mr. Speaker, and I can assure British Columbians out there who have been impacted, that we’re not done, in the opposition, in terms of bringing forward solutions and ideas. We’re going to continue to fight for you. We’re going to continue to do everything we can to urge the government to take action that’s actually going to make a difference — that’s actually going to provide relief. You can take that and count on it, because to not do so would otherwise let down, as the government currently is doing, a heck of a lot of British Columbians who really need some help.

With that, I conclude my remarks in second reading on Bill 14.

M. de Jong: We have heard in great detail from my colleague, the member for Kamloops–South Thompson, on the nature of the problem we are confronted by. It is widespread. It is dramatic. It is significant in terms of the numbers of families that it is impacting, and it is significant in terms of the magnitude of the impact it is having on those families. We have heard, again compliments of my colleague from Kamloops South, about the history of how this problem has begun to reveal itself.

It is important, I believe, for the assembly to acknowledge that this is not a problem that has presented itself in the last few weeks. The evidence that this issue would require the attention of government, of regulators, began to reveal itself a year ago. Certainly, by the fall of last year, it was becoming abundantly clear that there were challenges afoot.

We are confronted, as a society, by the actions of a sector of our economy, in this case the insurance sector, that would see the premium costs associated with the product that they not only offer but that statutes, generated by this assembly, require be in place…. For hundreds of thousands of families, we are seeing the premium costs associated with that product increase anywhere between 50 percent and 500 percent.

[2:05 p.m.]

If that were happening anywhere else in our economic life, there would be outrage. I cannot, for the life of me, understand the lack of attention, the lack of priority, that this has been given by the government thus far. To be sure, there has been another issue that has attracted the attention of government but surely not to the exclusion of all others.

The magnitude of the problem is this. We are told that there are upwards of about 700,000 strata titles registered in British Columbia — 700,000. Many of them include families — more than one person. It is undoubtedly true that people can own more than one, but to suggest that one million families are impacted by this challenge is not, I would suggest, to exaggerate. One million of 4½ million people in British Columbia impacted by what is taking place in the insurance sector. And what is taking place? Well, massive, massive premium increases.

You know, I have to say I hear from those who are trying to explain this, those from the insurance sector who have tried to minimize the impact of this by saying: “Yes, there are some outlying examples, but on balance, it is an average of 50 to 60 percent.” Fifty to 60 percent is unacceptable. I hope they hear me say that loud and clear. At a time when inflation hovers around 1 or 2 percent, for someone to come along and say an insurance premium of $80,000 or $100,000 is going up 50, 60 percent, let alone 300, 400, 500 percent, is unacceptable.

I hope this industry is under no illusions about where reasonable, thinking legislators — I hope on both sides of the House — stand on that matter. It is unacceptable. To foist those kinds of increases on people in a single year…. And in this year, of all times, when hundreds of thousands of families are out of work, when people are concerned about their future, uncertainty reigns.

The industry says to a group of people who live in a neighbourhood — 100 families: “By the way, the insurance premium that last year you paid $80,000 for has gone up to $540,000.” It is egregious. It is unreasonable. It is indefensible. It is at times like this that we rely upon the government to step in and take corrective actions and provide some safeguards. Regrettably, we have seen precious little of that. I am hopeful that that will change, and we are beginning the discussion today.

You know, it occurred to me that it is one thing for a sector of the economy — the insurance industry, in this case — to say to people: “Well, you know, we’ve done some analysis. Your premiums have to go up.” But imagine the reaction of a family or a strata council in Langley, Kamloops, Abbotsford, the Kootenays, Prince George and the Lower Mainland who are confronted by a bill from their friendly insurance broker that says: “On the one hand, your premium is going up 300 percent. Oh, and by the way, I have to direct your attention to page 2, because not only is your premium going up 300, 400 or 500 percent, that deductible that used to exist at $20,000 for you last year is now going up to $250,000.”

We heard specific examples from the member from Kamloops South about that. I advanced examples of that several days ago in this chamber — $250,000. I do not profess to be an expert on any real estate market, least of all ones around Metro, what the price of a condo today in Metro Vancouver is worth, but I can tell you this. In my hometown, $250,000 would exceed the value of many, maybe even most of the condos that people inhabit.

[2:10 p.m.]

So your premium is quadrupling, and your deductible is going up more than that. To add insult to injury, the same broker says to that group of families that are represented by that strata corporation: “Oh yes, but we have a product for you called deductible insurance, and we’ll sell you that.” That is…. Well, despite the protections afforded by this chamber, I’m going to use the words “inexcusable” and “indefensible,” but I can think of stronger language.

We must act, and we must act now. In fact, we should have acted…. The government needed to act sooner than this. As we heard a few moments ago, this is not an anticipatory discussion. We’re not talking about a challenge, a problem, a crisis that is about to reveal itself in a matter of months. This is a crisis for families that exists today.

Today as we debate this bill, there are strata corporations…. That is a fancy word for groups of people and families that live in a building, neighbourhoods, who are sitting down and making a decision. It’s happening in Kamloops. It’s happening in Langley. It’s happening in Abbotsford. It’s happening in Metro Vancouver. It’s happening right across British Columbia.

Families are sitting down and having to make a decision about whether to sign on to an insurance policy that is going to generate increases to their strata fees that in many cases may drive some of those families out of their buildings because they won’t be able to afford the monthly fees and the monthly fee increases that will be required to pay those dramatically, indefensibly increased insurance rates.

As they used to say in legal circles, time is of the essence. In fact, it is long past time for action, but here we are.

Again, as we have heard from the opposition critic and designated speaker, we had expected more from the government, and we had expected more sooner from the government. We are disappointed that they have chosen not to act and chosen not to act both as quickly and as imaginatively as we think appropriate.

They have tabled Bill 14. There has been much wringing of the hands. I must say that it is striking to see the difference that manifests itself on the part of members who are now ministers who, 2½ to three years ago, professed great powers on the part of government to take steps when confronted by injustice. I use that word here as it relates to what is happening to people and families with respect to insurance premiums.

A great wringing of the hands from the minister, who says: “This is the private sector, and there’s not really anything that we can do about that. We must, after all, ensure that the private sector insurance industry is in a position to generate healthy returns for their corporate clientele and for their shareholders.”

It’s novel. It’s interesting. It’s fascinating commentary to hear from members of the NDP government, but I’m afraid it is also camouflage for the fact that the government either doesn’t know what to do or, if it has an inkling of what to do, doesn’t want to do it and doesn’t want to do it in a timely way. If it is the latter, then I am at a loss to explain why.

We have before us Bill 14, which purports to do a number of things. In its early provisions, it contemplates changes to the amount of money that can be transferred to a contingency reserve — and this is a theme that exists throughout the bill — yet it provides no inkling of what those changes to the present percentages of 5 and 25 percent might be.

[2:15 p.m.]

Surely, it has occurred to the government that those families sitting down at tables today, this week and next week need to have that information in order to make informed choices about how to plan for their future and pay for the insurance that they are obliged to have.

There are provisions in this bill that require better disclosure of insurance coverages to owners and purchasers. I don’t think that the government should anticipate much in the way of opposition from this side of the House to those provisions. Won’t get much argument from us there.

What they will get is our concern that increasingly, without proper and appropriate response from government, the disclosed information that owners will receive from strata corporations is that they no longer have insurance on their buildings, because they couldn’t afford it. So it will be a pretty hollow instrument if the disclosure requirements are followed with information that says, “We don’t have insurance. Notwithstanding what the state of the law is, we don’t have insurance, because we weren’t able to afford a $200-, $300- or $400-a-month strata fee increase,” which some of these premium increases are driving.

There are sections in this bill that eliminate options around…. Well, they seem to eliminate options around the obtaining of depreciation reports. But as my colleague pointed out, maybe not. Because in the very same breath, the government in this, legislatively, includes provisions that would allow that to be altered by regulation. But again, no indication whatsoever of what the intention is there, with respect to what those regulations might be.

Those provisions seem — around the mandatory nature of depreciation reports — to be rooted in the belief, and this is something the insurance sector has been advancing, that the existing provisions have been used by strata corporations as a means by which they are avoiding doing the maintenance on buildings that is required and, therefore, increasing the risk of a claim.

Well, we haven’t seen any real evidence of that, but that seems to be the story. But if that is, in part, the rationale for the inclusion of the provision to eliminate what the minister keeps referring to as a loophole, and it’s probably more accurately referred to as substituting one for another, then I am at a loss to explain the presence of the very next provision in the bill, which seems to be the most direct and immediate response to the crisis we are confronted by today.

It seems to be a statutory recommendation by the government to strata corporations, which goes like this. When the notion of creating a contingency reserve fund was created and embedded in the statute, it was designed to ensure that there would be money set aside to deal with the expenses that will come up on a cyclical basis. Not every year. Not on an annual basis, but every ten years — to make sure the roof is replaced, expenses of that sort.

This provision says that that money must be there, and it must be safeguarded. It cannot be used for annual operating expenses. Yet this provision says, and, in fact, encourages strata councils to access those moneys to pay for their insurance.

Well, as my colleague pointed out, talk about digging one hole to fill the other. Because that may allow a strata corporation and the families in that community to get past the obstacle they are confronted by this week or next. But next year or the year after, when it’s time to replace the roof, there won’t be any money. There won’t be any money whatsoever. Guess what’s going to happen. The insurance company that has been happy to collect $500,000 a year in insurance premiums is suddenly going to come along and say: “Hey, you didn’t replace your roof. We’re not going to insure you.”

[2:20 p.m.]

It is an irresponsible response to a situation that is confronting…. It is the ultimate irresponsible stopgap measure.

There are provisions in here that allow for less than full replacement cost insurance to be purchased. I agree with my colleague and, I guess, by implication, with the government that that is an idea worth exploring.

Having done some modest investigative work…. The act is clear. It requires coverage for full replacement costs. I am told that in 55 years, there has been one total loss claim, in the 55-year history of strata title in British Columbia. So it would seem, on the basis of that, that requiring full replacement cost coverage is a bit of insurance overkill. Now, I’m sure the insurance companies are quite happy to collect premiums on that basis, because they never have to pay out that much.

I think the idea has merit and is worthy of exploration. But those families gathered around the table need to know what the number is, as my colleague from Kamloops–​South Thompson said. Is it going to be 80 percent? Is it going to be 50 percent? There are, I’m sure, rational arguments to be made, but it is of no help to those families today, who may sign on to an insurance premium cost only to discover, three weeks or three months from now, that they dramatically overpaid. They bought a product they were no longer required to buy. That’s not good enough. That’s not good enough, confronted by what we’re confronted by.

We have tried, in the opposition, as my colleague pointed out, to provide some suggestions, written letters. My colleague tabled a private member’s bill to try and signal the seriousness with which this issue needs to be addressed.

I’m going to try, in the time available to me, to offer yet another suggestion about what I think is required, which is a shift in the model, a significant rethink. I realize the minister is a busy person and, I’m sure, is tracking the debates, and her staff. I hope they will consider what I’m about to offer, and consider it seriously, and will be in a position to discuss it further when we get to the committee stage of the bill.

I was sitting on my deck on my farm on Matsqui Prairie. I was looking out across the fields, and I was thinking about this. I was thinking back to a time before I was born, just after the Second World War. I’m still surrounded by farms. There are more berry farms than there were back then. It was mostly dairy farms — farmers, growers, dairy farms — after the Second World War.

They wanted to borrow money to expand. It was a time when expansion was on everyone’s mind. The population was growing. We needed more dairy products. The big banks in Canada wouldn’t lend them the money. They couldn’t get access to capital. So they took matters into their own hands. The reason that British Columbia today is the centre of the credit union movement in Canada is because the agrarian sector, farmers, took the lead in pooling their resources and looking after one another.

I think this is an idea that has merit, with respect to the insurance crisis we are facing, the cost of insurance. There is an opportunity here, with engagement from the government and the regulator, the Financial Services Authority, to facilitate what is known in the statutes as a captive insurance company.

[2:25 p.m.]

We’re one of the few provinces that actually contemplates such a thing. The term I prefer is self-insurance, the ability for people to get together and generate their own insurance coverage, at rates that are affordable. Yes, it’s a big change. Yes, as I say this, the insurance sector is going to dismiss it at the same time they are appalled by it.

Just as those farmers did 70 years ago, when large financial institutions turned their backs on them, today, when insurance carriers headquartered in other parts of the world are saying, “Well, you’re too risky. We don’t really want to be in your market,” then I say, as the government of British Columbia, as the parliament, as the Legislative Assembly of British Columbia, let’s give British Columbians an option. Let’s give them the means. Let’s facilitate, through the regulator and the legislation and transitional support, the means for the owners of strata properties to look after themselves at rates that they can afford.

I believe it’s possible. I don’t think it’s possible on the fly. I think it requires a commitment from the government.

I’m hopeful that at the conclusion of second reading and through the committee stage debate, we will receive some kind of a signal from the minister and the government that they’re prepared to explore this, that they are prepared to endorse quick work, expeditious work, by the Financial Services Authority to develop a model.

I know this. Confronted by an industry that has adopted a take-it-or-leave-it approach…. “Here are our rates. You can take it or leave it.” Confronted by an industry that is saying, “You know, we don’t really want to offer this product. We don’t like the risk profile. Those are our rates, and it’s too bad for you if they’re going to increase 60, 70, 200, 300 or 400 percent….”

I say the proper response from us as a Legislative Assembly is to say to the people and the families who are being adversely impacted: “We are going to develop an option for you. We are going to develop a choice that you can avail yourself of.”

I think there are some important ancillary benefits that would go along with that. It occurs to me that a self-insured strata corporation is going to be pretty guarded about the nature of the claims that it accepts. To the extent that the insurance sector laments what they call frivolous claims, I don’t think that’s going to happen.

I think a self-insured strata corporation is going to be that much more motivated to ensure that the maintenance on their building is kept up to date, because the money to address any shortfalls or any deficiencies is not going to be coming from some insurance corporation overseas. It’s going to be coming out of the pockets of the members who are paying for the self-insurance. There will be a motivation on the part of the families and the owners to ensure that the work is done.

This is something that I believe is worth pursuing. As I say, I hope the minister will accept the suggestion as one that is made constructively and that we can further explore during the course of the debates. What we have now is not acceptable. It is impacting on families who are already confronted by all of the uncertainty that we are familiar with around job security related to the impact of the worldwide pandemic.

[2:30 p.m.]

On top of that, in the midst of that storm, the insurance industry comes along and says to people: “Now your insurance rates are quadrupling.” That translates into $200, $300, $400 a month, in terms of additional strata fees, at a time when families can least afford it.

It’s not just old buildings; it’s happening to newly constructed buildings. There does not seem to be a rhyme or reason, despite, quite frankly, the lame excuses and explanations we are hearing from the insurance sector.

I will ask the minister about the failure to include in this bill the mandatory disclosure of fees and commissions. I think that that time has come as well. But as you can tell from my remarks, I will be very interested in having the minister, as my colleagues will, filling in the blanks now — not three months or six months from now, but now — on what some of these numbers around mandatory coverage and contributions to contingency reserve funds or access to contingency reserve funds will be.

People need that information now because they’re making decisions now that, in some cases — not all, but in some cases — will be determinative as to whether or not they can keep the home that they are living in. It’s an important issue impacting, as I say, close to a million families in British Columbia. I’m hopeful that this assembly can be part of a meaningful solution and that the steps the government will take form a meaningful solution and not just window dressing.

Deputy Speaker: My apologies to the member from Saanich North, whose name was unintentionally skipped. He was supposed to speak before the member for Abbotsford West.

A. Olsen: Thank you for the opportunity to speak to Bill 14, the Municipal Affairs and Housing Statutes Amendment Act. I actually appreciate the opportunity to speak following the member for Abbotsford West. I don’t believe that I will be coming with as much bluster, but I do appreciate both the words that he shared about the challenges with this bill and, as well, always appreciate when members provide ideas that can be debated — for us to discuss.

[S. Gibson in the chair.]

I think that it’s important to acknowledge that we also, in the B.C. Green caucus, have been hearing from British Columbians over the past year about the substantive challenges that people are facing, British Columbians are facing, as they’re hit with some of the largest insurance rate increases that we’ve ever seen in the province. We’ve been hearing these stories from strata councils who are unable to secure insurance for their buildings, dramatic rate increases, ranging from 50 percent to 300 percent. You hear from owners that they were blindsided by these increases. The costs for some are upwards of hundreds of dollars, over $1,000 in some cases, on top of housing expenses that were already unaffordable.

I think it’s important for us all in this chamber to come to grips with the scale of the problem. Over 1.5 million British Columbians live in a home that’s part of a strata. That’s one in three, 30 percent of the people in our province, and they come from all walks of life.

In response to this crisis, the government directed the B.C. Financial Services Authority earlier this year to inquire into the causes of the increase. The issue was the focus of a number of questions from the official opposition earlier this spring. We’ve done a lot of work on this issue. The member from Kamloops–South Thompson, as we heard earlier, brought in a private member’s bill to really put this issue in front of government as one that needs to be dealt with and addressed with haste.

[2:35 p.m.]

Now we have this bill, Bill 14, before us to take what the government is calling “First Steps to Address Rising Insurance Costs for Strata Owners.” I expect, for the most part, Bill 14 won’t be met with significant criticism for what it proposes to do. The changes appear largely focused on ensuring more transparency for strata owners, providing more clarity, support and direction for strata corporations and better data collection and reporting for the sector. None of those can be complained about.

There are questions that I’ll want to ask about the regulatory power to allow certain stratas to not be required to get full insurance coverage and the potential consequences of such a change. But for the most part, the criticisms on this legislation will be for what it fails to do.

We’ve heard from our colleagues. We’ve heard some of those criticisms already in the second reading stage of the debate. I’m sure that we’re going to be hearing a lot more and raising some more of those concerns in the committee stage of this debate as well. I think it’s fair to say that this is a very complicated issue with few, if any, easy solutions and that there’s plenty of room to make the situation facing one-third of our province potentially even worse.

The B.C. Financial Services Authority, in their interim report issued on June 16, included in their list of causes minor claims due to water damage, poor building maintenance, initial construction quality issues, challenges with strata policies, high cost of replacement, earthquakes and a market lacking adequate insurer liquidity. Add this to the increasing costs associated with more severe weather events due to climate change, and which is only just starting to be grappled with by insurers, and the unique challenges we see due to B.C.’s overpriced housing market, and you can see the enormity of the task ahead of all of us legislators.

So while Bill 14 appears completely supportable, it is essential that we are clear that this is not a strata owner’s or strata corporation’s problem alone. For instance, Bill 14 will, in the government’s own words “set out clear guidelines for what strata corporations are required to insure to help strata councils make informed decisions on their insurance policies.” Do we have any data that suggests that the lack of guidelines has been a significant contributing factor? Do we know how much impact we expect this will have on the rates currently facing strata owners?

Or how about this change? “Change the minimum required contributions made by strata unit owners and developers to a strata corporation’s contingency reserve fund.” Will this have a measurable impact on the rates facing British Columbians today? How about for the next year’s expected increase? My point is that we must not let this issue be so easily defined as an issue with strata owners and strata management without the clear data to reinforce that.

We have seen just how devastating the lack of action by the previous government was when it came to the housing market. The deregulation and total free market approach has led to cascading challenges across our province. As it turns out, the so-called free market approach of the B.C. Liberals is not so free at all, is it? In fact, the cost of their policy for British Columbians has been more than most can handle.

I think it’s essential that we ask tough questions about all of these potential challenges and that the government equip itself with the data to inform further policy intervention, if so called for. These questions include: has there been any deregulation in the construction sector that has contributed to the construction quality issues that we now face? Have governments been so keen to create housing supply in the market that we failed to ensure that we have the regulatory regimes to support the increasing number of stratas that we see? Has the lack of updates to the Strata Act contributed to the problem?

In one publication I read, Troy Wotherspoon, the president of the Insurance Brokers Association of B.C., points to “more than 30,000 strata corporations of almost infinite variety.” Has the Strata Act been modernized to reflect this complexity? Or are British Columbians seeing insurance rates out of line with other jurisdictions because this is an attractive jurisdiction for multinational insurance companies to make a profit — a profit on the backs of British Columbians? Bill 14 will provide the answers to these questions. But if we don’t start asking them now, we won’t fix the underlying problem.

[2:40 p.m.]

The other significant challenge in front of the government is what Bill 14 is silent on: what support is coming for people who are facing unaffordable increases to their insurance rates? Actually, it should be pointed out…. This is something that has been pointed out, and I’ll reiterate the point that was made by the member who spoke before me. This is not something that is coming. This is something that is here. It is already impacting British Columbians today and for the past year.

While direct financial support may help pay the bills in front of people today, that will simply amount to a cash subsidy to insurance companies and risks building the higher rates going forward. We have to be careful. It’s essential that government is developing policy that will help address not just the long-term challenges with strata insurance but the immediate affordability challenge facing people today.

It is important to contextualize the challenge that we face. So I’ll repeat a quote from Frank Chong, vice-president and deputy superintendent of the B.C. Financial Services Authority. It was a quote coming from the press release announcing the completion of their interim report in the middle of last month. He said: “The underlying factors contributing to B.C.’s unhealthy strata insurance market are complex and do not present easy solutions. Everyone involved in the market has a role to play to balance availability and affordability of insurance, going forward.”

I certainly do look forward to their final report. I hope you get some answers to the questions that I have posed in this second reading debate and get a better sense of how Bill 14 fits into the broader approach that this government is going to take on this legislation at the committee stage. Thank you for this opportunity to speak to Bill 14.

J. Isaacs: I am pleased to rise today to continue debate on Bill 14. We pass so many bills in this House, and some bills have more impact on citizens than others. But Bill 14 is a bill that I am compelled to speak to, as I have heard from so many of my constituents that the rising cost of insurance and premiums, deductibles, is having a negative financial impact on them, and they are worried about what the future holds.

I have heard from seniors like Jack, who has been a strata resident for 11 years. He has managed a Coquitlam highrise for ten years. Jack is a strata council member. He manages the budget, contractors, cleaners and all aspects of operations. His building has not had a strata fee increase in ten years. The strata building is well-maintained and well-managed. Jack can see no reason why their building should be subject to such a high premium increase and feels that this insurance increase will “obliterate my hard work, curtail my disposable income and lower the value of my unit.”

But it doesn’t end with Jack’s dedication and good management over the last ten years. Jack wonders how he’s supposed to enjoy his retirement. The maintenance fee will increase $115 a month, just due to the insurance. Jack’s water damage deductible also went up tenfold, from $15,000 to $150,000, making his suite also more expensive. Like most seniors, Jack and many of his neighbours are on a fixed income.

Jack wrote to me and asked for help. But Bill 14 and the government’s response to the growing strata insurance crisis will not provide immediate help for Jack or his neighbours. Over the last few months, we’ve heard from many condo and townhome owners who have watched their insurance premiums and deductibles skyrocket to the point where they wonder if they can continue to pay the monthly fee increase. In many cases, the monthly fees have increased by hundreds of dollars per month.

Many seniors are wondering if they can remain in their homes. The high cost of strata fees, insurance premiums and high deductibles is causing a lot of anxiety.

[2:45 p.m.]

These kinds of increases would be a financial hardship for nearly anyone, but so many strata residents are seniors who made the decision to downsize from their family home, thinking that they could manage the monthly costs and keep a little more money in their pocket for their senior years.

I also heard from James, who lives in Coquitlam. James is also worried about the seniors who live in his building. Their insurance premium went up 170 percent. His strata corporation budgeted for $75,000, but with the premium increase, it is now over $200,000. This premium increase leaves a shortfall of over $127,000, which had to be paid out of the contingency reserve fund. But that money in the contingency reserve fund will not be there in the future, leaving owners wondering what they will do for next year.

Not only is James facing incredibly higher premiums, the deductible also went up from between $10,000 and $25,000 per claim to $150,000 to $250,000 per claim.

The rising cost of insurance premiums and a shifting marketplace of insurance providers was evident months ago, almost a year ago. There has been time for government to evaluate what this means to condo and townhome owners. There has been time for consultation within the industry and with stakeholders. There has been time to provide some solutions that would address the crisis.

This is not a partisan issue. This is an issue that affects over one million families in the Lower Mainland. It affects their monthly budget, and it affects their net worth. Coquitlam has many residential towers, and the official community plan includes ten to 15 more towers as we densify responsibly. So this cost and the rising costs of strata fees have a huge impact on this market.

We’ve raised the concerns of strata owners in the House, and we’ve been working hard to encourage government to address the situation. In February, we introduced a private member’s bill that would’ve taken steps to mitigate the growing problem. But the NDP refused to call it up for debate.

We sent a letter to the Premier with numerous commonsense ideas that could be implemented fairly quickly to provide relief. But we received no reply. We hosted a strata townhall where we heard directly from strata residents who shared their concerns and examples of just how these significant increases in premiums and deductions were hitting them personally.

We’ve been trying to convey, on behalf of our constituents, on behalf of all strata owners, how serious this crisis is and that if some substantial steps are not taken, and in a timely manner, we will see people lose their homes.

The Minister of Housing would give no assurance for those who are asking for action. In fact, the Minister of Housing introduced this bill, completely overstating its substance, and claimed that this would make life better for those struggling with strata insurance. But Bill 14 doesn’t address the major problems related to premiums and deductibles, and it comes up short when strata owners are looking for immediate relief.

Many strata owners, especially seniors, cannot wait until government figures out what this is going to look like in the long term. People are looking for and need immediate relief now. It’s frustrating to see government put aside the concerns of strata owners. We should have seen this addressed months ago. Government should have anticipated the financial and negative impact these increases would have on strata owners.

I mentioned earlier that Jack’s deductible for water damage went up tenfold, from a $15,000 to $150,000 deductible. Water damage deductibles account for 46 percent of total claimed costs since 2017 and was 56 percent in 2018 alone. This is well known. It’s a well-known concern that frequently affects strata buildings, yet this bill has no water damage prevention program that would assist strata owners with costly upgrades, upgrades that they will need in the long run. Hopefully, they will be able to save money on future fees.

[2:50 p.m.]

We suggested in our letter to the Premier last month that a temporary tax holiday on the insurance premium would be a reasonable approach and leave a little bit more money in owners’ pockets. This is a 4.4 percent tax that the government collects on every insurance premium paid. According to the FSA, strata insurance generates approximately $300 million in premiums. The total revenue collected by the government from the insurance premium tax is approximately $13.2 million annually. Of course, this revenue to government increases as premiums continue to skyrocket.

A tax holiday on the insurance premium would make a considerable difference for condo owners. It would be a simple solution to make life just a little bit easier for those who are struggling. Yet this suggestion has been completely ignored. Instead of implementing real solutions and providing some relief, government has taken what they describe as first steps. These first steps simply won’t make much of a difference to the current situation.

One step includes requiring stratas to inform owners immediately regarding material changes to their insurance coverage and enables government to prescribe a cap on an individual owner’s liability or an insurance deductible if that claim originated in their unit, but not out of negligence. These kinds of changes will be beneficial down the road, but they certainly do not address the problems in the short term or in the medium term.

Government needs to listen to what strata owners like Jack are asking. They are asking for help now, not sometime down the road. In the meantime, they don’t want to lose their homes or lose their quality of life.

Another step is to remove the ability to defer a depreciation report, which is noted in section 4. They are claiming that the ability to defer depreciation reports is a loophole. But they have simply moved the ability to defer depreciation reports into the regulations. It is still there under section 12(a). It seems like they want to avoid accountability. Once again, this change does nothing to help strata councils and strata owners with the rising costs of premiums and deductibles.

Ronald, who lives in Coquitlam, says their strata has hired engineers every year. All of the depreciation reports are in and all are in complete accordance with what is required. Then, overnight, somebody says: “You’re not doing things right.” Well, Ronald was doing things right. Despite his best efforts to do things right, his strata insurance went up by $200,000.

What’s most curious is that the government has introduced a bill to be debated and voted on and, at the same time, they’re going to have further consultations on the proposed legislation that is before us today. This is confusing and offers no real answers to strata owners who wonder what their future strata fees may look like. There is no indication when relief will come, and it clearly shows that the minister has not listened to those who have been asking for help.

Well, I want to help Jack. I want to help James. I want to help Ronald. I want to help all of the other strata owners who have reached out and voiced their concerns. I hope that as we move to committee stage, we can uncover how substantial — or not — this bill will be for British Columbians. British Columbians will be facing excessive cost increases for strata premiums and deductibles, and we look forward to debating this legislation in greater detail.

J. Thornthwaite: I am very happy to speak on this bill, Bill 14, the Municipal Affairs and Housing Statutes Amend­ment Act. I appreciate my colleagues ahead of me with their thoughtful suggestions to help this real financial crisis that is going on right now.

[2:55 p.m.]

I thought I’d give you a little bit of a personal note first. I live in a strata. I don’t know how many people in this House actually live in a strata. But how about this? On January 30, I got a letter from my property management company. They said:

“Please be advised that the 2020 renewal for the strata corporation insurance has increased the deductible significantly, most notably for water damage and sewer backup, which on February 1, 2020, will both be $100,000.” The letter was sent on January 30. “The deductible for water damage from supply lines will be $250,000 on February 1.

“Please review the summary of the coverages on the back of this notice with your unit and ensure that you have enough insurance on your own unit.”

On February 3, we got a notice.

“As the property manager has advised, there has been a dramatic increase in the deductibles to the strata’s insurance policy for water damage and damage caused by supply lines. In simple terms, this means that owners face a greater risk of having to personally pay for damage to their units or to the common property in the event of a claim related to water damage or water supply lines. Because of this sudden change in the deductible, you may not have enough insurance coverage under your current homeowner’s policy.”

“Please take the attached certificate listing the strata’s deductible to your insurance broker and have them review your insurance policy so that you can ensure your policy gives you enough protection. Please do so immediately, as these changes are effective February 1, 2020.”

That came on February 3, 2020.

Our property management company scrambled at the last minute to renew our building insurance. They got it, but then all the owners had to rush out and top up their insurance. I had to change brokers because of it. I had the same broker since the first time I moved out of my house. I’m not going to tell you how long that was. I mean my family house. I was underinsured for a bit but then was fortunate to get the $100,000 deductible from another agent.

Plus, four years ago my strata insurance was $412. This year it’s $1,395. That’s a $983 difference, 240 percent in four years. That’s a mortgage payment in many, many cases.

Plus, I live in a row townhouse. There is no one above me and no one below me. Why is my insurance clumped into the same category as a highrise, with condos that are all on top of each other? My building is not old, and it’s not new. It’s just 12 years old, and I believe it has been in good maintenance. If I could afford it, I’d probably move out of a strata, if I could [audio interrupted] a bigger mortgage for a house.

Out-of-control strata insurance fees will disincentivize anyone from downsizing into a strata, which will not help the housing market for those families who want to move into the houses that no one wants to move out of. It won’t help housing affordability. People will need bigger mortgages to pay for housing, versus the strata, because they will now be afraid of buying into a strata. Now the stratas are not necessarily more affordable. Maybe this will just keep people renting, if they want to buy.

I am very, very concerned. Townhouses and row townhouses like mine are all included in this, just like the same. Townhouses are essentially an attached house. Many younger couples and downsizers rely on these types of houses in their transition to a bigger house or downsizing after the kids move out. In my complex, that’s exactly what we have. We have downsizers, and we have people that are young couples starting out.

That’s how the housing market goes. You move up or you move down, depending on your needs. But with these strata insurance premiums that are so high, this is going to put a blockage on people either not getting into the market or not wanting to move on or into a house or back into a strata from a house.

This strata insurance crisis is clearly not isolated to certain types of housing or geography. I’m in North Vancouver. Other people on the strata town hall that I attended were from all over B.C.

[3:00 p.m.]

The point is that the insurance companies are the responsibility of the provincial government. What could they do to help strata owners? The B.C. Liberal caucus has some ideas that they presented to government, but Bill 14 is the government’s response.

We have watched, over the past few months, as strata insurance premiums and deductibles have skyrocketed across the province, leaving so many condo and townhome owners facing monthly fee increases of sometimes multiple hundreds of dollars every month. On this side of the House, we’ve been working hard to convince government to address the situation.

As the member for Kamloops–South Thompson said earlier, we first heard of this issue over a year ago. We introduced a private member’s bill back in February that would have taken the steps to mitigate the growing problem. The NDP refused to bring it to debate. We sent a letter to the Premier with numerous commonsense ideas that could be quickly implemented to provide relief. We got no reply. We even held a strata town hall, where we heard directly from strata residents, like me, at the centre of this crisis. The Minister of Housing would give no assurances to those who asked for action. My colleagues have listed many, many people’s situations in these debates that we’ve heard this afternoon.

The Minister of Housing introduced this bill with great fanfare, claiming that this was going to make life better for those struggling with strata insurance. But is this bill actually going to make a difference for more than one million British Columbians living in condos and townhomes? I don’t think so. This bill will not address the major problems that we are currently facing now. It’s a dismal disappointment to those struggling with these rising strata insurance fees.

First and foremost, the legislation that the government has come up with provides no financial relief for those who desperately need it. There are no measures to keep money in the pockets of strata owners. There is no water damage prevention program to assist strata owners with costly upgrades — upgrades that they will need in the long run to, hopefully, save money on future fees.

Instead of implementing real solutions and relief measures, they have taken what they [inaudible recording] first steps. That won’t make much difference to the current situation. These steps include requiring stratas to inform owners immediately regarding material changes to their insurance coverage and enabling government to prescribe a cap on an individual owner’s liability for an insurance deductible if the claim originated in their unit but was not out of negligence.

While these kinds of changes are needed as a piece of the wider problem, they do not properly address the situation in the short and medium term. It demonstrates that this government has been not listening to British Columbians for a year. They need help now. They need to see this House take steps that will make their lives easier right away — not measures that will only start making a difference long after they possibly have had to lose their homes.

Another change of note is section 4 of this legislation, which removes the ability to defer a depreciation report. The NDP are claiming that the ability to defer depreciation reports is a loophole, in their quest to avoid accountability for their lack of action on the crisis. However, they have simply moved the ability to defer depreciation reports into the regulations. It’s still there, in section 12(a). Further delaying action, the government has also said that they are going to be launching further consultations on the proposed changes in the legislation before us today — more consultation.

We heard from other members about the June 29 virtual round table on strata crisis. We heard from people from Richmond, from Penticton, from Williams Lake, from Coquitlam and from Ladner. But still they’ve not come up with anything that provides financial relief for any of the people that spoke of this on that strata round table — nothing to keep money in the pockets of strata owners and no water damage prevention program to assist strata owners with costly repairs. We offered ideas to keep money in the pockets of strata owners, like a temporary tax holiday on the insurance premium tax, an extension of the property tax deferment program, on a temporary basis.

Not only has the NDP wasted months before taking action, they’re apparently going to launch further consultations. Most of the changes in this bill are by regulation and won’t be able to deliver immediate relief. People don’t have the luxury of time.

[3:05 p.m.]

What did we suggest? Well, we introduced a private member’s legislation, the Strata Property Amendment Act, 2020. We called on government to implement the water damage prevention program. We wrote to the Premier, seeking further action on the strata crisis, to implement the temporary tax holiday on the 4.4 percent insurance premium tax applicable on strata properties, to leave these dollars in the pockets of strata owners. Yes, the government is making money on all of this.

Extend, on a temporary basis, the property tax deferment program to enable strata owners who have faced extraordinary additional expenses related to soaring strata insurance costs to defer a portion of their property taxes.

And to implement changes to the Strata Property Act and regulations that ensure that annual contributions are made to the strata corporation’s consolidated revenue fund at levels acceptable, considering the building’s age, claims history and other unique circumstances.

To require strata corporations to have a depreciation report detailing necessary maintenance every year, and require a strata corporation to inform owners and tenants of any material change in insurance coverage, including an increase in any deductible, as soon as possible.

Review the B.C. building code, and implement new requirements focused on the prevention and severity of water damage events.

There are other solutions that my colleagues have described, which I will not go over now. The members for Kamloops–South Thompson, Abbotsford West and Coquitlam–Burke Mountain had some great suggestions. But suffice it to say, I, like my neighbours and the hundreds of thousands of families who live in strata properties, see no help for them.

As my colleague mentioned earlier, this is bad enough to happen during a housing affordability crisis, particularly when this government had promised to fix the affordability crisis in their campaign. But this is during COVID. This is the worst impact on our economy and jobs since the war.

We have seen with previous measures that this government has presented promises that were simply empty — empty promises. How can this government profess to care about housing affordability and at the same time ignore this strata insurance crisis?

I am disappointed. We are all disappointed.

J. Sims: It’s a pleasure for me to rise today. Well, actually, I’m going to sit and speak on the legislation before the House, which is the Municipal Affairs and Housing Statutes Amendment Act.

You know, I’ve been listening to the debate a fair bit today, and there are a couple of comments that I do want to make before I get into my speech.

One of those is to do a huge shout-out to the people in Surrey-Panorama here who have been doing an amazing job, just as the rest of British Columbians have been, at social distancing and making sure that during this time they are taking the proper precautions. It’s because of them that we have the kind of moving into phase 3 that we have been able to do and to get the economy going again.

I also want to do a special shout-out to my staff, both here at the riding, in my constituency, as well as at the Legislature — staff for all of us who help to support us in the work we do.

But today we’re talking about a very important issue that impacts so many people in British Columbia, and that is strata insurance. Listening to my colleagues, you would have thought that this just happened out of the blue and that there wasn’t a long-term coming of this day, so to speak.

For the strata owners — and I’ve talked to many of them who live in my riding, both in townhouses and in condos — this is a huge challenge. For some of them, they’re finding it difficult to buy insurance, because they can’t find a provider. And for others, the costs have gone up so, so much that it’s hurting them.

When I talk to them, they realize that this is not a simple issue. They know that they’re facing challenges, but they tell me over and over again that this is a complex issue. They also know that this is one of the failures of the sort of private market approach.

[3:10 p.m.]

One thing we have to know is that government does not set insurance rates for private insurance, which is what this is. This is not ICBC, which is a regulated agency that provides insurance. This is free enterprise. Nor do we have regulations in place at this time that would get the government to determine the pricing for that insurance.

There are some heartbreaking stories, and we’ve been hearing many of them. But really, what is the solution? Yes, we could sit here and do what my colleagues have been doing, which is just throw darts and arrows, or we could say: “What is the real underlying issue here, and how do we get to finding solutions that will be there long term for the strata owners, for the managers who manage these stratas and for the insurance companies as well?”

Because it is a private insurance issue, it is very, very complex. I think everybody involved knows that this is a very complex issue. As a matter of fact, even my colleagues in the opposition know that this is a very, very complex issue. For those who either have had their insurance denied or are finding that their insurance has gone way up, to know it’s a complex issue is not enough. But because it is a complex issue, we really do need to have a multifaceted approach.

This is where I am so proud of the work that has been done by the Minister of Municipal Affairs and Housing. She has demonstrated how our government works in collaboration. It’s not about flying in to fix something that is out of our jurisdiction or our control at this moment, but looking to see what are the different components, what are the real causes behind the insurance having gone up so much and then making sure that there are levers in place to ensure that we can stabilize this industry and thus make sure that those who need insurance get insurance and that the costs are not as outrageous as they are.

Now, my colleague from Kamloops–South Thompson has said it himself on CKNW, and I actually went back and heard that clip, as well, where he said there is no silver bullet. And yet, speaker after speaker that has come on today from the opposition would imply that they have the silver bullet.

Let me assure you that we agree. We agree with the Member for Kamloops–South Thompson when he says there is no silver bullet, and so do those representing the strata owners and the insurance industry. They also agree with him that there is no silver bullet and that this has to be a collaborative approach, and it has to be done in stages, which is what the minister is doing.

Plus, this is not an issue that developed overnight. Often when I listen to my colleagues from across the way and we’re talking about challenges that British Columbians are facing, they speak as if for 16 long years they had nothing to do with the situations that have arisen that they want a magical fix for. I know you’re going to be saying that you were here, or that we’ve been in government for three years. Yes, we have, and we’re proud of the work we’ve done so far. We have lots more to do. But let me tell you: the damage that was done in a lot of different areas…. It’s not an overnight fix. That’s what we’re trying to do right now.

It also is a failure of an unregulated private market insurance system. I know my colleagues across the way absolutely believe in the free market. Yet, it’s strange, because they haven’t quite used the words that we need public insurance for homeowners and for stratas, but I would say that the message behind what they’re saying is almost that. The B.C. Liberals, you know — and this is not news to any of my colleagues across there — have always been, I would say, the cheerleaders at the altar, so to speak, of the private market.

[3:15 p.m.]

They’ve been calling for private insurance every time ICBC comes up. We know that’s the dumpster fire they’ve created, and it’s a dumpster fire that…. I’m very proud of the work that the Attorney General is doing to try to get control over ICBC. Once again, we’ve seen some significant changes, and we’re going to be seeing some more to make auto insurance competitive and affordable. We can do that because it is under our publicly regulated business. But even there, my colleagues across the way, when they were government, were real cheerleaders for private insurance, and here we have a private insurance system that has led to strata owners being in the bind they are in.

So what is the solution? What is the solution the worshippers of free enterprise are throwing out from across the way? They’re saying: “Go in there, and do this, do this, and do that.” But what about looking at the whole picture? As I said, this is very, very complex, and this is a failure. That’s why this bill, in its complexity, challenging the very complex problems we’re having, is there. It is there to make sure that we are looking at making sure that the levers are in place for all who are involved so that we can get a long-term fix.

Now, it’s very easy, when you’re in opposition, to try to score points, to say, “Look at this government. They are not doing anything,” and then forget there were actions that the opposition did when they were in government that have led to some of this.

Let me tell you that even when we sat down with the different partner groups…. I’m proud of the fact that we are a collaborative government. We are not pretending that we have the solutions for everything. We consult experts, we use data, we use science, and we use people’s lived experiences to come up with solutions and to find a way forward from people who know those sectors well. They will tell you that there are no simple solutions.

We are committed, and our commitment is very, very strong — a very hard-working minister. I know she has been on this night and day, so to speak, with her very complex file but giving this a priority, because we know that there are British Columbians who are hurting, through no fault of their own.

There is a system that was in place that has gone awry, and it needs to be brought back into some kind of a control, so to speak. We have to find a solution. We have to find a solution because people are hurting, and when people are hurting, that’s when it’s the role of government to see how they can assist them.

Assisting them doesn’t mean coming up with these and just throwing out ideas. It actually means finding solutions for the long term and for the short term that will work for everyone. This legislation, and we admit it, is the first step. We’re not going to stop trying to fix the failure that the private insurance system has created.

It has created a problem. It is more acute here in British Columbia, though I have to be honest — and I think my colleagues across the way know this as well — that this is an issue right across the country. It is compounded here because of the actions of the previous government, with some relaxation of the rules and regulations they did when they were government. As a result, we find ourselves with a double whammy here, and it is hurting British Columbians.

Now, some of these issues could have been addressed by my colleagues while they were in government. But instead, while they were government, they made things worse. When in government, the B.C. Liberals created a loophole that allowed strata boards to put off regular maintenance. We’re not making this up. The source for this is the Insurance Bureau of Canada presentation which I heard and received in May of 2020 through Zoom.

[3:20 p.m.]

They also, the Liberals, killed the loan program that used to help owners to fix their leaky condos. Two big actions by the previous government that created some of the problems that have led to the insurance situations we are facing today. They also allowed brokers — and this is really important — to hide their commissions from condo owners and enabled building managers to receive kickbacks for referring clients to insurance providers.

If you’re going to criticize and ask the government to take action, part of it should be to take responsibility that you played a role in insurance being the way it is today in British Columbia. That’s the double whammy I am talking about. You created this. Now you’re saying we created this, but you’ll fix it overnight.

As my colleague across the way, once again, the member for Kamloops–South Thompson, said…. I don’t often agree with him on many things, but on this issue, I do agree with him. When he goes on CKNW and says, “There is no magic bullet,” I agree on this issue.

We do have validators, people who have spoken up and are enjoying the collaboration. You know what I find? Maybe this is part of my teaching background as well. I find that people, when they are facing problems and challenges, do want to be involved when we look for solutions. Often the solutions lie with them because they have the expertise in that area.

Listen to this one. This is from Chuck Byrne. He’s the executive director of the Insurance Brokers Association of B.C. This is important for me. As we all know, when we build a house, a foundation is very important, just as when we learn something, learning the basics is very important. What he says is that the government’s changes “will be critical foundation pieces.”

That’s what this legislation is about. It’s the first step. It has taken time because we have collaborated. It’s going to lay down a foundation so we can address these very serious issues.

He goes on to say, on June 23: “These are the first steps necessary to stabilize the strata insurance market in the province.”

That’s not government MLAs or ministers saying that. Those are the experts who are saying that. Yes, we need the foundational pieces. We need the regulatory legislation in place so we can begin to stabilize the strata insurance market in this province.

I also have a quote here from Tony, who’s the executive director of the Condominium Home Owners Association of B.C. He is a spokesperson and a representative for the Condominium Home Owners Association. What he says is that transparency around reporting…. As I said previously, the Liberals were able to build in all kinds of loopholes and to take away reporting and requirements, but the transparency around reporting, commissions, disclosure and the changes to enhance owner responsibilities in strata corporations will all contribute to an improving insurance market which will benefit strata owners.

He also goes on to say that it’s a great start. We admit it’s a start. The minister says this is a beginning. This is the foundational piece. It’s difficult to build a house without a foundation. That’s why the foundational work has to be done first instead of sitting in the opposition and throwing darts and arrows.

He goes on to say, and uses very strong language, which I want to share with you: “I definitely want to resound a high level of support to the government for introducing these amendments. The initiatives that they have taken in this bill are going to have a positive effect for consumers.”

[3:25 p.m.]

You can see that those are very strong words from an industry that is struggling right now, both the owners, the stratas, as well as the insurance companies who are looking at how we do this.

It was a bit rich, hearing my colleague from North Van talking about the housing affordability crisis. I kept thinking…. I ran on that issue as well as on getting a hospital here for Surrey. Affordable housing? Yes. I’m proud of the work we’re doing in the area of affordable housing with our 30-point plan and billions of dollars invested to build more affordable housing, to build more rental units and to get people off the streets and into housing.

There is no way I’m going to take any lectures from the opposition on housing affordability when they did nothing. As a matter of fact, they helped to encourage, through their lack of action, the housing market getting out of control. Now professionals like our teachers, our police officers, our nurses…. So many people that could once afford to buy a house now do not qualify for a mortgage to buy a house.

Those are the kinds of challenges — the out-of-control housing market — that were allowed to occur under the previous government. So it is a bit rich now when they’re talking about housing affordability, as if it’s something that they have invented.

I do want to now take a minute to say…. I’ve talked about it being a complex issue. The B.C. Financial Services Authority has been very, very clear too. There is no quick fix. What they have said is that we all have a role to play. We all have a role to play.

We are willing — I think that’s what differentiates us on this side of the House from the other side of the House — to sit with people. We are willing to sit with those who are the experts, who have the information, and together, collaboratively, find a way forward. That’s who we are. We’re willing to do that because we know how important it is to bring balance to the market — to bring balance to the market — and, once again, no quick fixes.

We have to recognize there are dynamics driving these increases. There are dynamics driving these increases, and they have been compounded for years and years and years. This did not happen over the last 12 months or the last 24 months or the last 36 months. This has been going on for years. They are playing out in the private insurance industry.

Government does not set insurance rates nor does government regulate the pricing. That’s why this legislation is to give some levers so that we can begin to look at some regulations around insurance and the industry. This legislation will give more transparency, and transparency is a good thing. It’s a good thing.

I can tell you that I was kind of taken aback when I heard about some of the loopholes and some of the things that were happening. We want to make sure that the strata insurance market and the strata councils and owners have levers in order to be able to cope with the current situation.

As the minister often says — and a very hard-working minister at that — this is just the first step. This is the beginning of trying to tackle a very complex problem for which there is no simple pill. In Punjabi, there is a saying, miṭhī gōlī, a sweet pill to fix everything. There is no sweet pill that is going to fix and cure everything in this. This is going to take hard work from everyone involved, and we're committed to doing it.

The minister is going to continue to work with homeowners, with the strata stakeholders, like the Condominium Home Owners Association, and with the insurance industry. Every one of them has a role to play to help us to find solutions. We are committed to finding those solutions.

[3:30 p.m.]

Let me say that my heart breaks. My heart breaks for those seniors. My heart breaks for the young couples and families, young families, who are facing huge, huge increases in their insurance rates. We have heard 40 percent across the board. But I, myself, have heard of some who are facing much higher rates than that. It is a huge challenge for them, and I know that they are struggling. I want them to know that their government is working with all concerned to help find solutions that will be a fix for the long term.

[R. Chouhan in the chair.]

B. Stewart: It’s a pleasure and an honour to stand today before you and the public in regards to Bill 14. Having listened to some of the speakers that preceded me, I think it’s clear that everybody recognizes that there is an acute problem that came as a result of no necessarily wrongdoing by former governments or people individually. I think what we’ve been talking about is trying to find a solution here that will lead to the issue about the economic pressures that are faced by strata owners throughout British Columbia.

I think one of the things that was highlighted in June when the B.C. Financial Services Authority concluded that “the strata insurance market in B.C. is ‘unhealthy’” and not fulfilling the needs of British Columbians…. It further stated that the strata insurance market fails to meet the goals of sustainability, accountability and availability.

We can sit here and not talk about solutions. I know that the minister talks about the fact that this bill is a starting point, in terms of the solutions. But there are a lot of things that the government has taken on and a lot of promises. The thing about it is that it isn’t always about governments being able to solve affordability issues. Let’s take affordable housing for a moment and talk about the fact of the promise of 114,000 new affordable housing units. The government has actually only delivered 2,400 of those. I don’t think that that is quite what the intention was when that promise was made.

I think that more importantly, when we talk about solutions, we know that affordability is not government holding everybody’s hand and carrying them along to a place where they’re giving them a house. The bottom line that we’re faced with is we have undue delays and costs and regulations that are causing difficulty and increased cost to homeowners.

We’re talking today about the strata amendment act. Bill 14 refers to the fact that we do have an affordability issue, and one of the ways that we’ve been trying to resolve that is by being able to develop cities that are more compact. We talk about the fact that they have livability and all these things. But we won’t get it right if we continue to suggest that the problem is with what we did as a government and what you’re doing as a government. We need to come together and find solutions. There are all sorts of reasons that we need to find solutions to this.

Now, the member previously misspoke. The member for Surrey-Panorama declared the fact that the leaky-condo crisis was something of this previous government. That’s categorically incorrect. It was started back in the late ’80s. It went on through the ’90s, when their party was the government. In 2003, we came in and created the B.C. Homeowners Protection Office, with interest-free loans. That’s how we came to a solution. It’s a building code deficiency that was adopted in an effort to build more affordable housing.

The situation is that Tony Gioventu, who is with the Condominium Home Owners Association of B.C., stated categorically that British Columbia’s problem with leaky condos was solved in a big part by the former Minister of Housing and the creation of this particular office. I think that the fact that…. We provided interest-free loans for nine years, and those loans were to help people be able to afford the ability to be able to repair condominiums. Some of the bills were staggering. It was $5 billion in terms of repairs.

[3:35 p.m.]

We’re not talking about a repair job today, but the member for Kamloops–South Thompson talked very clearly about the fact that one of the issues that was identified by the Financial Services Authority in its review is that there is an ongoing issue about water claims and the damage. Having been a condominium owner myself, I know that there is a hesitancy by the strata corporations to increase costs or dealing with — whether it’s maintenance or deferrals — things like that.

I think that the situation is that this bill does attempt to address some of those things. But I think that one of the things that homeowners and stratas expect is…. They’re expecting relief from skyrocketing strata fees. I’m going to talk about just a couple in my riding. Somebody that is in jeopardy of losing their condominium and the other people that are facing increases that, staggeringly, are up…. And I’ll tell you the numbers in a minute here.

I think that we are not looking for more consultations. That’s what the minister has kind of suggested that we’re…. This is a first step. We’ve got to come to solutions. We have to take bold steps. We cannot be sitting on the fence on this stuff. We’ve known about this problem since last fall. It is not new news. We brought it up. It’s been brought up in question period. The member for Kamloops–South Thompson introduced private member’s bill M202, which was an attempt to get us doing and moving towards the solutions.

How many more crises does British Columbia need before this government will realize that consultations alone cannot solve the problem? We need immediate action, in particular, as this crisis is unfortunately disproportionately affecting seniors and people on fixed incomes. And that is a platform of the government today. I know that they said that in 2017 — that they were going to make certain that affordability was protected.

What we have here today is a crisis. Not only the pandemic, but we have the other crisis with these people, depending on where their income’s coming from. But the fact that they’re either on fixed income or low income…. They can’t afford these strata increases because of the fact that their insurance premiums have gone up. It’s really beyond offensive.

This is not how we should be treating seniors and peoples on fixed income. We have been actively working to address the strata crisis for months, from introducing the legislation I spoke of, to writing the Premier to propose solutions for relief. You also heard that we held a town hall with many different strata corporations and people that manage these buildings to try to see what their ideas are. It isn’t always about putting money. But there are some simple things that are being proposed by ourselves.

I want to just read that letter that is from strata corporation KAS 3058, commonly known in my community as the Cove. It outlines, in a letter of May 28, 2020, to the owners, that they had budgeted in their budget for this coming fiscal year a premium of about $368,000. If you can believe this, the premium came in at a staggering $530,195 — a 44 percent increase. I guess the only thing that’s consistent about that is that that’s consistent with the report by the B.C. Financial Services Authority that outlined that.

I think that the other thing that is more offensive in that is that the deductibles have increased to the point that it will be impossible to even make a claim against the insurance company, unless we have a major disaster. So we’ve got the premiums going up, the deductibles going up. You’ve heard all of that. But I think that there’s another requirement that each strata owner will have to have their own $100,000 strata deductible policy, because the deductibles have gone so high.

I think that that is very disheartening, when it comes to the people that have invested in property that they either live in or they hope to come to the Okanagan and spend some of the beautiful Okanagan sunshine by vacationing in a home.

I want to read a letter from a lady that is a hardworking woman who lives paycheque to paycheque just to pay for her basic living expenses. She’s worked hard her entire life so that she was able to purchase a home of her own. She says, in her letter to me dated July 13:

[3:40 p.m.]

“I’ve recently received a letter from the strata council in my building outlining the new cost of our building insurance. Our insurance is going from $77,000 last year to $310,000. That’s a 300 percent increase. What happened? They didn’t have a claim.

“This is simply extortion from the insurance companies and absolutely unacceptable. I’m a single, hard-working woman who lives paycheque to paycheque just to pay for the basic living expenses. I cannot afford the additional costs which will be added to my monthly strata fees to cover the strata increase.

“I have worked hard my entire adult life, and because of this, I was able to purchase a home of my own, an accomplishment I’m proud of. However, I deeply fear I will have to sell my beautiful house because I can no longer afford this ridiculous increase being forced on me. The provincial government must step in and put a stop to this.

“Regards, Karin Shelton.”

Those are two of several, and I know that there are many others that we have in our office. There are examples of many angry letters, as I mentioned, in my constit office, received from multiple stratas, which we have a lot of in Kelowna, and a growing number. I know that there are many other parts of the province that have a much greater propensity to having that. More than one million people across B.C. are at risk of losing their homes or are in desperate need of relief.

Now, we’ve made suggestions. They’re modest, but the suggestions that the member for Abbotsford South suggested was: what was the catalyst for creating the credit union movement in British Columbia? It was people that wanted to grow and expand their farming operations, and the banks….

Having been a banker back in the ’70s, I know exactly how bankers sometimes think, whether it’s crisis or whether they just don’t lend to those people. I had the same challenge in starting my own business. The banks were not there to help me. I ended up having to get the Farm Credit Corp. to help out to start my business.

What we’re suggesting is a solution that could be at least looked at, something like that, where the credit union movement, which is British Columbia–based, could possibly be that opportunity. We also suggested….

You know, today in the Finance Minister’s financial update, she talked about some of the hits that the government is taking on deferred or delayed taxation. There’s a 4.4 percent tax by the provincial government on every insurance premium paid. This, I think, is modest, but I still think that these are the types of things that the government has within and been able to amend and put into this bill just to give some relief, or have the Finance Minister do it.

So 2020 budget documents revealed that part of the NDP’s surplus was propped up by millions of dollars in these insurance premium taxes. As a result of the tax hike, the government stands to collect, actually, a revenue windfall. I know that that’s not the story that we were presented with today. But I think it’s outrageous that the NDP government would benefit from this crisis that’s affecting millions of British Columbians and won’t commit to helping them.

Many residents in Kelowna are deeply troubled by this government’s half-baked speculation tax. You know that I’ve spoken on that many times. It’s a tax that hurts affordability. It reduces supply, and it’s a tax that saw housing starts go down, not up. The government has been driving people out of their homes with one bad decision after another.

They destroy seniors’ dreams of a retirement home in my beautiful riding with their speculation tax. And now once again seniors are put out of their condos and townhomes. What have our seniors done to deserve this? The legislation in front of us today won’t provide any financial relief to the people to keep a roof over their heads.

Neither did they take the suggestions of a water damage prevention program to help strata owners invest in preventative maintenance via necessary upgrades, a little bit like what we did when we had the leaky-condo crisis. We provided loans to condominium homeowners to be able to upgrade and fix these things. I think that that may be appropriate, in light of the crisis that these people are facing. It’s clear that the NDP have no idea how to make life more affordable but are in fact making life more expensive.

[3:45 p.m.]

There are a couple of things that were mentioned in the report from the B.C. Financial Services Authority. We’ve recommended changes to the Strata Property Act, regulations that would ensure annual contributions are made to the strata corporation’s consolidated revenue fund at levels acceptable considering the building’s age, claims history and other unique circumstances, that require corporations to have a depreciation report detailing maintenance every year and that require a strata corporation to inform owners and tenants of any material change in insurance coverage, including an increase in deductible, as soon as it is feasible. It only makes sense.

I mean, if you have a business and you’re a landlord, you have scheduled maintenance. You know that your elevators will wear out, not in the first ten years, not even maybe the first 20, but you do have to budget for those types of things. You have to take into account the fact that there are significant costs that do reoccur. The roof has to be replaced and things like that.

I think that it’s important that some of these changes that we talked about, such as mandatory education and training for the strata council members, with particular emphasis on risk mitigation…. Too many of the strata corporations see building maintenance as something that can be deferred and deferred and deferred. They can’t think like that. They need to take decisive action and make certain that they’re doing the right things. Review the B.C. building code and implement new requirements focused on the prevention and severity of water damage events.

The B.C. Financial Services Authority also talked about the fact that these insurance premiums, the increases that we’ve seen in Metro Vancouver, at over 50 percent, and around the province at around 40 percent…. This number is likely much higher in some typical highrise condo units. This is because the survey covered all strata units, not just highrises but also low-risk bare land stratas and quadplexes. They said 46 percent of the policies surveyed saw a premium increase of greater than 30 percent. The report also says there’s no sign of relief in sight.

What does that mean? It means that these people, if they raid their deferral account or they do something that is not sustainable, are going to end up losing their homes. That is not the way to get to affordability.

It’s incumbent on the government, the minister, to act and to act now. British Columbians are not getting ahead under this government. This bill is doing nothing, but it’s a piece of empty legislation.

L. Throness: It’s a pleasure to rise today to speak to Bill 14, which is the Municipal Affairs and Housing Statutes Amendment Act. I’ve been listening to the eloquence of my colleagues on our side of the House, and it seems to me that we have the ideas and the capacity to fix this crippling insurance problem. I don’t think that capacity exists on the other side of the House, but Bill 14 is the government’s answer.

I wanted to find out just how bad the situation was in my riding, so we drove around and catalogued the strata units in my riding. There are about 8,100 strata units in my riding. If an average of two people live in each one, that means that about 40 percent of my voters live in a strata unit. The impact on them will be huge.

Many of these condos are retirement suites, where seniors live on fixed incomes. The impact on them, of course, is going to be disproportionate, because they can’t protect themselves. They can’t increase their earnings. They’re not in the labour force anymore. Nor can they do anything to lower these costs. They are stuck.

I’m really quite astonished that the NDP has come forward with a tepid bill as they have, and why so few NDP MLAs are speaking to this. In the Lower Mainland, where these strata corporations are concentrated, many of them are in NDP ridings. I’m surprised that so few NDP MLAs are rising up to speak on behalf of their own constituents.

In one strata corporation in my riding in Harrison Hot Springs, the annual premium will jump this year from $57,000 five times, to $277,000. That’s in one year. It’s going to cost every resident $3,000 more per year. That’s just the premium.

The insurance deductible also jumped. In many cases, the deductible is increasing to $100,000 per year or more. So if your toilet breaks while you’re gone and it floods out your place and your neighbour’s place as well, you could be left with any repair bill under $100,000, which, of course, would be a financial disaster for any condo owner.

[3:50 p.m.]

By degrees, we are moving toward de-insurance. We are moving toward no insurance at all in effective terms, which really calls into question the viability of strata corporations — period. Would you buy a condo if you couldn’t effectively insure it except for more than $100,000?

The amounts of money also spent on premiums are really enormous, if you think that the average condo fee in Chilliwack is about $350 a month. About 30 percent of that goes to pay insurance costs, as it does in the strata corporation that I live in. Altogether, in my riding alone, about $10 million a year is spent on insurance premiums. That could double this year, in my riding only, at the very least.

If you extrapolate these assumptions to all 35,000 strata corporations — 700,000 units, perhaps 900,000 units in B.C. — we’re looking at well over $300 million a year that is being spent, and now doubled, every year.

We’ve made a number of suggestions. We tabled a private member’s bill. That was the member for Kamloops–South Thompson. We asked for a water damage prevention program. We asked for a holiday on the insurance premium tax. The government ignored all of it, when the government should be prioritizing this issue. It should be seeking everywhere for solutions, quickly, to this huge problem.

Let’s talk for a moment about the failure of the market. Some large insurers have decided to leave the field of condo insurance entirely, not to offer it at all. That leaves owners — and, ultimately, renters, as costs are eventually passed on to them — at the mercy of just a few insurance companies who now have free rein to charge whatever they want to well over a million British Columbians.

They’re fleecing our people. Let’s face it. Their rate increases are unconscionable. For the government not to be doing anything substantive in the protection of these homeowners and renters is just as unconscionable.

The few companies that remain in the business have decided to insure less than they have before. They do this, as I said, by raising deductibles, sometimes by multiple amounts, so that owners are responsible for more of their own costs when disaster strikes. Then the companies charge much more for what little insurance they do provide.

Costs are going through the roof in these two different ways. It’s a double whammy on homeowners and renters. Part of this is the fact that there are huge global companies, like Lloyd’s of London that insure around the world. There have been disasters around the world that we may be paying for here in B.C., though they happened in some distant country, as insurance companies try to recover from us what they can’t recover from owners in those far countries.

People are going to suffer financial hardship over this. Some people will actually have to walk away from their investment simply because they won’t be able to pay their strata fees. That is a tragedy, and it is a new housing crisis.

The NDP came into government with a pledge to lower the cost of living and, in particular, housing costs for British Columbians. Since they came to power, the NDP have raised taxes in general. We’re paying more for everything from carbon taxes to ICBC premiums.

The insurance crisis will make housing and the cost of living even less affordable. It’s also going to reduce housing prices and reduce the equity of homeowners who need to sell. Their new elevated condo fees, which in some cases will double every month, will have to be factored into the selling prices, as buyers contemplate paying these new higher fees.

Most condo owners won’t have to leave their condos. They’re just going to have to dig deeper in their pockets and forgo all sorts of other things, not just luxury items but basic things, in order to spend that money on insurance. I do not call that making life more affordable. This is a huge hit to affordability in B.C.

Let’s talk about what Bill 14 does. This matter really came to my attention on February 7, when a strata owner came to me to inform me about the gathering storm here, but the government knew this a year ago. The NDP have had at least a year to tackle this problem. This spring we’ve been bringing it up constantly in question period, and all we have before us today is a pitifully weak response, which is Bill 14.

I can’t help but think that this has something to do with the NDP antipathy toward homeowners, which we’ve already seen in the speculation tax and in other ways. They seem to think that every homeowner is rich. So it’s okay to let them twist in the wind; they are those bad capitalists.

These are not rich homeowners. They’re responsible. Yes, they’ve scrimped and they’ve saved for years to put down a down payment and make regular payments. But in most cases, they don’t own their land. Condos are smaller in space. Often seniors live in them. They are a homeowner of lower financial capacity, and they’re going to experience real hardship. And in the midst of this disaster, the government comes back with a tepid, half-hearted bill.

[3:55 p.m.]

What does the bill do? There are 16 sections in this pathetic response to a major financial shock. There are only minor changes in the bill that tinker around the margins of the issue. It provides no immediate relief nor does it give owners any hope of relief in the future. There are no real answers to solve the problem of market failure that we see here.

For example, the bill requires more transparency: a strata corporation will have to include a summary of the strata corporation’s insurance coverage in an information certificate. Well, great. But big deal.

It will require that owners and tenants are informed of material changes in insurance coverage, including when an insurer decides not to renew a policy. I don’t oppose this, but it really skirts around the issue.

The bill gives power to make regulations regarding depreciation reports and makes it easier to vote for repairs by changing the voting threshold for repairs from 75 percent to a simple majority. Making repairs easier to approve is perfectly fine, but it’s fine window dressing. There are many brand-new strata corporations that do not need repairs which are caught up in this mess of escalating insurance costs.

The bill gives the government power to make regulations describing when a strata corporation’s insurance doesn’t have to be full replacement value. I question this one, if it could leave owners high and dry in the event of a major disaster. Now, as my colleagues have pointed out, this might be a viable idea if it were well defined. We want to avoid the occasion when someone might be surprised when there’s a fire in their condo and insurance doesn’t replace it all. So we want to watch for that, but it’s something we want to discuss.

The bill also prohibits the payment of referral fees in the sale of insurance. That’s fine. When well over a million people are confronted with costs that will change their lives — that even threatens some with the loss of their homes and puts them on the street — this government stonewalls in question period, repeats the mantra that they’re studying the problem, there are no quick fixes, it’s happening across the country, it’s somebody else’s fault, and so on. These are all sorry excuses.

I think that if the government knew what to do, we would have seen a concrete, viable answer in this bill, in Bill 14. I think the reason that we don’t see an answer in this bill is because the government simply has no idea what to do.

The bill does not attack the problem at its root. At its root, the problem is one of market failure that the government has the power to address but is unable or unwilling or simply unaware of what to do.

So let’s talk for a moment about market failure. I have spoken to a couple of insurance brokers in my city. They’ve explained that as a strata building ages, more repairs need to be done. But raising strata fees is unpopular, so some corporations don’t like to raise fees or require repairs. Sometimes elected strata councils are made up of homeowners who mean well, and they’re good people, but they don’t have a background in property management and they’re not aware of what needs to be done. Condo owners don’t like to raise fees because it makes it harder to sell their place.

But as buildings age, things start to go wrong, particularly in condos with multiple stories. When a water leak or a fire occurs in an upper floor, the water will leak down and cause damage in every suite along the way. If preventative maintenance work like replacing hoses or installing water leak sensors is left undone, the costs are then thrown onto the insurer. This is a significant issue — 56 percent of total claims in 2018 were for water damage. That’s not fair to the insurer.

Insurers were rightly sick of bearing costs that should have been borne by strata corporations and their owners, addressing normal wear and tear through preventative maintenance. These costs were rising as the building stock in the Lower Mainland, in particular, ages. So some companies stopped providing coverage entirely, leaving those who were left to cover their own costs by raising their deductibles and premiums.

The market is a wonderful and a powerful tool to bring prosperity to our country. But the market needs to be regulated by the government to make sure that it’s fair for everyone, that there’s a level playing field and that normal costs cannot be externalized. Here we have a classic market failure in which some companies were losing money because they’re paying for things that could have been prevented as owners and corporations shifted their costs onto them.

The final result is that some companies are able to charge virtually anything they want. But one of this government’s answers is to allow strata corporations to raid their contingency funds to pay insurance costs. Contingency funds are the very funds that are supposed to be used to do preventative maintenance to reduce insurance claims in the future. This is an unbelievably shortsighted move and one which, of course, we cannot support.

[4:00 p.m.]

Here I want to talk about another aspect of market failure, and that is fraudulent claims. A few years ago, I was talking to an insurance fraud investigator who worked for a private insurance company. I asked him what percentage of homeowner claims would involve some kind of fraud. He said that he felt it was 40 percent. That’s a lot of fraud, and fraud is a classic market failure, and it’s a big, unnecessary expense.

Well, what can we do? I think the government could do a number of things to ensure a more orderly, functioning market that offers competitive prices for insurance. It’s certainly not bad in the concept of insurance, by degrees.

The member for Kamloops–South Thompson has put forward a number of good ideas in his private member’s bill to require some kind of training for strata council members so that they become more aware of what they need to do to keep their corporations in good repair — to begin a water damage prevention program, to provide financial incentives to do preventative maintenance in strata buildings. That would be fine.

We’ve suggested implementing a temporary tax holiday on the 4.4 percent insurance premium tax applicable on strata property, to leave these dollars in the pockets of strata owners. We could extend, on a temporary basis, the property tax deferment program to enable strata owners who’ve faced extraordinary additional expenses related to soaring strata insurance costs to defer a portion of their property taxes.

We could implement changes to the Strata Property Act and regulations that ensure that annual contributions are made to the strata corporations consolidated revenue fund at levels acceptable considering the building’s age, claims history and other unique circumstances.

We could require a strata corporation to have a depreciation report detailing necessary maintenance every year and require that corporation to inform owners and tenants of any material change in insurance coverage, including any increase in a deductible, as soon as it’s feasible to do.

I like this one. To review the B.C. building code and implement new requirements focused on the prevention and severity of water damage events.

I have a couple of suggestions of my own that I want to make. I think we could pass laws that refer directly to fraudulent insurance claims by homeowners, to deter those who might make a fraudulent claim. This would be a big, low-cost solution to a big problem. At the very least, it would make everyone think twice before inflating a claim or making a false one.

Provincial legislation could give people more of an incentive to do what homeowners would naturally do. That’s to maintain their own property with regular ordinary maintenance. That is not allowing them to neglect their property. When components like water hoses fail, as a result, those costs are pushed onto insurance companies. That requirement alone could bring some insurance companies back into the market and lower the cost of insurance. Legislation could do the same for strata corporations maintaining common property.

Now, I want to talk for a moment about alternative insurance models. The government could pass legislation to ease entry into the market for other insurers using other models of insurance.

Here I’m instructed by my experience with the federal government. I was surprised to find, when I worked in Ottawa, that the federal government doesn’t insure anything. The federal government is self-insured; that is, it pays the cost of any damage directly from tax revenue. So if a federal building burns down, there’s no insurance company involved. The taxpayer just pays it out of taxes.

There’s no auto insurance on any federally owned car. If a federally owned vehicle is involved in an accident, the repair shop always knows that the federal government has the ability to pay for the repairs, without an insurance broker or policy to worry about.

One can only imagine, if the federal government wanted to insure the thousands of buildings and things it owns, that the price of premiums would defy description. Think, for example, of what the insurance premium would be on the federally owned nuclear reactor at Chalk River.

It’s so much easier and cheaper for the taxpayer to have a strict maintenance schedule on all federal property and just pay straight away directly for any damage that happens.

This idea could be extended to the idea of cooperative insurance, where owners gather together to insure themselves. My colleague from Abbotsford West talked about this, and I think it’s a great idea. I say this because the notion of a strata corporation is exactly that. It’s a cooperative venture to reduce individual costs by sharing spaces, sharing services, having things in common. This idea is not a new idea for strata owners.

I think there are two categories, two options, here for the government. The government could pass legislation to encourage smaller private investment firms that have an adequate pool of capital and perhaps only insure in Canada, or even in B.C., to provide insurance to strata corporations and take advantage of the premiums that are now paid to larger global insurance companies.

Why might they be interested in doing that? It’s because B.C. is a low-risk environment. Owners pay their bills reliably here. There’s a huge market opportunity right now, given the prices that people are now paying.

[4:05 p.m.]

Secondly, the government could take this cooperative idea and pass legislation to create a non-profit cooperative model for strata insurance here in B.C. Strata corporations which chose to enroll could pool their own insurance fees into one common account, and after only a few years, they would build up enough capital to cover any losses among them.

The difficulty here, of course, would be the transition period between the two, maintaining insurance under the present system at the same time saving for the future. Here’s where the provincial government could step in to play a role, helping to backstop these corporations, perhaps through loan guarantees or low-interest loans, until they arrive at a sufficient amount of capital to go it alone.

Cooperative insurance would do two things. It would create a natural incentive for every strata corporation involved in the pool to maintain their buildings well and to make fewer claims. Other corporations would also have an interest in making sure that everyone in the pool would inspect and complete regular maintenance to reduce everybody’s costs.

Second, it might actually lower the cost of insurance for everyone from what it was before, because it could be a non-profit venture. They wouldn’t be paying higher administration costs of large companies, nor would they be paying for disasters in other areas of the country or even across the world.

So to conclude, I don’t believe that the answer to this problem lies in bigger government, where ICBC takes over insuring 700,000 condos in B.C. As the NDP member for Surrey-Panorama implied earlier today, I think that’s a bad idea.

The answer lies in taking some of the suggestions made by the opposition and making the market work efficiently in a way that gives each condo owner and strata council the incentive to do ongoing maintenance to lower the number and the amount of insurance claims and in exploring new models for strata insurance in B.C., which will encourage the involvement of private capital or non-profit cooperative associations to take the place of insurance companies that have left the field so that insurance prices would quickly return to an affordable, competitive environment.

You know, over one million British Columbians are looking to this government in hope that they will act on their behalf soon, and they will hold that government accountable at the next election for doing nothing, and we in the opposition are going to hold them accountable too.

T. Wat: I rise today to speak on Bill 14 on behalf of the constituents of my riding of Richmond North Centre.

You know, it would have been nice to have been able to stand in this House five months ago and debate this legislation intended to provide relief to strata owners, like my colleague the MLA for Kamloops–South Thompson had presented back in February when the alarm bells were already sounding from condo and strata residents across B.C. The members of the official opposition had presented our solution to the House and called for action from this government. But here we are, and I suppose we will have to make do.

What I really cannot understand, looking at this legislation, is that this government has now had over five months to consult with strata owners and councils as well as the insurance providers to understand what is driving up this premium to unmanageable levels. We know the government has received hundreds of letters and petitions calling for specific relief. We know this government is aware of the solution presented in the private member’s bill back in February.

All of this input provided a very distinct outline of what solutions condo owners and strata groups need to drive down premiums and keep people from losing their homes. So where are they in this bill? In my own riding of Richmond North Centre, one of the fastest-growing municipalities in B.C., more and more residents, including seniors, are finding their homes in highrise condo units and stratas.

Back in February, I met with a group of strata owners in my riding. Some said that strata insurance premiums have soared as much as 500 percent, and the water damage insurance deductible also increased from between $100,000 to — listen — $500,000, beyond the ability of the strata owners. Some stratas are not able to purchase insurance.

[4:10 p.m.]

In June, I went to Rosario Gardens in my riding and received over 400 petitions from Richmond strata owners and tenants addressed to the Premier, calling for further action, and more are still being collected. Rosario Gardens has been one of the hardest hit stratas in my riding of Richmond North Centre. Only the strata’s current insurance broker, BFL Canada Insurance Services, submitted a coverage of $467,878, an increase of — listen — $359,997, or a 334 percent increase compared with last year. The deductible for water damage increased from $15,000 to $150,000. Given all the choices, the strata council has no alternative but to renew the insurance under their terms.

Every strata owner and stakeholder I have spoken to has all said the same thing — that the water damage deductible needs to be addressed. We have seen reports and data that suggests strata insurance has been used to fill the gaps where proper ongoing maintenance practices have not been implemented. This is one of the root causes of this horrendous spike in premiums and deductibles that we are seeing. But in this legislation, there’s no mention of any form in this bill of a program to address water damage issues whatsoever.

We know for a fact that this is a key action British Columbians are calling for. Why? Because it was formulated in our own private member’s bill, which called on government to implement a water damage prevention program to provide financial incentives for preventative maintenance in strata buildings. This is a solution presented by the official opposition, based upon recommendations presented to both government and the official opposition by strata owners and councils.

The very data we have been presented has shown that a key driver in insurance losses is water damage from plumbing leaks and failures. This has accounted for about 46 percent of the total claims closed since 2017. In 2018, that was 56 percent alone. A lack of preventative maintenance to cut costs years ago is coming out of the pockets of condo owners today and every day. That is why they have called for an incentive. A key driver of insurance losses is water damage from plumbing leaks and failures.

Speaking of highrise condo strata owners, in various Chinese media outlets and in Richmond, they have iterated that water damage and the associated costs have a very literal trickle-down effect on all residents in multi-storey units. Callers suggested that insurance rates for highrise buildings should be based on the level of the unit. Higher units should be charged more, as water damage from those units tend to affect more units underneath. Radio callers also suggested changing the building code to upgrade building materials and strengthen waterproof protection.

Why has the government taken none of these recommendations into account in this bill? Has the government done any town halls or consultation with strata owners, tenants and strata councils? Why is this government not listening to the voices of the affected strata owners and tenants? Vancouver has one of the most high-demand housing markets in the world, and we are going to need to depend on highrise condo developments more and more to meet our urban growth demands. How can we do anything to address our housing affordability crisis if we cannot offer both physical and financial protections for our residents for one of the most common and costly incidents occurring within these homes?

Well, let’s look at Bill 14, the government’s response to the growing crisis in strata insurance in British Columbia. The Minister of Housing introduced this bill with great fanfare. She claims that this bill is going to make life better for those struggling with strata insurance. But is this bill actually going to make a difference to the more than a million British Columbians living in condos and townhomes? The short answer is no. This bill will not address the major problems that strata residents are currently facing.

[4:15 p.m.]

If the Housing Minister and this government don’t want to listen to the official opposition and our members — who spoke earlier on before me, giving so much good advice and expertise and knowledge about this issue — I am sure that they cannot simply dismiss the comments of seasoned media professionals. Even Vaughn Palmer said it in his column in the Vancouver Sun: “Overall, the bill was underwhelming, particularly in terms of offering relief to strata owners and tenants being whacked with sky’s-the-limit premium increases.”

Let’s look at other journalists’ comments on this bill. Les Leyne of the Times Colonist said: “Condo residents will develop a sinking feeling once the government’s moves on the insurance crisis are fully digested. They are ineffectual in the short term and will only make a mild difference over time.” When I went on the Chinese-language two-hour open-line program ten days ago, together with a seasoned strata manager, virtually all the callers had the same sinking feeling as described by Les Leyne, simply because they do not see the government offering any relief for this runaway crisis.

Well, let me use the 1,000-square-foot unit as an example. The current strata fee is $300, with an increase of 50 percent. The insurance premium for each individual unit has risen from $800 to $1,300. That means a monthly increase of $282. Those two increases mean an extra expenditure of $340 per month. Just imagine. With a family with a monthly income of $3,000, all these increases take up 22 percent of the total family income.

A senior unit owner of the Prado condominium across from the Lansdowne mall, again in my riding of Richmond North Centre, has received advice from his strata council and property manager that their strata insurance has increased by 250 percent. Their monthly condo fee correspondingly increased by over 30 percent, effective February 1, 2020. So it’s an average increase of $120 per month. This is certainly a major increase for the fixed-income senior and many others living in Richmond.

Another retired senior living in a condo near Richmond Centre said that the high insurance policy over the last two years has resulted in a significant increase in strata insurance premiums as well as the deductibles. They are talking about an increase of 200 to 300 percent in premiums that is passed on to the condo owners and residents. In addition, the individual condo residents’ own unit insurance premium has also increased significantly due to increases in the strata deductibles. This has caused a significant financial impact on many senior condo owners.

Another constituent wrote: “Please be aware of the impending disaster regarding strata insurance denial of coverage and soaring insurance premiums. Homeowners and buyers now are in a double bind — can’t renew coverage, can’t get coverage for a new mortgage. What is the government waiting for — cancelled mortgages, loss of homes? Please act now. Is this province run by the insurance company or the elected MLAs?”

This government prides themselves on making life affordable for British Columbians. In the face of this strata insurance premium crisis and in the absence of any immediate or even short-term relief for the seniors living on a fixed income, how can this government still claim they are making life affordable for British Columbians? Maybe it’s for this reason that no representative from this government was willing to appear on the open-line program hosted by Fairchild radio to explain to the audience.

If the Housing Minister is so committed to solving the skyrocketing property insurance premiums, as claimed by the member for Surrey-Panorama earlier, why didn’t the Housing Minister or her Chinese-speaking MLAs appear in a two-hour Chinese-language hotline program to explain these to the audience? I appeared on the program.

[4:20 p.m.]

There were so many in the audience who wanted to voice their concern, frustration and anger. Too bad that we only had two hours and could not listen to all the callers who were waiting for the opportunity to talk. Not only I was disappointed that I cannot discuss this issue with a government MLA; the callers were upset, too, as this bill will not address the major problem that strata residents are currently facing.

I also went on Fairchild TV about a week ago, discussing these unprecedented strata insurance premiums, together with another guest speaker, David Tam, vice-president of the Chinese Real Estate Professionals Association. He urged this government to take quick action now instead of playing games. Tam said that more competition is needed in the strata property insurance market, as there are only two or three monopolies dealing with strata buildings’ insurance. He cited Alberta as making efforts to solve the problem. Condo market regulations have already capped deductibles for strata units at $50,000. Tam also suggested that B.C. should do the same.

He also noted that there are so many grey areas in the strata title property act, and it should be thoroughly reviewed. Tam also strongly suggested that education must be provided to property owners and tenants on a regular basis on ways to maintain their units, such as pipe replacement, and depreciation reports must be enforced.

My constituents have been asking me to speak in this people’s House to advise the Minister of Housing and this government about the challenges that they are facing. They hope that the Housing Minister and this government will, for once, listen to the voices of condo owners and tenants to offer some immediate relief.

Even if I put aside the frustration about this measure only now being introduced — we should have seen action on this months ago — the bill is still a disappointment to those struggling with rising strata fees. First and foremost, this legislation that the government has come up with provides no financial relief for those who desperately need it. There are no measures to keep money in the pockets of strata owners. There’s no water damage prevention program to assist strata owners with costly upgrades that they will need in the long run to, hopefully, save money on future fees.

One of the things that we suggested, in our letter to the Premier last month, was a temporary tax holiday on the insurance premium tax. This is a 4.4 percent tax that government collects on every insurance premium paid. In B.C., strata insurance generates about $300 million in premiums, according to a report from the FSA. So the real revenue collected by the government from the insurance premium tax is about $13.2 million annually, set to rise as premiums continue to skyrocket.

In the grand scheme of things, this is not that much income for the government, while it makes a considerable difference for condo owners. Yet this government has ignored our advice and continues to make money off rising insurance premiums.

The member for Surrey-Panorama said earlier that strata insurance premiums is a private sector issue and that there’s almost nothing that the government can fix or can do. The government, at least, can get rid of the 4.4 percent tax on property insurance, a total of $13.2 million per year. This $13.2 million will go a long way as an immediate relief for the million or so condo owners and tenants.

Instead of implementing real solutions and relief measures, the government has taken what they describe as first steps that won’t make much difference to the current situation. These steps include requiring stratas to inform owners immediately regarding material changes to their insurance coverage and enabling government to prescribe a cap on an individual owner’s liability for an insurance deductible if the claim originated in their unit but not out of negligence.

Why are these kinds of changes needed as a piece of the wider problem? They do not properly address the situation in the short and medium term, and it demonstrates that this government hasn’t been fully listening to British Columbians. They need help now. They need to see that Housing is taking steps that will make their lives easier right away, not measures that will only start making a difference long after they have lost their homes.

[4:25 p.m.]

Another change of note is section 4 of this legislation, which removes the ability to defer a depreciation report. The NDP is claiming that the ability to defer the depreciation report was a loophole, in their quest to avoid accountability for their lack of action on this crisis. However, they have simply moved the ability to defer depreciation reports into the regulations. It’s still there, in section 12(a). We will have to wait and see, yet again, how this government handles that issue. Most importantly, however, it does nothing to help the bottom line of the strata councils and strata owners.

Further delaying action, this government has also said they are going to be launching further consultation on the proposed changes in the legislation before us today. I honestly don’t know how many consultations they have to do. There’s no point conducting a town hall with British Columbians if they don’t listen.

This is really confusing, both for the clear problem of extending the timeline for relief and because it is yet another piece of evidence that the minister has not been listening to those who have been asking for help. Those struggling with skyrocketing strata insurance have already been clear about what kind of help they need and when they will need it. Still, the minister wants to push action further down the road.

In conclusion, I sincerely hope that the Housing Minister and this government can stop playing politics and, for once, listen to the voices of more than one million British Columbians who are living in stratas and condos. Many of them are on the brink of losing their homes as a result of these skyrocketing strata insurance premiums.

R. Coleman: I’m pleased to have an opportunity to speak to Bill 14 today. I enjoyed the comments of my colleague who just finished. I would not want to be on the wrong side of that individual in a debate. The minister should be aware of that, because I’m sure that in committee stage she’s going to have some questions.

This particular issue facing us today reminds me of 1996. The then government of the day was facing a condo crisis, albeit a leaky-condo crisis, but kept punting it down the road rather than addressing the issue, in spite of advice, ironically, that even the opposition was prepared to give and work with the minister on. They punted it down the road by, in this case, doing a commission, by former Premier Dave Barrett, with a bunch of recommendations. By the time it was done, the problem had gotten so large that it actually wasn’t fixable in any short or near term.

This one feels a little bit like that. About a third of B.C.’s population, 1.5 million people, live in condos or stratas. Some work was done by the government with regard to how insurance was affecting it, but they went to the whole strata package to see how this was affecting insurance rates in British Columbia.

To get a true picture, what they should have done is eliminate duplexes, fourplexes, townhouses and bare land stratas in that calculation when they decided what the effect was on insurance in British Columbia relative to condominiums. The real hit is coming in condominiums, in buildings across British Columbia, whether they be wood frame or concrete, whether they be new or old.

As a matter of fact, it is very disconcerting as to how this has gotten away from the government, how the legislation they brought is so weak, and in the fact that it doesn’t actually bring tools to the table to actually help to solve or find solutions that can be brought to bear to help people that are in this situation.

[S. Gibson in the chair.]

Now, the first thing I did when I first got information on this file is that I called the Insurance Bureau of Canada. Then I started to phone people I knew in the major insurance business in Canada and internationally. The first piece of information I received was…. These are the four things that I was told. I was told four things, but there was one other thing that I wasn’t told, and it is the real rub.

[4:30 p.m.]

The excuses were that companies had left the market for condo insurance because it wasn’t profitable. It had been a loss-leader for a long time. Therefore, it wasn’t profitable, which is No. 2. Therefore, there were less companies doing the insurance, and those that were there were making up for lost revenue and going back into the market to make this book of insurance profitable.

What they don’t tell you, though, is this. Those that used to do the reinsurance globally — insurance is a very large global market — decided to step out of this marketplace because of claims they had in other portions of the books of their insurance, which are more profitable for them, and they wanted to reduce their risk somewhere else.

One of the first questions I’d like the minister to answer at some point — hopefully in committee stage of debate with our critic — is how many conference calls or meetings you have had with the other housing ministers across Canada, including the housing minister for Canada. At no time has there been any comment on that. The reality is that this isn’t just in British Columbia. It’s across our country. People are being hurt and hurt very badly.

There are some shocking stories, some stories of constituents of mine and other people that have contacted me over the last few months. I have two seniors who have paid off condos, who are today exploring a reverse mortgage — a reverse mortgage, going into debt on the property that they own outright because they’re not getting an increase in their pension and they need to find the money so that they can stay in their home. Two particular cases, one is at $400 a month and one is at $450 — the additional cost they have to pay for the insurance for next year.

They also had to dip into their savings and pay out just over $2,000 as a special assessment to pay this year’s insurance. Going forward, $5,000 more a year in after-tax income is what these people need just to stay in their own home — just to stay in their own home. That’s disturbing.

I had to deal with a constituent’s issue that I was stunned by. This brings me to other institutions relative to things like financing and insurance. I had to talk to a financial institution on behalf of one of my constituents because the insurance on their condominium building, the deductible, went up to $250,000. The premiums also went up substantially.

Their financial institution said to them: “You need to put $8,000 more cash into your mortgage. We want you to put in, essentially, more of a down payment in equity.” They’re a high-ratio mortgage. Basically, they were told, “Go find the money to do this, to actually make us whole,” when they’re an insured institution. CMHC insures a mortgage for the institution. Then they turn around and say to this young couple: “In addition to that, you have to go buy another form of insurance to cover the risk on the $250,000 deductible on the build.”

Fortunately, the person who I went up the food chain with, with that financial institution was able to tell their folks: “Wake up here, guys. This just isn’t fair.” But how many more of those are out there? How many more of them are there to come?

I have a project in my community that is two years old. It has a two-, five- and ten-year warranty under the Homeowner Protection Act. Its insurance deductible went up to $250,000, and the average increase per person in that building is $350 a month, just to pay the increase in insurance, on a two-year-old building. No claims. Not one in this particular building. Yet that is the situation these people live with.

You know what? That’s in one condominium building of about 96 units. In that area alone, in my riding, there are probably 700, 800 or 1,000 units of condominiums and more being built. What’s going to happen to that market? What’s going to happen to those people, and how are they going to adjust to be able to go forward?

A friend of mine is the president of a strata in Burnaby. Now, this is a big strata. Their premiums on this big strata went from $250,000 a year to $750,000 a year. Not one previous claim had touched the deductible in the entire complex of hundreds of units.

[4:35 p.m.]

How do you explain that? You are trying to explain to somebody that, actually, insurance is about risk and measuring your risk. Why are you penalizing this brand-new building in Burnaby at the expense of the rest of the market, where maybe there are some buildings that aren’t so good? Why are you penalizing ones that are? The fact of the matter is the deductible…. This one also went up to $250,000.

It’s more than that. It’s what’s happening in the rental market. The Woodward’s building in downtown Vancouver — a $1500 to $2,000 special assessment per unit to pay the insurance, and $1,500 to $2,000 per year per unit. I know somebody that owns 14 units in that building. They’re rented. They’re now going to be strategically sold into the marketplace. As this person said to me: “Basically, a month’s rent is gone. My costs are going up, and I might as well get out now.” So it goes into homeownership in some other form but not rental, and we lose product in the marketplace.

My friend in Burnaby and I talked about this a lot. I thought I’d explore it with the industry — what the thinking is. I think there’s a responsibility here with regards to how you manage your building, whether you’re taking care of it, whether you’ve got the right amount of reserves there to fix the roof and the windows and the stuff in the future. The reason it was put together, by the way, in the act years ago was because of the former leaky-condo crisis, to be able to have the reserves to do that.

This legislation allows people to actually go touch the reserve to pay for insurance. I’ll get into that in a minute. I think short term, maybe; long term, it’s a big mistake.

The reality is this. My friend in Burnaby says to me: “We had a $50,000 deductible. Now we’ve got a $250,000, and we’re paying $750,000 for the insurance instead of $250,000. We’ve had to do a special assessment because of the jump.”

The biggest challenge is that these things don’t come at the same time as the annual general meetings or annual meetings or financial years for condo buildings. Imagine if you were in business and somebody came along and said: “I’m going to triple your rent midway through your financial year.” They added some costs. Now you’ve got to survive as a business. Well, these guys have got to survive as a residential condominium building. They had to survive. They had to do a special assessment.

We talked about this, and I said: “What about self-insurance?” The question to the industry, which I haven’t got an answer to, is: if that building in Burnaby agreed that they would accept a $500,000 deductible instead of a $250,000, what does the premium come down to? Does it come down substantially or not? What if the building is insured not at 100 percent of loss but, let’s say, at 75 percent or 50 percent of loss?

Now, why would you entertain that when you have mortgages on a building and individual units? Why wouldn’t you have insured for 100 percent of the value? Let’s think about that for a second. If you bought a condo in a building five or six or seven years ago, the value of your unit has gone up substantially because the real estate market moved upward. But is the replacement cost actually what the value of the unit is? How are you deciding what to insure?

More so than that is this. It took a while to get an answer, and I know the member for Abbotsford West mentioned the same thing that I found out when I started asking my questions. I said: “How many total loss claims of an entire building of condominiums have occurred in British Columbia in the last 30 or 40 years?” One. And they’re not even sure if that was a total loss.

You’re insuring a building with sprinklers in it, a building with other things in it, for a total loss, when you’ve done all of this prevention work so that can’t necessarily happen. What does that mean to the premium?

[4:40 p.m.]

My friend in Burnaby said: “If we’re paying $750,000 and we don’t have any claims, which we haven’t, and we’ve got a very good reserve already built up, why can’t we just self-insure for the next three years?” Basically, we’ll take the premium, but we’ll put the $2.25 million into a fund instead of giving it to an insurance company. Then we will self-insure from the standpoint that we will then, actuarily, figure out what our costs are going to be, what our risks are and adjust the insurance down accordingly. Believing that within 10 years, they’d have $10 million to $15 million in the bank.

Now, I had hoped that this legislation would actually think about something like that — a tool. It doesn’t. It doesn’t give power to do anything outside the box or think outside the box, but you can imagine the difference that would make to people, being able to now look at how they can control their lives.

The other thing the Insurance Bureau of Canada says, and everybody says, is that it’s all about water. But when you ask the Insurance Bureau of Canada or insurers: “If you really believe it’s about water, why don’t you incent your market to de-risk the issue?” Why don’t you say to condominium buildings: “If you put in the new sensors that are available in some appliances today, the minute there’s moisture, a shutoff valve kicks in and no water gets out”?

What if you allowed these people to say: “Okay, make the investment in your building to refit it to take care of this water issue.” It’s not about major leaks. It’s usually appliances or whatever that have leaked when a homeowner has been away or something has gone wrong, and the trickle down of the water…. Everybody who knows anything about construction knows that water is tough. Because it goes through almost anything. It just leaks through — pipes in the floor and in between walls, that sort of thing. Why not incent the market to help to fix their own problem?

We have the Homeowner Protection Office. We had the building standards branch. We could actually figure out a way, like we did with HAFI, on disability housing and stuff like that and adaptability — a program where we could actually incent people to take care of some of that risk. Make these buildings safer from the standpoint for water. If we did that, maybe we could actually help bring insurance costs down.

The other thing this legislation does that really does concern me is the notion that you will go into your contingencies — your building fund, for lack of a better description — and take that money out this year and pay insurance. How long will you allow that to go on?

Who’s going to answer the question — if you do it for one year, two years or five years — to the strata owners when somebody says you have a $300,000 roof that has to be put on, because the roof is getting to the end of life, and there’s no money in the account to do it because you allowed the money that was supposed to be there for that to go to another purpose. This is a very short-term solution with significant long-term deficit problems with regards to these buildings. I think it is important to know that so that we know what we’re going into as we go forward.

The other thing I think is important is to understand that people that live in condominiums buy a lifestyle and are prepared to pay a strata fee for the purposes of maintaining their building, for the purposes of making sure the lawns and yards are taken care of and for the purposes of knowing there’s a contingency so that if over a period of time, there’s any form of water leak or issues in the building, that contingency can help to fix that without having to have a special assessment like back in the leaky-condo days.

But also, it’s for them to have a lifestyle that says: “This is what I want. I want to be able to lock my unit. I want to go away, go out for dinner, whatever. I don’t want to have to cut the lawn. I don’t want to have to do the painting in the hallway. I don’t want to have to take care of the common area.” All of these things are built into the budget for the operation of a building.

What they also want to know is that there’s a contingency there for a challenge. For instance, if you have a boiler and the boiler goes — sometimes you don’t know that can happen — or an elevator needs fixing, a major capital cost, you can do it without having to go back to the homeowner and say: “We need more money again.” Because they’re paying a portion of their strata fees into this fund to make sure that they can take care of the building.

[4:45 p.m.]

As you walk through this, you’ve got to think of so many things. But the fact of the matter is that at the table should be the insurance companies, the Insurance Bureau of Canada. At the table there should be Housing Ministers from across this country, talking about what they’re doing in their jurisdiction and what you can do together.

At the table should be options to actually try and come up with solutions to mitigate some of these problems for people who are going to be heavily stressed by the additional costs that they’re going to face. It’s a big cost.

When I talked to a lady on the phone, 78 years old, crying — whose husband is not really healthy — because they’re talking about having to find a way to get a reverse mortgage or get money so they don’t have to move from their condo, where is the humanity in that? It’s not in this legislation. All of the things that have actually been recommended or given as an idea are not dealt with in the legislation.

It’s kind of unconscionable, when you announce the size of annual deficit that was announced in British Columbia today and the money that has been put out for other things, that a government would be taking 4.4 percent of the premium of increased insurance costs in British Columbia — $13.2 million. That’s not a big amount of money, but it actually affects people. It might actually make them think that somebody is starting to think and care.

I think that as we go through this, we need answers. Where are the Housing Ministers across the country at? Have discussions taken place there? Where is the federal government at in this conversation?

Has somebody sat down with the insurance industry, like I did, and have them say to me how many companies are out there, what’s their risk, what happens if you do this, or what happens if you do that? Do we always have to have 100 percent insurance when we don’t have the loss, like one loss in over 40 years of one complete loss of a building. So why are we over-insuring an entire marketplace for the profitability of international companies?

What about some self-insurance? Allow these guys to make some decisions and find a way to incent the market to take care of the water issue. The sensors — they’re out there. It can be done. So if something starts to leak in a wall, you can actually have the water turn off because of the sensors. These are big issues for people with regards to the future.

So on one hand you have a problem. You need some ideas, and creative ideas, to be able to go and deal with it. Giving people options and terms of de-risking their opportunities with regards to their homes. Well, all you’ve got is a piece of legislation that doesn’t allow for any of those ideas to come to fruition.

I’m sure that there will be a lot more detailed conversation about this in committee. But my only advice to government would be: don’t do what you did in the ’90s. Don’t keep punting this down the road with pieces of legislation, regulations and studies, because you’re going to end up with a massive issue like the leaky-condo crisis of the 1990s, which has taken 20 years to fix. So think about that.

Take the industry to task. Get together on a national basis. Use your leverage there. Come up with solutions like self-insurance and those sort of things and ideas where we can turn the table for these people and give them some hope that we actually care about their future, their lives, their homes and their health.

Deputy Speaker: Now I invite the hon. minister to close debate on second reading of Bill 14.

Hon. S. Robinson: The member is right. These are very big issues. They’re affecting a lot of people in this province. We have a lot of work to do. But this is a first step — to pass this bill to bring some relief to strata owners.

Again, clearly, as I’ve said in this House, there is absolutely more work to do. I look forward to the BCFSA…. They’re continuing their work, and they’ll be providing a final report this fall. I look forward to reading that report and taking additional action that they determine might need to happen. We’re certainly looking to act on those recommendations as well.

This legislation that is before the House begins a process, and it goes a long way to help provide some relief for strata owners who are facing considerable insurance costs. When we receive the report in the fall, we will take further action, as needed, and make sure that strata owners have access to the insurance that they need.

So with that, I now move second reading.

Motion approved.

[4:50 p.m.]

Hon. S. Robinson: 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 14, Municipal Affairs and Housing Statutes Amendment Act (No. 2), 2020, 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 second reading of Bill 20, Motor Vehicle Amendment Act (No. 2), 2020.

BILL 20 — MOTOR VEHICLE
AMENDMENT ACT (No. 2), 2020

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

Through Bill 11, the Attorney General Statutes (Vehicle Insurance) Amendment Act, 2020, the government is undertaking a fundamental change to create an auto insurance system that provides the benefits British Columbians need to recover from a vehicle accident while ensuring stability, predictability and fairness with respect to premiums and ultimately making life more affordable.

This bill, the Motor Vehicle Amendment Act (No. 2), 2020, amends the Motor Vehicle Act in support of that fundamental change to provide the legislative framework for further modernization of the Insurance Corp. of British Columbia. The amendments relate to number plates and validation decals, also known as licence plates and stickers. Specifically, the amendments provide for validation decals that are valid for periods longer than the term of the vehicle licence, or non-expiring, and provide for regulations which authorize ICBC to issue a prescribed document or take a prescribed action instead of issuing new validation decals.

Regulations will not be made until consultation with law enforcement, brokers and other stakeholders are complete. The bill makes other consequential and related amendments to the Motor Vehicle Act with respect to number plates and validation decals.

M. Lee: We recognize the need to continue to look at what is being reviewed under Bill 20 in terms of the Canadian modernization and utilization of licence plates and renewals, but we have some important questions relating to the bill that we’ll certainly be canvassing at the committee stage, both members that have received briefings on this bill, including the member for Richmond-Queensborough and myself, and the member for Prince George–​Mackenzie. We look forward to that debate at committee stage.

J. Johal: I wanted to add my comments along with my colleague. There is certainly a need for flexibility and choice in our public insurance system. I think that the thorough conversation in and around Bill 20 is very important today and moving forward here in British Columbia. There has been a hue and cry for a very long time from British Columbians who have stated that they want to see choice and flexibility in the insurance product here in British Columbia.

That has been the ongoing conversation here in this province over the last couple of years in regard to ICBC and how we move forward. We’ve had a vigorous and thoughtful debate in and around Bill 11, and this is part of that broader conversation of how we modernize ICBC moving forward in regard to providing that choice for British Columbians?

[4:55 p.m.]

There has been ongoing conversation in this province among ratepayers that they do want to see changes. They want to see and be provided the opportunity to go online and to pick an insurance product that suits them.

At the same time, we want to look at this particular proposal in and around what that will mean in regard to insurance brokers. They are a vital part of the system here in British Columbia in regard to the insurance product that is offered. They provide a tremendous amount of information and service to British Columbians in regard to the insurance product that’s available.

Can we provide flexibility to British Columbians moving forward, and what does that flexibility look like, particularly in and around these decals but also in and around the safety and security of information for the public as well? There’s a lot to discuss, and I look forward to the committee stage, moving forward, in regard to this bill.

Hon. D. Eby: Thank you to the members for their comments. I look forward to their questions during committee stage.

With that, I move second reading.

Motion approved.

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

Bill 20, Motor Vehicle Amendment Act (No. 2), 2020, 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 second reading of Bill 21, Wills, Estates and Succession Amendment Act, 2020.

BILL 21 — WILLS, ESTATES AND
SUCCESSION AMENDMENT ACT, 2020

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

The purpose of these amendments is to make it easier for people to make wills, both by allowing for electronic documents to be recognized as wills and by allowing the signing of both hard-copy and electronic wills to be witnessed remotely. The state of emergency caused by COVID-19 has made the need for additional flexibility in will-making apparent. However, the proposed legislation is not reactive. It is based on work by the Uniform Law Conference of Canada that began over a year ago.

Lawyers and academics from across Canada have given careful consideration to whether the protective purposes of a will can be satisfied by an electronic document and whether technology has progressed to a point that witnesses connected electronically are in a similar position to witnesses that are physically present to attest to the circumstances of the signing.

With these amendments, British Columbia will be among the jurisdictions leading the way in Canada with respect to the use of technology in will-making. However, given the work of the Uniform Law Conference of Canada and the fact that a number of other provinces have passed ministerial orders allowing remote witnessing of wills during their states of emergency, I am confident that many other provinces will be following British Columbia’s lead on this in the near future.

M. Lee: I wish to also rise to speak to second reading of this Bill 21, Wills, Estates and Succession Amendment Act, 2020.

It’s certainly, in this special session, the one example of this government bringing forward legislation, in the face of COVID-19 and the emergency orders that have been passed, and looking at legislation as to how to move forward in a way that we can actually debate the terms of how we improve, in this case, how wills are dealt with.

I certainly encourage the government to continue to consider, when we look at the Emergency Program Act, which we did with Bill 19, the nature of those emergency orders and how we can bring the subject matter and the terms and conditions around those orders on to the floor of this House so we can actually have some thorough debate about it, as this government is doing with this particular bill.

As the Attorney General had mentioned, it amends the Wills, Estates and Succession Act, which is the governing statute of wills and estates law in British Columbia, and seeks to modernize the original act, creating provisions to allow more flexibility.

[5:00 p.m.]

More specifically, Bill 21 will enable courts to accept electronic wills that are created on a computer and signed electronically and for which there is no printed copy. Additionally, the bill will also permit the use of technology for the witnessing of wills, allowing documents to be witnessed by people who are in different locations altogether. As I mentioned, these changes were enabled through an emergency order made on May 19, 2020, under the authority of the Emergency Program Act.

Now, I will say that I’ve certainly heard, in the course of the COVID-19 pandemic, from many lawyers and notaries about the importance of that emergency order. As we know, particularly with elderly people and others — people who are vulnerable, people who are quarantined and people who live in remote areas — they don’t have the same access to travel to or meet with, in person, a lawyer or a notary. Certainly, this bill will enable and create more flexibility around the witnessing of wills electronically and the process around creating documents for that purpose.

These kinds of changes are the kinds that we need to continue to look at to modernize our justice system and our legal process. Too much of the COVID-19 pandemic has, again, seen limitations in the way that our justice and legal process systems work in this province. This is certainly a step in the right direction.

I look forward to continuing to see the progress that can be made by this government in terms of adopting and utilizing and enabling greater technology and electronic use to open up our jurisdictions, certainly in a judicial and legal way. In fact, apart from the work of the Uniform Law Commission of Canada, we’ve seen the Uniform Law Commission in the United States actually adopt and recommend that U.S. states adopt the practices that are being looked at under this Bill 21.

I look forward, with that, to reviewing the details of this bill, but certainly, I am supportive of Bill 21.

Hon. D. Eby: I thank the member for his comments and note his critiques, although I disagree with them.

With that, I move second reading of the bill.

Motion approved.

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

Bill 21, Wills, Estates and Succession Amendment Act, 2020, 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 committee stage for Bill 2, the Motor Vehicle Amendment Act.

[5:05 p.m.]

Committee of the Whole House

BILL 2 — MOTOR VEHICLE
AMENDMENT ACT, 2020

The House in Committee of the Whole (Section B) on Bill 2; S. Gibson in the chair.

The committee met at 5:07 p.m.

On section 1.

M. Hunt: My first question is: in section 1, how many sheriff vehicles need emergency lighting or sirens installed, and what would the cost be?

[5:10 p.m.]

Hon. M. Farnworth: I am advised that police, special constables, already have the authority for theses vehicles, and there are no modifications or costs required.

M. Hunt: How many instances have we had where persons have been negatively impacted by being transported by a sheriff where they have failed, in time perspective, because of the lack of emergency lighting and sirens?

The Chair: Hon. member for Surrey-Cloverdale, could you please repeat the question? Thank you.

M. Hunt: Certainly. My question is wanting to understand how many times there has been a problem in transporting an individual because of the lack of emergency lighting or sirens on these sheriffs’ vehicles.

Hon. M. Farnworth: We can get that information for the member. I’d be happy to do that.

M. Hunt: I’m wondering. Is there special training that is required by these sheriffs in order to exercise this privilege? How many sheriffs will actually need this training?

[5:15 p.m.]

Hon. M. Farnworth: Yes, specialized training is required. It’s done annually, and there are about 200 that will require it.

M. Hunt: About how long is the actual training? Is it just a matter of hours, a day or two?

Hon. M. Farnworth: We’ll get the exact amount of training that’s required, but I don’t expect it to be an onerous, particularly long amount. We’ll get the exact time that’s required for the training, for the member.

M. Hunt: That’s all my questions for section 1.

Section 1 approved.

On section 2.

M. Hunt: What is the current state of driver training in B.C. for classes 5, 4, and 1 to 3?

[5:20 p.m.]

Hon. M. Farnworth: This particular bill is divided between two ministries, so I can advise the member that the Ministry of Transportation will be dealing with this section and taking these questions. Then we will come back to the Ministry of Solicitor General for some following sections. So if the member is able to repeat his question for the Ministry of Transportation, she will be pleased to answer that.

M. Hunt: My question was concerning the current state of driver training in B.C., particularly class 4 and 5 and, of course, 1 to 3.

Hon. C. Trevena: I apologize if we’re misinterpreting the question, but at the moment, ICBC is the regulator of driver training. But it is voluntary if you are going to take any further training for anything except air brakes. I’m not sure if that’s what the member is specifically looking for, but if he wants to maybe hone down a little, we might be able to get a more specific answer.

M. Hunt: I’m assuming that these changes are focused on the commercial drivers, being the classes 1 to 3. Is it the intent of the minister to be bringing in mandatory entry-level training for these new drivers?

Hon. C. Trevena: For class 1, it is the plan. These amend­ments will work with class 1. We haven’t contemplated class 2 and 3 yet.

M. Hunt: If we’re just focusing on class 1 in the current thoughts on this, is it also the intent of the minister to have possibly a refresher course after so many years — or changes that she’s wanting to institute? Will there be the need for a refresher course for those who currently hold a class 1?

Hon. C. Trevena: No, there are not refresher courses being planned at the moment. So those who have their current licence will be able to continue driving on that licence.

M. Hunt: Also recognizing that often we have commercial drivers who are transferring from one jurisdiction to another over time, my question is: what efforts are going to be made to ensure that this training program that is going to be established is going to be such that it meets the standards of other jurisdictions? In other words, is there an intent to have some commonality across Canada in this?

[5:25 p.m.]

Hon. C. Trevena: Apologies for the delay there. I’m getting some advice, obviously, before answering the questions, and we hadn’t quite finished getting the advice.

There are now federal guidelines under the national safety code, which obviously we will be following. I believe that we’re actually going to be exceeding those. We’ve been working with every province, from Ontario west. There has been cross-jurisdictional collaboration with every province from Ontario west on this. We are the last province from Ontario west to bring in this. It’s definitely time that we did bring it in.

M. Hunt: This clause refers to an exemption for a class of persons. My question is: what is the purpose of this? If the minister could give me an example of a class of person that would be exempt from this training.

Hon. C. Trevena: This is really to recognize reciprocity so if somebody is coming from another jurisdiction and they have got their mandatory entry-level training in, let’s say, Manitoba or Saskatchewan, they don’t have to retake the test. It also is for those who have had their licence long enough that they would not have to take the test. It allows for the ability for people to work across jurisdictions.

Section 2 approved.

On section 3.

M. Hunt: Question. A real simple one. What has prompted this change?

Hon. M. Farnworth: What has prompted this change is that there is no existing provision to ensure that someone who lives in B.C. has, in fact…. We have established a residency requirement for drivers’ licences and allow ICBC to request evidence that a person is and continues to be a resident of British Columbia. There is currently no existing provision, and this will now create that provision.

[5:30 p.m.]

M. Hunt: Are there any statistics on how many people may be abusing the B.C. driver’s licence privilege?

[R. Chouhan in the chair.]

Hon. M. Farnworth: I can tell the member that ICBC processes and deals with about one million applications a year. In the latest stats we have, which are from 2018, about 0.6 percent are, in fact, problematic.

M. Hunt: I’m just fascinated with curiosity on this particular one. I was originally born in Alberta. I got my licence in Alberta. When I came to British Columbia, boy, I thought it was a normal thing for us to do, to change.

I guess it’s just a really funny question. What does it mean to be an ordinary resident in British Columbia, and what’s going to be accepted as evidence that a person is a resident in B.C.?

Hon. M. Farnworth: For the hon. member’s elucidation, I can tell you that “ordinary resident” is defined by judicial case law in terms of someone who has settled here in the province of British Columbia.

In terms of how you would go about proving that, it can range from a number of things. It’s determined on a case-by-case basis. Such things as a mortgage agreement, for example, paying of taxes or a rental agreement would be some of the ways in which you would be able to prove that you are ordinarily resident here in British Columbia.

M. Hunt: Also listed here is a prescribed class of person. Could the minister give me a possible example of what else we would be dealing with in the class of person that wasn’t an ordinary resident?

[5:35 p.m.]

Hon. M. Farnworth: Regulations would be used to accommodate classes of persons that are residents of B.C. but do not maintain a primary residence in B.C. and need access to a B.C. driver’s licence. Temporary foreign workers who maintain a residence outside of B.C. but who need a driver’s licence to work here would be an example.

M. Hunt: Curious question, continuing on that. Right now there’s a shortage of the commercial drivers’ licences that we have a need for here in the province of British Columbia. Would that also potentially be a class of person — those from other provinces who aren’t here permanently but are here on a temporary basis as well? Would they also be considered as a similar class of person?

Hon. M. Farnworth: If you’re a driver from another part of Canada or the United States, you would not fall into this. You would be fine. This change does not impact commercial drivers who have a commercial licence.

Sections 3 and 4 approved.

On section 5.

M. Hunt: The question on section 5 is: what has prompted this change?

Hon. M. Farnworth: Currently, right now, if, for example, the hon. member had a B.C. driver’s licence but you lived, let’s say, in Spuds Acre, Saskatchewan, and you didn’t reside here in British Columbia, ICBC could ask you to surrender your B.C. driver’s licence, but there’s no requirement to do so. This section will allow ICBC to say: “No, that licence is no longer valid, as you’re not resident here in British Columbia.”

M. Hunt: It also says in section (b): “the licence was issued in prescribed circumstances.” Could the minister please help me to understand what type of prescribed situations might apply?

[5:40 p.m.]

Hon. M. Farnworth: This deals going forward. For example, if you come into an ICBC office to get a driver’s licence, and you get the temporary yellow driver’s licence until you’ve provided all — your what they call “identity proof” — and established that you’re resident here…. If that doesn’t come in and you don’t come back, we are able then to cancel that yellow paper licence, which is something we’re not able to do at the current time.

Sections 5 and 6 approved.

On section 7.

M. Hunt: A real simple question: what’s changed? I thought this was the current law.

Hon. M. Farnworth: No, the member is correct. It is exactly the same, except it’s been renumbered in the act.

Sections 7 and 8 approved.

On section 9.

M. Hunt: The amendment refers to “by order of the minister,” ICBC may extend the terms of a driver’s licence. Which minister will be authorized to do this?

Hon. M. Farnworth: Currently, as the current Solicitor General, it would be myself, because it would be taking place under a state of emergency.

M. Hunt: Do we have any statistics on how many people had the issue of an expired driver’s licence during last year’s state of emergency? How many people were impacted in such a manner over the last five years, say?

Hon. M. Farnworth: We will get that information for the member.

[5:45 p.m.]

M. Hunt: If the driver’s licence terms can be extended during a state of emergency, which we all know is an extraordinary occurrence, was any consideration given to providing a similar extension during a state of emergency for motor vehicle and trailer insurance?

Hon. M. Farnworth: That issue would actually come under a different piece of legislation, hon. Member.

M. Hunt: My question now…. It’s sort of a series of questions. I’ll put them all together, and the minister can give me a more fulsome response. My question is: how is this extension going to occur? Is it going to be automatically in the system based on where or when a state of emergency takes place? Will it affect persons or a certain class of persons who have to call a certain number? Or is there some way that when they check in for a state of emergency, that’s recorded, and it kicks in?

I’m just sort of wondering how this is actually going to occur and work out in the real world.

Hon. M. Farnworth: As the member can appreciate, this is a new provision. One of the things that we are doing in terms of both with this legislation but also in the other area that I’m responsible for, emergency management B.C. and the changes that we have been implementing there, is to learn from the lessons, in terms of the COVID pandemic that we are currently going through, to implement things and streamline this initiative as quickly as possible, so that we can get the proper procedures in place.

Whether it may be, for example, in the case of registering — if you register with EMBC, maybe a model that we would be able to put in place where…. That may be one of the questions where you ask: is your driver’s licence going to expire? Then that could be forwarded to ICBC. That’s one of the areas that is currently being worked on and developed, being put into place for when the next state of emergency, if we need to implement one, is in fact implemented.

Section 9 approved.

On section 10.

M. Hunt: Now, if a person is not being personally served and instead receives a notice by mail, is there a new form being considered that would be enclosed with the mailed notice that will allow the person to sign it to acknowledge that they have in fact received it and send it back?

[5:50 p.m.]

Hon. M. Farnworth: The answer to your question, hon. Member, is yes. A new form is being considered.

M. Hunt: Is consideration being given to an electronic form to acknowledge receipt?

Hon. M. Farnworth: I am pleased to tell the hon. member that the answer to that question is also yes.

M. Hunt: It’s always wonderful when we have such cooperation. We enjoy that.

My next question on section 10 is: what impact does revoking the prohibition versus terminating the prohibition have on a person’s driver’s licence? Do partial points remain when a termination takes place versus a revoking?

Hon. M. Farnworth: I thank the member for the question. If it is revoked, it means that it will stay on the record. If it is terminated through termination, then it will be removed from the record.

Section 10 approved.

On section 11.

M. Hunt: Are there any specific types of documents currently considered as technical materials that would be prescribed?

Hon. M. Farnworth: Thanks, Member, for the question. There are a number of manuals, scientific documents and other documents that are listed in the regulations that would qualify for what you are talking about.

Sections 11 to 13 inclusive approved.

On section 14.

[5:55 p.m.]

M. Hunt: Question on 14, real simple — what’s happening here and why? We’re talking about red reflectors and flashing red light. What are we talking about?

Hon. M. Farnworth: It is removing the requirement for ICBC to approve the make and design of bicycle lights and reflectors. It was causing considerable confusion for cyclists and for the people who make bicycles. ICBC has never set standards. It has never approved bike lights, lamps or reflectors, nor does ICBC have any expertise related to bike lights or reflectors. This is getting rid of, in essence, a regulation that ICBC does not use, has no expertise in and does not currently enforce.

Section 14 approved.

On section 15.

M. Hunt: We’re dealing with a real technicality here. What is the difference between a firm and an organization?

Hon. M. Farnworth: I can let the member know that all this is doing is making this section consistent with the rest of the act. The changing from one word to the other has no material impact on the rest of the legislation or the section.

Sections 15 to 17 inclusive approved.

On section 18.

[6:00 p.m.]

M. Hunt: I don’t wish to impede the traffic here and the moving of this, but I’d simply like to know what is happening here as we amend section 18 and why.

Hon. M. Farnworth: Just for the member, this is not a policy change; rather, it is a clarification. What it says is…. With the sections to 17 in this bill, it clarifies the rules around the use of electronic devices in a hands-free manner by stating that drivers in the graduated licensing program are not permitted to use hands-free devices the way that fully licensed drivers are. It’s the current policy, but this clarifies it and makes it clear and removes any ambiguity.

M. Hunt: I believe the minister shifted to the question on 19 rather than 18. Nineteen is where we’re dealing with hands-free. The question is concerning 18, or is 18 also dealing with hands-free?

Hon. M. Farnworth: Eighteen deals with hands-free as well.

Section 18 approved.

On section 19.

M. Hunt: The question is the exemption for classes 7 and 7L. Did it not previously exist anywhere? ICBC’s website indicates that hand-held or hands-free electronic devices cannot be used by a class 7. So where did the authority come from for ICBC to have this policy?

[6:05 p.m.]

Hon. M. Farnworth: The reason for this particular section is the clarification. Under the previous section…. People were misinterpreting that section. The reality is they’re not allowed to use the hands-free in the graduated program with a class 7 or 7L. This just makes that clear.

Sections 19 and 20 approved.

On section 21.

M. Hunt: I’m aware that this amendment is related to changes being brought about by the federal government. For the record, can the minister please state why sections 224 to 229 of the Motor Vehicle Act are being repealed?

Hon. M. Farnworth: These sections are, in fact, redundant. The authority to do what is required is already there in the Criminal Code.

M. Hunt: That is all the questions I have.

Sections 21 to 32 inclusive approved.

Title approved.

Hon. M. Farnworth: I move the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 6:07 p.m.

The House resumed; Mr. Speaker in the chair.

[6:10 p.m.]

Report and
Third Reading of Bills

BILL 2 — MOTOR VEHICLE
AMENDMENT ACT, 2020

Bill 2, Motor Vehicle Amendment Act, 2020, reported complete without amendment, read a third time and passed.

Hon. M. Farnworth: I call committee stage, Bill 13, Miscellaneous Statutes Amendment Act.

Committee of the Whole House

BILL 13 — MISCELLANEOUS STATUTES
AMENDMENT ACT, 2020

The House in Committee of the Whole (Section B) on Bill 13; R. Chouhan in the chair.

The committee met at 6:11 p.m.

On section 1.

M. Lee: Just turning to section 1 of Bill 13, in terms of the expansion of the ability to collect personal information from any other person. Could I ask: in terms of determining what other person personal information can be collected from, who determines that?

Hon. D. Eby: The context of this is we have these family justice counsellors that are providing assistance to people in our family court system. It’s in a pilot project in Victoria, and we’re hoping to expand it to other parts of the province.

In doing their work, we have realized that they are collecting information about people in order to do that work of assisting parties to come to some sort of resolution in their family law dispute.

[6:15 p.m.]

In order to collect information, they need to have authority to do so under the Freedom of Information and Protection of Privacy Act. Section 27 requires them to have legislative authority to collect that information.

If they didn’t have this authority to collect information, basic information included — the name and contact information of the parties to the dispute, information about the children of the marriage, other people who may be involved, grandparents and so on — they wouldn’t be able to do their work of helping negotiate a settlement or an agreement. This has been a very successful program.

I can advise the member that the ability to collect information about the parties and about relatives and so on to do this work has enabled the Victoria registry to not have any COVID-related backlog as a result of their efforts in family-related matters. That is quite an accomplishment, given the fact that so many matters were stood down and cancelled, but the family justice counsellors were able to help people reach agreements outside of court, eliminating that backlog.

The provision has to be broad enough to include the type of disclosure of information about key people important to the family, including children and grandparents. It would be the family justice counsellor that determines what other information they may need, and they only know about who they need to collect information from based on the discussion with the parties as they come to resolution.

M. Lee: I just would like to ask the Attorney General: in terms of the requirements around maintaining those records, what governs that process?

Hon. D. Eby: It’s the Freedom of Information and Protection of Privacy Act that governs the collection of information by government employees, such as a family justice counsellor.

M. Lee: Has the Office of the Information and Privacy Commissioner commented on this amendment?

Hon. D. Eby: I’m advised that the Office of the Information and Privacy Commissioner was involved in the drafting of the provision and doing an assessment around the privacy implications here.

Sections 1 to 7 inclusive approved.

On section 8.

[6:20 p.m.]

M. Lee: Just to ask the Attorney General what the information is that’s contemplated would be provided here.

Hon. D. Eby: Currently — just a little background for the member — search orders can assist a party with protection order matters if the party is also applying for parenting arrangements or support, but they can’t assist if the party is only applying for a protection order. Under part 9 of the Family Law Act, a person may apply for a protection order without also applying for another type of order. So this section remedies that issue.

The particular information that is expected to be provided here is the residence of a person that needs to be served, in particular, typically, with a protection order. That would be the kind of information that we would expect, because search officers often assist with locating a party, and they need to be located in order to be served so that enforcement isn’t delayed.

Sections 8 to 11 inclusive approved.

On section 12.

M. Lee: I certainly recognize the importance of the tools in which to deal with debtors under the Family Maintenance Enforcement Act. On this particular provision, could I just ask the Attorney General the purpose of eliminating, effectively, two notices to the debtor before taking action with respect to their driver’s licence. Could I ask what has been the assessment done in terms of the effectiveness of reducing notice from two notices to one notice of only 30 days advanced period?

[6:25 p.m.]

Hon. D. Eby: There already is a 30-day notice period for the debtors, acting against their vehicle. The 30-day notice right now is in relation to a driver’s licence. So if your driver’s licence is going to be suspended because you haven’t paid your child support, that’s a 30-day notice.

There’s a deeming provision. It’s 30 days from the deemed receipt of a mail notice, a notice received in the mail.

The notice in relation to a vehicle, which prevents you from renewing your vehicle if you haven’t paid your child support, is 60 days. The driver’s licence piece is generally understood to be a more immediate impact. Your driver’s licence is immediately cancelled.

But the vehicle notice prevents you from renewing. You have to renew it after a year, so generally, there is more time. People have, in the past, been known to have received notice that their vehicle is being suspended and not taken action to bring their child support up to date or contact maintenance enforcement because they don’t have to renew their vehicle sticker for a number of months. So there’s a lag between the notice of the action and the action actually impacting.

The weird thing is that there’s only a 30-day notice for the immediate action, which is a driver’s licence, but a 60-day notice for the action that has a lag behind it. This brings the two together, a 30-day notice for both, to make it consistent for both. It also provides the ability of earlier notice to someone that their vehicle also will not be renewed. It hopefully will encourage people to take swifter action in bringing their child support up to date.

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

Motion approved.

The committee rose at 6:28 p.m.

The House resumed; Mr. Speaker in the chair.

The Committee of the Whole, having reported progress, was granted leave to sit again.

Hon. D. Eby moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:28 p.m.