Orders of the Day

Hon. L. Beare: I call second reading of Bill 5.

Second Reading of Bills

BILL 5 — InBC INVESTMENT CORP. ACT

Hon. R. Kahlon: I move that Bill 5 be read a second time now.

[N. Letnick in the chair.]

I’m delighted to be introducing this important piece of legislation that will help promising B.C. companies scale up and grow jobs and investments here in British Columbia. This bill fulfils a key commitment in my mandate letter from the Premier as well as a commitment in the recent throne speech and Budget 2021 by establishing a new strategic investment fund for British Columbia.

This new Crown corporation will be named InBC Investment Corp., or simply InBC, and will be an important part of our province’s economic recovery in the months and years ahead. InBC currently exists as a Business Corporations Act company. The bill you have before you today, Mr. Speaker, transforms InBC into a statutory Crown corporation. This legislation sets out some of the key structures and features of the corporation, including the mandate and the independence of the investment decision-making.

Before I speak about the legislation, however, I want to spend a few moments explaining why InBC was established in the first place and why it matters. Currently our government has several programs to support investment in small and medium-sized businesses in B.C., including the venture capital tax credit program and the employee share ownership program. But InBC, the strategic investment fund, builds on this by supporting small and medium-sized businesses with a new source of patient investment capital. That capital will be invested in accordance with a triple-bottom-line mandate, which I’ll speak about a bit more, and in more detail, shortly.

[1:55 p.m.]

InBC will take this support for small and medium-sized businesses to the next level through proactive investments in high-potential B.C. business. By investing alongside other sources of capital, both public and private, InBC will support the creation and development of new markets, drive economic growth across the province and partner with private sector to address pressing social, economic and environmental challenges.

What does the bill before you achieve? Specifically, it sets out InBC’s mandate, which is to achieve financial returns and to advance certain social, economic and environmental policy priorities. It expressly states that the chief investment officer will have sole authority to make investment decisions within the scope of the policy framework set by government.

It enshrines the important transparency and accountability measures, including an annual reporting requirement, an external review to be conducted every five years. Finally, it sets out the structure of the board of directors and its role as well as the option for the board to create a body called an advisory forum.

While this is not a complete list of everything the legislation does, the points I have just outlined represent some of the bill’s main policy positions. I will now speak about each of these in turn.

InBC has a unique mandate. It is a strategic investment fund with a triple-bottom-line mandate. It will be doing what is known as impact investing. This means that investments must aim and achieve a financial return. However, that is not the end of the story. Its investments must also support social, economic and environmental policy ob­jectives of the government. In other words, across the portfolio, InBC investments must aim to make money but also move the dial on key priorities, like building a more innovative, low-carbon economy; growth and investment across the province; and achieving reconciliation with Indigenous People.

The idea here is that the value of the investment is no longer just about financial returns. It’s also about the money making positive impacts across British Columbia. This mandate has set out, in section 4 of the legislation, the purposes clause and will also include a chief investment officer in their work as they decide which B.C. companies to invest in.

Another central feature of this legislation is the independence of investment decision-making. I want to read this section out because of how important it is. Section 18(1) states: “No person other than the chief investment officer or an external fund manager retained by the corporation may make an investment decision.”

The legislation goes on to clarify that in making investment decisions, the chief investment officer cannot be directed by anyone, including the government, a minister, the board or a director, the CEO or any other public officer. Put another way, no one can direct this chief investment officer or influence them when they’re making investment decisions. The bill prohibits it. Only the chief investment officer can make those investment decisions.

For example, if someone sitting on the InBC board of directors came across a good investment opportunity and they wanted the chief investment officer to consider it, that director cannot call them up and ask them to look at it. That company needs to apply for the investment via the InBC website just like any other company and go through the regular application process. There will be only one process for applicants, and they will all need to go through the front door. This provision in the legislation reinforces that.

The statutory independence is an important safeguard. Not only will it help protect the chief investment officer from any actual or perceived interference, but in doing so, it will give InBC more credibility in the marketplace amongst players that will hopefully seek to co-invest alongside it. It will give InBC more credibility amongst companies that will potentially be seeking its investment, and it will give InBC more credibility with B.C. citizens and taxpayers who are funding its activities.

InBC is a public strategic investment fund and will be investing taxpayer dollars. For that reason, it is incredibly important that it has the highest standards of transparency and accountability to the public. I will touch on a couple of those measures.

Section 23 of the legislation contains an annual reporting requirement. Specifically, every fiscal year InBC will be required to report to myself and the Minister of Finance on the performance of its investments. As ministers, we can specify what form and manner we would like the report to take, including any information that we would like it to contain. Section 23 also requires that I then lay the report before the assembly and, promptly after doing so, make the report publicly available.

[2:00 p.m.]

The transparency doesn’t end there, though. Above and beyond this annual reporting requirement, section 24 of the legislation requires that every five years InBC must undergo an external review. This is modelled on the legislation that supports the Scottish National Investment Bank. Specifically, the legislation states that I’m required, as minister, and after consulting with the Minister of Finance, to appoint someone to review and report on the performance of InBC’s investment over a certain period. The idea is that this person or organization would be external to government, a third party. Once I receive that external report, I am then required again to lay it before this assembly and promptly, after doing so, make the report publicly available.

In practice, these annual reports and external five-year-review reports will be put on InBC’s website for anyone to read. These measures are in addition to the typical transparency and accountability mechanisms, such as publishing an annual service plan report and submitting annual reports as required by the Budget Transparency and Accountability Act.

Finally, I’d like to speak briefly about InBC’s governance structure. InBC will have a nine-member board of directors. Seven of its members will come from outside of government, while two will be senior public servants. The legislation stipulates that these individuals will be appointed by cabinet. However, the names of the board seats will be put forward for nomination by the board to the ministers.

All the InBC board of directors will be recognized leaders in their fields, chosen for their expertise and their ability to represent a diverse range of perspectives and experience. The initial board will also reflect the diversity of this province.

Section 11 sets out the duties and powers of the board of directors, but at a high level, it will be responsible for managing the affairs of InBC or supervising the management of those affairs. Section 25 also empowers the board to strike an advisory forum, an optional body that can give the board non-binding advice or populate board committees. While the board is not required to strike an advisory forum, it’s another tool to make available to them should they wish to supplement their expertise or add extra horsepower.

In conclusion, there’s no doubt that the past year has been a challenge for all British Columbians. As we emerge from this pandemic, this government is committed to building a sustainable, innovative and inclusive economy that works for all British Columbians by creating family-supporting jobs in every corner of this province.

InBC Investment Corp. will help promising businesses scale up and grow here in British Columbia, resulting in more jobs and investment flowing into the province. By acting as a strong institutional investor in the province and by crowding in other additional sources of capital, InBC will anchor and grow more companies here in British Columbia.

I hope that everyone here today joins me in support of Bill 5, which will help our economy come back roaring by helping our highest-potential companies and driving long-term economic growth across the province. With that, hon. Speaker, I look forward to hearing many of my colleagues’ and, of course, the hon. member from Kamloops’ comments. I strongly encourage everyone to support this.

T. Stone: I appreciate the minister’s opening remarks and look forward to the debate on this, when we get to the next stage. But I do want to offer some comments here, as part of second reading.

This topic area is obviously close to my heart. I’m very, very proud of the over 15 years that I spent in the tech sector, starting and growing a tech company and going through all of those trials and tribulations that come with starting and growing any business, but some of which are pretty unique to the tech sector.

I’d like to also think that there was some added challenge in doing it in Kamloops. In fact, back in the day, when we started our business up in Kamloops, we were tech company No. 3. I’m proud to say that there are more than 100 companies now in Kamloops. It’s still a small ecosystem of companies, and I’ll talk about that more in a moment in terms of the regional needs in the tech sector and how to best meet those needs.

[2:05 p.m.]

I’m very proud of the work that we did, and I’m very proud of where the industry is today in my hometown and certainly across British Columbia. I mean, the latest numbers that I have suggest that there’s well over 11,000 tech companies in British Columbia, plus or minus. This sector now employs well over 120,000 people, again, in every corner of this province. On top of those 120,000 jobs, there are about 60,000 jobs that are tech people working in non-tech companies, although even suggesting that a company is non-tech is akin to suggesting that that company’s probably not going to be around for much longer. I mean, technology is now pervasive. It’s a foundational requirement in pretty much every business out there and every type of organization.

The potential for continued growth in this province, obviously, is significant. When we look at what’s happening in life sciences, when we look at what’s happening in clean energy, when we look at the gaming sector and the Internet of things — and on and on the list goes — there is no question that we are good at coming up with innovative ideas in British Columbia. British Columbians are extremely creative and innovative, and we have a darn good track record at taking those ideas and starting companies and commercializing those ideas.

The three main challenges that tech companies face in British Columbia — and, frankly, across the world, really — can be summed up into three different areas. One, you need those good ideas. And we’ve got a demonstrated track record of coming up with those good ideas. You need to be able to attract talent. You need to have talented people that are willing to work in these companies and help them scale, help them grow, help them conquer the world. Lots of work still to do on that point. We’ll talk about that in a moment. Thirdly, you do need to have access to capital.

Some of my most sleepless nights were waiting for the term sheet to come, you know, back in the early 2000s, over the fax machine. Dating myself there. But waiting for that term sheet to come in from that next venture capital firm that we’d been working with to inject that next round of capital into our business. We went through multiple rounds of investments. We did take advantage, and we’re very appreciative, of the small business venture tax credit program, and we were an eligible business corporation. That was instrumental to our ability to get off the ground. So ideas, people, and money. Those are the three critical ingredients very specifically needed in the tech sector in order to grow.

I do appreciate the intent behind this piece of legislation. I do appreciate the intent that I think is embedded within this Bill 5 and the creation of this framework for InBC. I do have a range of concerns, however, that I’m going to walk through today. I think, first and foremost, that British Columbians should be pretty concerned — and probably are concerned — that there’s a tremendous lack of detail, a lack of clarity to this point, on so many facets of what InBC is going to be all about or how it’s going to be structured, how it’s going to work.

The board — probably the most important initial decision to get right — and the entire process around which the board is going to be put in place. The compensation of executives. It worries me greatly that we likely have yet another Crown corporation that will have a need to recruit a very senior and very expensive executive, particularly, the chief investment officer. The other management positions will be critical in support, I believe, of the efforts of the chief investment officer. That’s not a position that you find easily out in the market, and it’s a position that is quite expensive.

[2:10 p.m.]

There’s a bigger question here as to whether or not this is really the strategy, or the approach, that makes the most sense in terms of trying to help better facilitate small and medium-sized businesses accessing the capital that they need to scale their businesses. Are we going to spend $500,000 on the chief investment officer? Is that position going to be a $1 million position? Is that position going to be on par with the CEO of BCIMC, which is $3 million per year? We don’t know. I do think that there are some legitimate questions around what those details are going to look like.

The investment criteria. I mean, there’s certainly a tremendous amount of lofty rhetoric and phrasing that the government talks about often, and in this announcement, as well. We don’t know, in terms of the investment criteria, really, truly, the who, when, where, how and what, if any, strings will be attached to these investments.

When the government talks about anchoring companies in British Columbia, is that code for there will be strings attached to the investments that will be placed? If so, what do those strings look like? How is that workable? I, for one, can say, as a former tech CEO, I would not have wanted strings attached to my business when I did investment rounds.

One of the worst things you can do in the tech space is to attach strings to financing. One, it’s a great way to scare off subsequent investment rounds for that business. And two, it’s quite easy for the company, through subsequent investment rounds, to be potentially evasive of those strings in the first place. That begs the question: why do it? It becomes a deterrent. It becomes a red flag, another reason not to do business in British Columbia, potentially.

What are the priority sectors for investment? What are the return imperatives? How will these funds integrate with other funds that are out there, private sector funds or funds like the Canadian Business Growth Fund? Will placements be made beyond series A investment? Are we talking about, potentially, series B or even series C? Are we talking about laddered investments? Again, no details at this point.

I would be curious to know what data the minister and his ministry have relied upon to justify the creation of the strategic investment fund and to structure it in the way that they are — data on the scale-up of the capital gap that we all know has existed.

I would point out — and I know the minister would know this too — one of the odd side effects or consequences of the pandemic. There is a heck of a lot of capital sloshing around, looking for a place to invest right now — private sector capital. Record levels. Billions and billions of dollars, a lot of which is looking for a place to invest here in British Columbia as well.

Again, it begs the question: why this structure? Why do it this way? Was this decision made in part or predicated in part on data that the minister has that suggests that there’s been a flood of talent leaving the province and that this is one way to try and ensure that bleeding stops? Is there data that the minister has that helped predicate the decision to structure it this way that looked at the regional needs, not just the tech sector in the Lower Mainland, there in Vancouver, but the needs across British Columbia?

These are all important, I think, and focused questions that we’ll want to get to the bottom of in committee stage. It is a $500 million investment fund that’s being established. It’s taxpayers who ultimately assume the risk for this. So these are important questions to be asking.

[2:15 p.m.]

I’m very concerned. I’m not in a place where I’m feeling all warm and fuzzy about the independence that the minister talks about in terms of the arm’s-length nature of this corporation.

I acknowledge the sections of the act that he’s pointed to. I acknowledge the intentions that he has established. But as I’ve been making calls and talking to all kinds of folks — CEOs of tech companies, men and women that place hundreds of millions of dollars through their venture capital funds, financial institutions — the common theme on this that I’ve been told, in terms of how this is structured, is: if you’re appointing the board and you’re requiring certain investments to actually have to be considered and only made through the lens of the policy priorities or the policy initiatives, policy objectives, of government, you really don’t have true independence. Yet that’s how this is being structured.

The service plan, which the minister referenced, pro­vides a lot of the top-line messaging on some of this stuff, but again, the detail is lacking. We want to see that detail. The appointment of the directors and the independence of the investment decisions are probably two of the most important pieces that represent critical success factors for what the minister is attempting to do here with the creation of InBC.

With respect to the appointment of directors…. Again, I think this is one of the things that is absolutely critical and has to be right. They have to get it right. I’m concerned, however, that there is, as with many other facets of this proposed investment fund, a lack of transparency around this.

Most typically, when a new Crown corporation is formed or when there are changes being made to directors on Crown corporations, the positions are posted on the board resourcing office website — in terms of one more measure that government usually puts in place to foster some arm’s-length aspect to the recruitment of directors. Ideally, you want the best and the brightest to serve on those boards, and you want people that have very relevant expertise in the area of focus for that particular board. You see that posting on the board resourcing website.

We understand that the directors are to be appointed for May. We have scoured the board resourcing office website and don’t see a posting for the directors of InBC, which leads me to, then, believe that the government already knows who the people are that are going to be appointed to the board. That, then, in my mind, calls into question the rigour that has actually been employed to be truly independent in sourcing those directors.

If all the government is going to end up doing here is appointing men and women who are known entities to the government and known to be strongly supportive of the policy priorities of the government and supportive of the government, potentially, in other ways…. That potentially represents the most significant risk to this entire scheme.

We’ve got a number of questions that we will ask in committee stage in relation to the recruitment and ap­pointment of boards and the measures that the minister keeps talking about, or mentioned several times in his comments, that need to be in place to make sure that this government and future governments are not able to meddle in the operations of InBC and, especially, not meddle in the investment decisions that are taken by the corporation.

[2:20 p.m.]

I mentioned earlier, concern around strings attached to investments. Again, this is an area that perhaps we’ll entirely clarify in the committee stage. But in the absence of details, and just with nothing more than the rhetoric attached or detailed in the news release and the announcement that was made the other day by the Premier and the minister, it sounds like there will be strings attached — in the form of investments having to meet the test of fitting into the key policy initiatives of government as well as tests or strings that may be attached that relate to the requirement for businesses to remain in British Columbia or to ensure that their head office is here or to ensure that they’re anchored here.

We don’t really know what anchored means. I understand the definition of anchor. I don’t understand the definition of anchor as it pertains to what the government is doing through the creation of InBC. I will say, again, in talking with lots of venture capital folks over the last number of days and tech CEOs of small and large companies, even the slightest hint of strings attached is a no-fly zone in most of these folks’ mind.

The B.C. tech fund, which was created in 2016, into which $100 million was put, which has been actually leveraged quite incredibly over the last four to five years…. It’s why that fund and the deployment of those dollars does not have strings attached in the form of: “here’s what government’s policy priority areas are. Make sure the investments fit those. Here’s what must happen with respect to anchoring a business in British Columbia.”

We do see hints of those kinds of strings. Tech CEOs and venture capital folks say that’s a surefire way to have investors — well, tech companies — take a pass on tapping into the investment fund in the first place, but also having third-party venture capital funds, other private funds, from wanting to come in and ladder their investments with that company.

I also will say this. If the intention is to try and keep a business here and help them grow here…. Again, at a high level, I don’t think there’s anyone in this chamber that doesn’t agree with the objective of trying to figure out how we can take all of those thousands of start-ups that we see in British Columbia every year and help them get to that 50-person size, that 150-person size and so forth.

But if there are going to be strings attached to the investment here, as it was put to me by a very well-known figure in the venture capital world here in B.C., the fastest and easiest way around that string is for the government’s position to be bought out in a subsequent investment round. Maybe it’s a series B round, and it’s a much larger investment at that point. The very first thing that’s going to happen is that venture capital firm and the other partners are going to say: “Part of our investment in your company is we’re going to buy out the position of InBC and whatever fund it’s called at that time, and we’re packing up and leaving.”

There are ways around this. There are a number of questions in that area that I intend on canvassing in the committee stage. I also want to just say that there’s a fundamental difference of approach here, I think. I touched on it a bit in terms of how our former government established the B.C. tech fund and that we then engaged Kensington partners to manage that fund.

[2:25 p.m.]

They’ve been able to leverage those dollars very effectively. It’s been done with absolutely no interference or influence or meddling of government whatsoever. It’s helped dozens of B.C. companies scale up. The approach being taken here is not that.

The approach being taken here is, through a Crown corporation with a CEO and CIO and all this compensation, the assuming of risk very directly by the taxpayers through the $500 million strategic investment fund. The questionable lack of independence between the board and the investment decisions being taken and government’s policy priorities…. I just don’t think that the government really has — any government, frankly, but this government in particular — the expertise to pull this off. This is a $500 million risk to the taxpayers of British Columbia.

I’m alarmed to learn that investments that might meet the government’s key policy areas also don’t necessarily need to be profitable. I’m alarmed to learn that the anticipated rate of return on the overall portfolio of InBC is somewhere in the range of 5 percent. That’s an astoundingly low rate of return, considering the risk that B.C. taxpayers are to be taking with the $500 million to begin with.

In the venture capital world, the anticipated rate of return on an investment is in the sort of 12 percent to 25 percent range. Yes, there are always some losers. There are always some big winners — at least, you hope there are — and a bunch of companies in the middle. But a 5 percent anticipated rate of return with the amount of risk that’s attached to this venture is a very, very small rate of return.

The risk is detailed, actually quite extensively, in the service plan for InBC. On page 6 of the service plan, it says: “Venture capital is a high-risk asset class that does not afford guaranteed returns. Expected timing and distribution of venture capital returns is difficult to predict.” Absolutely correct.

It goes on further to say that InBC is not anticipated to be in a position to place investments until the end of fiscal year 2021-2022, which takes me to another issue, and that’s that the timing of any potential impact from the deployment of this capital is at least a year away. I would caution the minister on positioning this as an economic recovery program, certainly not in the short term.

By the time a board is put in place and a chief investment officer is hired, investment criteria is established and the overall functioning of this operation is up and running, and then you begin the due diligence of seeking and accepting and reviewing investment opportunities and then doing the negotiations and all the due diligence…. This stuff does not happen fast, so the deployment of capital is a long ways off. That’s confirmed in the service plan.

The service plan indicates a $4 million surplus in B.C. this year and cumulative deficits of $16 million over the next three years. The service plan does reference the fiscal agency loan that is the facility that is being used to deploy the $500 million. On that point, the service plan indicates that the timing and amounts of this debt are “uncertain and difficult to predict at this time. The timing and amount of debt drawn will have a significant impact on the future financial results of InBC.” Again, highlighting the inherent risk that comes with making investments in tech companies.

[2:30 p.m.]

[S. Chandra Herbert in the chair.]

On this point, as I said earlier, there is a tremendous amount of capital, more than anyone has seen in a very, very long time, sloshing around, looking for viable places to invest. It does beg the question, if this is even as priority of an area as other areas are in terms of what government can do best to assist small and mid-sized companies in the tech space scale up.

In the 2020 B.C. Tech Report Card…. As the minister knows well, B.C. Tech and KPMG put out an annual report card of tech executives across the country. The B.C. subset was obviously of interest to me. According to B.C. tech CEOs, the number one challenge that they’re facing at the moment is not access to capital. It’s actually access to talent. It’s access to supports around systems and education and those kinds of things. That’s not to say that capital isn’t a significant need, a significant challenge. But is it the number one challenge that’s faced by the tech sector?

I mentioned the timing of investments. I’m also concerned, again, that I don’t see…. The minister mentioned it, perhaps very briefly, in his comments moments ago, but I certainly haven’t heard much about the focus of InBC in terms of a cross-province focus. When you look at the sectors that were referenced in the announcement, that are in the news release, that are in the background documents and whatnot, it’s life sciences, animation, gaming, sectors that are predominantly anchored in Vancouver and, to a lesser extent, in Victoria.

These are not the tech companies that need help scaling in Kamloops or Prince George or even, in many cases, Kelowna. In fact, the main challenge in the Interior and the north when it comes to the tech space is not scaling businesses. It’s actually helping those start-ups in the really early stage. So I question where in this scheme called InBC there is going to be a focus on ensuring that companies in the Interior, the north, on the Island and the rural, regional areas of this province have access to the capital as intended through this program. We want to see an equitable distribution of this access.

That brings me to my final point. I am the designated speaker on this. My final point is this. When I listened to the Premier and the minister make this announcement, and when I got my hands on the material and was able to dive into it and start to wrap my head around what this was shaping up to look like, InBC…. Obviously, there were references in StrongerBC. There were references in the budget. There were references in previous communications. But when you look at this, InBC, as it was announced earlier this week, I couldn’t help but be struck that this appears to be an initiative that’s largely silent. What I mean by that is: where is the broader economic strategy for the province of British Columbia? Where is the broader jobs plan for the province of British Columbia, and how does this fit into it?

If the government believes that risking $500 million of taxpayers’ money to establish a highly risky program — a corporation that’s making investments in highly risky companies — is the be-all and end-all and is the only piece of the puzzle that’s required to facilitate the growth of tech companies in British Columbia, they’re sadly mistaken.

I look at things like the 23 new and increased taxes that the NDP have put in place since they’ve been in power. I look at the fact that British Columbia has the third-highest marginal tax rate in Canada. That directly impacts the recruitment of tech sector workers. It’s a highly competitive industry.

[2:35 p.m.]

Washington state has no state income tax. According to talent.com, a software developer earns $27,000 less in B.C. than they do in Ontario, but their taxes are much higher here. B.C. has a higher corporate tax rate than Alberta and Ontario, two of our key competitors in this space from a Canadian context. B.C. has the employer health tax. Obviously, Alberta doesn’t. Ontario and Quebec have a similar form of employer health tax, but they’re both in the midst of moving to reduce the employer health tax burden on businesses.

High tech investments are actually moving out of the province. I was struck the other day, in looking at a news release on carbon emissions from a company in Squamish that is doing some incredibly cutting-edge innovation relating to carbon capture…. They’re headquartered in Squamish. Well, the news release was all about how they were excited to tell the world that they’re establishing a pilot project not in Squamish, not somewhere in the interior of British Columbia, but in Texas.

We hear this story far too often — companies like Carbon Engineering that will tell you the taxes in this province are too high, the regulatory burden is too high, the access to talent is really challenging, and this is not a friendly place to do business. It’s not a friendly place to come and make an investment.

This is, again, a major difference between us and the government. We believe that the role of government is to create the conditions within which investment is attracted to your province so great jobs can be created, so companies start here and can grow here. And they do it largely without the need of the taxpayer to risk significant sums of money. They do it because it’s a great place to live, it’s a great place to work, and it’s also a great place to start and grow a business.

So there’s that whole tax and regulatory piece that…. You know, I’d be curious where the government’s plan is on that, because that is a critical component that has to go hand in hand with an access-to-capital strategy. I don’t see a strategy around tax and regulation.

Likewise, we need some significant modernization of the intellectual property laws in British Columbia. There are some significant challenges that relate to IP issues. Where’s the government’s plan to deal with that?

I’ve talked about talent quite a bit today. Where’s the plan to attract the talent that British Columbia needs? Where’s the plan to grow that talent in our own universities? We, our former government, had an actual jobs plan with sector-by-sector components. The tech sector was one of those components. We mapped out, over a ten-year period, what the needs of that sector were going to be in terms of capital, in term of labour, regulatory changes that would make a difference — on and on it went. We don’t see that with this government.

Another point that, absent action, is going to make the access to capital issue more challenging than it should be is that this government…. We still don’t do a good job in this province of government acting as an agent, meaning government acting as a customer or being a customer for early-stage companies in British Columbia.

I remember in my days, I had signed up with…. Our tech company had signed up almost every customer we could in the local government space. It’s where we did our early business in Alberta. We had most of the municipalities there. We signed up a whole ton in Ontario. We had half the state of Washington signed up. I could count on one hand the number of organizations in the government space we were able to sign up here in British Columbia, for all kinds of reasons. That challenge still exists today.

[2:40 p.m.]

Carbon Engineering should be a company that…. Maybe there is a strategic opportunity to have them doing carbon capture as part of the Site C project or some other major industrial project in this province. The province, if it was strategic about this, would be looking for those opportunities and matching those opportunities with B.C. companies that are already here today.

That’s not about risking taxpayers’ money. That’s not about attaching strings to the investment of taxpayers’ money in private sector companies. That’s just about being smart and strategic and saying government is going to serve as a pilot for tech companies in British Columbia. We don’t do that. We don’t do that here.

I want to also say this. Every venture capital and tech CEO or tech executive that I’ve talked to this week has said the same thing too — that the government is walking away from its child care commitments, walking away from its housing affordability commitments; that these are critical headwinds that are building that are making it more and more difficult for tech companies to recruit the talent, to bring people in, to fill the positions that are needed to help them scale.

So much for access to capital. But if you can’t get people here to work in your businesses…. Part of the reason is because if the taxes are too high, the regulatory challenges are too burdensome, you can’t access a good and affordable place to live for yourself and your family, you can’t access child care for a variety of reasons, that person is not going to come to that tech company here in British Columbia. That’s what’s happening right now.

The point is that access to capital is one piece of the puzzle. The government has got to have a strategy around taxes. The government has got to wrap its head around the regulatory burden. It’s got to wrap its head around talent. It’s got to wrap its head around intellectual property. It’s got to fulfil its commitments relating to affordable housing and affordable child care. Those are all key economic imperatives that need to be in place for the tech sector to have a fighting chance.

I did want to say that the B.C. tech fund that I referenced earlier…. It’s part of what’s being rolled up in InBC — the B.C. tech fund and the Renaissance Fund. The B.C. tech fund actually has been quite successful. I looked in the service plan. You look at the investment tables there, and for 2020-2021, the cumulative capital called on the B.C. tech fund commitment was $51 million. The cumulative investment by fund managers and syndicate partners in B.C. companies, so leveraged off that $51 million, is $663 million. That’s a significant and very positive leveraging of the investment.

Again, what are we trying to fix here? It would appear that there’s a tremendous track record with the B.C. tech fund and how it’s managed and the results that it’s generated. We know there are literally billions in private sector capital sloshing around, looking for good investments here in British Columbia, yet the government is proceeding with creating this whole new scheme.

In summary, again I go back to my initial comments. The tech sector, and everyone in it, is something that I’ve been very proud of and been very grateful to have been part of for so many years. I, like the minister and I think every person in this House, wants to see this sector continue to grow, and not just in the Lower Mainland but right across the province.

There are great ideas in every town and community around British Columbia. Yes, access to capital is an ongoing challenge. I’m not convinced that this model, this particular structure, is the way to go about facilitating improved access to capital. I’m not convinced that this structure minimizes the risk to the taxpayer. I’m not convinced that absent the government’s apparent lack of focus on those other areas — taxes, regulations, talent, IP, government as a customer and other areas — this strategy is going to work.

[2:45 p.m.]

We’ll get into all of these details in the committee stage. I look forward to very thoughtful and detailed answers to what will be thoughtful and detailed questions. With that, I thank you, Mr. Chair, for the time.

B. Bailey: I apologize that there is banging in my condo. This has been an ongoing issue in the months that I’ve lived here, and I apologize to the members and those listening that there is a distraction in the background. However, we will push on.

I’m delighted to have the opportunity to share my enthusiasm in regard to this wonderful InBC strategic investment fund, which is what the tech sector has been asking for, for years, maybe even decades. The $500 million over three years is a significant amount of money. This is not a small investment, and it’s a carefully structured investment to be done on behalf of B.C. and on behalf of taxpayers.

Let’s talk a little bit about the need that this is solving for. British Columbia has a really amazing start-up sector, and we’ve often been recognized for our start-up sector. There are some who say that in fact we’re the number one start-up system in Canada and in the top 15 globally. We’ve heard mention, of course, that we have over 11,000 tech companies, but the challenge that I’ve seen in the two decades that I’ve been in the sector, and which we often hear about from those who represent it, is that so many of our companies are start-ups, are small and medium-sized businesses.

When you identify the challenges within a sector — certainly, the member who spoke prior to me, the member for Kamloops–South Thompson, rightly noted it — it always comes up that talent is a challenge, for sure. That challenge has been growing year over year. It also always comes up that capital in this system is problematic. It’s not only a lack of capital, but it’s also the type of capital. We hear from people frequently that this gap keeps our businesses from scaling.

I don’t want to assume that someone listening today will necessarily understand how an investment makes a big difference in a company and why companies need investment. Let me just take a moment to kind of paint that picture a little bit. When you’re building a company, it’s not always true that you can bring product to market and use your own revenue to fund the growth of your company. Of course, we all wish that were true. Wouldn’t it be great if we could very inexpensively get our product to market and we could use revenue to build our company? The best money in, to build your company, is revenue. But that’s difficult.

Often the cost of building whatever product it is…. Whether it be software, a technology that’s going to be applied to reduce carbon emissions or any other example, those costs to create the product that you’re building or the intellectual property that you’re building can be very large. Yet when you look at the potential, the upside, once you do bring your product to market, of what it will make, it makes sense. But you can’t get there. There’s a gap. That’s why this investment money is so important.

I apologize to those who understand the investment world. It’s a very simplistic description. But I’ve heard a couple of folks in my community say: “What is this InBC, and how does it affect me?” It’s really, really important that when we look at how we grow our tech sector, we help address that issue.

When you look at really successful ecosystems in the tech sector…. Of course, we like to look at Silicon Valley. There are a whole bunch of reasons that go into the success of Silicon Valley. There’s not just one. One of the important reasons is that the ecosystem includes a huge amount of investment income. If anyone has ever done the Sand Hill walk, it’s just one VC company after another. There’s so much money in the ecosystem. It’s a fast-moving ecosystem. Deal flow happens incredibly quickly. It’s a “yes” ecosystem, not a “no” ecosystem, which ours often is. There are many, many other differences.

[2:50 p.m.]

British Columbia is interesting because we have really, in many ways, quite a unique scenario in that we punch above our weight in terms of this start-up ecosystem, in terms of the quality of ideas people have, the companies that they’re building. Technology is iterative. It builds on top of each other, and there is a lot of iteration happening within our sector, but the challenges were relatively small. We’re relatively small in terms of our labour flow, but we’re also relatively small in terms of who we attract for capital.

Even though we punch above our weight in terms of having many, many start-ups and great ideas and we’ve done well in the start-up ecosystem, we don’t really have that when it comes to capital. Death on the vine happens from being undercapitalized, so it’s really, really important that we address this gap.

The ability to grow your company, to look at that as a solution, is really, really important. Without that capital allowing you to grow, what happens is often you’ll take different types of investments that aren’t what we call a patient investment. This is a patient investment. It’s not immediate returns quickly that you have to then replace with other investments, this perpetual replacement of investments that can completely eat up a CEO’s time and energy.

Founders are best at running their companies and growing and working on their product and moving it forward. To always spend your money on fundraising is really not the best use of founders’ time. It’s so important there’s a way to allow growth that doesn’t mean that the only strategy for your start-up is in early acquisition.

What happens in the British Columbia ecosystem is people sell pretty early, before they really get the value out of their company. That’s just tragic. We’ve seen it so many times. It’s so disappointing because we don’t unlock that potential within that company.

We do that because there’s no capital to help them move and grow. When we think about becoming an anchor company, what do we mean by that? Of course, we do know what an anchor company is, but the difference is that if you’re able to grow your company from maybe being a 40-person company to being a 500-person company, you can be an anchor company in your own province.

What does that look like? It’s so important. I’ll give you an example. I’ve mentioned that I worked in software, specifically in video games. One of the anchor companies in British Columbia was founded about, I don’t know, 25 years ago and got bought by EA. Distinctive Software, it was called. When EA bought Distinctive and decided to grow in British Columbia, it did a huge amount for that ecosystem. All of a sudden, there’s a big player.

What happens when there is a big player? Well, it draws attention to the sector in the province. You’ve got someone to point to. “Hey, look what’s built here. Look at this amazing work being done.” But also what happens is talent works within that organization, and they learn best practices. They’re great engineers when they come in, but they’ve got even better processes when they step out. They become very astute in business practices in addition to just building.

The corporate training that people experience in a larger corporation like that is just so incredibly helpful. What very often happens is that entrepreneurs, after being at a large corporation, an anchor corporation, for some time, will even start their own companies. We’ve seen literally hundreds of companies, mine included, started from people who left EA.

Interjections.

Deputy Speaker: Sorry, Member.

Members, if you could please respect that the member for Vancouver–False Creek has the floor. Thank you.

Sorry, Member. Apologies from the House. Please proceed.

B. Bailey: Thank you, Chair.

It’s just so integral that when people leave anchor companies and start up their own companies, they do so with really strong experience and great processes, and they’ve learned that from the larger corporation that they’ve left. Very often this sort of calving off that happens from anchor companies is how the whole ecosystem builds. Often the anchor company will buy the smaller companies that have started out as part of the whole ecosystem development.

[2:55 p.m.]

We want to see more anchor companies, because it feeds the ecosystem. These are really well-paying jobs. The tax base from them contributes to the public coffers. It’s very, very important. Now what we have instead is a very, very strong start-up ecosystem, but that growth has been stymied because we don’t have that middle investment piece that we need, and people have been asking for it.

It’s very, very important that we address the question of scaling and how to scale. The idea that if people are able to bring in investments into their company and grow their company in British Columbia instead of taking sort of the first exit opportunity that’s there — that’s massive. It can actually change the ecosystem. It can change it, and I think it will. So I’m extremely, extremely excited about this. Again, it’s something that’s been asked for, for a very, very, very long time.

Sometimes selling your company externally, outside of British Columbia, outside of Canada, can be beneficial. It’s not always a negative thing. It’s negative when the company leaves, in my opinion, and we lose that talent and lose that potential of growth here in British Columbia. Sometimes when a company is purchased by an external actor, the growth continues in B.C. Those great jobs stay in B.C., and the talent stays in B.C., but the revenue and the profit doesn’t stay in B.C. Profit staying is important, again, to that ecosystem.

When you consider another example…. For example, I’m thinking about something up in the Kelowna area from some time ago, when Club Penguin sold to Disney. That particular acquisition created something like 40 millionaires in one day. The ecosystem, as I understand it…. Certainly, the member for Kamloops–South Thompson can speak to this probably more than I, but as I understand it, the ecosystem that came about in Kamloops — much of that money is related to that particular acquisition.

So it’s not always true that acquisitions to external actors are negative. They can also create funding to feed the ecosystem. But what we’re concerned about is really when that money leaves, and that’s happening more and more in British Columbia. We see a lot of exits.

However, I would take issue with my colleague the member for Kamloops–South Thompson in saying that people are fleeing British Columbia right now. I don’t believe that’s so. In fact, we’re seeing data to the opposite. Many, many tech companies are investing here in B.C. We just saw Best Buy decide to settle in south Mount Pleasant, which is a really encouraging aspect. I think it’s really about what the ecosystem can be. We’ve got an exceptional, exceptional tech talent group here, and this will support the continued growth.

Does that matter beyond the tech sector? I think that’s interesting, because the tech sector…. It used to be that we would think of it kind of as a vertical. You know, there’s the logging sector, fisheries and technology. But the tech sector isn’t a vertical anymore. That’s just not the case. There is not even really a tech sector. People who work in technology work in all other sectors. I think that’s really important to note, because this is going to affect all of B.C., right? It’s not just the tech sector. The kind of growth that this can drive will benefit all of B.C., not just the tech sector, because the tech sector is all of B.C., really, and technology is a competitive advantage. It’s not a separate thing.

In addition to anchoring and growing more companies in B.C. and driving long-term growth across the province, I’m also very excited about the structure that’s been chosen for this InBC, specifically the triple bottom line. My colleague mentioned that businesses don’t like investments that have strings attached. I’ve certainly heard that to be true, and I know that was true in my own business. But there are strings and there are strings.

[3:00 p.m.]

I think that the way that this is being designed is very attentive to that concern. We can balance the objectives of having government priorities as part of decision-making but very broadly, so it’s not prescriptive or limiting or somehow makes it less appealing for businesses to be involved in the funds. I think that’s being paid close attention to, and I’m particularly excited about that.

I’ll share with you now my thoughts on why the triple bottom line is so important and why I’m proud that this fund has taken that movement. A lot of people might not know what a triple bottom line is, so I’m going to just speak a little bit about that. It was a concept developed in 1994 by John Elkington, and it’s made up, of course, of the three elements: the people, the planet and the profit.

Historically, investments made by VCs, in particular, would only look at profit. But profit registered in revenue is a quite minimalistic way to look at how businesses have impact and also how the world impacts businesses. The idea is to encourage businesses to look at their performance analysis beyond just financial performance — to look also at sustainable investing, sustainability, what it means to the planet and what the implications are. Often those implications are not borne by the particular business. They’re shared out among all of us — so an encouragement to look at that and also to look at people and community.

We know that these businesses that have pivoted into looking at triple bottom line have actually been very successful, because talent is interested in this. People want to know that businesses have a conscience, care about the planet, care about the people that work for them. So from a particular business point of view, where this original triple bottom line emerged, it became quite successful and popular.

I think it’s also important because we know — I know, anyways — that investment decisions are not always decisions that are made just on the merits of a business. There’s a lot of bias that exists in venture capitals and investment firms. I witnessed this firsthand when I was searching for investment for my second company, Silicon Sisters, which was a women-owned and -run video game studio.

I did that walk on Sand Hill down in Silicon Valley. I had great numbers, and I had a great story, and I had a business that was really rolling, and I was told: “Women don’t play video games. No. Women don’t run video game companies. No.” Not any interest at all in the metrics and the data and the business case, but a bias. That bias is something that’s been noted again and again. There’s a tremendous bias against women leading companies. Yet that bias is remarkably unjustified, because we do know, in fact, that there’s really, really good data on what happens when women run companies and when women sit on boards.

Just to share with you, here’s a case for women-led start-ups. This is from Forbes magazine. It’s the top ten reasons that we should consider supporting women-run start-ups.

“Private technology companies led by women are more capital-efficient, achieving 35 percent higher ROI and, when venture-backed, 12 percent higher revenue than start-ups run by men, according to the Kauffman Foundation.

“Women-founded companies in First Round Capital’s portfolio outperformed companies founded by men by 63 percent.

“In a study of over 350 start-ups, MassChallenge and BGC determined that businesses founded by women deliver higher revenue, more than two times as much per dollar invested, than those founded by men, making women-owned companies better investments for financial backers.

“Despite the severe funding gap, start-ups founded and co-founded by women actually performed better over time, generating 10 percent more in cumulative revenue over a five-year period, according to BCG.”

Fifth point:

“Companies in the MSCI world index with strong women leadership generated a return on equity of 10.1 percent per year, versus 7.4 percent for those without strong leadership.”

Number 6:

“‘Women-owned businesses are growing much faster than all businesses. From 2007 to 2018, women-owned businesses grew by 58 percent in terms of the number of firms, and 46 percent in terms of revenue,’ according to American Express researcher Geri Stengel.”

The other three points are very similar, but essentially, I think you get where I’m going. Although there’s a negative perception in Silicon Valley about investing in women-owned companies — or certainly this was true five, six years ago — the data doesn’t bear it out.

I think this experience that I’ve had, and it’s been documented widely now, is also true when it comes to BIPOC people’s experience in business. We tend to invest in folks that remind us of ourselves. We tend to hire folks that remind us of ourselves. Those two things are problematic, and they keep us from perhaps making our best decisions in both of those regards.

[3:05 p.m.]

I’m not saying that this is a factor that should overwhelm all other factors. I’m not making that argument. I do, though, think that these types of considerations should be part of any decision in regards to investment. Although I don’t know yet exactly what this will look like and haven’t seen the mandate letter, I do hope there will be some component that does provide encouragement that we look at women-led companies and companies led by folks who are BIPOC.

I’m also really excited about the structure. In part 3, in 6(a), we see that there are two directors from the public service and up to seven directors outside the public service. This is so important. We have some exceptional business people who have had amazing exits here in British Columbia and who have just tremendous knowledge to share. I don’t know yet, but I’m hoping we’ll see some of those folks who step forward to use their incredible experience to help us guide the best investments possible in this fund.

I think the independence of the chief investment officer — not being political at all and cannot be directed by anyone — is absolutely integral, not only to the integrity of the fund, but in terms of who we attract. We really want to attract the best of the best. I think that the structure that I see in the bill will be able to do just that. I think that’s incredibly important, because this person is going to have a lot of power and decision-making capacity and really needs to be the right person, which I think will be structured into this. It invites the right person — let’s put it that way.

In regards to the priorities of the fund, I’m very excited that the priorities of companies that are focused on a low-carbon economy are going to be highlighted as well as our absolutely stellar and growing biotech sector. The tech sector is very broad, as I’ve mentioned, but those two particular areas are so ripe for investment — just absolutely ripe for investment. We’ve seen some incredible acquisitions. We’ve seen IPOs in both of those sectors that are really, really encouraging.

I will just disagree a bit with my colleague from Kamloops–South Thompson when he speaks about the carbon company in Squamish leaving to Texas and that this is an example of the result of taxes. Actually, I think it’s different than that. I know that businesses react to paying more taxes for sure, but really, the challenge is not that. The challenge is ensuring companies stay because there is a climate for investment here. This fund is exactly the kind of fund that will keep a company like that here. That’s exactly what this fund will do. So I don’t think that that example is…. I think that example is on the other side of the ledger. It is, in fact, why this investment fund is just so important.

When we think about the word strategic…. Strategic has a very specific connotation when considering it in light of investment. “Strategic investment” is a term that really specifically means that this investment is meant to draw other investments. It’s a tool to leverage. The strategic part of it is that it’s very specific, well-thought-out and designed to get particular outcomes.

[3:10 p.m.]

I think those outcomes are just going to be absolutely stellar from this fund — specifically focusing on the two areas already mentioned, those of biotech and clean tech — because when we grow those sectors, we’re not only supporting the business environment of that growth; we’re supporting incredible jobs for young people in our province — we’re also supporting new technologies that can help us address the greatest crisis of our time, which is climate change.

These new technologies can serve us in so many ways. They can serve us in terms of us battling climate change, but they can also serve us in terms of us exporting best-in-class technologies all around the world and establishing ourselves, even further than we already have, as being the cream-of-the-crop leaders in terms of climate change technologies and help in solving this problem. B.C. has the capacity to do that. We absolutely do. The talent here is extraordinary. I think that particular aspect of this strategic investment is really worth noting, because it will pay dividends in so many different ways.

I had the great privilege — not anymore, but prior to this year — of sitting on a board that gives out scholarships to women who are studying for post-secondary STEM degrees. One of the things I most love about that scholarship fund is that we asked them to talk about how their research, how their studies, will change the world. There are usually about 150 applicants a year. It’s incredible what they write, what they want to study and what they want to do.

Across the board, probably 80 percent of the answers are in regard to solving for climate change in the most creative ways imaginable. What these young engineers are planning to do is incredibly exciting to me, and I know that some of those young women will come out and start start-ups. This fund makes it more likely that they’ll be successful. Instead of hitting that wall of growth and not being able to get past that 20- or 30-person company, we have a much greater chance of that occurring because of this.

As you can tell, I very, very much support Bill 5. I think this is an absolute game-changer. I’m not overstating it. I truly believe that this will pivot our province to being a world-class leader in technology. We’re already a competitor. We’re already doing incredible things, but this will kick it into top gear. I’m absolutely excited to see the metrics going forward, to finding out who our CIO is and the board of people who will help us continue this work. I’m very proud of the minister and all of the folks who worked so diligently on this excellent piece of legislation.

L. Doerkson: It’s indeed a pleasure to bring greetings from the Cariboo-Chilcotin to you and, certainly, to the House. We’ve heard much information here in the last couple of hours. I’d like to bring it back to, maybe, some simpler terms. It is a great pleasure to stand here and speak to another important bill — the InBC Investment Corporation Act.

I want to start, though, if I could, just by acknowledging all of our front-line workers. It can’t be said enough in this place how grateful we all are for the services that so many people have provided for all of us throughout this extremely challenging time. I did want to note some of those front-line workers who are perhaps a little bit less obvious to most of us.

I’m obviously very appreciative to all of the nurses, doctors and care aides, but I’m extremely thankful that our search and rescue departments have not taken a break; that our volunteer fire departments continue to serve all of our communities every day; that police continue to keep our communities safe; that wildfire fighters are here in the Cariboo-Chilcotin right now and that they’re sandbagging, waiting for those inevitable wildfires; that vets and vet techs continue to watch over our pets and livestock; and that truck drivers, retail workers and grocers continue to provide for us. I’m extremely thankful for all of them.

With respect to Bill 5, I understand that it will create loans and funding for businesses, and I think we’ve heard that there is some support for that, but there are questions around it. These investments can be risky, and these will see taxpayers funding the start-up of these businesses. It focuses, of course, on tech and those start-ups, and it refers to post-pandemic recovery.

[3:15 p.m.]

It also appears that it would be taking half a billion dollars and investing in these private companies, which is concerning, a bit, to me. It should be noted that so many of these businesses existing today have done their very best to not only supply us with some very essential goods and services, but they have also done that on limited income, with limited staff and, of course, around very strict public health orders. Those orders continually challenge these businesses to reinvent themselves and to recreate the ways that they conduct commerce.

So many of these businesses have been unable to obtain funding today through current programs that have been offered — programs that have, in many ways, failed in the business community. It is highly peculiar to me that we would be introducing post-pandemic funding, as clearly, we’re not through the pandemic.

I referred to these businesses as providing essential services, and I’d like to speak to that for just a moment. When I speak to the essential need for a resort to be open in the West Chilcotin, some may question this, but I must point out that for road crews or other work crews, where else would they stay? Where else would they dine? While the operators find themselves servicing crews like this — and I’m sure they’re all too happy to do so — it’s not without its own challenges. Because of public health orders and because of travel bans, these businesses are struggling with less staff and working very, very hard to provide those services, but they do.

Bill 5 will aim to help those businesses that are focused on tech and will focus on start-ups. Furthermore, it suggests that this will be post-pandemic funding, as I mentioned before. For the $500 million committed to this program, it does nothing for businesses today. I would have hoped that the funding could have helped businesses that are struggling right now. I’m sure that businesses, struggling to provide essential services for people that have to travel for medical needs to larger centres — where they and their families will need lodging, restaurants, fuel, perhaps supplies — need support now.

Most of these businesses are struggling under either orders or lack of business. In other words, they’re struggling to keep the lights on while they serve us. It is, for sure, a trying situation for so many small businesses right now. They’re struggling now, and from what I can see, post-pandemic is still some time away.

I know that in my riding — in the early part of many of the most recent orders that were introduced for restaurants in the Cariboo-Chilcotin and, certainly, the rest of the province — if they were the lucky ones that had outside dining facilities, they were, of course, covered in snow. The restaurants farther north than the Cariboo-Chilcotin were, for sure, at odds, not only with orders but, certainly, weather as well. Many of these businesses have been unable to secure funding and help from this government.

As the government has introduced other funding models in bills like Bill 5, we’ve seen some failures with respect to those rollouts. Certainly at this point, those failures would have to be acknowledged by this government. There have also been funding models that have simply vanished. We saw the animal care initiative in 2020. They’ve acknowledged that there were issues with guide-outfitters, rodeo stock contractors, zoos and even the Vancouver Aquarium. The need to help these businesses was identified in 2020, and I would certainly hope that that need is recognized here again.

These costs have not gone away for the businesses, and they have not had business at all — nothing. I know a number of businesses that are caught in this situation with respect to animals, and I know that with action not happening soon, some of these operations will have to make very serious decisions.

[3:20 p.m.]

Someone pointed out on my Facebook page the other day that businesses don’t want to have to apply for funding. They don’t really want the government to have to come up with these creations like Bill 5. It was pointed out to me that all they really want is an opportunity to work, an opportunity to earn money and an opportunity to be in business.

I would never suggest that we shouldn’t all do our part, and I’m sure that most businesses would agree that they, too, want to do their part to keep COVID-19 at bay. But it must be acknowledged…. If the government insists that these closures and travel bans are necessary, then we must figure out ways to effectively find funding and get that to the businesses today. It is key that funds actually get to businesses, particularly when the funding has been approved and is literally sitting there doing nothing.

We’ve watched how the B.C. recovery benefit has rolled out. This promise, made back in the election of 2020, was to be delivered to qualifying recipients by the Christmas of 2020. It’s May next week, and I still have constituents coming in to find out why they have not received their $500.

Surely, the government must understand that this program has certainly been flawed. There is hardly a day that goes by now that I don’t receive calls as to held-up funding, applications that have not been accepted, requests for massive amounts of information for the B.C. business recovery program. With respect to the businesses of this province, Bill 5, should it pass, will not help anyone until 2022.

I have my doubts about this bill. Should it come into effect, I’m hopeful, at a minimum, it will have mechanisms that will protect the taxpayers who have provided the funding for this bill from their hard-earned money. I hope that if it is passed, the criteria of getting these funds and loans does not become so cumbersome, also, that it costs tens of millions of dollars to administer the program. The previous funding models have struggled at the cost of business throughout the province.

This process has truly been flawed from the beginning. I believe, at this point, that only about half the funds have actually been delivered by the B.C. business recovery program. I want to point out that these funds have been approved by everyone in this place months ago. I would have hoped that rather than posting a pandemic funding announcement of Bill 5, we could have seen funding to help other sectors of hurting businesses and funding for some of our not-for-profits.

There is a real need by many rodeo grounds, agricomplexes, fair grounds, racetracks, sporting complexes, etc., that have a constant pressure of maintaining property. They’ve had no business. Giving good care to the Williams Lake Stampede Grounds for sure comes at a cost. Volunteers, as always, are happy to do the work, but there is a real cost of buying materials. Oftentimes a lot of these materials are donated by small businesses, but as you know, many of these businesses are struggling because of the lack of these events.

It’s a vicious circle. Each of these events and businesses feed off each other, and many exist because of each other. It is very important that we see funding for some of these groups.

Bill 5 could have had options for funding today, I think, to help some of these groups and businesses or, at the very least, make what we already have approved in this House function better and actually get to where it needs to be the most. There has been no funding for groups like these, yet Bill 5 will take half a billion dollars in taxpayer money with very high-risk investments. We must be far more efficient with programs like this in the future.

The last round of closures to indoor dining has been devastating to the restaurants. The travel bans have destroyed what was hoped to be the start of the summer season for so many tourism operations. I’ve discussed, at length, these bans with many operators in the Cariboo-Chilcotin. It has been a devastating blow.

When introduced, it was suggested that the province leads Canada in supports for small business. I would suggest that we may lead in announcements, but I question whether we’re leading in deployed funds. The deployment is paramount at this time. These funds will have to get where they are destined to go. We must break down the walls and obstacles that have slowed the delivery of funds in the past. We must be as committed to delivering these funds as we are to announcing them.

[3:25 p.m.]

Mr. Speaker, I don’t have to tell you that a lot of months have passed between the last funding announcements and these ones. Of course, these ones are announced for the future and not for right now, when they’re needed most. The times right now are, for certain, desperate for some. It’s not just that the times are uncertain, but orders have also been very uncertain.

While restaurants have struggled with outdoor dining orders…. As I’ve mentioned before, when these orders were first introduced, many decks that existed were co­vered in snow. But for many, they didn’t have a deck or outside dining possibilities. Not to mention the timing of the orders before Easter.

It didn’t take long for many restaurants to call with their absolute shock at these latest orders. It wasn’t just that they were difficult to work around, with establishments coming up with creative ways to prepare different meals. The timing of the orders was awkward as well. As you know, there was not much by way of warning, and many of these restaurants had already received speciality orders for the Easter long weekend. Many had hired extra staff for what was to be a good weekend financially.

With respect to lodges, the confusion of announcing a travel ban with no clarity around the rules has been a complete disaster for their businesses. I’ve not talked to an operator in my riding that is clear on the rules or what they are to do with people that seem to be committed to breaking or disregarding those rules. It is safe to say that these operators have been put in a very awkward position.

My point is that while Bill 5 is being announced as a post-pandemic recovery fund, it does nothing to help businesses that have been completely boxed in by the government’s regulations. Bill 5 is to help tech start-ups in this province, and I understand that. It’s also set up for a post-pandemic world. The problem is that there are no economic recovery plans unveiled in that world yet — no clear direction.

Bill 5 is being announced at a time when many businesses are teetering on the brink of closure. The timing of the announcement and the bill is, quite frankly, to me, a bit strange, particularly in light of the situation, with so many small businesses that are suffering right now.

In my role as rural critic…. Connectivity has become the number one priority in rural British Columbia. It was interesting to see that we will invest the taxpayers’ funds in these companies, some of them very risky, through Bill 5 funds. But wouldn’t it be nice if our government saw as much value in connecting our rural communities with such privileges as Internet and cell phones?

Bill 5 will commit $500 million to tech, but the commitment to connectivity over the next four years in this province is only $40 million. How can this government show its commitment to tech when so many people in this province can’t even connect to the Internet? They cannot connect to the World Wide Web.

In closing, I really think this bill would have been better suited to helping businesses now. I think there would have been so many more things the funds could have done to help right now.

A. Mercier: It is a pleasure to stand in this House and speak to Bill 5, the InBC Investment Corp. Act.

To the relief of many in this House, I think, my remarks will be rather brief today. I’d like to begin by thanking my friend the Minister of Jobs, Economic Recovery and Innovation. He has not only managed to help support and throw a lifeline to small businesses that are having an incredibly hard time right now because of the pandemic.

I’ve heard from businesses in my community and my constituency of Langley that have received the circuit breaker grant and that have applied for and received the launch online grant. To have had that come to them is a real lifeline to help them. The minister has also done that while bringing forward an innovative bill that looks towards the future of British Columbia and the future of the B.C. economy.

Now, we heard, amazingly, some remarks from the member from South Kamloops that he’s worried about the government meddling in Crown corporations. Imagine that, coming from the former minister responsible for ICBC, from a government whose track record, over 16 years, was to view Crown corporations as a source of income for general revenue so they could extract value from ratepayers and use that to give tax breaks to their friends.

[3:30 p.m.]

What we’re seeing with this bill is a paradigm shift and a sea change in the way that Crown corporations are managed and in the way that the government interacts with the economy — and not one that is just value extraction for the wealthy and those who sit at the top, for the well connected.

[N. Letnick in the chair.]

This isn’t about giving buildings that belong to Crown corporations to lobbyists. This is about ensuring that values and public purpose are at the heart of our investments. And to assuage the concerns from our friend the member from Kamloops South, I’m going to read from the act. I find that many of his answers, he’ll find directly in the act itself.

Going to section 4, purposes of the corporation: “The purposes of the corporation are as follows: (a) to make investments that achieve a financial return; (b) to make investments that support the social, economic and environmental policy objectives of the government.” So you can see, Mr. Speaker, that a financial return is in here, but also: “…to make investments that support the social, economic and environmental policy objectives of the government.”

What this is about is…. This isn’t about a quick return for venture capitalists. This is about crowding-in funding…. It was very eloquently stated by my friend the member for Vancouver–False Creek about patient capital. This is about crowding-in funding for firms that have trouble scaling up due to a lack of ability to attract capital, because they need a longer lead time for returns, and making sure that those that are having trouble getting off the ground, and that serve a real social and economic purpose, have the support that they need.

You know, I can understand that there are some members on the other side that don’t believe that greenhouse gas emissions are a source of pollution or cause climate change. But on this side of the House, we do. That is a major purpose of this act — to make sure that there is support there.

I’ll turn now to section 16, because we heard concerns about the chief investment officer. Section 16 of the act: “The chief executive officer must, on the recommendation of the board, appoint an individual as the chief investment officer of the corporation.” Subsection (2): “The board, on the recommendation of the chief executive officer, may determine the remuneration and the terms and conditions of employment of the chief investment officer.” Here’s the important part: “The chief investment officer must ensure that investments of the assets of the corporation are made in accordance with the purposes of the corporation as set out in section 4.”

What does that mean? Well, if you continue reading, it’s explained. Subsection (4): “For the purposes of subsection (3), the policy objectives referred to in section 4 (1) (b),” which is the section that we just read, “are to be determined by the minister and the Minister of Finance, acting jointly, and communicated in writing to the chief investment officer by the chair of the board.”

What this does is it sets up a structure whereby the minister, my friend the Minister of Jobs, Economic Recovery and Innovation, and the Minister of Finance — both of whom oversee deputy ministers who will sit on this board — together communicate in writing to the CIO, through the chair of the board, what those purposes are. The CIO then must make investment decisions that generally fit those purposes.

What’s important, then, is turning to section 18 of part 4, “Financial Administration,” division 1, “Investment Independence”: “No person other than the chief investment officer or an external fund manager retained by the corporation may make an investment decision.”

So the government can set the parameters of the policy objectives, but they cannot meddle or interfere in that investment decision, subject to section…. I’m going to read the entire section. It’s important. It ought to help inform the committee stage. “Subject to section 16 (3), in making an investment decision on behalf of the corporation, (a) the chief investment officer is not subject to direction from anyone, and (b) an external fund manager is not subject to direction from anyone other than the chief investment officer.” This is a high degree of latitude and independence.

“For certainty, in making investment decisions on behalf of the corporation, the chief investment officer and an external fund manager are not subject to direction from any of the following” — so for certainty, no one can interfere, but here’s a list of those that specifically can’t interfere: “(a) the government; (b) a minister; (c) the board or a director; (d) the chief executive officer; (e) any other public officer.”

[3:35 p.m.]

So the answer is in the scheme of the act, which is that the government can’t meddle, which is a theme of the acts that this House has passed under our government as pertains to Crown corporations. I’m thinking back to the act that was passed to prevent the government from raiding ICBC coffers into general revenue.

Further, if you turn to section 23, “Annual reports,” division 3, “Reports and Reviews”: “(1) The corporation must, for each fiscal year of the corporation, make a report to the minister and the Minister of Finance on the performance of the investments of the corporation.” It then specifies the form and how to make those reports.

But subsection (3): “The minister must lay a report made under subsection (1) before the Legislative Assem­bly as soon as practicable and, promptly after doing so, must make the report publicly available.” This is about transparency and the public interest.

You see that throughout the scheme of this act in terms of how the corporation is set out. It ensures that the values of the public are realized, through direction from the chair of the board on what the parameters are, in terms of government policy objectives. It’s a very, very clear and clearly laid-out act, and it’s very forward-thinking. There are examples of this around the world from strategic investment funds in Ireland and in Scandinavian companies. That’s really what this is. This is a triple-bottom-line strategic investment fund. It’s a key component of the economic recovery, yes, but it’s also about what we want our economy to look like after the recovery.

To answer the member for Cariboo-Chilcotin’s assertions that all of this money ought to be spent elsewhere, what government has to do is complex, and there are many different facets of the economy in our society that we need to manage. Yes, we absolutely need to make sure that we’re getting relief to businesses, and we are. I’m hearing from those businesses every day in Langley. But we also need to make sure that we’re setting ourselves up for success down the road, so that we can address things like climate change, which is real and is happening.

We need to make sure that those firms have a chance to scale up and aren’t passed by, by venture capital looking for a quick return. We need patient capital. What this will do is crowd in investment into this sector and ensure that this money isn’t just value extracted from our economy but that it creates value and generates additional value. This really fixes and solves a very clear public policy problem. It’s going to be a game-changer, and it’s going to be a game-changer in my community, as well as in this province.

I had a great conversation the other day with the board of Kwantlen Polytechnic University about the great things that they’ve got going on there and the innovation corridor that they want to plan along the Langley bypass and Glover Road. That’s a key component of the changes and the rezoning that are happening within the city as a consequence of SkyTrain and our investments, in the last budget, on SkyTrain.

Well, that will set up…. The fact is that B.C. is changing. We have clear and pressing public policy challenges and social challenges that we have to meet. This act and this corporation are going to allow us to do that. It’s going to make sure that we don’t get left behind and that the money is used to generate value.

In closing — I know it’s a disappointment to many, but I said my remarks would be brief — what this is about is a new paradigm for Crown corporations, where they’re not just there to act as piggy banks for government to fill holes in the budget generated by handouts. This is about making sure that Crown corporations ensure the public interest and are there to address the policy challenges of the day.

B. Stewart: It’s an honour to stand in this House and talk about this particular bill and the items that I’ve had a brief amount of time to review and see in here.

[3:40 p.m.]

I guess one of the things that we all need to be concerned about is…. I’m sure the member and the minister responsible for Jobs is definitely concerned about businesses in British Columbia. Thousands of small businesses, as he knows, have been struggling in B.C. for more than a year. Many are hanging by a thread. They need help right now.

Here the InBC Investment Corp., created by this bill, won’t be ready to make investments until a year from now. That’s not the type of action that government needs to do if this is intended to help create rebuilding an economy.

We’ve got to think about the economy that we had before this, unless there’s another plan that I’m unaware of. According to the service plan, this is going to take some time to implement Bill 5, the InBC Investment Corp. It’s a big, complicated Crown corporation that’s going to take time to set up, find the right people, attract people.

Frankly, I can just see that this is not going to help us in the current short-term economic downturn that we face. It’s almost a year from now. How many of these small and medium-sized businesses are already on the brink of permanently closing, let alone being able to survive until 2022 and wait for this investment to scale up?

The truth is that one in seven of British Columbia’s small businesses today is at risk of closing for good. That’s 25,000 small businesses. Small businesses typically have under ten employees. Frankly, that’s an awful lot of employment that we’re going to lose. It adds up to over 300,000 employees whose jobs are currently in jeopardy. This is on top of the 8,000 small businesses that B.C. has already lost.

So far, every program that’s been rolled out for small businesses by the NDP hasn’t necessarily helped and has been a failure. The most glaring of these has been the business recovery grant, which has failed miserably to get the money out the door. We saw the announcement. We saw the extension. We saw the adjustment. In fact, we saw the money being reappropriated into the circuit breaker program that was announced and then, of course, had to be extended because of the current change in the public health emergencies that have locked us down.

I guess what’s more concerning are the criteria for InBC to make investments. Those are the questions that we’ll, of course, be asking at the committee stage.

I know the member from Langley just mentioned this purpose. I want to read it again, “Purposes of corporation”: “The purposes of the corporation are as follows: (a) to make investments that achieve a financial return; (b) to make investments that support the social, economic and environmental policy objectives of the government.”

We also see that there is another subsection. It says: “…does not apply in respect of investments that are made under agreements that were in place before this Act comes into force.” What does that mean? I mean, are there deals that have already managed to have been funded by something that the government has done? I know that we’ll be pursuing this much more when it comes to the committee stage on this particular bill.

I do worry about that type of language and what the purpose of it is. I do think that it says: “…to make investments that achieve a financial return.” Well, there’s contradictory messaging, I believe, in the service plan that says they don’t have to necessarily make a profit.

I’m conflicted by this. I know that it talks about the importance of doing things for “social, economic and environmental policy objectives of the government.” As a matter of fact, we had a fund. When the carbon tax happened to be revenue-neutral, we took $50 million and put it into the ICE fund, the innovative clean energy fund, and that was for new technology that was to help create opportunities like what’s being talked about. That was $50 million, less than 10 percent of what’s being promised here.

We successfully found new, innovative technology. Nothing that…. It had to be brand-new, and we were looking at all sorts of green opportunities. I would recommend that that definitely continue.

[3:45 p.m.]

On the other hand, the fact is that this fund itself doesn’t clearly state where those funds are going to be invested. I even suspect, by that subsection I read out, that there’s the potential that there are investments that may have either already been committed to or…. The fact is that there’s a risk that some of the investments might not work out. They have to be carried by the other investments that are meant to be, as suggested by the member for Vancouver–False Creek….

The fact is that there are winners and losers in the tech field, as we know — in any business. It takes a business plan to come up with that. It doesn’t just take…. I think that the old saying goes: if you fail to plan, you plan to fail.

I think the situation is…. Some of us in this House have been entrepreneurs, where we actually had to not only take our own capital, but we had to risk everything that we had to make certain we did that. That didn’t guarantee getting access to this capital. I know that the intention is to help the sector in terms of technology and make certain that that’s being created.

Let’s talk about some of the things that take place in other jurisdictions.

What about the size of tech companies here in British Columbia? I know that my colleagues from the Okanagan area sat down and participated a number of years ago. We had this goal of growing technology from 6,000 workers to 20,000 workers, and I have to tell you that we’re well on track with that. I believe that the number now is about 13,000 workers.

We’ve had, as mentioned by the member for Vancouver–False Creek, Club Penguin, which was one of these companies that was already in existence. It had about 350 employees. There have been many other spinoffs in technology that exist in that area. We do want to see that grow, but we want to see it grow for the right reasons. We want to make certain that the people that are getting the benefit of this are here to stay.

I know that there are some things…. The minister mentioned the fact that we’re trying to make certain that we have an opportunity to retain those businesses. Some of those things, which I know the member for Kamloops–South Thompson talked about, were the fact that…. What is it? We’ve got the climate. We’ve got people. We could always train more. We could invest more in post-secondary education, because we all know that getting talent is one of the things we need.

We have seen some things. The $100 million we put into the B.C. tech fund has helped in terms of attracting. We gave that money to an outside firm, rather than trying to keep it in. Kensington Capital managed that money, and it has actually been leveraged, which is the whole idea of these types of things. You want to leverage these funds so that you can actually take a dollar and hopefully make that $10. I’m sure that the minister, no doubt, wants the same thing.

Prior to getting elected, myself and the former member for Kelowna-Mission and a number of other local people invested in an innovation fund, which was around that type of thing.

Interjection.

B. Stewart: Oh, sorry. Okay. I missed that. And the member for Kelowna–Lake Country. Maybe what it was, was that I was on the board, and he was one of the people attracted into it.

Anyways, we took our lumps, and we learned the hard way about investing and doing this. On a small scale, we tried very hard as entrepreneurs, as we all were, in trying to invest the dollar and trying to make that even $2. It didn’t quite work out that way, as the Deputy Speaker has just pointed out. It did morph into something. It has grown.

The bottom line is that there are other funds, like NDIT and CDIT and ICE-T, that all became part of what it is that the government was looking to. They wanted to invest and incentivize businesses to be attracted into these regions with specific goals.

What I’m thinking with the InBC investment…. I laud the government for the goals, but I have to say that one of the things that really needs to be considered here is: what are the things that we have to attract people here? We’re talking about putting money into these businesses, in technology. We want them to come and have the opportunity for capital.

I have to tell you, having dealt with, in a previous role that I had, attracting companies to British Columbia to invest in technology, that it is very competitive out there. We have some serious competition south of us, in Washington state, California. These are big, powerful entities.

[3:50 p.m.]

Let’s talk a little bit about some of the things that we have done. We decided that we wanted to incentivize people to come here and work in the movie production business. We have film commissions. We have people. We’ve just had an event with Creative B.C.

We have an incentive system. It is not the most generous. It is not a complete giveaway. However, one of the things that we do know is that it has made British Columbia a place where the talent is, where people want to come. They come here because they want to be a part of the climate, the people, the lifestyle, all of the things that we have to offer. I think that that’s one of the things.

Now, the things that we have that are negative things? We’ve got California, which has average-sized companies instead of what we have here in B.C. So 500 is kind of in the top 10 percentile of tech companies that are in the tech sector in California. We’re 10 percent of that.

We have Washington state, which we know is the birthplace of Microsoft. Of course, they have no income tax for people that are high-wage income earners. That means that somebody in British Columbia has to pay a penalty for being here. Not just an income tax penalty. They actually have to pay many other taxes, and employers have to consider that when they’re setting it up — and how competitive. I hope that that consideration goes into the type of investments, because we do want to grow companies.

Electronic Arts was cited by one of the members opposite. It’s a great example — I believe, a Burnaby-based company — that’s home-grown. It attracts all sorts of talent being trained at BCIT. We want more electronic art companies and other companies that are coming here.

One of the things that we have to remember about this type of fund is that having it so close and in government…. I look at the structure of what’s in here — the board of directors and who the chair is. That’s all good and accountable to the Minister of Finance. However, as I said earlier, the B.C. tech fund had Kensington Capital, which managed the funds, take $100 million and leverage that.

I think that the danger is…. We have examples, with the government, in their previous time in government, with the Working Opportunity Fund, which was not what it should have turned out to be. Currently we have projects where…. We talk about it in a language that makes it sound very sexy and home-grown, etc.

The community benefits agreement, frankly, is costing more for British Columbians to get capital built. We’ve heard, in the budget, that there is going to be lots of capital and new hospitals and things like that that are going to be built, roads that are under construction, etc. Frankly, that just delivers less value, and it means that the taxpayers, like in this particular group, are going to have to pay not just a little bit more. We’re hearing numbers of maybe 30 or 40 percent more for the cost of projects.

We’re a small province — five million people or just over that. We need to make certain that we’re competitive and that things that we produce here are exportable. We have to sell them. We’re not the place where a lot of these products are going to be consumed. Electronic Arts, for that matter, is global. Same with many of the other technology firms that are here. We need to be globally competitive to attract the talent in and bring those people here so that they want to set up their businesses here.

What we have is…. We’ve got a bit of a history of making up policies on the fly. I say that…. Well, look at the things on the fly. Let’s talk about the renters grant. It was promised in 2017 during an election, in April. We’re coming up on four years on that, or past four years, and there’s no sign of it.

We just recently, in this House, talked about something being done on the fly with a seniors home right in Vancouver, Grace Seniors Home. The fact is that we had B.C. Housing make an arbitrary decision to bring another group in, with the federal program, and displace 70 seniors in a culturally appropriate building. It was rectified, but making those decisions on the fly is the type of thing that proves that government is probably not the best place for making investment decisions.

Find a way to attract and incentify the tech companies to come here, other than a rule book that essentially is being run by people that, frankly, have made decisions that are on the fly.

[3:55 p.m.]

I’ll give you another one. There’s another example right now. The minister was on the radio yesterday talking about the agreement with Victoria and Vancouver. Strathcona Park was going to be decamped on Friday. Essentially, the park board in Vancouver is going to be obligated to move, with a court order, to make certain that the park is vacated, because there’s enough capacity to make certain that the people that are taking up residence there….

Well, the same thing is happening here in Victoria. We have Victoria West, at 225 Russell Street. It’s got a complex, a warehouse, that has now got sea cans in the backyard, essentially, next to cooperative housing. The sea cans are being filled with washrooms and safe injection sites for 70 additional people coming out of those parks. No consultation. Absolutely none. Those people, until about three weeks ago, had no idea that this was going into their neighbourhood, their community.

It’s not the first time. There have been many other purchases, as there was yesterday. There was another purchase of a piece of property owned by B.C. Housing and run by them.

The bottom line is that there is a lot of capital flowing out. Frankly, I think we do need to ask ourselves, in a sense: do these types of decisions have the financial test that makes them certain that they’re going to carry out and deliver on what they want?

On top of that, we’ve got hundreds and hundreds of families with children, a community housing complex right across the road. They’re going to be impacted by the effects of moving 70 people from Beacon Hill Park and Centennial Square into this type of facility. It’s going to start on Saturday. That is not the type of decision-making that I think we should be doing as government.

Frankly, I worry about the InBC tech fund being something like that, with the control. Now, it does say on here that there have to be no government officials on that board. It doesn’t say who the chair has to be, but in the act, it does talk about the fact that there can be an advisory board.

I’d be looking forward to seeing the independence, the business acumen of the people that are going to be on that. I’m sure that the minister is going to be thinking deeply and carefully about that, but that’s what I think we need to do — make certain that the people that are running this can meet that acid test of whether they are truly in a position to administer half a billion dollars.

I know that the member for Cariboo-Chilcotin…. They’re building a new hospital. He told me the other day that it’s going to cost close to half a billion dollars, but that’s a new health care facility. If we blow this and we spend that half a billion in a way that just doesn’t do the objective, doesn’t attract the talent here that we’re talking about….

Where is the investment in advanced education to make certain that if we’re going to grow this sector, we’ve got the spaces at BCIT, Kwantlen University, UBC, all the other tech-type universities, etc.? We have to make certain that we have the capacity to provide people, as well as that incentive system to attract them here to British Columbia.

So what are we doing here? We’ve got half a billion dollars going into this. Sure, we’ve got a COVID pandemic. It is a big problem, no doubt about it, as the minister struggles under the weight of that every day on Health. The situation is that we’re looking at deficits that…. A lot of places are looking at deficits. We can talk about it. We talked about it in the budget speech the other day.

They talk about rising to 30 percent of debt-to-GDP. If the economy holds, we’ll maybe be at 30 percent. What happens if it goes higher? What happens if the rating agencies decide to take us down a notch or two from triple-A down to something like B-plus or something like that? What is that going to cost? We’re going to have to pay more. What if interest rates go up? We’re talking about deficits here that…. We’re forecasting a $9.7 billion deficit for 2021, a further $5½ billion deficit for 2022, with the combined provincial debt at $103 billion.

I guarantee next year, when we’re in this chamber and we’re talking about the budget…. I bet you these numbers are wrong. I bet you that they’re off by a long shot. I bet you the numbers are going to be staggeringly high, and the situation is that we’re going to be faced with increases in taxes, things that we don’t want to see.

[4:00 p.m.]

We already are feeling the effects of the speculation and vacancy tax on land that people bought not to speculate, just land. The fact is that it’s seen to be people that are speculating, every piece of raw land. I’ve got letters from people from Saanich to the Okanagan to the Shuswap, up into the north. They’re all frustrated by this whole businesses of the taxes. What if that tax gets expanded to other parts of British Columbia? What’s that going to do?

It’s not the foreign buyers, which it was said that it was going to address. Kind of a little bit like what we’ve been hearing about that inquiry that’s going on in Vancouver and stuff like that. It seems to me that the problem isn’t quite as described by the current Attorney General. I think that when it comes to the issues around foreign buyers, that is also inflated. We know that foreign buyers represent 1 percent of the current market today. The fact is that there is a significant tax on them. We actually put that tax in, in 2015.

I think that we wanted to make certain that housing was for British Columbians, and I think that’s what it is. But at the end of the day, we haven’t done anything to address that. We’ve got half a billion dollars here. Maybe what we should have been thinking about is that some of that money could have gone into municipalities, where we could invest and have them reduce the community amending agreements or DCCs. Find ways to make it so that we could actually get stuff fast-tracked. Government doesn’t have a way of making things fast-tracked at any time quickly.

Picking winners and losers. I think that that’s a risky game. I think that it might be fun, but that’s not necessarily what it is. You know, you sit around and you get together with friends. There are lots of people that have ideas. How many of those people take those ideas and put real capital in behind that, and how many actually work out? I don’t know the statistics. But I would say that many of the successful entrepreneurs…. It takes a lot of entrepreneurs to find a few successful ones.

I think one of the things that we’re looking at is this increased cost to our regular operating of government — businesses in general. We’ve got 23 new or increased taxes. What’s next year’s deficit going to do? Are we going to have to react to that? And that’s going to be an even further turn-off to those businesses coming here. I have to say that…. I heard the member talk about her business, the member for Vancouver–False Creek talking about women and technology and how much more successful they were. I don’t know. It doesn’t say in here. Is there going to be a gender or ethnicity bias in terms of where this fund’s going, just because their track record is better?

I hope that, as I said earlier, the seven outside directors are going to have real business experience. I think that one of the things that we’re looking at is that we need to keep in perspective, from the minister’s point of view, what other good uses this could be put to. I think that it is a significant amount of money. I think that the intent is reasonable. However, is the process, that we’re setting this up, actually going to deliver? Have we got too many rules in place? Is it government picking winners and losers — that we should be actually thinking that we’re doing the right thing when it comes to approving this type of expenditure? I think that only time will tell.

Of course, one of the things that I’m going to be looking for in the future and during the committee stage is the reporting out. It talks about having a report at a certain point in time. But accountability and this type of stuff…. This is taxpayer money we’re talking about here. I think that taxpayers are expecting transparency and accountability, and the idea that that information being readily available allows the public to see how this investment is going.

Mr. Speaker, I think, on that note, I do want to make certain that I will be asking questions during committee stage on this, and I look forward to this bill coming to the floor of this House for that stage. Thanks very much.

Deputy Speaker: Thank you, Member.

Recognizing Richmond South Centre.

[4:05 p.m.]

H. Yao: Thank you, Mr. Speaker, for the opportunity to speak.

Before I begin, I want to acknowledge that I am speaking from and representing Richmond South Centre. Richmond South Centre is in the traditional and unceded territory of the Musqueam, Kwantlen and Tsawwassen Coast Salish people, and I thank them for allowing us to live, work and play on their ancestral land.

I also want to take a moment to thank the people of Richmond South Centre for allowing me to represent their interests.

I am very proud to support Bill 5, the InBC Investment Corp. Act, in second reading. As an MLA, I do also want to do a little bit of historical reflection.

As I mentioned earlier, since March 2020, B.C. was hit hard by COVID-19. Even today, we’re still trying to keep our economy moving forward under the shadow of a pandemic. I know many restaurants have expressed their concerns with us in regards to the restriction and how it’s limiting their ability to serve the public. Our government is working hard, through the small and medium-sized business grant, to help us and help our restaurants, especially with the circuit breaker grant to help the restaurants to endure this tough, difficult time. I want to thank the Minister of Jobs and Innovation for this great initiative, moving forward.

I also notice that the retail sector in Richmond is struggling as well, even though we can see that even Richmond Centre has a certain amount of liveliness. The Aberdeen Centre, Landsdowne mall…. Many of them still have quite a few patrons participating. I often love to see how people are lining up, keeping themselves two metres apart, ready to purchase products. But we know we are still under the shadow of a pandemic, and we need a government who understands the importance of investing in our business sector. If you look at recreation, tourism, entertainment, B.C. has been hit hard by the pandemic. We need a government with proper leadership to move forward.

Let me go back to talk a bit more from the beginning — what our B.C. government, the provincial government, has done so far. The B.C. government made record investments to keep B.C. moving forward. In B.C., we have provided the highest per-capita support for businesses and people in any province in Canada. The B.C. government has put in place a $10 billion COVID-19 response, which includes StrongerBC and B.C.’s economic recovery plan.

Government has provided and continues to provide support for businesses to help them recover and rebuild, like the small and medium-sized business grant and circuit breaker grant. Of course, we cannot forget about the tax break — the PST — an initiative to help people rehire their staff. I’m proud of all the large investments our government has made in both the public and private sectors.

I do, however, want to take a moment to reflect on a comment made earlier by the member opposite. After 16 years of neglect, our B.C. government is doing a great job investing in health care, education, mental health and addictions services and other public services in B.C. I do believe it is difficult for us to assume the investment is going in the wrong direction. B.C. was hit by the pandemic, and the pandemic exposed our lack of ability to respond, due to 16 years of neglect. Our provincial government had to play catch-up and respond to the most immediate emergency at hand.

When I heard the member opposite criticize the government’s large investment in B.C. to fight COVID-19, to help British Columbians to protect their livelihood and living standard, keeping our economy moving forward, I’m further troubled by the criticism. It concerns me about their sincerity when they express their gratitude to our doctors, nurses and health care professionals who, after 16 years of neglect, had to be supported by our government in our catch-up. Exhausted staff, overworked ICU nurses, an overloaded health care system…. We are all trying to combat the COVID-19 pandemic with a limited, inadequately invested public health care system.

He also made me question opposition’s sincerity when they talk about the need for additional mental health services. COVID-19 has taught British Columbians the importance of families, and by forcing us to isolate, many British Columbians are struggling. But remember that after 16 years of cuts and neglect, our health care system, especially mental health, requires so much effort just to catch up to today’s standard. I’m so thankful for the Minister of Mental Health putting so much effort by providing comprehensive and strategic service provisions and increasing beds for individuals who are dealing with mental health or addiction issues.

[4:10 p.m.]

It also further makes me doubt their sincerity when they ask for additional support for toxic drug supply for the fentanyl crisis. The reality, as I would like to also mention, since the beginning till the end, is that our provincial government continues in recognizing the dual pandemic we’re facing. We could be better prepared if we did not have 16 years of neglect — if they were properly invested in British Columbia and British Columbians in B.C.

I also want to talk about education professionals. I actually personally was there when I witnessed a youth worker getting laid off by the school board because of lack of funding. The youth worker was providing great services to youth who sometimes skipped school, a long way from home, ignoring their parents and getting too connected with…. It has been leading to problematic behaviours. We’re always thankful for the youth workers, who provide individualized, catered, direct support to our youth. When I saw this youth worker getting laid off, it reminded me how important it is for us to invest and continue to support our teachers and education professionals.

Deputy Speaker: Hon. Member, could you please bring it back to Bill 5 at some point?

H. Yao: Exactly. I’m going that direction just right now. Thank you for the reminder, Mr. Speaker.

Again, that’s why I’m so proud of our provincial government’s investment in British Columbia. When we’re talking about the InBC investment economy, we’re talking about investing in health care, teachers, and now we’re targeting economic development for British Columbians. As the light at the end of the tunnel draws near, I’m glad our government’s past investment will further complement the InBC Investment Corp. Act for B.C. to recover from the COVID-19 pandemic. InBC is a $500 million strategic investment fund and will provide B.C.-based businesses with capital to position the province at the front line in the post-pandemic.

I want to echo what some of my colleagues mentioned earlier. We want to keep this money in B.C., and we want to support individuals with diverse backgrounds by creating an inclusive and independent investment strategy. It is one of the tools that we’re using to build a foundation for a strong economic recovery and to build a brighter future for British Columbia.

InBC will help support start-ups, help promising B.C. businesses scale up and attract world-class talent to our province. It will also stimulate innovation, create family-friendly jobs and build a resilient economy that works for everyone. I cannot emphasize the importance of that. We do not just want to create jobs, but we want to create jobs that help people maintain sustainable and equitable and affordable lifestyles. British Columbians and the B.C. government — we are here to work with the people.

As I mentioned earlier, we’re providing a more comprehensive strategy to bring affordability to British Columbians. InBC definitely has been one of our strengths. It will also help us align British Columbia with significant changes in the world, such as environmental changes, social changes, technological changes and reconciliation with Indigenous People.

As I do not need to take my time to remind our colleagues in the House, we live in a world that is ever changing. Anti-racism has brought up many issues that we need to address. Also to face the environmental crisis and, of course, the discrimination against Indigenous People. I’m so glad InBC has focused so much energy and effort to support the environmental development, social changes, technological changes and reconciliation with Indigenous People.

The most important thing which I really appreciate about InBC is the triple-bottom-line investment mandate. It aims to establish B.C. as a global competitive low-carbon jurisdiction. It promotes values that make life better for people in B.C., including job creation, advancing reconciliation with Indigenous Peoples, promoting diversity and inclusion and, of course, as was mentioned earlier, achieving a financial return on investment.

But we’re not just simply talking about turning InBC into a financial investment hub. We’re also talking about patient capital to support businesses as they slowly grow. The goal is to keep money in B.C. and allow B.C. businesses to have proper breathing room as they continue to explore different venture opportunities and explore different innovation and creativity in British Columbia. This investment will keep B.C. moving forward.

We’re talking about investment that will target B.C. businesses for growth potential and the ability to anchor jobs, talent and including intellectual properties and innovation here in B.C. Funds critical to capital will be provided to B.C.-based companies so that they can grow and sustain profits.

[4:15 p.m.]

The fund will invest in B.C.-based businesses that create family-supporting jobs in all regions of the province. InBC will help establish us as a global competitive low-carbon jurisdiction. I know it sounds repetitive, but I’m just so glad to hear so many great opportunities created by InBC.

I think one of the key things I enjoy the most about InBC is that InBC will operate independently from government, with investment decisions made by a chief in­vestment officer and a team of investment professionals. The chief investment officer will be held accountable by a nine-member board of directors, the majority of whom will be from the private sector. Responding to a member’s previous concern, they will be from the private sector.

I do want to say that in the end, InBC will promote investment to keep B.C. focused on people, on the planet and on profits and make sure all investment in B.C. stays in B.C, will nurture British Columbians and foster talent. InBC is one of many, many tools that will continue to support small and medium-sized business in B.C. and climate change. I look forward to working with our ministers for future strategies as B.C. recovers from this pandemic.

K. Kirkpatrick: I will give the gift of brevity to the House this afternoon. There is still a lot of information that we don’t know outside of the act that we were given, and many of my questions and comments will be at committee stage. And while I appreciate the member for Langley explaining to us and reading through the act, as a lawyer, I’m sure he appreciates that the act only forms part of the legislative framework for this Crown corporation and that the meat of this, which we have to look at, is really the governance structure, the regulations, the investment policy statements. Those are things that we just don’t know anything about yet.

I’d like to start by saying how much I do care about building our low-carbon economy and the importance of creating a business climate that encourages innovation and entrepreneurship. I’m really excited about B.C.’s biotech sector. I’m really excited about our life sciences sector. B.C. is very fortunate to be home to the largest clean tech sector in the country. This has already caught the attention of many public and private investors. Twelve, nine, six — it’s different every year, but our clean tech companies always place in the Global Cleantech top 500, which is something we should be very proud of.

Low-carbon technologies are essential to accelerating action on climate change and, at the same time, creating economic opportunities for us. In fact, I’ve spent a lot of time looking at global trade policies, those kinds of policies that we can use to encourage investment and also to encourage the adoption of clean technology, so I am excited about what British Columbia can do there. Our tech sector was a key pillar of the B.C. jobs plan. It has consistently been growing faster than our economy overall.

I also just want to say I fully support the investment direction of the triple bottom line. That is a very healthy approach to investment. It’s good for business. In fact, though, it is not something new. It sounds like it’s something brand-new that we’ve thought of here. Fifteen years ago we were talking about a triple bottom line. We were talking about sustainable investments. This is something that just makes good business sense. It is something that we should be looking at with all of our investments.

Right now in this time and this place, government needs to be focusing on the local businesses hurting right now. Traditional businesses are struggling. Government needs to focus on getting that desperately needed funding out to keep the lights on in these struggling businesses, in so many sectors, including hospitality and tourism. Rather than setting up a new Crown corporation and taking on the role of investment manager for the money of British Columbians, why doesn’t this government think about some of the other tools that it has in its toolbox that can help the business sector and support them — tools that other strong and competitive economies leverage?

[4:20 p.m.]

As my colleague said earlier, B.C. has the third-highest top marginal tax rate in Canada, and this obviously is going to impact the ability to recruit people for tech jobs, software engineers. Washington state…. When the state right beside you is able to attract people because it has no state tax, that is something very challenging to compete with.

We also know that salaries in British Columbia are less than salaries in Ontario. If you’re a software engineer in British Columbia, you’re already making less than a software engineer in Ontario.

B.C. has a higher corporate tax rate than Alberta and Ontario. We now have the employer health tax, which is a tax on jobs. I know from running an organization, when that EHT came in and the MSP was still there as well, it was very, very difficult for our organization to be able to get through that year without actually losing staff because of the additional cost of that tax. Ontario and Quebec are both moving to reduce that burden on small businesses.

I wonder: has this government heard from the sector and the sector has said, very specifically, that they need money? Are they asking for money or are they asking for a competitive tax environment? Are they asking for lower and competitive marginal tax and capital gains tax? Are they asking for housing so that people can come and work in these organizations? Is that what they’re asking for or are they actually asking for money?

It would surprise me if the ask was for money for investment. The money being shifted into this fund, this is the money from hard-working British Columbians that we should not be putting at risk.

Will this fund, with its connection to government…? I’ve heard conversation about this being arm’s-length and being independent, but I think there are some real concerns about how independent that’s going to be. Will this connection to government put government in a fiduciary duty conflict? What’s the risk management framework and how does the government balance its fiduciary role to protect British Columbians investment dollars by taking on the role of a venture capitalist, and taking on financial risk?

I’m concerned that this government feels that it is its role to determine the winners and losers in B.C.’s economy. The minister says it’s meant to help businesses thrive, but I’m not sure which businesses. Again, let me remind you that the hospitality and tourism sector is certainly not thriving right now.

Apparently, the fund will be investing in high-potential businesses. I can tell you there is a lot of money out there that wants to invest in high-potential businesses. There is a lot of venture capital looking for high-potential businesses. That’s what everybody wants to invest in. We are all looking for that unicorn, in British Columbia. Why do we need to try and fill a gap that’s not there? Why are we trying to compete against private money to be investing?

I was surprised and alarmed to learn that investments that meet government policy criteria won’t necessarily be required to be profitable. I’m wondering what the expectation is, in terms of how many businesses there are that are actually going to take advantage of this. There’s an online application process that you have to go through. When you’ve got a great business that is going to give you a good return, there are other people coming to you, you don’t have to go online and be applying for something that is going to have stringent requirements connected to it.

We want to make sure we promote B.C.’s emerging industries, while getting the best return for taxpayer dollars. Competing with the market to invest or chasing those investments that to the private sector, perhaps, seem too risky is a concern to me. This money is the money of British Columbians, not money that can be carelessly thrown around.

I think we all remember another time the NDP government decided to step in and get involved and invest in a sector. That would be the shipbuilding sector, where they put $500 million into a program to build fast ferries and then had to eventually auction those off for $19.4 million. I worry that this is the type of investment management we can expect from this government.

Investment decisions are, apparently, to be made independent of government, can only be authorized by the chief investment officer. Again, who develops, who ap­proves the investment policy statements? What are the checks and balances? The independence of this is questionable.

[4:25 p.m.]

As I said I would keep my comments brief, I thank you for the opportunity to speak to this. I will look forward to learning more as we go further.

Deputy Speaker: Just to remind hon. members, according to Standing Order 17A(3), there are no pictures taken in the chamber. Thank you.

Member for Chilliwack.

D. Coulter: Thank you, Mr. Speaker. It’s a pleasure speaking in front of you again. You are truly one of my favourite Speakers. [Laughter.]

Interjections.

Deputy Speaker: Take as much time as you like, hon. Member.

D. Coulter: I’d like to begin by acknowledging that I’m on the traditional territory of the Lək̓ʷəŋin̓əŋ-speaking people, in particular that of the Esquimalt and Songhees First Nations.

I also want to begin…. I thanked the Whip’s assistant the other day, but I butchered her name and mispronounced it, so I’d like to just thank her again and correct the record. Her name is Kaylee Szakacs, and without her, I don’t think I would be able to do a very good job.

I’d really like to thank the Minister of Jobs, Economic Recovery and Innovation. I think he’s doing a tremendous job. I’ve known the minister since before he was elected, so I’ve known him for quite a while. I must say, I am proud to call him a friend. I think him and his team have done a great job on this bill.

In Chilliwack, we have a similar sort of setup to this. We have something called the Chilliwack Economic Partners Corp. It’s very similar to this. There are differences, of course, but the broader kind of theme of it, to attract business to Chilliwack, is very similar to this bill. It does a great job. It has attracted some great businesses to Chilliwack. It attracted the Molson brewery there. That’s quite a few jobs. It’s quite a large brewery. It has attracted liquid natural gas compressors and other industrial companies. It’s really providing good jobs for my constituents. This bill is going to do the same thing.

I’d also like to thank the minister for the other programs that he has instituted. The small and medium business grant is making a huge difference in my constituents’ lives. I’ve been working closely with the Downtown Business Improvement Association, my local Chamber. We have a group called the Chilliwack Economic Recovery Network, and they’ve been getting out the word about this grant, also about the launch online grant. Chilliwack does have a tourism industry. Personally, I know a business operation that…. He takes folks sturgeon fishing. Obviously, the pandemic has been a little bit of trouble for him.

One of the things I really love about this bill is that InBC Investment Corp…. The investments will consider people, the planet and profits. Really, people are the economy. The economy isn’t its own thing. During the pandemic, I think, more than ever we have come to respect that it’s people that are hurting. I think we need to keep our eye on that. I love that it considers people.

[4:30 p.m.]

I’m a working-class person, if you will. I still have the scars on my hands from when I was a welder, so I really feel an affinity for workers. I’m not going to say the opposition doesn’t care about workers. I’m sure some of their best friends are workers. But I will say that I find….

[S. Chandra Herbert in the chair.]

I’m going to introduce a word here that I know the member for Nanaimo–North Cowichan used to say quite a bit in the House. I hope he doesn’t accuse me of plagiarism. He used to say “jiggery-pokery.” I’m sorry if I’m offending anyone. Coming in here, talking about supporting workers, when your Labour critic…. I sat on Zoom for four hours before we got to clause 1 of the bill to provide workers with up to three hours to go get vaccinated. I just found that jiggery-pokery, if you will.

I heard the member for Kelowna West sort of slam community benefits agreements. Those community benefits agreements are helping workers. When people come in here and want to talk about paid sick time, etc., community benefits agreements are helping workers. They’re helping to get younger people into the construction trades, helping to bring more Indigenous people into the construction trades, and more women. So if you care about workers, I think you need to take a closer look at community benefits agreements and really consider supporting them, for sure.

You can’t really talk about workers in the House when you have a certain record. This bill is going to obviously help workers. That’s why I’m talking about workers here. My mother was in the HEU back in the early 2000s, when they clawed back 15 percent of her wage and made her pay back that 15 percent of what she made from when the contract was signed. She was close to retirement. I find that shocking. Then to come in here and to lecture us about paid sick time and treating workers with respect. You have to look at your own record.

Also, the contracting out of housekeeping services in hospitals. People were making good wages, had benefits and only needed one job. I met with some workers from the Hospital Employees Union recently. In this contracting out, they lost their benefits. Their wages were reduced. It wasn’t a very good thing.

Now, this strategic investment fund is not something super novel. It is the first time it’s being done in B.C. I congratulate the Minister of Jobs, Economic Recovery and Innovation on developing this great bill. In Ireland, they have a strategic investment fund. In Denmark, they have the Danish Growth Fund. I’m not going to even try to say the name, though, because I’m a little rusty on my Danish. I’ll avoid that.

When we’re talking about business, and we’re talking about economic recovery, this is badly needed. We’re in a pandemic. Lots of people have lost their jobs. We need to come out of this pandemic stronger than ever before. That’s part of the reason why I really like that the InBC Investment Corp. will consider people, the planet and profits.

[4:35 p.m.]

People are concerned that this corporation is going to lose money, that it’s going to have a lot of risk or that it’s going to be run by people who don’t know business. Well, one of the things this corporation will do is to help promising B.C. businesses to scale up. These businesses already have somewhat of a proven track record, so it’s not that huge of a risk. It’s bringing jobs and economic activity to British Columbia. It’ll be great.

Now, my friend the member for West Vancouver–​Capilano mentioned tax rates. For 16 years, the B.C. Liberals cut taxes for wealthy folks and then downloaded the costs onto working people, with fees and the like. One of the biggest tax cuts in the history of the province was the B.C. NDP eliminating the MSP — the largest middle-class tax cut.

Also, tolls on bridges. I know lots of people who had to cross those bridges to get to work. That’s $12 every day. I can’t remember exactly what the toll was. That’s quite a bit of money every day coming out of their pocket. Some of them would have to work an extra hour in a day.

I support this bill, obviously, with my whole heart. I think it’s going to be a great bill. It’ll help align our pro­vince with the significant changes in the world, such as environmental change, social change, technological change and reconciliation with Indigenous Peoples. Now, one of the things…. Folks are talking about how maybe we need experienced business people to run this corporation and if this something that business is asking for. Well, I have some quotes from some folks who are in the business world and who think this is a good idea.

Wendy Hurlburt, president and chief executive officer with LifeSciences B.C., says:

“B.C. is home to a dynamic and world-renowned life sciences community comprised of nearly 2,000 companies employing roughly 20,000 people. The sector offers tremendous potential for exponential growth and foundational support for B.C.’s economic recovery and will continue to deliver innovation, attract investment and create high-paying jobs. We look forward to working with InBC to further expand our life sciences sector and enhance B.C.’s resilience to future health challenges and ultimately ensure our health and economic security.”

Greg D’Avignon, president and chief executive officer of the Business Council of B.C., says: “Access to capital is critically important to our economy and innovative businesses as they seek to scale and to compete globally. I am pleased to see the province launch this strategic investment fund that can support higher productivity and growth while retaining exciting new and growing businesses, intellectual property and talent in British Columbia.”

Jérôme Nycz, executive vice president of BDC Capital, says: “Congratulations to the B.C. government on the launch of the InBC strategic investment fund. We are pleased that the province can rely on a new source of capital to support its innovation economy alongside other national players, such as BDC Capital.”

Obviously, business thinks that this is a good bill, that this will be a good thing to do, that the fund is going to help spur economic recovery. That’s really important.

[4:40 p.m.]

Also, I heard some concerns from the member from West Kelowna. He was concerned about what the board would look like, whether the board would either have some distance from government or have good representation of business folks. Well, the board will have two deputy ministers on the board, the Deputy Minister of Finance and the Deputy Minister of Jobs, Economic Recovery and Innovation. The rest of the positions on that board will be made up of folks from the private sector. This corporation will do some great stuff.

Like the member for West Vancouver–Capilano, I’m going to cut my remarks there and just say that I hope all members of this chamber support this great bill. I couldn’t be prouder of the Minister of Jobs, Economic Recovery and Innovation for his hard work here.

R. Merrifield: I’m going to start with a story. The story is, hopefully, to allow the member for Chilliwack to understand how much the members on this side of the House actually understand workers.

The year was 2008; it was October. The sky had fallen, and the financial markets had absolutely crashed. I didn’t know how I was going to pay $563,000 of payroll in 24 hours. I had hundreds of employees. That morning my daughter, who was young at the time, decided to ask me a really curious question: “Mommy, what is it that you actually do for work?” In that moment, with tears in my eyes, I looked at her, and I said: “Every day I go to work, and I feed hundreds of families, because I sign paycheques.”

I don’t know how many on the other side of the House have actually signed a paycheque or understand business, but I can assure you that the people that have stood up today and asked very intelligent questions understand. We talked about….

I heard my colleague from Kelowna talk about the community benefits agreement. Having been in the construction industry for 25 years, I take exception to the community benefits agreement because it’s inequitable. It only values 15 percent of those that are actually in the construction industry. The other 85 percent are excluded. Winners and losers are chosen with the drop of a hat and a community benefits agreement.

Talk about the definition of “worker.” I am a worker. I am someone who will be in the trenches alongside all of those that will work alongside me. I have helped feed thousands of workers’ families over the course of my 25 years in business.

To mention hospitals and privatizing contracts? Hospital authorities were at pivotal moments in which they were going to have to invest tens of millions of dollars, not into people, not into contracts, but into equipment. Instead of redoing tens of millions of dollars of equipment, they privatized the contracts, saving almost $150 million in one health authority. You know what happened? People got surgeries. For four years, our surgical wait times went down. Why? It’s because we had more money to spend on people.

[4:45 p.m.]

So forgive me if I take exception to the fact that the B.C. Liberals, when we were in charge, saved taxpayers hundreds of millions of dollars and still achieved things, like from 2013 to 2017, getting more surgeries done and lowering wait times.

Now let’s talk about this latest crisis. The Okanagan Spirits Craft Distillery. They responded to a desperate call for hand sanitizer because B.C. was desperate. Kelowna General Hospital didn’t have enough. Not just for a hospital, but all of our front-line workers. Doctors’ offices were asking for it. You know what they did? This business converted their craft whiskey into charitable hand sanitizer. Over $500,000 worth was donated. They converted their craft whiskey, something that makes them money, into charitable hand sanitizer.

But do you know what this government did? Well, as the CBC reported, the province paid about a million dollars to Vancouver-based Parallel 49 brewery for hand sanitizer. The difference? Parallel 49 brewery hadn’t given away any hand sanitizer, hadn’t risen to any call to action, because as a brewery, not a distillery, they don’t produce their own alcohol. If our distilleries, if our businesses hadn’t stepped up in the first few months of the pandemic, shortages would have been way more lengthy and widespread.

Tyler Dyck, the owner of Okanagan Spirits Craft Distillery, who is in close contact with other B.C. distillers reported that many of these distillers are on the verge of bankruptcy after months of donating bottles of sanitizer in a year of economic instability. That story wasn’t from last year in the summer, when we didn’t know. It was actually from January.

So why am I saying that? Because this is indicative of B.C. businesses. They’ve done the right thing. They’ve sacrificed. Now this is our economic restart plan forward, InBC? We need to be focused on local businesses hurting right now and look for ways to make investments in them. We need to take actions to make the environment better for them, not worse.

This fund doesn’t do any of that. In fact, this fund is completely missing the mark. Having been involved with financial institutions over the course of the last six years and having been in business for the last 25, this fund is a downright disaster. Who predicts losing money for two years and only making a 5 percent return? That’s not even patient money. It certainly isn’t venture capital. That is a misspending of our taxpayer dollars.

This fund won’t even be ready to make investments until the end of the fiscal year, which is next spring, which means that we have another year of waiting for some form of economic stimulus. There are no requirements for a throughout-B.C. investment. There are no requirements for the companies to look different than anything else.

Speaking of Club Penguin, as the MLA for Vancouver–False Creek said, I was very intimately involved with Club Penguin, as my last name would denote. Honestly, I can tell you that Club Penguin wouldn’t have fit inside of this fund. The very companies that are being used as an example wouldn’t have fit the criteria. Why? Because they were profitable from the very first year. Unfortunately, it didn’t make 40 millionaires, but I’m not going to take exception with all of those facts. It’s also not in Vancouver. There’s nothing in this bill that says it’s going to be tied to the rest of the regions.

So if we’re not basing it on profitability, as the balance sheet would suggest, and if we’re not…. What is it based on? Well, the member from Vancouver–False Creek actually went on to talk about women. She mentioned that women often get overlooked, which I would agree with. They do. But this fund doesn’t have anything to do with women-led organizations.

[4:50 p.m.]

I do agree when the member said that women-led companies are more profitable, produce better ROI. They have faster returns, higher revenues, and thus…. Oh, wait. They wouldn’t qualify for this fund because this fund is supposed to lose money. How is that even in the realm of what we should be doing?

If the fund isn’t really throughout B.C., is it based on some form of economic restart plan based on where we’re going? If the fund is the plan, then we have to question: is the government predicting that we’re not going to be profitable for the next two years?

When I was working with the Central Okanagan regional district’s economic commission, they focused on nothing but the economy. The way that they stimulated the economy, specific to the Okanagan, was by building the infrastructure, by building the studies that would talk about the superclusters that could be attracted and the synergies that could occur in between different businesses. They created a plan forward, and then they attracted investment by doing the groundwork, making it easier, completing the studies, finding rental space and retail space, etc., taking away risk factors. That’s how you attract investment.

Where’s the planning? Where’s the full economic restart plan? How does this fit in? It just doesn’t seem to make sense.

If I was to just suggest something that would help…. I’m going to go back to another B.C. Liberal story from close to my riding. That was actually the innovation centre, where the B.C. government, alongside the Central Okanagan economic commission, along with the federal government, along with the city of Kelowna, created the largest tech hub in all of the Okanagan — I can say that because the MLA from Kamloops isn’t here right now — the largest in all of the Okanagan.

Today, when you go there, it has green walls. It has a green roof. It meets LEED standards. Oh, wait. It houses thousands of tech employees, based on a plan. I was privileged enough to be there at the ribbon-cutting ceremony with all three of the MLAs.

Is this money being asked for? As my colleague the MLA for West Vancouver–Capilano said, is this what’s being asked for? Right now, in my business ears, there’s a tremendous amount of attention already on clean tech. There’s a tremendous amount of attention and the most money in history going towards biotech.

Why are we jumping on to a bandwagon that’s already taken off? If there are already trillions of dollars out there for this exact enterprise, why would we then compete? Then I’m left to think: are we only picking up the non-profitable ones, the failing ones, the ones that are almost bankrupt?

If we really wanted to do business a favour, if we really wanted to stimulate the economy, let’s make it easier for business.

How has this NDP government reduced risk for businesses? Well, they’ve introduced 23 new and increased taxes and made us the most uncompetitive jurisdiction. We have the third-highest top marginal tax rate in Canada, which impacts the recruitment of tech jobs and software development engineers. We’ve got Washington state, to the south, which has no state income tax. We’ve got B.C., which has a higher corporate tax rate than Alberta and Ontario and, yes, the employer health tax. It hurt the bottom line.

Why not other aspects of making it more affordable and more attractive and a better environment for businesses to thrive? How about lowering risks, lowering taxation? How about a buy-B.C. plan where we would be guaranteed contracts to our businesses that are starting up? That certainly would have helped Okanagan Spirits Craft Distillery.

How about working on more affordable housing? How about child care? Spend the $500 million towards child care.

[4:55 p.m.]

We want to make sure that we promote B.C.’s emerging industries while getting the best return for taxpayer dollars, because that’s whose $500 million this is. And spoiler alert: don’t use taxpayer dollars to buy interests in failing companies. I would ask: where is the independence of this fund? Because putting people and appointing people to a board is not independent. We’ve had the hunger games of vaccine clinics, and now we have the hunger games of the economic world. Picking winners and losers with taxpayer dollars is a very risky game.

The independence is certainly questioned. We don’t know who the priority sectors are for this investment. We don’t know what the criteria is for choosing these board members. B.C.’s tech sector is the fastest-growing in the economy overall. So when I look at this plan, at this InBC fund, this is not throughout B.C. This is not thoughtful in B.C., because it’s not based on any economic plan. It’s certainly not independent and, therefore, is not effective to incite actual investment in B.C. It’s touted as a $500 million economic stimulus, but I’m going to go on record today by predicting that this will be a $500 million failure.

To quote from the Hunger Games, this seems to be another place where this NDP government chooses hunger games for desperate business owners and our economy, rather than a fair, equitable playing field that’s actually attractive for investors. So all I can say, in summary, to the businesses out there that wanted some hope is: “May the odds be ever in your favour.”

S. Chant: I appreciate the opportunity to speak to this group. Once again, I have the opportunity to speak in support of something that our government is putting forward as a way for British Columbia to recover and thrive in our future. I thank you for the opportunity to speak in support of this bill.

I also want to be sure that I recognize that I’m speaking from the unceded lands of the Squamish, Tsleil-Waututh and Musqueam Nations, where I have the privilege of living, working and learning.

This is a wondrous opportunity, I think, on my part, to be able to speak to something that I support with all my heart. For so many times, we have seen that…. We are seeing people that have bright ideas, good thoughts, wonderful things to offer, recognize needs, know ideas, how to fill needs, but cannot get the financing to move forward and make these things a reality for themselves or for their community.

We have, so many times, seen people, for instance, going down to the United States, going to other parts of Canada, leaving for Toronto, going to many, many different places because that’s where the opportunities are for them. They are often getting money from other places so that they can go. They are doing their training elsewhere. They are getting their education elsewhere, and we lose them — the next generation.

[5:00 p.m.]

We have families that are spread all across the country and, in fact, all across the world. I know geologists in Australia. I know folks that are living in Silicon Valley, folks that are working in media, which is one of our strongest of points, but they’re working in Toronto or they’re working in Montreal because that’s where they could get a job. That’s where they had the opportunity to do whatever it was that they had trained for and wanted to do.

This strategic investment fund that is proposed through InBC Investment gives so many opportunities to these folks. It’s a way that B.C. can actually look at investing in our own folks, investing in our own technology, investing in our own ideas and creative thoughts and allowing ourselves to get the benefit of those and maintain those people in our province, maintain those families and maintain those communities.

Up the street from me, I’ve got a guy that pretty much runs the artificial intelligence research people in the Silicon Valley. He lives in North Van. However, he’s paid in American dollars. He pays American taxes. He pays some taxes here. But that money? That work that he does? That’s not Canadian work. That’s American work. That’s work for the Americans.

I have a nursing friend whose son is in the Silicon Valley doing the work that he learned to do through our universities and that he co-opted with many of our companies. However, when he got out of university…. At that point, well, he could work as a barista. There were a couple of other opportunities, but there was nothing in the area that he was working in. It was a very focused environment. So now he works in the Silicon Valley, again, for another company that profits by his work and that has the intellectual property of his work. It just keeps going in an endless circle.

Many times when the entrepreneurs or the start-up companies are looking for financial support, they go seeking investors. They want people to support them. They go out. They sell, and they sell. They try so hard to find somebody that will invest in their opportunity. What happens with that is they….

Sure, they’ll probably find investors. Probably it will be a great idea. You know what? Now who is getting the profit from them? The investors are getting the profit from them. People or companies that already had funds, that already had money, are now making more money. That cycle keeps on going.

What this is going to do is allow British Columbia to invest in its people so that when there is some profit, appropriate profit, not such that the people themselves that are doing the work are left behind but a profit that allows them to live and flourish and a profit that allows us to grow a fund and reinvest and keep investing…. This is something that we can really utilize. It’s been done in different places. We’ve seen it in Ireland and in Denmark. It’s already been used and started and working. It’s providing a platform and a stimulus to promote local work.

I had the opportunity a while ago to go and visit a place that had been doing small industry prior to COVID. When COVID struck, they looked around, and they realized that the big thing about COVID was infection and the transmission of the virus. So what did they do? They dropped what they were doing, the work that they were doing, and went into ultraviolet sanitization.

They had a whole range of products going from a small thing that was about the size of a lunch kit, with a zipper on it, portable, light, able to go with you wherever, re­chargeable. You could charge it. You could have it with you. You could drop your cell phone in it, your pens in it, your cutlery in it and anything small you had that was being handled through the day. After a prescribed period of time, your stuff was clean again. Sanitized. The virus could not exist through that.

[5:05 p.m.]

They had these nice, little, tiny things. Then, as you looked, they had a whole variety of other mechanisms that worked with UV to sanitize environments. They had a light that you could install in a room. When the room was empty, you’d flip on the light. You’d leave it on for the amount of time that was appropriate. Then you could go in and turn the light off, and you could be sure that the room was completely clean. All surfaces that were exposed to that light would be clean. It’s more than you can say sometimes for wiping things down with a sanitizer of various kinds. Invariably, you’re going to miss spots.

They had portable things that did the same work. You would take it into a room. You would close the door on the room. You would turn the machine on, and it would sanitize that room. Now, when you think of that in terms of a hospital room, for instance, or a long-term-care facility room…. Even in a home, you could use something like this.

However, where was their market? Who was buying their stuff? They had online advertising, etc. Who was buying it? They had sent several of their, actually, large units that were good for long hallways and bigger areas…. Several of their large units had gone to the United States by this point. A couple had gone to other provinces. Some of the small things had gone, in bulk, to other parts actually outside of Canada, not in the United States.

However, what were their B.C. sales like? Not a lot. Where were they getting investments from? Well actually, the two guys that were doing the work and building these things, building the prototypes and then making it so that they could be replicated…. They had both mortgaged their houses to do this work. Was it working for them? Yes, it was, painfully and slowly. They couldn’t actually afford to pay themselves. However, they were getting this equipment out to the marketplace and out into a world, at that point, that was becoming more and more riddled with COVID.

This type of thing is, in my opinion, an example of where InBC investment becomes a critical piece. This is somewhere where you would have the opportunity to go and say: “Hey, I’ve got something that may work for our world as it stands right now and that reflects a problem that I’ve identified in my community or perhaps in my province or perhaps in Canada or maybe even in the world. I’ve got a method. At the moment, I’ve got an idea. I’ve got it down to some…. I’ve got a business plan. I’ve got something to work with. I would like to present it to you as a possibility to be invested in.”

I’m a local B.C. person. I want to stay here. I want to do my work here. I want my family to live here and enjoy this beautiful province. I want to pay my taxes here. I want my income to go through my community and be reused again and again. When I go to the store, it supports them. When the store buys supplies, it supports them. It’s an endless thing. However, if my investors are private investors, companies or individuals, that money is not seen in my community again, nor are the investment they make and the financial return they get seen again, effectively, within our province.

This is a spectacular opportunity for our province. We know we’ve got really smart, creative, innovative people that are passionate about working on things that are environmentally friendly, socially effective and workable within our various industries. All those things are there. We need to husband it, and we need to support it. That’s what InBC is going to give us the opportunity to do.

One of our other things with this is, oh my goodness, the room that it has for working with and collaborating with our Indigenous communities as partners in a whole variety of initiatives. We’ve got many, many different initiatives that have come into place. We’re sort of sitting a little bit on the outside watching what’s going on and going: “Wow, I wish I was a part of that.” This is our opportunity to be a part of that.

[5:10 p.m.]

All of these things need some financing, need a stable source of financing they can count on. They know the method is there. The process for application, the process for review and the process for oversight are transparent and standardized.

That’s the other part of this. When you work with InBC, you’ll be in a standardized environment where you know what you need to attract an investor, where you know how much the investor will have available for you and what percentage you’ll see and what percent…. Those things will all be part of it, and that allows us to all benefit from it.

The triple bottom line is a critical piece of this — people, planet and profit. Where can you lose in that equation? If we’ve got all of those in an opportunity, why would we not utilize it? When we think about people, there are so many places where people benefit from this.

I think about health care as an example — the money that British Columbia so far, in the COVID environment, has invested in, first of all, making individuals have access to things such as the COVID benefits and having things such as various types of payments increase. All of these things are investments in people. We’ve made investments in small and medium businesses. Now what we’re doing is we’re investing in British Columbia as a whole. That is a really forward-thinking opportunity.

I have a friend who was involved for many, many years in microeconomies overseas. These were things where there would be a small community where somebody was able to plant or work with something that is a benefit for the community. With a small amount of investment in that work that that person was doing, it turned into a viable business and allowed funding to come into the community, which then allowed for small schools to be built.

There are many, many instances of this type of work being done in many, many countries. We look at that work, and we think about that work, and we go: “Well, why don’t we apply it at home?” Canada, overall, is known as a place that goes out and does work in many, many places to support people that are perhaps not as privileged or haven’t the same resources. Why aren’t we doing this at home? This program is addressing that question.

This is forward-thinking, allowing us to be innovative and creative and entrepreneurial and start something up and work on it and not have it die on the vine because the funding was inconsistent or not available beyond a certain point or just ran out. This is a much-needed method of doing business.

I’m truly impressed that the Minister of Jobs, Economic Recovery and Innovation is living well up to his name. This program focuses beautifully on all of those thoughts and allows a much broader capacity for people to step back, take a look at what the needs are in their community, perhaps, and then figure out a solution set so that they can settle down and do the work and do it in a way that is well supported.

[5:15 p.m.]

I have been concerned for years about what my family, and probably many others, laughingly call “brain drain,” where young people in particular, and others — some of us older folks have skills too — go to other parts of Canada or out of Canada to practise their skill or job or to find an opportunity to follow up on some type of idea that they’ve had, because they’re not able to get the support within our province to do that work here. They’ve gone somewhere else.

It’s become particularly poignant through COVID because, again, people that, for instance, have gone down to the States and have come home every six months or so to see their family, or their family is able to go down to them — those restrictions have become very painful. Not only that, but we looked at some of our family members in the United States and went, “Holy crow, are you guys going to survive COVID?” because of the state that the States were in earlier this year or late in 2020 and so on.

This program and initiative may, in future, allow those people to stay where their families are, where their communities are, and be able to go to the other places — absolutely. Go as tourists, go as consultants, go as subject-matter experts. However, being able to come back home, come back to where we live….

This is something we really need to support in our province and try and reduce that brain drain and try and make it a viable and attractive place to bring people into and to allow people to bring their skills to us and work here in an environment that ideally is going to lead to a strong quality of life, a strong ability to have a social fabric that is supportive and to give folks an opportunity to flourish and to shine.

I think we often sort of work in a bit of a bubble. All of us do. We get our head down. We do our job. We work within our family and within our community. Sometimes, if we’re very lucky, we get the opportunity to serve in a variety of ways, whether it be in our community or in our province or other areas as volunteers or as helpers in some way. These opportunities would become stronger if we can have people in jobs where they are well suited. They’re not just doing it because it’s a paycheque, but it’s a job that they’re in because they have a passion for it and because, maybe, even, it’s something they have created for themselves or for their community.

If people have that opportunity, what happens is it reinvests itself. The happier people are in their chosen profession, the more they have to offer in other places — to our kids, to our seniors, to our sports. In so many different ways, we see this. If we can set up a system whereby our entrepreneurs and our small businesses can get themselves going, get their feet under them and start, maybe, offering jobs to other people and employing others…. Our smart people, our bright people, are able to be, perhaps, a resource or a consultant, but they’re a B.C. resource or consultant. We’re not looking outside of B.C. for this valuable input. We’ve got our own people, thank you very much. This is perhaps something that we need to strive for. I believe that this initiative will allow us to make that progress and go forward.

We have to recognize that we’re in a climate crisis, a climate emergency. I truly understand that, and I suspect there isn’t anybody who doesn’t. This will also work towards B.C. again becoming a leader in figuring out ways to deal with climate change. This will allow people to sit back and put their thinking caps on and say: “Okay, what is it that we can do to help our world do better in the climate area, in the area of environmental management, of environmental support, of environmental preservation?”

[5:20 p.m.]

How do we do this? How do we do it right? How do we make it so that our world can maybe slow down the things that are happening? How, also, do we recognize the changes that have already occurred? How do we manage firefighting? How do we manage floods? How do we manage tidal surges that are coming up higher and higher? What are the things we need to do for that? There are businesses that need to focus on those things and need to provide services, from British Columbia to British Columbia, to manage those things. We know this.

Our wildfires have become incredible. I recently heard about a young man who was involved with a small company where they had technology that you could fly in an airplane over areas where traditionally you’d look and the fires are out. They’re gone. There’s no smoke. There’s no flame. There’s nothing going on down there, so we can move on and take our troops somewhere else to manage the fires.

However, what this technology could do is it could image the heat, if a fire had gone underground and had burrowed, and would potentially…. It could go underground and stay underground until the next warm season and keep alive. What they were doing is they were going through, in early spring, and identifying these spots that could be dealt with then so that they didn’t initiate forest fires, so they didn’t flame again and, as it got drier and hotter, come to the surface.

This kind of technology is critical. Is there much of it? No. Is it expensive? Oh, yes. Could we benefit from investing in it? Absolutely. Have we? Quite frankly, I don’t know. But this is an example, again, of something that would make a huge difference if we can get it going in a way that it is being used strategically and scientifically within our province and around the world. We know that fires are out of control. Look to our southern neighbours. Look to California. Look to what has happened in Australia. Fires are huge now. They’re going to be part of our life until we figure out how to get beyond that.

Floods. Working a river that’s in full flood — ask how difficult that is. Ask what you need to go and get people and livestock and pets and valuables and belongings from houses that have been flooded by a river that has gone over its banks. I’ve been very lucky in that I’ve worked with the military for a long time. The reserves have been involved, for a number of years now, in the freshet management, of flooding. That is a huge undertaking.

We know that it happens. We know that it needs to be managed, and somehow or other, we’re going to have to take those steps to learn how to do that effectively so that we can do it proactively, as opposed to reactively. There are people that have brilliant ideas about this, so many different thoughts. However, we need to support them to bring those thoughts forward so that we can help manage it.

That big island of plastic that is out there in the middle of the ocean. There are a lot of really good ideas about how to deal with that. We had pivoted last summer, and we’re looking at it again, for our own shorelines and for gathering up plastics out of our own waters. Can we help internationally? I bet we can. How we will do that remains to be seen. But there are these types of initiatives that say: “Okay, you’ve got a good idea. You’ve got a business plan. You’ve got it set. Now bring it forward, and let’s take a look at it. Let’s see if we can make this work.”

I am very pleased to be able to support this bill, Bill 5, the InBC Investment bill. I am very pleased that as a framework, it uses people, planet and profit, because I feel all of those things can be well incorporated into something that helps B.C. not only recover but move forward and make a B.C. that our future generations are both lucky and proud to be able to live in and be part of and be contributing to the ongoing prosperity and beauty that is our province.

[5:25 p.m.]

I feel that this initiative speaks well to British Columbians and will be recognized well by British Columbians as something that contributes in an ongoing fashion and is supportive of B.C., not only B.C.’s people but B.C.’s communities and B.C.’s businesses.

[Mr. Speaker in the chair.]

Mr. Speaker, I thank you so much for this opportunity to speak today in support of this bill. I think that it will offer a lot to all of us. With that, I will note the hour and move adjournment of the debate.

S. Chant moved adjournment of debate.

Motion approved.

Hon. L. Beare: I move that when the House next ad­journs after the adoption of this motion, it do stand adjourned until 10 a.m. on Monday, May 10, 2021.

Motion approved.

Hon. L. Beare moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 10 a.m., May 10.

The House adjourned at 5:27 p.m.