Orders of the Day

Hon. S. Robinson: I call continued Committee of the Whole, Bill 28, Municipal Affairs Statutes (Property Taxation) Amendment Act.

Committee of the Whole House

BILL 28 — MUNICIPAL AFFAIRS
STATUTES (PROPERTY TAXATION)
AMENDMENT ACT, 2022

(continued)

The House in Committee of the Whole (Section B) on Bill 28; S. Chandra Herbert in the chair.

The committee met at 2:58 p.m.

The Chair: Hon. Members, I just wanted to provide some greater clarity on a bit of a discussion that was occurring the last time we were here in committee. I reviewed the practice and precedents of the House with respect to debate on amendments moved in the Committee of the Whole.

The review revealed that the practice has been over the years a little inconsistent. The standing orders and our procedural authority, Parliamentary Practice in British Columbia, are clear in their direction that a member may speak more than once to an amendment moved in a Committee of the Whole. There’d been some question on that. They don’t have to, but they may.

That said, of course, I would ask, as always, to be conscious of time and the productive use of this House’s time. Of course, I retain the responsibility to guide members who may be less conscious of that with respect to repetition and relevance. So just to provide that clarity.

We, of course, are now here to discuss Bill 28, and I believe we were on clause 2 at the time when we finished up last time.

On clause 2 (continued).

P. Milobar: While it may sound like it’s some repetition, there are some important points I think we still need to get a better handle on. One of the amendments that would have sparked that review — and thank you for that review, Mr. Chair — was our amendment to try to remove the 95 percent.

Now that that amendment has failed, I just want to get some better clarification around the 95 percent from the minister before we move on. After all, this is a legal document once it’s passed, and municipalities, especially with the massive changeover we’re seeing across this province, are going to have to work with this document and land­owners to try to figure out and guide their way forward.

[3:00 p.m.]

I’m wondering. In regards to the 95 percent land value ratio, can the minister point me to where there is any accommodation for interpreting any rounding that may have to happen if it’s not exactly under 95 percent?

Hon. S. Robinson: I want to remind the member that it can be over. I suspect that his question is on if you’re just under and that that’s really the frame that he’s coming from.

I want to share with the member and with everyone in the House that it’s the working group that sat down, took a look and actually modelled out this 95 percent ratio. They determined that with that 95 percent ratio, you get almost all of the properties that have been identified for development potential, that have been pre-identified as being challenged.

If someone falls short of this threshold, because it’s an annual review, it’s quite likely that the following year, they would fall into the 95 percent frame if they’re just not there yet. But the initial analysis identifies that the bulk of the properties that are currently, right now, facing these challenges would be captured by 95 percent.

P. Milobar: To be clear, then, with this legislation, if your improvements on the land are 5 percent of the overall assessment, you would qualify. If it’s 4.9 percent of the overall assessment, you would qualify. But if it’s 5.1 percent of the overall assessment, you would not qualify, because there is no mechanism in this bill to allow rounding to get to the 95 percent.

Hon. S. Robinson: There is no rounding mechanism. I’m sure the member can recognize there needs to be…. When we work with thresholds, we pick a threshold.

I also want to remind the member that the following year, given the appreciation that happens, it is quite possible — perhaps, I would even suggest, likely — that that would shift so that in the following year they would benefit.

P. Milobar: I guess the concern is…. This was going to lead into some other questions around the five-year term that a municipality could use. The minister had several times referenced other permissive tax exemptions that are out there. But those permissive tax exemptions — when a city grants one, for whatever reason they’ve set out — are typically for a five-year term or a ten-year term. The property owner knows that, and they can budget accordingly.

[3:05 p.m.]

Most are set up — not all, but most — so that if it’s a ten-year setup, you get an exemption of 100 percent for the first five years, and then 20 percent gets added each year over the proceeding five years. So at year 10, you’ve kind of weaned yourself back on to a full property tax, and it’s not a big hit to you all at once.

Under this legislation, what it’s sounding like is…. Not only are you going to be potentially flipping back and forth on whether you qualify, based on a 0.1 or 0.2 change in a calculation, but also, a municipality has to review it yearly, instead of just giving a five-year exemption.

In other words, if a property this year is at 4.9 percent, with an improvement ratio, they would qualify. They have to reapply next year. If they’re at 5.1 percent…. Land values and improvement values can change, and that calculation can change. You’re at the mercy of B.C. Assessment at that point.

The first year they qualify at 4.9. They think they have, hopefully, a five-year break on taxes. The very next year, at the last minute, before tax bills start to come out — they’re only going to find out, just before the tax season, what their assessment is — they’re going to find out that they’re at 5.1 percent. Suddenly they’re back to 100 percent of taxation, which got them in trouble in the first place. Then on year 3, they’re back at 5 percent or 4.8 percent, and they qualify again. Then they’re back to 5.2, and they don’t qualify.

Why did the minister not contemplate having a rounding mechanism to at least try to keep whole those properties that are on the bubble? More importantly, if a municipality has deemed this to be an area where they want to see development — the airspace is the assessment problem; that is where they want to see growth in the next four or five years — why was there a cap that makes this a yearly application process, instead of like the other property tax exemptions that municipalities access and are trusted with, where it gets approved once and it’s for that certain time frame?

Hon. S. Robinson: First of all, I want to note, for the member, that municipalities asked us for structure. They wanted numbers. They wanted a line. That’s why we worked with them. It’s why we worked with our working group to look at the properties that are currently recognized to be challenged with this and identified 95 percent as the right ratio which would work and capture almost all the properties.

Certainly, in urban areas, the assessment was that all of them are well over 95 percent. So there’s not really even a question of on the edges. That wasn’t the case in the analysis that was done.

We also know that historically, assessed land values for highly developable properties pretty much increase year over year, while the improvements decrease over time. The member’s example of a back-and-forth is not likely at all, given historical evidence. It’s within that frame that this was identified as a good balance.

[3:10 p.m.]

The last comment I will make on this is that every year, for most permissive tax exemptions, local governments review them. Certainly when I was on council, every year we would review, for example, faith communities. Every year it came back so that we could renew our bylaw, renew our commitment to the faith communities.

This is still part of the routine that local governments have, and they, too, want to be able to review them every year to make sure that it’s still doing what it’s supposed to do. So they’re happy to take this on every year as part of their regular annual work program.

P. Milobar: Well, I think comparing a potential development property and a developer’s ask of city council to waive significant property taxation, or a small business owner in the public conversation piece around a council table — based on my experience — would be dramatically different than the public conversation and appetite for waiving historical property taxes that are essentially turned into a rubber stamp exercise for faith-based groups, as the minister just referenced.

The two are completely different conversations in the eye of a property taxpayer, who may see a shift in taxes over to their rate class. The politics of it is completely different. One is long-standing and, literally, practically year in, year out. If anything, more churches get added if a new church gets added into your community.

The minister said that the municipalities were asking for structures. Were the municipalities…? I will note that the minister, over the break, the week that we were gone here…. I still haven’t seen any of the notes from the meetings — not surprised. I guess we’ll still have to FOI that. But this bill will be long since passed from there, so on the consultations.

The municipalities may have asked for structure. Did they ask for one-year-at-a-time approvals as the structure, or did they ask for a five-year maximum, and the minister has chosen to make it a “year by year for up to five years” structure?

Hon. S. Robinson: The local governments were keen to review, on an annual basis, the nature of these properties. For example if, during the year, the owner of the land demolished the building, and there is no longer a tenant, they’re technically no longer eligible. So it would be helpful for the local government to know how things are playing out across their communities and making decisions accordingly, based on changes that might happen to the property.

P. Milobar: The minister referenced several times the soon-to-be former mayor of Vancouver being supportive of this particular bill. He was definitely not. I read some of his quotes, from the temporary bill the minister brought in, supportive of the previous bill — that zero municipalities action on zero properties. So this bill is supposed to be the replacement for that — that municipalities will assume that there is going to be action.

Vancouver, according to the minister, is half of the properties. So I would think that what the mayor of Vancouver’s opinion is on this would be somewhat consequential, given the fact that they are half of the properties that would be impacted.

[3:15 p.m.]

Has the minister given any thought at all to pausing this bill? We could still have it passed long before this House rises at the end of November. But to be able…. When last we spoke on this, the minister pressed me and asked me which mayors I spoke to in the middle of a municipal campaign. That just ended on Saturday.

I guess I would ask the minister: has she given any thought to pausing this bill to do some follow-up outreach with the municipalities where we have seen significant change over, not just with mayors but with councillors on those councils, in municipalities that this would be impacted on, given that now they can actually see the full context and writing and nuance of an actual piece of legislation?

You have Vancouver, where Kennedy Stewart will no longer be the mayor on November 1, and Surrey, where Doug McCallum will no longer be the mayor. Vancouver, very not surprising — I said that in here — that an NDP mayor would support an NDP minister’s bill. I guess it wasn’t shocking to see that many NDP ministers were out door-knocking for Mayor Stewart, but that’s not the way forward for the next four years.

We have change in Kelowna. We have change in White Rock. We have change in West Vancouver. We have change in Lions Bay, Langley, Maple Ridge — all communities that will likely be impacted with airspace and this type of potential.

I ask that with sincerity, because the previous bill was not actioned by any municipality. The only way to have a successful piece of legislation that will bring true relief to these business owners on these properties that are being hammered with airspace taxation is to have a bill that local government will actually action.

Again, this bill would take effect on royal assent. This bill has areas in clause 2 that may create unease for new councils where they might want to see things change slightly. Is the minister prepared…? Has the minister contemplated just putting this on pause for a few weeks so that those new mayors and councils can be reached out to, have a quick conversation with them and find out if this is, at least, reasonably going to be actioned or not?

Hon. S. Robinson: I appreciate the member’s concern. But I do want to point out…. He keeps suggesting, somehow, that because the outgoing mayor of Vancouver was an NDP MP that somehow he supports everything this government does. I want to remind the member….

He pointed out that the interim recommendation that we put in the interim legislation was not supported. So it’s not like we get automatic support. It’s a bit contradictory to suggest that’s the case when, in fact, our interim measure was not supported at all by the outgoing mayor of Vancouver.

I want to remind the members that the work that the technical group undertook was a technical group with staff in municipalities around urban centres, including from my community, where the mayor didn’t change. The technical working group of staff who are familiar with the issue, who have been around asking for a permanent solution that allows them to make the choice of permissive tax exemption is what we’ve been working on for the last two years — 2½, almost three years.

To pause, as the member suggested, would be, I would offer, a significant pause, given that they’re not going to be sworn in for three weeks and then to bring new councils up to speed, in terms of the hierarchy of things that they need to be briefed on. That would move us into a spring session, which would then delay another year of relief, a window being missed by businesses.

So we’re not going to pause. We’re going to keep moving forward. The staff at local governments…. They have worked with us in partnership to craft legislation that delivers a tool. Staff do have work to do around local government tables to bring new councils and new leaders up to speed on what is a pretty technical piece of legislation. At the end of the day, our focus is to give a tool that pro­vides relief for these local businesses, these small businesses.

[3:20 p.m.]

I would hope, and I imagine, that the staff around local governments — particularly in Vancouver, who have worked closely with us — understand it and will be able to explain it to a new council. I want to congratulate the new council and encourage them to take a look at this and to act as quickly as they can to bring the relief that small businesses and not-for-profits in communities, particularly in Vancouver — I know that the member sitting in the chair is very familiar with the issue — have been asking for.

Again, I want to thank my staff for their diligent work in working with staff groups all across mostly urban centres in British Columbia to deliver a tool that would work and to do it as quickly as we can so that for the 2023 tax year, there is relief in sight for these small businesses.

A. Olsen: I appreciate the minister bringing this bill forward. We’ve had a look at it.

Raised to us by one stakeholder was the potential that this bill opens up, due to many of the leasing arrangements in a situation where tenants pay the taxes of their landlord. The approach that’s taken, the concern that was raised by the stakeholder, is that this could potentially create a tax shield for the property owner. They’re still benefiting from the elevated, increased value of the land, but now they’re paying lesser taxes on it because they have created a leasing arrangement with their tenants that passed that tax down to the local small business — the mom-and-pop shops.

Could the minister maybe provide a little bit of in­sight? It was important we ask this question, because I think it needs to be on the record — the government’s thinking in structuring a bill this way, recognizing that this is indeed the relationship between tenants and their landlords.

Hon. S. Robinson: I want to thank the member for Saanich North and the Islands for asking the question, because it’s been, I guess, sort of a frustration of mine. The Commercial Tenancy Act is a very, very old act. I don’t know that it delivers what it ought to. That’s a huge undertaking, in terms of advice that we got around the risks of going into that act and what that would look like.

We took the concerns that the member rightly raises and that the stakeholder rightly raises…. That’s why we’ve limited it to five years, so that it can’t become the loophole that is being suggested here, so that’s it’s very time-limited.

And there has to be a business on site. They can’t get this tax relief if there’s no business on site. If this is developable land and there’s nothing happening on it, they have to pay the full tax. If there’s a business on site, they can get up to five years of relief. But it’s just five years of relief, with the idea that you have to start doing the redevelopment process.

I’ll just point out for the member that when we did the interim property tax legislation, we did it with this lease in mind — it’s the flow-through, so the property owner doesn’t necessarily feel the pain of sitting on developable land — and the local governments found it burdensome to have to check everyone’s leases. That became a barrier, for them, to taking this up.

[3:25 p.m.]

With all of that in mind, thinking about all of these challenges, we crafted this piece of legislation that took all of those various elements, so that it made it easier for municipalities to adopt. It provides them with the opportunity to check it every year to make sure that these properties continue to serve a public good — which is that there’s a business, the mom-and-pop shop idea the member speaks to — but it’s only five years, so that everyone can make their plans accordingly. They know that there’s a time limit.

At the end of the day, I think every member of this House recognizes that if a local government has rezoned the land or has done a neighbourhood plan update — changed it, in some ways, by the OCP, saying there should be more here — then it is up to the property owner to do something. If they’re not going to do something, then there’s a price to be paid for that. They can sit and wait, but there’s an increase in their taxes. Balancing all of this is what we’ve tried to do here.

A. Olsen: Just one follow-up. I thank the minister for the response. A question with respect to that — this may have been answered, and excuse me if it already has: what type of business in that location is suitable, in order for that property to be able to comply with these rules? You can think of all manner of business, from a retail shop all the way through to just a numbered company, that is located at that location. Would those two examples — and there are many different examples — be treated similarly?

Hon. S. Robinson: I know the member, coming from local government, will appreciate the role that local government has around how they provide a business licence, for example, to whatever the business is. As long as it fits within the zoning, for the purposes of this legislation, it just needs to be a business. It’s not whether or not it’s mixed or it’s light industrial or commercial. Really, the local government makes that determination, and for the purposes of this legislation, it’s just a business.

A. Olsen: I thought I only had one more question. That raises a question for an area like the southern Gulf Islands, which don’t have business licensing, as an example, and how we’ve seen a dramatic increase in the cost of land.

On the southern Gulf Islands, as an example, there’s so little land that’s zoned commercial or industrial, but they don’t have business licensing in some of those areas. How does that get handled?

Hon. S. Robinson: Perhaps I was sloppy with my language. They don’t need a business licence per se. There just needs to be a business operating there, but I want to remind the member, and all members of the House, that this wouldn’t necessarily apply to regional districts. This is for municipalities.

P. Milobar: I just want to pick back up. I know the member from Saanich North and the Islands had a few questions to get to another meeting, so I just want to loop back.

[J. Tegart in the chair.]

The minister was talking about how it was a technical staff working committee. Frankly, I’d expect nothing less. That’s typically what happens, in who municipalities would send and things of that nature.

But just as the minister referenced in her last answer to me, her staff has been very integral as well. That’s the way it should be. The staff are working very hard on the technical, but ultimately, just as we’re doing right now, elected officials in a municipality are going to decide whether or not a property qualifies or not by the rules in clause 2, and how they’re going to be actioned, or not.

[3:30 p.m.]

Again, it’s with that backdrop that I was asking about delaying for a few weeks to try to check in with councils. There are not that many councils that would be significantly impacted by this legislation. There are a few. Vancouver has half of the properties, by the minister’s own calculation. They have a very professional staff, a very large staff. I’m sure they could brief, and bring up to speed, their council in fairly short order, just to give them the highlights of a bill like this.

Not to split a fine hair, but it’s not three weeks before they’re all sworn in. All municipalities are sworn in, in almost exactly two weeks, 15 days. It’s November 1. I say that because there is an urgency of time, but royal assent could happen. It happens several times in a session — typically, it has, at least under this government. We are literally talking a few weeks. If mayors and councils won’t have been briefed on this within that time frame anyways, how are they actioning their bylaw that they need to action to put this into place?

I’m not talking about jeopardizing the 2023 property tax here. I’m talking about trying to advance and get some consultation with new mayors and new councils, through very large areas of this province that have a significant stake in this, but the minister seems unwilling to do that.

What I’ll now ask the minister is around clause 2 and some of the numbers she’s provided to us. Has the minister, with her staff and with the technical working group…? The previous bill had zero uptake. The private member’s bill was flatly rejected by the government. Meanwhile, we have an urgent need to try to get some of this building going and ease to business owners that are on these upzoned properties with airspace.

What type of modelling has the minister received, in terms of the number of units of housing that are tied up — either in the 3,000 lots in Vancouver that have been identified or in the 6,000 lots, provincially — that have been identified that this bill hopes to address? Hopefully, there has been some modelling done, based on OCPs and densification, of how many housing units are sitting in limbo right now — that are on chunks of land that could be developed but that are, for various reasons, not.

The Chair: Minister.

Hon. S. Robinson: Oh, thank you, Madam Chair. Welcome to the chair. New glasses? They look great.

I’d said before, and I’ll just remind members that our best estimate is that there are about 3,000 properties in the city of Vancouver alone, and about 6,000 properties provincewide, that are in this situation. The zoning that currently exists isn’t specific enough to identify number of units. There’s just not enough detail there.

I know that the members can say that with 6,000 units, we’re talking thousands and thousands of potential homes that have yet to be developed. I would urge those who have the opportunity to do that to use those lands wisely.

Our ability to actually model and get a number would be impossible, given the challenges with the level of zoning that has currently taken place.

[3:35 p.m.]

P. Milobar: Just one more question around the staff be­ing the technical working group and things of that nature. If it has been a somewhat purely technical exercise, in terms of professional public service staff for the province interacting with the professional planners and other staff within municipalities — them putting their best guess as to what would be palatable to each of their elected bodies and whether the vagaries of election cycles and things of that nature…. Most of them are fairly well experienced and get that.

If it has been somewhat of a much more technical exercise, especially on all these sections and in clause 2, why is the minister not willing, then, to release the contents of what that consultation and work actually was, without the potential of an FOI and massive redaction, when it sounds like it’s been predominantly technical, not political, in discussion?

Hon. S. Robinson: Again, I do want to point out to the member that this has been a problem that has been around, probably, since 2010, ’11, ’12 — somewhere in there — that has been raised to the provincial government over time. So this has been…. Various local governments, regardless — because there have been many elections since then — continue to struggle with this problem.

Our interim solution, until we could figure out how to get to this solution…. I would say that while there wasn’t any uptake, it really forced a discussion at that very technical level, as the member rightly pointed out, to figure out…. We all agreed what the problem was that we wanted to solve, and both the local government technicians and the provincial technicians sat down to do the work to get us here so that everyone has been working towards the same direction.

We do have a formal process that is available through a simple FOI request, and that’s how anyone can access any activity of government — through a process that has been designed to release information appropriately. The member…. As I said a couple of weeks ago, I hope they took us up on that and filed the request so that we can get that happening and moving as quickly as possible.

P. Milobar: Although I appreciate the minister guiding me towards FOI, it’s not simple, and it’s not straightforward. Typically, they come with extensions requested. There is now a fee associated with it. You usually get pages and pages that have been redacted for no apparent reason, because you’re at the mercy of whatever section gets quoted when they redact it.

The question to the minister was: why the unwillingness? Government can also proactively release. They don’t need FOI. The government can choose to initiate. And in an effort of transparency…. I recognize that that’s not always the easiest thing for any government to do, let alone the one that’s been deemed the most secretive in Canada.

But in the spirit of transparency, if we’re talking about truly just technical back-and-forth discussions over the last couple of years — while a failed piece of legislation wasn’t being actioned, about its replacement piece of legislation — why the unwillingness to provide what was discussed and the various options that were discarded at the technical level?

Obviously, the minister has made a political decision, but the public is not having any eyes on that technical decision that led to this legislation. Again, we can understand a non-disclosure agreement while legislation is being crafted, but it has now been crafted. It’s in front of us.

Of course, we want to help business owners, but the implication for new mayors, new councils and for the rest of the citizens in that city is a tax shift. We’re simply asking why there’s not better transparency on the decision-making to get to that enabling of municipalities to provide that tax shift so that taxpayers can better understand the logic behind it as well — and, in all likelihood, likely think it’s not such a bad idea to actually have that happen or not.

But in the vacuum of that lack of information on clause 2, it would be much harder for municipal councils to try to explain to their constituents why they’re going down a road like this. And if they don’t go down this road, nothing has been accomplished for the help of small businesses that are facing this airspace increased taxation.

[3:40 p.m.]

Hon. S. Robinson: Well, we’re happy to share the deck that we shared with stakeholders about the development of this legislation. I can certainly have that over by end of day today, maybe, depending on when we get out of here. We can certainly get that over to the members opposite.

But again, nothing has changed around FOI. It went under development of legislation when the folks on the other side were on this side of the House. If you wanted to get information about ministry engagement that has to do with development of legislation, there is a process to get the notes to get information about what was discussed and what was decided. That is done through the professional public service.

It’s not like I get the documents and I get to redact them, and I think the member knows that full well. It’s professional public service that has criteria for what’s cabinet privilege. I know that the member knows that, so to suggest that he doesn’t is, I guess, disappointing. But that has been the process from when they were on this side of the House, and it’s a process that continues today.

Having pointed that out, as well, to the member, I know the deck that we used as we engaged with stakeholders around what we were planning and what the process is going to look like for getting through this legislation — we’re happy to share that with the member.

P. Milobar: I’m not going to get in the back-and-forth with FOI law with the minister, but I’m well aware. I wasn’t remotely trying to suggest that it’s the minister sitting there with a felt pen redacting. I full well know that’s not how. In fact, if any minister is doing that, they’re breaking the law.

Just like when I was the mayor and repeatedly got FOI’d by media or public or anyone, you send whatever information is requested of all files, all emails within the date range. If it covered off three topics within that email, they redact two of the three, and the person only gets the one topic they actually FOI’d. So I fully understand that.

My question is about proactive release. The minister could do that. The minister could proactively release documents. But I take the minister with her offer to provide a slide deck, at a minimum.

I would point out…. The minister stood up as the Government House Leader for this session of debate to bring us into committee stage of Bill 28. I would note next on the docket is Bill 29, which is also this minister’s bill, so she and I will be questioning in committee stage of that bill.

I’m wondering if, with the minister’s indulgence, she would want to pause the current bill we’re on, Bill 28. It is the government’s purview to do that if they so wish. We could move on to Bill 29, and then we could receive the slide deck before we close out debate on this bill, in case there are questions that arise out of that presentation that was made to the technical working group.

Hon. S. Robinson: While I appreciate the member’s offer to switch out, I don’t have all my staff here, and I don’t want to waste the House’s time. We’re doing this bill right now.

But I also want to point out to the record that there was a briefing for the member. There was no request at that time for additional information, anything that was shared with stakeholders, to help the member prepare for this debate.

So we’ve started this. I think we need to…. We’ve been at this now…. We started ten days ago. I’m losing track of time, but it’s 12, 14 — well, ten days ago. So I do think we need to move on this and get this done and continue to move on, as noted in the schedule.

P. Milobar: Well, frankly, we could be through this bill in the next five minutes if I just stop asking questions on clauses, and that same staff would have to be here.

[3:45 p.m.]

The minister’s answer that we had a briefing — we asked. We asked for the information of the consultations on the briefing on the Monday when this was first presented to this chamber, and the answer from staff is that they’re not allowed to discuss the consultations. I then asked, in this chamber, for that information ten days ago, and the minister refused to provide it. Now, ten days later, the minister’s saying: “Well, I’ll give it to you, but only after the legislation has passed.”

There’s not much point seeing what consultation and what the discussion around the consultation of these various clauses were, after the fact. That is the problem.

We got admonished by the minister for not talking to mayors ahead of this legislation coming into committee stage, when they were in their last week of a municipal campaign that 37 of them didn’t get re-elected in. They were a little busy to pick up the phone from the opposition to ask about a bill. We now get told: “Well, this was ten days ago.” Well, the minister had ten days to decide to give us a slide deck. It was only ten minutes ago that the minister offered it up.

I’m not asking to overly delay the proceedings of anything in this chamber. We can go directly to another bill that the Minister and myself will be literally doing this exact same thing with. It would provide us time to look at the slide deck that we were told on the Monday: “No.” That we were told ten days ago: “No.” That we were told ten minutes ago: “Yes, but only after you have this bill passed.”

So again, I would ask the minister: in the backdrop of all those times we actually did request this information and were told no by the government up until ten minutes ago, would the minister agree to pause this bill? We can move on to Bill 29 while we receive the deck, and then we can continue on. It does not significantly change the proceedings of this House at all. At the end point will be Bill 28. Bill 29 will pass because — hot tip for the minister — she’s got a massive majority. She’s going to win.

But perhaps we could actually have some transparency for the public and municipalities as to what they’re going to expect and what actually went into the development of some of these pieces of legislation.

Hon. S. Robinson: I appreciate the member’s question. I’m just talking with staff about tracking down the very slide deck that we’re talking about. I have a counter-proposal to the member that we can carry on here. We’re going to get the slide deck to the member. Perhaps we can take a 15-minute recess. The member can take a look at it. I’m not sure how the member is going to debate another bill and still come back to this bill at the same time.

What I’m proposing to do, as a counter-proposal, is to continue on asking questions through the rest of this bill while staff identify the deck. I want to let the member know that the requests that they’d made in the briefing were for the specific details of the legislation. That’s not what this slide deck is. It’s a slide deck that was shared with stakeholders to understand the policy perspective and the challenges that we were working together to resolve.

I don’t think the member will see that there’s anything in there that he isn’t already aware of, but given that the member’s wanting to see how we talked to others about this particular challenge and this particular problem, and our commitment to solve it in partnership, then we’re happy to share that deck with the member. We’re just in the process of tracking it down and getting it to the member. Perhaps we can take a ten-minute break while the member takes a look at it, and then we can carry on with the with the rest of the bill, if that works better for the member.

[3:50 p.m.]

P. Milobar: Yeah, that would be fine.

To be clear to the minister, though — and again, I want the public to understand — we asked specifically about consultation. We did not ask about the drafting of the bill. We asked about consultation, and the answer we got back was that they could discuss the concept of what was consulted on, but they could not discuss the contents of the consultation.

That’s why things like the slide deck are important. We are getting different answers over the space of two weeks here. That’s why we feel it’s important to get that. So I’m more than happy to take a few minutes’ break to get that slide deck.

Hon. S. Robinson: While that’s happening, I’m wondering if the member has other questions through the bill so that we could continue to do this work. Then once the slide deck is sent…. I have staff actually tracking it down, because it’s not on anyone’s phone; it’s on a drive.

Perhaps we can continue the work of the House on this bill and then carry on if the member does have any other questions. Then the member could ask for the break so he can take a look at the slide deck. Then, if he has any questions about that, we could carry on.

P. Milobar: Then I will ask the Chair for clarification, because we’re on clause 2, which is dealing with the Community Charter. I do have some questions around the Vancouver Charter as well. However, I would hate to close clause 2 and not be able to come back to it if questions arise based on the slide deck, because they are two different areas. How would the Chair like to handle that?

The Chair: Do we have agreement to stand down clause 2 and the ability to go back to it once the information is shared between the two parties? Yes? Okay.

Clause 2 stood down.

On clause 3.

P. Milobar: Thanks again to the minister for trying to get that slide deck here in a timely fashion.

In terms of clause 3…. This is where we get into the Vancouver Charter. For those viewers at home, the Vancouver Charter is what Vancouver operates under. The rest of the municipalities in the province operate under the Community Charter. That’s been a long-standing provision, so there’s nothing new there.

I’m just wondering. In terms of the overall consultation, then, changes to the Vancouver Charter are being made. The consultation happened. Half of the properties are actually in Vancouver, so the Vancouver Charter will be quite consequential, actually, to these changes. Was Vancouver…? Did they have a separate parallel consultation going, in addition to participating in the Metro input into this development of the bill, or was it all done as one package of consultation at the same time?

[3:55 p.m.]

Hon. S. Robinson: The member was just asking questions about the Vancouver Charter and why it comes up. In some ways, I think I need to explain — perhaps not to members of the House, but certainly to the public — that Vancouver has its own charter, which is unique among our municipalities. So what you’re seeing here is just the parallel shift in the actual legislation but achieves the same end.

It’s making changes in two different pieces of legislation. One is the Community Charter, which governs all other local governments, and the Vancouver Charter is unique to Vancouver.

I want to assure the member that the work — the conceptual work, the legislative work, the policy work, all of that work that goes into making these changes — was everyone sitting around the table and working on the problem and trying to find the solution. Then the actual legislative drafters, the technicians who use language and are familiar with language for getting the end result that we want — they have to do that change in two different pieces of legislation because Vancouver has its own piece of legislation.

So that’s what this is. It’s the same end but just a different piece of legislation.

P. Milobar: With those technical discussions, was there any modelling done on what the potential high or low dollar value of…? In other words, what would be the maximum amount that Vancouver may have to waive or shift? I guess not “waive,” because we have to be clear that this is a shifting of property taxes. Has there been any calculation on what the high and the low would have been from those technical consultations in terms of what type of municipal taxes might be involved?

Hon. S. Robinson: Because this is a permissive tax exemption, it really depends on the local government. Each local government would do their own analysis. Again, they can apply it to different parts of their community. They have so many options to choose from in terms of how they construct this bylaw. That really is up to each local government to do that analysis so that they understand and can explain to their residents about what the shift is and how it’s playing out and for what reasons it’s playing out.

Clauses 3 and 4 approved.

On clause 5.

P. Milobar: Again, just to get some clarity around some of the consultation that was done, there was the…. We had an earlier discussion with the Community Charter not providing five years in a window. Was that something that Vancouver specifically advocated for? Again, a lot more interest, frankly, in what Vancouver’s input was and what they asked for, given that they are half of the properties involved that would be impacted. So it makes sense that they might have a slightly weighted voice at the table.

Was it Vancouver that was requesting the year-on-year versus a five-year blanket, or was that the consensus of the whole group?

[4:00 p.m.]

Hon. S. Robinson: As I pointed out earlier, this was a collaborative working group made up of…. Again, I’m just going to call them technicians because of the technical nature of this legislation. They worked together to come up with parameters that worked for different kinds of communities, which certainly were around the table. Vancouver was one, but there were certainly other communities. They all agreed.

Again, because it’s permissive, there’s a lot of flexibility. Local governments can make the choices that best meet their needs. That was one of the things that was requested by local governments.

P. Milobar: With the complexities of trying to model each city, I can understand why there wouldn’t be a minimum or a maximum dollar value attached to some of these consultations. But to be able to bring a bylaw forward, in terms of how you would like to shift around your tax rates and things of that nature…. Municipalities and electeds are going to want to know those values that they’re dealing with.

Under the Vancouver Charter, what would be the expected timeline that a bylaw…? How far out would a bylaw have to be done, and able to meet the test, to be able to qualify for the 2023 property tax year?

Hon. S. Robinson: April 30 is when the city of Vancou­ver has…. That’s their deadline for getting these bylaws done. May 15 is for all other local governments.

I would ask for the indulgence of the House, if we could take a ten-to-15 minute bio break. The slide deck is on its way, and I could really use a bio break.

The Chair: Okay, we will recess for ten minutes. This committee is in recess.

The committee recessed from 4:04 p.m. to 4:12 p.m.

[S. Chandra Herbert in the chair.]

P. Milobar: April 30 is when the Vancouver bylaw would have to be in place. Again, I’m just checking with the minister as to what the harm would be to put this bill on hold for a couple of weeks to consult with a new mayor and council and new administrative regime in Vancouver, just to make sure they’re still on side with the broad concept and that this is something they would reasonably see themselves initiating and using in the 2023 tax year.

It seems, if it’s April 30, there is still a good window of time that they could actually implement it. I say that with the backdrop of how fast things are moving.

If you look at Surrey, the mayor has not been sworn in, yet there’s already discussion and conversation around changing out the police force and meeting with police boards and things of that nature.

If you look at Vancouver, the new mayor’s party also controls park board, and they’re already talking today about changing the driving structure of the travel lanes within Stanley Park. Things are moving quickly in these cities.

If April 30 is the deadline to have a bylaw in place, it probably won’t be starting to get actioned till February. They need data. They need confirmed assessment rolls. They need all of that type of thing from B.C. Assessment to make an informed decision as to the magnitude of the type of help they may or may not be able to give. What would be the harm in delaying a few weeks to make sure that Vancouver was on side with this, given that they have had such a massive shift politically with their mayor and their council?

[4:15 p.m.]

Hon. S. Robinson: While the deadlines to get their actual bylaws done is not till the spring, we need to re­member — I know that the member was a mayor — that the work starts well before the deadline for getting a bylaw signed off. They need to first do their own modelling. They need to talk with their tax service providers to get tax notices updated. They’re already looking forward to engaging with B.C. Assessment to get the information they need to start modelling and crafting a tool that would help provide relief.

Again, I want to remind the member that delaying can have some serious consequence in terms of missing a window. While we might be doing the legislation here that gives them the tool, they then have to do a whole whack of work to craft a bylaw that will deliver what it’s supposed to deliver. So while it looks like there’s time to get it through their various stages of doing a bylaw and to pass it, the work to prepare happens right now.

Now is the time when they’re doing their financial plans. That happens in the fall, typically. That work needs to be part of that thinking. So it is important. We committed that we would have this available for them, and we’re doing the work now to get it done.

P. Milobar: For all I know, the new mayor and council will think this is great. This isn’t about even trying to guess that.

Based on those timelines of the answer the minister just gave, and based on the backdrop of a two-year-old piece of legislation that was supposed to be temporary and that hasn’t been actioned once, if the goal is truly to have a piece of legislation that provides relief and is used, that would mean that we would have a very strong indication from municipalities if they were even contemplating this, let alone close to implementing their bylaws by the time we reconvened in February.

So that we can avoid this type of a rush next year in trying to get things in place for the following municipal property tax year,will the minister be bringing forward amendments in the spring sitting — so that we can try to finally get the relief to businesses and property owners that they’re seeking — if, yet again, no municipalities action this newest piece of legislation that this minister has brought forward? They haven’t done so previously.

Hon. S. Robinson: I want to note that this is one of the reasons why we worked so closely with the staff in a number of municipalities, some of which did not have a change of mayor or of much of the council. The staffs understood and worked with us so that it would be simple enough for them and flexible enough for them to advise their councils about the value of this tool to help mitigate a significantly complex issue that we are all trying to solve.

That is exactly why we worked so closely with these local government staff complements — the technicians, as I call them — to craft legislation that would work in a number of municipalities where this is a critical issue and with enough flexibility that it would meet the varying needs of different local governments.

It’s within that context that we are bringing this forward. It is different than the interim measure that we did. We always said that it was an interim measure, because we needed the time to work closely with local governments so that it made sense and had ease of application, with enough structure that local governments would feel comfortable using it. It’s with that feedback that we crafted this piece of legislation.

[4:20 p.m.]

P. Milobar: Well, since we’re still waiting for the deck to arrive…. The question, however, was…. We have a temporary piece of legislation that’s been on the books that this minister introduced when she was the Housing Minister, I believe, and it hasn’t been actioned. Not one municipality, not one property has actioned it across this province.

We have a new piece of legislation that is supposed to replace that. Yes, the staff think it’s a good idea, but ultimately, if the electeds don’t implement it, it has not been implemented. If the staff are recommending one thing, and an elected official and council wants things to be structured slightly differently, this won’t be actioned.

The question was really about: if this is not actioned — and we will have a very good understanding of that by mid-February, when we’re back for budget, and we’re back until the end of May, beginning of June — is the minister prepared to bring forward amendments so that we’re not in the same situation in a fall sitting next year, scrambling at the last minute, trying to get something in so that municipalities might have a tool in place before the next property tax year?

Hon. S. Robinson: I think, to the member’s question about feedback, that it’s always critically important that we get feedback and make sure, especially with new legislation, that it’s doing what it’s supposed to do. That’s why B.C. Assessment is going to be working closely with local governments. It’s why my staff have been working so closely with local governments. That’s why the technician team will…. There’s enough relationship to feed back as we move forward with this new piece of legislation.

Again, we’re all trying to solve a complex problem that has many different component parts. We heard the member for Saanich North and the Islands talking about the Commercial Tenancy Act and the implications around leases and how the flow-through of taxes happens there and the impact that has. Then we’re trying to incent redevelopment of properties, and we’re trying to manage, for mom-and-pop shops, the sudden increase in taxes because of the decision that a local government made around an OCP change.

All of these various actors and pieces of legislation all come together around this particular challenge. So working closely with local governments, I think, has been the absolute key in making sure that we have a tool that works for them. Absolutely, as we move through and there’s adoption of this, that will get feedback, just like any other piece of legislation, if there are parts of it that need to be adjusted or are altered, because we get new information back to the system. Then we’ll certainly take a look in terms of what makes sense.

[4:25 p.m.]

At the end of the day, this legislation will be available to local governments to say: “These businesses in this particular neighbourhood, where we have changed the OCP to say that there should be more density here, were seeing an increase of taxes.” The local government will now have a tool that says: “We’re going to soften that for the next number of years to give these mom-and-pop a little bit of a break.”

But also, we need to incent the landowner to redevelop the land, because there’s better use of the land. That, ultimately, as well, is up to the local governments to make those determinations. That’s why we have been working closely with them, so they can change the OCP to get more density, and, at the same time, help those small businesses that have the burden of a triple-net lease.

P. Milobar: So it sounds like the minister is saying that once it’s too late for this current property tax year, if it’s not actioned, then they’ll reconsult with municipalities and all of their new councils versus doing a quick check-in while there’s still time for this coming property tax year.

The gamble with that is that if we get into yet another year where the municipalities don’t action the legislation the minister has brought forward, as her previous temporary legislation has been, we do actually miss that tax year that the minister and myself are concerned about. It will then be after-the-fact consultation.

Again, that’s why I say that delaying the passage of this bill by a couple of weeks to find out ahead of time if it’s something that’s even remotely palatable to the new elected councils across the Lower Mainland — most notably Vancouver, which is half of the properties covered by this bill — would seem prudent, instead of waiting until it’s literally too late for the upcoming tax year and then finding out they’re not actioning it, then saying, “Well, what would you like changed in it?” and then making that change. It just doesn’t seem to make any sense.

Again, they may say it’s totally fine, and that’s fine. I don’t know what their answer is, and that’s the point: no one has asked them. So we need to find out.

On page 4 of the one slide deck that came through, it’s got a bunch of questions to the stakeholders — policy questions. Is the issue taxation on development potential, volatility or both? Should relief apply to owner-occupiers as well as tenants? Should it only apply to small business tenants? Who defines…? Should taxes on development potential be redistributed to other taxpayers or paid by the landlord or other?

I think we’ve heard that that has landed on: it should be a tax shift or not happen. Consider any changes to the highest and best usage valuation. Examples would be to phase that in — highest and best use assessment changes over multiple years. Then, at the end, the last bullet says: “Any deal-breakers?”

Could the minister let us know if there were any deal-breakers provided by the stakeholders and the technical working group?

Hon. S. Robinson: There were actually five items that were really, absolutely critical to the technicians who were at the table.

They wanted it to be permissive. That was really clear. They wanted it to be time limited.

Interjections.

The Chair: Excuse me, Minister. Thank you.

Hon. S. Robinson: Thank you, Madam Chair.

They wanted a framework, they wanted flexibility, and they wanted administrative simplicity, all of which the our staff complement and the public service from local governments…. That was the starting point. That was the stuff that they were really clear that they wanted, and that was the framework that we have right here in this legislation.

Clauses 5 to 7 inclusive approved.

Clause 2 approved.

Title approved.

[4:30 p.m.]

Hon. S. Robinson: First, I want to thank staff and the members opposite for engaging in good questions at committee stage.

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

Motion approved.

The committee rose at 4:31 p.m.

The House resumed; Mr. Speaker in the chair.

[4:35 p.m.]

Report and
Third Reading of Bills

BILL 28 — MUNICIPAL AFFAIRS
STATUTES (PROPERTY TAXATION)
AMENDMENT ACT, 2022

Bill 28, Municipal Affairs Statutes (Property Taxation) Amendment Act, 2022, reported complete without amendment, read a third time and passed.

Hon. S. Robinson: I now call Committee of the Whole, Bill 29, Mortgage Services Act.

Committee of the Whole House

BILL 29 — MORTGAGE SERVICES ACT

The House in Committee of the Whole (Section B) on Bill 29; S. Chandra Herbert in the chair.

The committee met at 4:37 p.m.

Hon. S. Robinson: I’m looking forward to Committee of the Whole going through a significant number of pieces of legislation here for Bill 29, on the Mortgage Services Act.

I want to just introduce my staff, which is available to help me answer some of the more technical questions, for sure. We’ve got Renée Mounteney here on my left. I’ve got Joey Primeau, behind me, and Suzanne Anderson to help steward this through the committee.

On clause 1.

P. Milobar: Well, thanks to the minister for this bill as well. Between last Thursday and today, it’s a good thing that I’m an inquisitive-type person, apparently. I think the minister probably has an ounce of sympathy for my mother and for what she had to endure on road trips with me as a child — as long as she bears with me here.

First off with this bill, I understand the basic concept of it being much more around the regulation of mortgage brokers. Based on the definitions and some of the descriptions of those definitions, would the minister also characterize this bill as having significant consumer protection measures built into it?

As the bill progresses and as it actually gets implemented, moving forward, will consumers have that significant added protection in knowing the state of play with some of the rules around mortgage brokers?

[4:40 p.m.]

Hon. S. Robinson: The member asked a question about consumer protection, and this piece of legislation very much addresses that. As part of this legislation, there’ll be a superintendent of mortgage services. They’ll be able to make rules that lead to having to be more than just registered as a mortgage service broker. They actually have to be licensed.

The other part of this really is about setting professional expectations, professionalizing the industry. Part of that will be standards of conduct and making sure that there is an understanding of what expectations are. What the public expects, I think, is probably the most important thing, as the member talked about consumer protection.

I think the public expects that those engaging in mortgage services are professionals and have the interest of their consumer top of mind. Setting expectations for the profession — standards of behavior, fines for when that is missed — is also part of what we’re seeing here as part of this legislation.

P. Milobar: Certainly, I think everyone would like to see modernization of acts that look at a more modern way of business being done. And certainly, that consumer protection is always very important.

This act or this bill repeals the Mortgage Brokers Act. So kind of a twofold question, I guess, if the minister can explain how the definition of mortgage services is changing from the previous act, how old that act actually is from the last time it had any meaningful amendments to it, and why those types of changes, in terms of the definition, would be so important to change.

[4:45 p.m.]

Hon. S. Robinson: The Mortgage Brokers Act, the old act, was brought into force in 1972, which makes it almost as old as me, but not quite —although I think it’s older than the Chair. There haven’t been any significant changes, which is why we’re doing more than adding other components to the old legislation. This is a full rewrite.

The member had asked about definitions. “Mortgage services” defines what may be regulated under this act, and that includes “(a) dealing in mortgages, (b) trading in mortgages, (c) mortgage lending, or (d) administering mortgages.” The definition of each of those terms has been aligned with the meaning used by mortgage regulators in other Canadian jurisdictions, so it just aligns us right across the nation.

Dealing in mortgages includes soliciting, providing information, advice or arranging a mortgage in respect of a borrower or lender.

Trading in mortgages includes soliciting, buying and trading mortgages.

Mortgage lending means lending money on the security of the mortgage. Administering mortgages includes re­ceiving payment, monitoring or taking steps to enforce payment on behalf of another person.

I think the major distinction between this piece of legislation and the old legislation is that here they’re really talking about activities rather than titles. This allows a clearer understanding of the activities that people are engaged in rather than what their title is.

P. Milobar: Why is the $1,000 fee threshold no longer being used?

[4:50 p.m.]

Hon. S. Robinson: Comparing the two pieces of legislation is an important process, but making sure that we understand what they were thinking in 1972 is often challenging because it was a long time ago.

In the old definition, if you found someone a mortgage and you were paid the threshold, which is $1,000, then you had to be registered. That was the trigger for registering. I imagine back in 1972, $1,000 was a lot of money. Today, with this new legislation, if you find someone a mortgage, regardless of what you are paid, you need to be licensed — not just registered but licensed.

We can see the evolution of these sorts of mortgage services changing over time and requiring that people have more knowledge about the field than just getting paid $1,000 for finding someone a mortgage.

P. Milobar: Updating a 50-year-old piece of legislation is always a good thing, and recognizing how modern transactions happen is a good thing.

Can the minister explain which individuals that were previously left out of the act 50 years ago will now be included in this act?

[4:55 p.m.]

Hon. S. Robinson: The member’s earlier question, really, around the sort of threshold is…. Because that is being removed, it captures anybody. So this new piece of legislation, frankly, captures anybody who lends money for a mortgage. So removing the threshold means that if you’re going to be lending money for a mortgage, then you need to be licensed.

P. Milobar: So then what consideration has been given, with all these new definitions, in terms of what may affect lenders in smaller, rural and remote communities around B.C.?

[5:00 p.m.]

Hon. S. Robinson: Currently anybody who is engaging in this field, regardless of where they represent or how big or small they are, has to be registered. We’re taking that frame, and just saying that now they have to be licensed, which professionalizes the whole thing.

At this point, there’s not a sense that rural areas will be impacted any differently than any other area around helping to bring licensing to this industry.

Clause 1 approved.

On clause 2.

P. Milobar: This clause is all around the superintendent and the establishment of it for mortgage services. Can the minister provide, I guess, some insight? Will this be continuing on with the previous model of having one superintendent who occupies multiple superintendent roles within the BCFSA, or is this going to be a stand-alone, independent superintendent?

Hon. S. Robinson: There’s one superintendent for the industry that we’ve been talking about, in terms of real estate. There’ll be one superintendent, the same person.

P. Milobar: Just to be 100 percent clear: that’ll be the same person for the mortgage services as well?

Hon. S. Robinson: Yes, the chief executive officer of the BCFSA is appointed by the board of the authority as the superintendent of mortgage services and would have the powers and duties set out in the act. That’s what this section is about.

P. Milobar: Since that person is already in place and this will come into effect once the regulation is set by order-in-council, will the existing superintendent, then, be helping craft any outstanding pieces of regulation that need to be done before that is issued?

Hon. S. Robinson: We work very closely with the BCFSA. In crafting regulations, they’ll have full making auth­ority as well. So making sure that they understand what the intent is here is absolutely critical. I guess the short answer is: yes, that’s the work that they’ll be doing.

Clause 2 approved.

On clause 3.

P. Milobar: Well, since, under clause 2, it’s clear that it’s a continuation of people and person-power within the BCFSA to deal with this, within the licensing requirements and all of those types of provisions for the licensing regime, it’s, obviously, one would think, an added workload. What net new resources are going to be allocated to the licensing regime once this bill is adopted?

[5:05 p.m.]

Hon. S. Robinson: The member, I suspect, likely knows that the current CEO of BCFSA is the superintendent of real estate and was also the registrar of mortgage brokers, so already has part of that function. We’re expanding the scope. There’ll be an expectation that part of the fee structure that’s built in will support any additional resources that might be needed by BCFSA to address licensing of this professional group.

Clause 3 approved.

On clause 4.

P. Milobar: In clause 4 here…. The Canadian Mortgage Brokers Association had submitted that the old act only exempts banks and their employees who deal in mortgages from having to register as a mortgage broker and does not exempt them from other provisions of the MBA. Do the new provisions for exemptions address this issue, since that group is already covered by the OSFI?

[5:10 p.m.]

Hon. S. Robinson: The way the current legislation is written, it allows folks who are employed by the bank to work, perhaps, the banker’s hours and provide mortgage services, and it allows them to then go off on their own, perhaps on weekends or outside of hours, and continue to do that same work.

What we’re doing with this legislation is that we’re tightening that up in terms of the exemptions so that if you are working for a bank, and you are accountable to them, to that institution, and you’re providing mortgage services, that you do get exempted. However, you can no longer go outside of those hours to do your own thing. You have to be licensed now to do that. So we tightened it up to make sure that there were accountabilities built in where there weren’t any currently.

P. Milobar: So is clause 4 in this bill replacing section 11 of the existing Mortgage Brokers Act?

Hon. S. Robinson: Yes.

P. Milobar: Thank you. Just wanted to make sure I was comparing the right sections. I thought so, but it’s just a double-check.

With (e), which is, “A lawyer in respect of mortgage services that are incidental to the legal services provided by the lawyer,” I read that to mean that if I’m purchasing a home, and I go to a mortgage broker, and I trust my lawyer, maybe, more than the mortgage broker, or the financial numbers are just overwhelming, so I want to…. I’m getting my paperwork done on the house by the lawyer anyway, so I engage the lawyer. They can read through the mortgage. They can point out questions I might want to ask the broker. They can provide advice.

They’re not the ones providing the mortgage, but they’re providing advice about the mortgage, and they are exempted from needing to be registered. And then by providing that advice — I’ll just take it one step further in the interest of time — there’s not blowback, legally, if the person decides to walk away from that mortgage in particular. They can’t have the broker suddenly try to sue the lawyer for giving advice that the mortgage maybe wasn’t as good as was presented. Is that correct?

Hon. S. Robinson: Just following up on the member’s question and example. If the lawyer is giving you mortgage advice, then the lawyer is exempt from having to be licensed.

[5:15 p.m.]

P. Milobar: Again, we’re updating a 50-year-old piece of legislation, trying to bring it into modern times in terms of how people seek advice, place mortgages — how they access those funds — while making sure that we have the ultimate security and safety for people on things like money laundering and other sources of funds coming in and placing on those mortgages. We’ve seen recent reports where financial information gets doctored to qualify people for mortgages. We want to avoid that as well. We want things to be done properly and legally.

So with that in mind, and as the minister acknowledged at the very beginning, we also want maximum consumer protection out of this. That always should be a goal whenever you’re dealing with this type of legislation.

I’m just curious. Back in January — mid-January, January 13, 2021 — the B.C. Notaries Association had written the minister, specifically asking at that time to be added in under section 11 of the current Mortgage Brokers Act, which will now be replaced by clause 4 in this bill, to be exempted for providing the same type of advice on a mortgage that lawyers are currently providing.

I’m wondering why the minister did not choose, given that that was well over a year ago…. Over a year and a half ago now, this would have only been in the early infancy of drafting, if not nowhere on the radar screen yet. Given that the real estate changes were already rolling through government, why have the notaries been left out of a modernization of a piece of legislation that’s 50 years old?

[5:20 p.m.]

Hon. S. Robinson: Notaries do play a role in the mortgage services milieu, in the whole framework of mortgage services. Because we recognize that, we have established that the superintendent of mortgage services will have the rule-making authority to take a look at the role that notaries play in this whole framework and be able to adjust accordingly, based on further engagement.

What I would want to say, in terms of section 4 that we’re on right now, is that the rationale for the exemptions here is to harmonize across jurisdictions so that there’s consistency. That’s why it’s written here in legislation. But there are certainly other opportunities to take a look at the role that notaries play in this whole framework.

P. Milobar: The notaries wrote specifically, a year and a half ago, directly to this minister, asking for a very specific request on section 11 of the existing act. The minister has acknowledged that what we’re debating now is its replacement. The minister also said it’s meant to tighten things up and make things streamlined. But the request was very clear as to what it would encompass. So any confusion or any duplication shouldn’t actually be there, because it would have been inserted into the exact piece right here.

Is the minister aware of — and if so, can she share with us — what percentage of transactions on real estate are handled by traditional lawyers versus notaries public in B.C.?

[5:25 p.m.]

Hon. S. Robinson: I was just checking with staff. We don’t have an independent assessment of the number of notaries that provide assistance with mortgages, versus lawyers.

P. Milobar: Well, we’ve done a little bit of digging, so I’ll help the minister out. The reason this is quite important, given that it’s a piece of legislation that’s meant to modernize, meant to recognize the changes in how transactions happen and in who is actually providing those transactions…. Traditional advice from lawyers is 30 percent; notaries public are 70 percent.

To not include them in a modernization of a piece of legislation, for somebody to go and get some independent advice about a mortgage that they may or may not be signing, seems to be a gaping hole in this and a missed opportunity, considering that they asked the minister directly, on January 13 of 2021. They’re not asking for special privileges. They’re not asking to be treated any differently than a lawyer.

They recognize that they need to be fully certified. In fact, they are part of the Society of Notaries Public of British Columbia. It’s a regulatory body which governs all practising notaries. Every registrant is required to participate in continuing education as part of their annual professional development. In order to practise within that society, they have to hold a master of arts in applied legal studies degree from Simon Fraser University.

Much like they don’t try to pretend they’re a lawyer, by their designation, what they’re saying, though, is that they want it to be recognized that they can provide sound feedback to somebody that brings them documentation from a mortgage provider, a broker or a bank; to be able to provide that information; and to have the same protection of an exemption as a lawyer has, to provide the exact same reading of that document.

Why would the minister not include them in this bill when it has been asked for a year and a half ago? It’s what 70 percent of the public is seeking out, in terms of a notary public — on a bill on which the very first question was around consumer protection. It would seem that providing, for 70 percent of the people seeking advice, the ability to go to a notary public to get that advice on a financial transaction if they choose….

Not all of that 70 percent are going to want advice on a mortgage. They’ll trust their bank or their lender, and that’s fine. But for those that do and are engaging a notary public, why would notaries public not be part of a modernized consumer protection/regulatory update?

Hon. S. Robinson: In the previous question, the member asked if I knew the proportion of notaries versus lawyers that processed mortgages. I have the same numbers that the member has. They came from the notaries, but we don’t have an independent verification of that. That was my response: that we don’t have an independent verification. While I appreciate the notaries and all the work that they do, I would have to have an independent body provide us with accurate numbers.

Having said that, I want to remind the member of an earlier response I gave: that the superintendent will have rule-making powers to take a look at the role that notaries play in the mortgage services milieu and will be able to have the ability to take a look at how to best deliver these services for consumers.

P. Milobar: Well, apparently, the minister doesn’t go to a notary public to get advice on a mortgage, because she doesn’t seem to trust their numbers. But let’s say they’re way off, by a massive quantum. It’s still 50-50 at that point. Even if they’re more off, it’s 60-40.

[5:30 p.m.]

It’s a huge segment of the population making the largest purchase investment of their life. They get shut out of potentially getting independent, third-party advice on the mortgage, on what the various clauses mean, what the various penalties might mean.

[J. Tegart in the chair.]

Not everyone is completely financially literate when it comes to that stuff. That’s why they seek someone out to explain it in laymen’s terms. That’s totally okay. They shouldn’t need to be. They should be able to go to a trusted source. And if their notary public happens to be that, they should have that ability.

Now, it’s interesting that the minister says: “Well, the superintendent will have that ability.” But the minister had that ability by way of this bill. The minister could have listened to the request from the notaries from January 13, 2021, added them into a piece of legislation that is significantly changing a 50-year-old piece of legislation because it’s blowing it up completely. That’s totally understandable and needed.

But if we’re going to modernize things in this chamber, we should modernize them for the public to recognize. All through this is recognizing and changing the language, recognizing how mortgages are placed in this day and age. That should be happening. It’s good that it’s happening. But to not include a notary public into the exemptions in the exact section that they had requested in the first place doesn’t seem like it’s the strongest piece of legislation we could have moving forward.

I’ll move an amendment, if I can, and I’ll distribute it. Then I’ll await further guidance. Thank you.

[5:35 p.m.]

The Chair: The amendment has been distributed.

P. Milobar: I moved an amendment on Bill 29, the Mortgage Services Act.

[CLAUSE 4, by adding the underlined text as shown:

Exemptions

4 In addition to any exemption provided by regulation, the following persons are exempted from the requirements to be licensed under this Part:

(a) insurance companies;

(b) savings institutions;

(c) a director, officer or employee of a person referred to in paragraph (a) or (b), in respect of mortgage services provided on behalf of that person;

(d) any person acting for the government of Canada or the government of a province or for an agency of any of those governments, in respect of mortgage services provided on behalf of that government or agency;

(e) a lawyer in respect of mortgage services that are incidental to legal services provided by the lawyer;

(e.1) a notary who is a member of the Society of Notaries Public of British Columbia, in respect of mortgage services that are incidental to services provided by the notary;

(f) a person acting under the authority of a court;

(g) a trustee in bankruptcy, custodian, receiver, receiver manager or liquidator who is appointed under a federal or provincial enactment, in respect of mortgage services provided by the person in that capacity;

(h) an executor or administrator of an estate, in respect of mortgage services provided by the person to the estate in the person’s capacity as executor or administrator;

(i) a trustee, in respect of mortgage services provided under the terms of a will or marriage settlement.]

On the amendment.

P. Milobar: Essentially, what it does is it would include notaries in the exemptions. So in clause 4, it would add, under (e), an (e.1): “a notary who is a member of the Society of Notaries Public of British Columbia, in respect of mortgage services that are incidental to services provided by the notary.” That is the whole insertion to the clause.

I think it’s important that we try to act upon the request by the notaries from a year and a half ago to the Minister of Finance, because they are an important part of the overall real estate system within the province. We’re, by this, signalling…. The wording is very similar to (e), which is the lawyer. It’s “a lawyer in respect of mortgage services that are incidental to legal services provided by the lawyer.”

It’s not meant to try to dilute this legislation at all. It’s not meant to try to create some sort of loophole or back door. What this would do is provide notaries public that are under the society…. That’s a critical piece, because under the society, they have to have their professional development done. They’re guided by their own regulator, and they are part of a professional body.

Again, trying to make sure that it’s ultimate in consumer protection, ultimate in providing options for people while still making sure that there is strength within the legislation to still accomplish what it is trying to do. But it’s 50 years old. We’re standing here today to update it, so let’s update it.

Let’s recognize that the notaries take care of a significant portion of the transactions in British Columbia and that that has changed over the years. Part of it is workload. Part of it is ease of access. Part of it is fees charged. There’s a wide range of reasons. Some people just don’t regularly engage a lawyer. They feel more comfortable going to a notary public.

I have always used a lawyer, mainly because my sister worked in a law firm, so it was very easy access, and my sister-in-law worked in a law firm before her. So I didn’t have that discomfort of using a lawyer, a law firm, with my real estate transaction. But there are certainly many people that wouldn’t necessarily be in that situation, especially in smaller communities. They may only have a notary public to access. They might not have a law office that’s actually set up on a regular basis for them to access their real estate transaction.

Again, notaries public account for almost $3 billion worth of transactions in the real estate industry in British Columbia in a year. Their percentages may be off on the overall number of transactions. They may not be, because I would suggest that if it’s a multi-hundreds-of-million-dollar real estate transaction, that would be going, probably, through a fairly significant law firm.

But all those smaller transactions, when people are buying and selling modular homes and things of that nature — a lot of those as an individual file are likely going through a notary public. They’re lower-cost housing stock. By virtue, people are going to, rightfully so, price-shop to try to get the best and most affordable advice they can possibly get to try to place a mortgage and get the legal paperwork done to close on their purchase.

This would not impair the government’s objective of this bill whatsoever. It would strengthen the options for people. It would provide assurances to notaries that they would be exempted, which they currently are not under the current bill. It would make good on their request of a year and a half ago, directly to this Minister of Finance, before this bill was even being drafted, to essentially be included in that clause. And I don’t see why the government would object to that.

We cannot continually keep telling the public there’s no such thing as a bad idea regardless of what side of the House it comes from, and you continually reject amendments that stay with the spirit and the intent of the legislation to begin with.

[5:40 p.m.]

They point out that there was a glaring omission made. That is why I brought forward this amendment. I think it makes perfect sense to do, in terms of providing that access. That is why I asked the questions earlier on about how this would impact rural and remote communities — recognizing those brokers will still have to be registered.

That’s a good thing. But there really is a lack of law offices in rural and remote areas, and not that rural and remote. Barriere is 40 minutes outside of Kamloops. They do not have full-time lawyers in Barriere. Clearwater, Blue River. That’s just my riding. There are land transactions that happen all through those areas, where people need access to these types of services. But there are notary publics in those areas. That is why I’ve made the amendment.

I do truly and sincerely hope that the government can see their way to support this and acknowledge that it was an accidental oversight, that it is no problem to include it. It will not fundamentally change this bill. It will provide better consumer protection for a large portion of people that are currently out trying to get advice and help. As they place their legal papers on a transaction on their house, they can actually now take their financial paperwork with them to a notary to get that reviewed and looked at to make sure there’s nothing in there that they missed or didn’t understand.

For that, I truly do hope that the minister will see that this is meant in a positive way, to try to strengthen the legislation and provide that consumer protection to many more British Columbians than fewer.

Hon. S. Robinson: I’m just wanting to speak to the amendment that is before us. We’re not going to be supporting it, for a number of reasons.

One, the member might not be aware that on March 1 of this year, the Attorney General undertook a plan to look at a legislative proposal to look at regulating all legal professionals in B.C. under one single statute and with a single regulator. That includes notaries, the legal profession, as well, so that work is being undertaken. Because there are changes coming there, it doesn’t necessarily make sense now to supersede that. There is an opportunity, through rule-making, to address what the member is speaking about.

I also want to point out that the member argues and presents an argument that access to lawyers, particularly in smaller communities, might be more challenging, which is very well the case. But given the electronic age and our ability to get information, get documents signed through modern tools that weren’t around in 1972, there’s certainly access to all kinds of legal advice throughout British Columbia.

With that, I know that other members want to speak to this amendment, but we will not be supporting it.

M. Bernier: It’s interesting having to go after the minister now, after I’ve already heard her thoughts of her not wanting to support this. I mean, the whole point of bringing forward this amendment was to try to address what not only we but I think others out there are seeing as possibly just an honest oversight of not including the notaries in this.

If it’s all about strengthening and creating new legislation because it hasn’t been updated in 50 years, some of the arguments that the minister is presenting don’t quite match up with the whole intent, I would argue, around consumer protection.

As my colleague said, approximately 70 percent of mortgage renewals…. A lot of places use notary publics. He mentioned some in his riding. I could argue Tumbler Ridge, Chetwynd, places in my area that don’t have access to a lawyer who might actually reside in those communities where there could be notaries that do that work.

The minister highlights that we have technology. Well, we could also say that not only myself but other members, even in the NDP caucus, have identified the gaps that we have in rural British Columbia around technology. So it’s not as easy as the minister has put forward.

[5:45 p.m.]

You know, when I looked at section 3 before this, knowing that my colleague was going to be bringing up an amendment in section 4…. We talk about what a person can or cannot do unless they’re exempted in section 4. That was the reason for bringing forward this change, this exemption for notaries, because it talks about how services can’t be provided.

My question, I guess, or concern would be…. Looking back at other parts of the legislation, it’s almost prohibiting notaries from doing what they are doing right now, unless they’re exempted. Now, the minister highlights and suggests that the superintendent can look at these. I assume by her commentary that she’s saying on a case-by-case basis. I’m not sure how that’s going to unfold. It sounds like we’re punting this now to the superintendent for extra workload when it could be actually addressed right here in legislation.

We’ve heard so far today, again, that this legislation is 50 years old. This amendment was not brought forward for any other reason than to help strengthen consumer protection, to help guide the legislation for our notaries in the public, the notaries that we have in the province. We’ve all said the industry has changed. The mortgage industry itself has changed. We know that the notaries are regulated, that they themselves are trained to give this advice.

As we’ve said, a lot of people use notaries. So including them in the exemption, to me and, I would argue, to many, only makes sense. In all fairness, what we’re trying to say to the minister…. We’re not bringing this forward for any political reason. This isn’t a gotcha moment. This is just an opportunity for us to highlight that we feel that there was just an honest oversight, and there’s an opportunity here to fix it. It’s unfortunate the minister jumped up right away to say that she’s not going to support it, without, I would argue, giving this some serious consideration.

Now, we do know that the minister was given heads-up well over a year ago with a letter from the notaries that they should be considered in this section, in this portion around an exemption. To me, on the face, it does not make sense to send a message now to the thousands out there that they now have to contact the superintendent, who has the rule-making powers, to see if they may or may not be considered, that they may or may not be allowed to give advice or they may or may not be allowed to take on clients now in this sector when dealing with mortgages.

Many people in this House maybe use a notary. What are we actually saying to the notary profession? That they’re not going to be trusted anymore? That they shouldn’t be doing this work? I sure hope that’s not the intent here. I sure hope that’s not the message that the minister is trying to give out to notaries and to people in the province by the absence of not including them in the exemption.

Although I heard the minister stand up right away, be­fore hearing some of the arguments, to say she wouldn’t support it, I hope she would reconsider that. Again, I believe this is just an honest oversight. It’s a gap. It’s something that the minister can easily, easily fix.

We’ve got the wording right here in the amendment. It can be added into Bill 29 here. It will strengthen the bill. It will help with consumer protection, and it’s something that government should easily be considering. It’s something that we will all support, and I think it will strengthen the bill but, more importantly, offer that consumer protection and help the families and the people in British Columbia who are using notaries when looking at securing mortgages and looking for that advice to ensure that they can make the best decision possible. It is probably the largest decision, largest issue, that they’re ever going to face in their life, as we’ve all talked about in this House.

Again, I ask the minister and her colleagues to really consider supporting this amendment.

[5:50 p.m.]

B. Banman: As the minister well knows, my critic role is that of Citizens’ Services. There has been great discussion, and part of that role of that ministry, on connectivity in rural areas.

I would just like to bring to the minister’s attention that — I’m sure it was an oversight, very similar to this amendment has been — there are vast areas of British Columbia that do not have the simplicity of hooking onto the Internet. They are forced to drive, in very long areas and very long time frames, to be able to seek out that legal care that she’s doing.

I would just like to, for the record, point out that it is not as easy as the minister has pointed for these people simply to go seek legal advice. There are dramatic problems in much of this province to get something as simple as Internet.

The Chair: Seeing no further speakers, we are voting on the amendment to clause 4, which reads: “(e.1) a notary who is a member of the Society of Notaries Public of British Columbia, in respect of mortgage services that are incidental to services provided by the notary.”

[5:55 p.m. - 6:05 p.m.]

Amendment negatived on the following division:

YEAS — 25
Ashton	Banman	Bernier
Bond	Clovechok	Davies
de Jong	Falcon	Halford
Kirkpatrick	Lee	Letnick
Merrifield	Milobar	Morris
Oakes	Paton	Ross
Rustad	Shypitka	Stewart
Stone	Sturdy	Sturko
	Wat
NAYS — 42
Alexis	Anderson	Babchuk
Bailey	Bains	Beare
Begg	Brar	Chandra Herbert
Chant	Chen	Chow
Conroy	Dean	D’Eith
Dix	Dykeman	Elmore
Farnworth	Fleming	Glumac
Greene	Heyman	Kang
Leonard	Lore	Malcolmson
Mercier	Osborne	Paddon
Ralston	Rankin	Rice
Robinson	Routledge	Routley
Russell	Sandhu	Simons
Starchuk	Walker	Yao

Clauses 4 to 8 inclusive approved.

On clause 9.

P. Milobar: In this, it seems like it’s a bit of a tiered regime, largely following the recommendations of the CMBA B.C. They called for mortgage brokerage licence, principal representative licence, associate agent level licence. Can the minister confirm whether this is the case and outline any differences from their proposal if not?

[6:10 p.m.]

Hon. S. Robinson: Yes, this is the case.

P. Milobar: With subsection 9(3), what is the purpose regarding the limits on persons who are not individuals?

Hon. S. Robinson: What this signifies is that it has to be a real human being, not a corporation.

Clauses 9 to 12 inclusive approved.

On clause 13.

P. Milobar: Lucky 13. Here we go.

Just for the minister, with sections 13 to 24, I’ve kind of got some general questions with all of them, because I recognize these sections are dealing with the licensing process. I may jump around a little bit, but then we’ll just move them all along.

How onerous is the application process for the brokers going to be under the new regime? Will it be very, very intensive, or is it just somewhat of a box-checking exercise if they have their credentials?

Hon. S. Robinson: It’s really up to BCFSA to frame out what the application and licensing is going to look like. We’ve already seen some recommendations that go beyond what’s considered a simple criminal record check, but a more extensive background check.

We also appreciate that we don’t want it to be so extensive and onerous an application that it becomes a barrier. BCFSA is going to be responsible for finding the right balance.

P. Milobar: What’s the anticipated transition that will take place for those that already hold licences?

Hon. S. Robinson: That’s one other piece the BCFSA will be tasked with determining in consultation with the industry. Again, this is about a shift, but wanting to do it in a way that doesn’t create unintended consequences. So working together with the industry to identify a time frame that is reasonable is part of what the BCFSA will be undertaking.

P. Milobar: What types of conditions are contemplated to be imposed on licences moving forward?

[6:15 p.m.]

Hon. S. Robinson: The BCFSA will be responsible for doing this work as well — the conditions and restrictions that the member asked about — and they’ll be doing it in consultation with the industry.

P. Milobar: I’m assuming the public will be made aware. It looks like in 24, specifically, there are things around that. Will they be made aware of the conditions, especially around revoked licences? And if so, what is the format? Will it be an easy-to-find web page, or will it be much more of a direct contact with the BCFSA and a superintendent on an individual basis?

Hon. S. Robinson: The BCFSA currently does have this with mortgage brokers. So this will be consistent in this legislation as well.

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

Motion approved.

The committee rose at 6:18 p.m.

The House resumed; Mr. Speaker in the chair.

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

Hon. S. Robinson moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:19 p.m.