Fourth Session, 42nd Parliament (2023)
OFFICIAL REPORT
OF DEBATES
(HANSARD)
Thursday, March 2, 2023
Afternoon Sitting
Issue No. 281
ISSN 1499-2175
The HTML transcript is provided for informational purposes only.
The PDF transcript remains the official digital version.
THURSDAY, MARCH 2, 2023
The House met at 1:02 p.m.
[Mr. Speaker in the chair.]
Orders of the Day
Hon. M. Farnworth: In the main chamber, I call continued debate for the supplementary estimates for the Ministry of Public Safety and Solicitor General.
In Committee A, I call continued supplementary estimates for the Ministry of Indigenous Relations and Reconciliation, to be followed by the supplementary estimates for the Ministry of Transportation and Infrastructure.
Committee of Supply
SUPPLEMENTARY ESTIMATES: MINISTRY OF
PUBLIC SAFETY AND SOLICITOR GENERAL
(continued)
The House in Committee of Supply (Section B); J. Tegart in the chair.
The committee met at 1:05 p.m.
The Chair: Good afternoon, everyone. I call the Committee of Supply, Section B, to order.
We are meeting today to continue consideration of the estimates of Public Safety and Solicitor General.
On Vote 41(S): ministry operations, $150,000,000 (continued).
E. Sturko: Has the one-time expenditure that the government is seeking approval for been reviewed by the Treasury Board?
Hon. M. Farnworth: Yes, it has.
E. Sturko: When did the Treasury Board approve the release of these funds? Can I just have the date so that I can take this into account, please?
Hon. M. Farnworth: The answer I gave previously on this was…. The Minister of Finance is the one who can answer that question. That is Minister of Finance jurisdiction.
E. Sturko: Can the minister confirm that the Ministry of Finance approached the ministry to identify candidates for the use of this surplus?
Hon. M. Farnworth: The Ministry of Finance and the Premier asked us to identify priorities that would be available for supplementary estimates and that would fit in with the work that we’re doing within our ministries.
E. Sturko: When did that happen?
Hon. M. Farnworth: About a couple of months ago.
E. Sturko: Did the review at the Treasury Board happen after that?
Hon. M. Farnworth: I thank the member for the question.
Again, that’s an area that the Minister of Finance has responsibility for, in terms of when and how they decide to answer.
E. Sturko: Presumably the ministry, though, would have made a presentation to the Treasury Board about this matter. Was that done, and when was that done?
Hon. M. Farnworth: It is the Minister of Finance’s responsibility for when Treasury Board meets, when they discuss things, but also to answer for decisions around Treasury Board, including when, how, why, who and what before Treasury Board. Those questions are best directed to the Minister of Finance.
E. Sturko: The question was: did the ministry that was seeking funding for this project make a presentation, and when was that done?
Hon. M. Farnworth: I’ll give the same answer as I gave before: those are questions that the Minister of Finance would answer. They really do, when it comes to Treasury Board, come under cabinet confidentiality. But the Minister of Finance is in a position to be able to give answers if they feel that that would not be an issue.
M. de Jong: It is actually pure happenstance that I happen to be listening to this very engaging and informative exchange.
Look, the minister obviously is the most experienced member on that side of the House. I think the opposition’s interest is as follows. It extends, obviously, to this ministry, but it extends beyond this ministry.
Something relatively unusual…. A supplementary estimate in and of itself isn’t unusual. The magnitude of these supplementary estimates is fairly unprecedented: approaching, I think, $3 billion, if I’m not mistaken.
My colleague from Surrey is, early on in this exercise with this ministry, trying to establish, which I think is entirely appropriate, the process that not just the ministry but the government has followed in advancing these supplementary estimates and seeking permission and the support of this chamber to spend this money. It’s a lot of money.
There are, within the government, these procedures that have been established over the years and not by any single government. They have involved…. But they are safeguards that protect the government, protect the minister and ultimately are designed to protect the taxpayer, to ensure that funds are being expended appropriately and receiving agencies are the appropriate agencies to receive these funds.
Now the minister and my colleague have had an exchange about the particular project and some of the technical requirements. But this is important not just for this ministry but for the government.
When my colleague from Surrey asks about the process that was followed, I am going to suggest, respectfully, that those are entirely appropriate questions for the minister and the ministry, who are seeking the spending authority under a particular vote, to answer.
No one is asking the minister to disclose the nature of discussions that might have taken place at Treasury Board. I think everyone understands that those take place under a veil of confidentiality. It is appropriate, in my view, for the minister to inform the committee as to whether or not his ministry made a submission to the Treasury Board that was reviewed and that this supplementary estimate and request for spending authority comes in the aftermath of approval by that agency that is there to safeguard the taxpayers.
Quite frankly, it’s not, in my respectful opinion, an answer to say: “Well the Finance Minister will answer that.” I don’t think the Finance Minister has a supplementary estimate. So if the minister — and I don’t think he wants to say this, upon reflection — is saying that in order to satisfy this committee around the process that has been followed within the government to bring $3 billion in additional spending, “You should ask the minister,” who isn’t actually part of this process, then that’s a little too clever.
I think the opposition understands the limitations of what can be asked and the limitations that exist for the minister on the kinds of information that can be disclosed. But he has already indicated to the committee that this is a matter that came up in the last two months. I take it that means January or February — the idea of spending this money came up in the last two months.
I think the minister may have disclosed this, and I might not have been listening closely enough about whether or not it was at the initiative of the Premier’s office or the…. I think he gave some information about receiving a request via the Premier’s office. But if I have misstated that, he’ll correct me.
My colleague is asking, in the immediate aftermath of that request: is that when the ministry prepared its submission for review by Treasury Board, or had that taken place previously? It may have. But that is an appropriate question, in my view, to have asked and an entirely appropriate question for the minister to answer. Deflecting it to a colleague who is not even part of this supplementary estimates process actually causes great concern.
Hon. M. Farnworth: I thank the member for his question. I appreciate the way in which he has phrased it, in which he has asked it. I would make the following comments in regard to it.
Yes, the process has been followed. Yes, the request came a couple of months ago in terms of: do we have projects that would be available for year-end funding?
I’ll make this particular observation about it. This was one of the key priorities, within our ministry, that we have identified. It has been in the works since 2017. There has been a significant amount of work done at the local level. E-Comm and the municipalities that are responsible for 911 have been working on this. We’ve been aware of that.
They came forward, just over a year ago, and said that they had a plan on how to do it. There was going to be a considerable cost to them. We had identified that. We were aware that they were looking for help.
We, in the ministry, understood the importance and the need to meet that timeline of March 4, 2025. So when the request for submissions came forward, we understood the importance of this particular request. We had done work on it in terms of its importance and where it fits in with overall government priorities and the issues that we’re trying to address. A Treasury Board submission was prepared, a Treasury Board submission was submitted, and Treasury Board dealt with it.
The member will also know that there is a long-standing practice, a tradition…. Timing, in regards to Treasury Board, when and what time, is confidential. It’s not about trying to be saying, “Hey,” for the Minister of Finance, in terms of them either being here or not being here. That’s just how the process has worked.
A submission was made. The work, in order to do a submission, was made, and the Treasury Board did their analysis.
M. de Jong: I can’t remember. Is the Public Safety Minister a member of Treasury Board?
Hon. M. Farnworth: I don’t know whether to say “happily yes” or “happily no.” But no, I’m not.
M. de Jong: I’m glad he didn’t have to seek the advice of staff in answering that question.
That’s partially helpful. The minister will understand…. The opposition’s interest relates, as I’ve said before, not just to this particular supplementary estimate but to the whole broad gambit and the procedures that were followed.
My understanding is that the request went out from the Premier’s office to ministries around initiatives and spending that might be accommodated with supplementary estimates. It sounds like that happened early in the new year. If that’s incorrect, the minister can correct me. It sounds like the ministry quickly looked at an existing priority, which was the transfer of funds or the project with E-Comm.
I’m going to parenthetically say this, drawing on some experience, happy and not so happy. Procurements and projects that involve technology, over the last few decades, I have found, can be a pretty good way to clear the room of terrified politicians because they have a habit of going sideways. I say this non-judgmentally, for anyone. They involve, frequently, technology that the laypeople who occupy these posts are challenged to try and understand. All to say that the process of oversight, and technical oversight, is all the more important.
It sounds like…. This is where I’m a bit unclear. There was a submission prepared by the ministry as it relates to the E-Comm project. What I’m unclear on is whether that was merely reviewed by Treasury Board staff or by the Treasury Board. There are two separate agencies. There’s the secretariat, which is the professional people that conduct this work, and then there is the body, comprised of ministers. I’m not sure if there are some private members on the government side that sit on the Treasury Board or not. There were, under a previous regime.
When that happened, did that…? When I say “when,” did it happen prior to the beginning of this year, which, I guess, would have been last year, or at some point previous to that? Or did the review take place after the request came in from the Premier’s office?
Hon. M. Farnworth: I just want to clarify. It would have been in December that the request for projects came.
I totally agree with the member on…. I, too, have been around here long enough to know that whenever technology is discussed, it can be like…. That is why when people have issues with technology, I sometimes look over the other way, and we both smile, knowing: “Hey, we don’t use it.” There are days I go: “I really like that habit.”
That being said, I want to make these observations. First, the technology is not something that has been developed for British Columbia. It’s the technology that’s being used by all the provinces right across the country. We’re all on the same page.
In terms of the work that has been done and in terms of the determination of the funds required…. That planning work had been done by E-Comm. It had been done in discussions with UBCM in terms of the amount of money.
They had let us know, a year ago, that they had this plan. This is what their expectations of the costs were. That was something that was in my ministry. We knew that it was a key priority and that the 2025 date was coming. When the request was out, this was, if you want to use a term that is often used around here, shovel-ready and in line with the priorities of the government.
This is at the top of our list of things that we wanted to move forward, whether it be a Treasury Board submission…. There’s now an issue for supplementary estimates or going into a budget for this year. The analysis would have been done, and was done, by both the Treasury Board secretariat and the full Treasury Board.
M. de Jong: Was this dealt with and approved by Treasury Board as a “minor item”?
Hon. M. Farnworth: No.
M. de Jong: Thank you. That, too, is helpful. It tells me that unless things have changed appreciably, the ministry would have submitted its request, its proposal, which would have been analyzed by the Treasury Board secretariat staff. It then would have been followed up with consideration by what I will term the political level Treasury Board, which then would have given rise to a decision to approve or not approve. Presumably, in this case, the decision was to approve.
Have I described fairly accurately the process that would have been followed?
Hon. M. Farnworth: Yes, you have.
M. de Jong: I think the final piece in that puzzle, having now clarified, thank you, the initiating step for this project…. That was already considered a priority within the ministry. The thing that elevated it from its status as a “wish to have” to “let’s proceed” being that request from the Premier’s office in December, the remaining question is simply, then, to confirm that that process involving the review and the decision from the political body, Treasury Board, occurred sometime between that date in December 2022 and the date on which the supplementary estimate was issued. Is that correct?
Hon. M. Farnworth: The answer to your question is yes.
M. de Jong: I think this might be the last question, or process-related question, that I would have.
Did the…? Was the review of this project…? I’ll back up and say, just for the record, that the importance the opposition attaches to this is out of recognition that….
Ministries come along with their projects, and there are stakeholders who are very anxious to see these projects advanced. And the objectives are sound. People want…. I don’t expect you’ll hear any quarrel from my colleagues on the opposition benches about the overall objective.
But there is this group of people in the Treasury Board staff whose job it is to poke and prod and make sure that everything is properly addressed, that whatever contracts are signed are properly constituted, and to reduce, to the greatest extent possible, the risk to the taxpayers. So we derive some comfort when we discover that that process would have been followed in this case.
Was the E-Comm project and the $150 million that were part of that approval process dealt with separately by the Treasury Board, or was it part of a much larger submission that went to Treasury Board, including other ministries and other projects?
Hon. M. Farnworth: I appreciate the question. I know the member has got the…. Having chaired Treasury Board, he understands fully the process.
I can tell you that the presentation I made was not part of a larger package. It was there with this item — myself.
M. de Jong: Then I think the remaining piece of the puzzle, if you will, is my sense that that presentation took place sometime between the ministry receiving the invitation from the Premier, in December of 2022, and the date upon which the supplementary estimate was tabled in the House.
I’m not asking for a more specific date than that, but I am asking for confirmation that the presentation to Treasury Board took place sometime in that 2½-month period.
Hon. M. Farnworth: That’s yes.
E. Sturko: In terms of selecting this particular project…. It is a worthy project, but we have a lot of other projects, I think the minister would probably agree, that are also priorities for our province: improving response times for 911 or Alert Ready being fully operational or even ensuring that we have provincial 911 in every community.
Can you please provide more clarification on what other alternatives to this project were considered and what the criteria were?
Hon. M. Farnworth: I appreciate the question from the member, and she’s right. There are all kinds of worthy projects and initiatives that government can undertake. There are those that are in terms of the mandate. There are those that are asked for by communities. There are those asked for by outside agencies. There are those asked for by the opposition. The challenge is, of course, that we can’t do everything.
Part of the decision around…. Ultimately, it is a decision of the minister on what to advance forward. When I ask my staff — look, we’ve got all kinds of issues, projects and priorities — one of the key things is: does it fit in with my mandate letter? Does it fit in with the priorities of the government? Are there other external factors?
In this case, the external factor is that we are mandated. There’s a mandate by the CRTC to get this done by March 4 of 2025. We know that it’s a priority in terms of local government. We know that it will have a significant impact on improving public safety. In terms of 911, it has to be done. Local government wants it. It helps people; it helps first responders. So there’s a broad benefit that you can readily see and that’s available. That’s why, in my mind, this is literally right at the top of the pile. That being said, there are lots of other worthy projects to do.
I just want to comment briefly on the Alert Ready system. That’s also a worthwhile project. That’s now in Emergency Management B.C., which is now in its own separate stand-alone ministry.
When I get a request, it’s for the areas under my particular jurisdiction as minister, but it’s not easy. You’ve got competing priorities, and you try and do the best you can. Part of the role, the job, of being minister is to ultimately make that decision and go: “Hey, this needs to go forward, and here’s why it needs to go forward.”
E. Sturko: Next gen 911 — is that in your mandate letter?
Hon. M. Farnworth: It’s not specifically part of my mandate letter, but it does touch on an awful lot of areas that do fall under my mandate, like domestic violence, for example, the ability to be able to text and say: “Hey, I’m in a terrible situation here.” As I said, it touches on so many different aspects, and there’s the mandate that this project needs to go ahead.
E. Sturko: Let me just…. This has been something that, as you mentioned, was identified as a priority for a long time, because in 2017, CRTC has indicated that all the country has to make this, yet it didn’t appear on any other budget.
I think back to the heat dome, when 600 people lost their lives. We had terrible floods. We’ve had things that are not predictable happen here in British Columbia. I would argue that having a mandate from the federal government, from the CRTC, to change over our 911 system to a digital system is something that is predictable, that could have been budgeted for before.
When we’re talking about priorities for this government, the Alert Ready, while not also in your ministry perhaps, does touch on public safety. Our natural disasters, perhaps heat domes…. These things, may not be predictable, which is why it would be a priority for our province to have the Alert Ready system and 911 response times and things that could potentially save lives and keep people in British Columbia safe.
If this was a priority for the government, why has it taken so long? Why is it only coming forward at this time when we have many other worthy and potentially life-saving initiatives, also priorities for this government, that have not been put through this process and given these fundings?
Hon. M. Farnworth: I thank the member for the question. I want to go back to the answer I gave to…. The member has asked, in a similar frame, a number of questions on this front.
First off, this is a local government responsibility. It’s under their mandate. The CRTC made the mandate to move to next gen 911. That was done in 2017, right across the country, all the provinces. They have been working on that in terms of how it’s going to take place, how it will be put in place.
It was just a year ago that they came to the province and said: “Here’s our plan. Here’s how we see it being implemented. Here’s what the costs are going to be to us, and we need some help. We would like you…. This is a big burden for us.”
It’s at that point, not back in 2017…. Government cannot budget money in 2017 to implement something for 2025 that they don’t….
Interjection.
Hon. M. Farnworth: I’ll explain it to you, and the Minister of Finance will do that.
If I were to budget in this year’s budget and say $100 million to buy X amount of widgets, and that doesn’t get spent, the money doesn’t just carry over. It doesn’t carry over into the next year, right? That’s money that’s not available to be spent on something else.
And, we don’t know what that cost is going to be. We didn’t know until a year ago what kinds of costs we were looking at. That’s when the province can choose to decide to assist, which is what we’ve done. You can’t do it before you know what the costs are going to be.
E. Sturko: I understand. You cannot say that…. You’re not going to save a big lump sum over to be done at the last minute, because you can’t. You’d have to pay back that money, of course.
Why, though, did it take, then, four years before the government knew that it would need to help pay for this? You’re saying that…. From 2017 until 2022, was there no work done on this seemingly tremendous project? So you only learned in 2022 that there would be a cost shortfall, that the municipalities would need this type of assistance.
Hon. M. Farnworth: I want to stress the work for this is done by E-Comm and local government. They are the ones who have to deal with the system. They are the ones who have responsibility for that system. The province is aware that they’re doing the work. It’s when they bring the business case to us that we’re able to assess: “Okay, here’s what they’re looking at. Here’s what’s what they’re saying they need.” This is happening in every province.
As I mentioned in one of my answers earlier, some provinces chose to do a call levy. Ontario did a block grant. We’re looking, going: “Okay. If they need assistance, what’s the best way to do it?” Is it through a call levy or is it a block grant? As I said earlier, I think the block grant, which is what we’ve done, was the right way to do it.
It’s not a question of work not being done. That work is being done in the same way it’s been done in every other province. It’s a very complex process. This is not something…. As the member herself said when they were making changes in Surrey and moving to new technology, it’s very complex and intensive. It takes a lot of work, and that’s what’s been taking place with this. That’s why I think that things will be ready for the 4th of March, 2025.
E. Sturko: I do appreciate that. I do appreciate that it’s complex. As you mentioned, I lived through it at the Surrey RCMP. It is very complex, and there are often unforeseen consequences or hiccups at times. In the process and in the business case that was brought forward from E-Comm and from the municipalities, were there any risks identified?
Hon. M. Farnworth: Yes. There would have been a full risk assessment done in terms of the development of the business case, which is exactly what one would expect.
That’s the answer to the question. Yes, there was.
E. Sturko: So if there’s a natural disaster…. Thinking of our new system, thinking of some of the potential risks, how will the next gen 911 services be affected? Let’s say we have a natural disaster, something caused by climate change perhaps. If the internet service or cell services go down, how will this affect our 911 services?
Hon. M. Farnworth: One of the big advantages of next gen 911 that’s not available right now is if something happened, there would be a secondary centre that would be available to take over the tasks of the main centre.
E. Sturko: You had mentioned before domestic violence. It actually would be awesome for someone to be able to be, perhaps, in hiding, not have to talk, to be able to have that real-time texting. It’s great. But can we get some more clarity or, perhaps, a timeline? A little bit more for British Columbians about when do we anticipate every community will be able to have this.
Right now we know that 93,500 people in British Columbia don’t have 911 service. Knowing how important this is, knowing that this technology could be life-saving for somebody, what does that look like? When can we anticipate this being rolled out for the rest of the province?
Hon. M. Farnworth: The member is correct. There are those areas that do not have 911 service. That’s why the connectivity initiatives underway by the government are critical. Our goal is to get that done by 2027. Then those communities, once they’re connected and then able to get 911, it would be next gen 911. Those services then start to be available.
E. Sturko: What type of work has been done in terms of quality control? Can you take us through that a little bit?
Hon. M. Farnworth: I thank the member for the question. Yes, there is quality assurance. That’s built into the $60 million that goes to UBCM, and it’s to deal with just what you have asked.
There are standards. The quality assurance is to ensure that those standards are met. Those standards are not just B.C. standards. They are, in fact, standards that are adopted and recognized as North American–wide.
M. Morris: I appreciate the proceedings here today. I’m operating remotely. There have been some issues with connectivity. I hope it doesn’t occur during these estimate processes here.
I want to thank my colleague from Surrey South for pinch-hitting for me, as I’m stuck here in Prince George, for a variety of different reasons. I think she’s done a good job for her first time up to bat during this process here.
I also recognize the learned and valued staff that the minister has sitting around him. I know they provide good input and advice. It’s good to see you folks again.
Just a comment. I’ve got a couple of questions I want to talk about, with respect to the priorities. The member for Abbotsford West went through some of the process questions that I was interested in as I listened through this debate so far. I guess I have to say that I haven’t been around as long as the minister has, but the magnitude of this process seems a little bit unusual at this particular time.
You know, I’m not supportive of the supplementary estimates. It appears, by the numbers here, that perhaps this government is making this a routine part of doing business, which I have trouble with. This should be for the extreme, unusual cases.
[S. Chandra Herbert in the chair.]
Again, I’ve had this mentioned by different folks in the community here. They lose confidence in the government’s ability to do proper budgeting in the process when we have numbers of this magnitude coming in as supplementary budget issues moving forward here.
Having said that, I’ll focus now on some of the issues. The minister was talking about priorities that his ministry was looking at. He had been approached by the Premier’s office, in my understanding, listening to the conversation earlier on, to come up with a shovel-ready project. They’ve chosen this one. It’s a large amount of money — there’s no question — and it’s within the area of responsibility for municipal governments, regional district governments. So it’s outside of the scope in a normal course of doing business.
A couple of questions. I just wondered why this one was chosen as a priority over, perhaps, looking at increased help for forensic labs to look at the backlog of laboratory analysis on drugs, considering the opiate crisis that we have, or firearms-related offences. Of course, I know that the minister has put some time into that.
The other issue that is causing a lot of police forces some concern is the encryption of cell phones, which are so critical in the criminal investigations they have, not only for the number of homicides and the gang activity that we see across the province but for other major investigations over the province here as well.
I’m just wondering: have the RCMP provided any multi-year plans looking for increases in these areas? If they have, I’m just wondering why the minister would not have considered those issues as a priority over this particular one with 911.
Hon. M. Farnworth: I thank the member for his question. Those are all legitimate issues and priorities that work has been underway on in my ministry. In some cases, I know, the member, when he was on this side of the House, was involved in a number of those issues, and we’ve made progress on them.
There are two issues in particular about this decision — around why 911. I think it comes down to two things. One, this is one-time funding. It’s not for operational funding that goes on from year to year. That’s crucial in determining what projects can go ahead. The other, which is also important, is that the move to next gen 911 is mandated by the CRTC. It has to happen.
There’s a clear date by which it must be in place. Given the importance of 911 right across the province, questions have been asked by the opposition, and the UBCM and local governments have identified it as an issue of critical concern to them.
I don’t want to stray too much outside my ministry now. When I did have EMBC, for example…. Notification and all of those things tie into each other. They’re all part of what’s required, both legislatively and programmatically, but also in terms of, as I said, the CRTC and the mandate that it is putting in place.
When we have the ability to say, “Okay, we have funding that can go out” — in this case, in the case of supplemental estimates — based on what we’re seeing through the financial situation of the province, through the course of the year in my ministry, we go: “What have we got? What can we do that can achieve a whole series of objectives in public safety and that will have a significant impact?” This is it. This project is ready, it’s supported, and it’ll make a big difference.
At the end of the day, my job as minister is to make that decision on what priorities go forward. That’s why I made that decision. That being said, it does not take away from any of the other issues or priorities that I have on my desk. It is looking at everything and saying: “Okay, what is going to give us the biggest value that is going to have an impact?” This absolutely does. It meets that mandate of when something has to be done by.
M. Morris: I appreciate the response from the minister, and I certainly understand the list of pressures that he has on his desk at any given time.
I’m wondering if the minister can tell me what the next priority or the next two priorities would have been, on his list, that he could have turned his attention to. I say this because there are a couple of questions that I’m going to be asking a little bit later on and that might pertain to this.
Hon. M. Farnworth: I appreciate the question from the member. I will say this, because these are supplementary estimates, and it really is just about this particular expenditure of money on this particular project. I know the member has been Solicitor General, so he understands and knows the different pressures in the ministry, and the competing issues that the ministry faces.
I would just say this. We’re going to be going into Solicitor General estimates later on this year. I think, because he and I have talked about it in the past, to me, the biggest priority, and I made the announcement earlier, was to deal with that issue around core policing. To me, that priority of getting that funding of the $235 million was absolutely crucial. That has been my, you know…. But that’s for another set of estimates.
In terms of these estimates, it’s about this. My decision was: “Look, if we’ve got one-time funding, this project will have the biggest impact and support across the province in terms of local governments, in terms of first responders, in terms of improving the ability to communicate.” As I said, it meets that mandated deadline, which we are required to meet.
It’s not one that we can say: “Oh, we’ll do a bit this year and a bit next year.” Sorry; local government can’t say that. They have to meet that deadline, and this funding allows them to do it. It takes a significant pressure, financial pressure, off them, and that’s a good thing.
M. Morris: I appreciate the minister’s response to that. Just a little bit more on this one particular issue here.
I look at, probably because I’m fairly up to date on a lot of the complex technical investigations that are being done across the province here…. I’m wondering whether or not the minister would have considered a one-time opportunity for the RCMP or police forces in British Columbia to upgrade their labs so that they can do that cell phone encryption in a very timely fashion, so that they’re not waiting for a year or more — for a lot of these gangsters, drug traffickers that are killing our vulnerable population with fentanyl-laced drugs — to solve a lot of these crimes. I think there may have been an opportunity there.
The minister has made his decision now to go with the upgrade for the 911 system. I know that’s what we’re dealing with in supplements today, but I think it’s also my job as critic here to find out why some of these other priorities may not have been looked at in favour of this particular one here.
Maybe just: does the minister see this as an issue, and was there any kind of a multi-year plan in front of him that provided him the opportunity to put some one-time funding into this capability for police forces in British Columbia?
The Chair: I would say, just a reminder, that, yes, we are on Vote 41(S), and that is about the local government next gen 911 readiness fund. I would hope that questions could be drawn to the supplementary estimates as opposed to other questions outside of the estimates, which can be raised in the main estimates, which will be coming soon.
M. Morris: Thanks, Chair. This is pertaining to the decision to go in this direction. I think it is critical for us to understand why this decision was made. Then I’ll have some more questions in relation to how that is going to be rolled out whenever it’s approved here, but I do feel it’s a pertinent question to this issue.
The Chair: Totally appropriate to ask about the next gen and why this was selected. I think there was a question about multi-year funding, which was outside of the ambit of this committee hearing.
Hon. M. Farnworth: I thank the member for the question. I’ll make this observation. The decision to choose this particular initiative for funding does not take away from any of the work on any of the other priorities within my ministry and the priorities in regards to policing.
We have done and put in place a significant amount of work on…. Well, for example, the forensics firearm was set up by our government, and this initiative is supported by the police. This is a key priority for them as well, just as it is for other first responders.
The other thing I want to stress is that this is one-time funding. A lot of other things require operational funding on a multi-year basis. They go through the process of my ministry, determining priorities for ongoing funding, for new programs. That’s the regular work of the ministry.
In this case, the issue is that we have the ability to do some one-time funding that impacts…. It’s coming out of my ministry. When I look at it, I go: “What is going to have, as I said a moment ago, the biggest impact?” I’ll say, given the questions that the opposition has asked in the past around emergency response around 911 and given the demand from local government in terms of the pressures that they’re facing and the ability to have a significantly improved system which can — as I’ve mentioned around domestic violence, for example — allow texting so you’re not having to be on a land line….
Being able to point to exactly where somebody is assists first responders in a host of ways. Those are the kinds of things that police want to have, that firefighters want to have, that ambulance wants to have and, just as importantly, that the public wants to know that we have.
When that’s also mandated by the CRTC at the federal level and all provinces are engaged in having to implement these changes and we’re all using the same technology, if we are…. And there’s a mandate date. So to make sure that we’re able to do that and able to assist in what is going to be a significant…. I absolutely think that that was and is the right choice. That being said, so are other priorities just as important to me and will continue to receive the attention and the work that they require and deserve from my ministry and our government.
M. Morris: I’ve just got a few more questions. I won’t be too much longer here, and we can wrap it up.
The minister mentioned earlier that he chose the option of this one-time infusion of money into the upgrade for the 911 system versus a telephone or cell phone surcharge. I just want to explore that a little bit more, because it’s my role to ensure that public funds are spent in the best way possible, and if there are other options available, we should be exploring them as well.
Now, maybe perhaps from the business case that was submitted by E-Comm or the regional districts, can the minister…? Does he have any idea of how many 911 calls are received from cell phones across the province in a given year?
Hon. M. Farnworth: I thank the member for the question.
Right now it’s about 60 percent cell phone and 40 percent land line. I couldn’t give you an exact number of the number of calls, but what I can tell you is, and it is no surprise, that the number of land lines is decreasing exponentially.
To give you an example, we have a family friend who was complaining about budgets. My partner asked him: “Well, how much are you spending?” He goes: “I spend this much” — on your bill — “and I’m spending this much on my land line.” It’s like: “Why are you spending that money on your land line? You don’t use it. Get rid of it.” That’s exactly what they did. I think they saved something like 65 or 70 bucks a month. They had some…. We go: “No wonder you’re having money problems.”
But that’s the situation that we’re seeing. Technology is advancing so quickly that we are seeing less and less use of the land line and more and more use on cell phones. The advances in cell phones and their ability in terms of texting, their ability in terms of images — all of those things are playing into a direction that is not going to change and is only moving forward.
M. Morris: I think people get attached to their land-line phone number. Some of them have had them for decades, and they don’t want to let that go. I know that’s the case with some folks that I know.
When it comes to funding for 911, is there a surcharge, or is there presently some process in place to recap some of the 911 costs through a land line? Is that added to a phone bill in British Columbia?
Hon. M. Farnworth: Yes, there is a levy on land lines but not one on cell phones.
M. Morris: Does that levy also apply to voice-over Internet service providers? When they use a land line that’s connected to the Internet, does that levy apply in those situations as well?
Hon. M. Farnworth: Yes, it does.
M. Morris: When we consider that the cell phones, as you’ve alluded to, are the communications device of choice for most British Columbians…. British Columbians are quite mobile. They go from community to community and from regional district to regional district. A lot of them are in provincial parks when they call their 911 service, in areas outside of where they pay their taxes. This has an impact on some of these lower-populated regional districts that end up with a big tourism influx and a higher number of 911 calls going through the service there. These communities have to bear the brunt of those costs.
Does the minister think that a 911 surcharge for cell phones is an option that should be looked at or explored now or in the future?
Hon. M. Farnworth: I appreciate the question from the member, and I’ll make the observation that I made earlier on this particular issue. This is about the implementation of the new next-gen 911, so it’s about the hardware and the soft component of that — the training and the audits and the communication and those sorts of things. Some provinces have gone to a levy in order to fund that. We, along with Ontario, made the decision to do a block grant to local government to enable implementation.
As I said, somewhat tongue in cheek, to my colleague across the way, if we were to put in place a cell phone levy for this, I would bet some money that you and other members of the opposition would be standing up and asking questions such as: “Why are you making cell phones more expensive for people in British Columbia when, in this country, we already have some of the highest cell phone charges of any jurisdiction in the western world?”
I will just say we made the decision that what would be the most effective way was a block grant to E-Comm and to local government for the implementation. I think it was the right decision.
M. Morris: I appreciate the minister’s response. We’re always looking for something to debate, as if we don’t have enough on our list already. I appreciate the answers from the minister, and I appreciate the staff being here to help answer the questions.
We don’t have any further questions with respect to this supplement.
Hon. M. Farnworth: I want to thank my colleague across the way for the questions that she asked. I know we committed to get, I think, a piece of information for her. We will make sure that happens.
I thank my critic for his interventions.
The Chair: Seeing no further questions, shall Vote 41(S) pass?
A division has been called.
All right. Thank you, Members. The vote is Vote 41(S). It is the Ministry of Solicitor General and Public Safety, supplementary estimates.
Vote 41(S): ministry operations, $150,000,000 — approved on the following division:
YEAS — 41 | ||
Babchuk | Bailey | Bains |
Beare | Begg | Chant |
Chen | Chow | Coulter |
Dean | D’Eith | Dix |
Dykeman | Elmore | Farnworth |
Fleming | Glumac | Greene |
Heyman | Kahlon | Kang |
Leonard | Lore | Ma |
Malcolmson | Olsen | Osborne |
Paddon | Ralston | Rankin |
Rice | Routley | Russell |
Sandhu | Sharma | Simons |
Sims | R. Singh | Starchuk |
Walker |
| Yao |
NAYS — 19 | ||
Ashton | Banman | Bernier |
Bond | Clovechok | Davies |
de Jong | Kyllo | Letnick |
Merrifield | Milobar | Morris |
Paton | Ross | Shypitka |
Stone | Sturko | Tegart |
| Wat |
|
Hon. M. Farnworth: I move the committee rise, report resolution and completion of the supplementary estimates of the Ministry of Public Safety and Solicitor General and ask leave to sit again.
Motion approved.
The committee rose at 2:42 p.m.
The House resumed; Mr. Speaker in the chair.
Committee of Supply (Section B), having reported resolution, was granted leave to sit again.
Hon. R. Kahlon: I call the supplementary estimates for the Ministry of Health.
Committee of Supply
SUPPLEMENTARY ESTIMATES:
MINISTRY OF
HEALTH
The House in Committee of Supply (Section B); S. Chandra Herbert in the chair.
The committee met at 2:45 p.m.
The Chair: Of course, before we get started here, just that we are here looking at supplementary estimates for the Ministry of Health. It’s a very focused set of questions. Of course, it’s not the main Health estimates, which will be coming up. I’d, of course, ask members to keep their questions focused on the supplemental estimates — the minister as well, yes.
Hon. A. Dix: I was going to say I have the answers, hon. Speaker.
On Vote 32(S): ministry operations, $150,000,000.
Hon. A. Dix: What I just propose to do at the beginning is sort of lay out what the supplementary estimate is. Then, I know, the member will have, and members will have, lots of questions about that. What we’re doing is asking the House today to approve the $150 million to the B.C. Cancer Foundation to support cancer research and a highly skilled cancer care workforce.
I want to speak a little bit about the foundation. I know members of the House will know the foundation well. It’s British Columbia’s largest charity in terms of charitable donations last year. It’s extraordinarily well-run and plays a central role not just in the lives of people engaged with cancer, who are diagnosed with cancer and who work on cancer issues, but of the whole community. The B.C. Cancer Foundation is the fundraising partner of B.C. Cancer and supports, in its own way, more than 80,000 patients every year.
I’ll just give you a sense of, recently, some of the things that foundation has done here in B.C. in advancing cancer care. The first population-based lung cancer screening program, launched in May 2022. They played an integral role in that; we’ve spoken about that before in this House. The first effective prevention strategy discovered and deployed for ovarian cancer. The first cancer centre to effectively treat a patient based on the DNA of their cancer, which is obviously important. Their work on the evolution of cancer over time and the development of advanced forms of radiation therapy is now used worldwide.
The B.C. Cancer Foundation obviously plays a central role. I think what’s also to be understood is just how successful and connected to community they are. Last year, the B.C. Cancer Foundation raised $77.1 million. That wasn’t based on government grants such as this. In fact, I think only $4 million of that came from various government grants. That’s from the community.
Certainly, in response to the action that I hope the House will approve today, the foundation is setting its sights high. I’m not going to make their announcements in terms of their targets, and so on, but you can imagine that their current campaign, which is called the Beyond Belief campaign, has a number of priorities: advancing innovation, investing in leading-edge research; accelerating access, bringing world-class care closer to home for every British Columbian; and activating the world’s best, expanding and empowering B.C. cancer teams across B.C.
I want to talk about what the grant will do and then sort of the detailed sublines of that grant, and then I know we’ll have an opportunity to discuss each of those in detail. The $150 million grant to the B.C. Cancer Foundation will support cancer research and attract high-calibre talent needed to implement the overall plan and meet key priorities related to accessing specialized and essentially new and novel treatments, and integrating research into cancer care.
The capacity to undertake research and integrate scientific advances in the world, as we all know, is such a positive thing and is occurring at an extraordinary rate. Our involvement in that here in B.C. is critical to ensuring the best cancer care to patients and, of course, the best cancer care for generations to come.
Specifically, this money will fund delivering clinical trials across all cancer centres in the province, allowing for greater access for patients living outside the large centres to participate in clinical trials. That is, I think, of fundamental importance and of fundamental value. Increasing radiation oncology trials that study treatment approaches, which require fewer visits and precision radiotherapy research to enhance efficacy, while reducing toxicity from radiation treatments. Anyone who has themselves received, or has had a family member receive, radiation treatments will understand the value of that.
Enhancing capacity and genomic testing to deliver the optimal treatment for every patient. This includes improvement and development of cost-effective gene panel assays for cancers; the continued development of novel gene assays that are performed on blood samples, cell-free DNA rather than biopsies, reducing health care costs and allowing longitudinal monitoring of patients. They are rapidly becoming an emerging standard in cancer medicine.
In addition, expanding access to new diagnostic and therapeutic approaches, treatments and technologies; establishing innovative cancer treatment programs; supporting emerging multidisciplinary research programs; enhancing capacity in population health and health economics research; providing research start-up and seed grants to attract research talent and support research trainees. The B.C. Cancer Foundation has created a new program to attract trainees in cancer research to B.C. Cancer. The Rising Star Awards build specific criteria to ensure that other students — women, Indigenous and from underrepresented communities — get equitable access to scholarship support.
Creating four endowed leadership and research chairs within the foundation to help recruit and retain key clinical researchers that are vital to the long-term success of B.C. Cancer. Creating scholarships within the foundation to support schooling for critical cancer medical positions, such as radiation therapists and technologists and medical physicists.
Supporting equipment for clinical trials. This includes support for the acquisition and installation of a state-of-the art, ultra-high-sensitivity long axial field of view PET CT scanner, which could upgrade one of the instruments to be installed at the Vancouver centre. This PET CT scanner is more than ten times faster than the current state-of-the-art equipment.
To lay out the numbers of the $150 million, it’ll be invested by the following breakdown. Clinical and multidisciplinary research: $55.7 million. Research equipment and infrastructure: $34.3 million. Start-up and seed grants: $19 million. Recruitment and retention initiatives: $13.5 million. Training and education: $4.5 million. And endowed research chair positions: $23 million.
The last time we did supplementary estimates in Health, members will remember, we were addressing similar questions of research in terms of a long-term investment in research for Genome B.C. and the Michael Smith Foundation. That was the last supplementary estimate we did here. I think it’s fair to say that these research investments in Michael Smith and Genome B.C., which started under the NDP government in the 1990s and were supported by the Liberal government subsequent to that and then our government subsequent to that, have been used in such a process here.
The B.C. Cancer Foundation and this funding will benefit cancer patients, benefit research and help us to recruit high-quality people and cutting-edge researchers. I think it will also, more broadly — and this is beyond cancer — support the innovation economy. I think, therefore, this opportunity, using the supplementary estimates here in partnership with the B.C. Cancer Foundation, is something I hope all members of the House will support.
M. Bernier: I didn’t want to interrupt the flow of the minister, but I just wanted to bring it to the House’s attention that we do not have quorum and should not be continuing without it.
The Chair: There are ten members. We do have quorum, including the Chair. There’s now an 11th member. But I appreciate the support for the Chair to ensure we have quorum. We have 11. Quorum is ten, so we did have quorum.
S. Bond: One would hope we would be able to drum up quorum in the Legislature. Thank you to my colleague for pointing that out.
I do appreciate the opening comments from the minister, but I want to remind us why we’re here today. Certainly it isn’t to question the merit of the work that is done by the B.C. Cancer Foundation. I appreciate the minister reading into the record a number of things that this grant will likely do or accomplish. So that is exactly the line of questioning that I hope to undertake over the next few hours as we go through the supplementary estimates.
I think it’s important to remember that the reason we’re here is because the Ministry of Health overspent its budget. That’s what supplementary estimates are about.
While, certainly, the importance of the work that will be done with the amount of money…. It may seem like a small amount of money to the Ministry of Health, $150 million, but it’s a big amount of money to the people of British Columbia. So we are going to talk about what it potentially will do. Before we do that….
When you look at the definition of “supplementary estimates” that is provided to legislators…. Supplementary estimates actually grant approval for one-time expenditures to cover additional spending on items that were unknown at budget time.
Now, this money is being provided to the B.C. Cancer Foundation to support cancer research and do a number of other things. We will walk through each of them. To be clear, I’m not sure how that could not have been known at budget time.
Let’s just start with a basic question. Could the minister confirm for me what the Health Ministry budget is?
Hon. A. Dix: I just take a different view of what supplementary estimates are. This is a decision to spend $150 million more, in this fiscal year, for this purpose. It’s not because we are over budget or over the previous estimate that we’re doing that. It’s because, for this purpose…. We’re seeking to be granted $150 million more to support the B.C. Cancer Foundation.
With respect to the main estimates last year, which we debated last May, and the estimates…. There are, obviously, different numbers, which we will be debating soon, either later in March or in April of this year.
The main estimates were $25,455,895,000.The supplementary estimates would take that to $25,605,895,000.
S. Bond: I’m certainly not going to quibble about the definition of “supplementary estimates.”
The reason we are here having this discussion is because this is outside of a budget that we debated previously. It is outside of the amount that the Ministry of Health was provided in terms of the work that they needed to do. It was not anticipated, or it was not necessarily identified as recently as the last quarterly report we had.
[J. Tegart in the chair.]
I certainly want to make sure, as we proceed through this discussion…. This is not about the B.C. Cancer Foundation and whether or not we need to do research and a whole pile of things that are included here.
We have a Health Ministry that has, undoubtedly, the largest ministry and budget in government. We are here today debating $150 million that was not included in the original budget estimates or plan of this ministry.
I would like to start there. I’m wondering if the minister could confirm that he received, or the ministry received, a request from the Ministry of Finance to identify items for which surplus dollars could be utilized.
Hon. A. Dix: The Premier, I think, has been clear for some time that government would seek to use the extraordinary revenue improvement in the ’22-23 budget year to support British Columbians. This estimate most clearly does that.
The member will know we regularly engage with the B.C. Cancer Foundation on opportunities. It’s clear that they are an outstanding agency that will use this money for the stated purposes of the supplementary estimates. That’s why we brought this forward. Obviously, it was subsequently approved by the government and included in the budget as a supplementary estimate. I think all of that is straightforward.
The reason we’re debating it here today is because it is a priority. We need to bring such a request back to the Legislature for debate, and that’s what we’re doing.
S. Bond: The purpose of having a discussion and debate about supplementary estimates is because it is about choice. It is about the minister, obviously, with the advice and suggestions and partnership of his ministry team. I know that team, and I know what an excellent job they do.
This is not about that. This is not about the Cancer Foundation. It is about a choice that was made to spend $150 million. That’s in the context of an environment where we have significant concerns about cancer care in British Columbia. No one is disputing that this isn’t a worthy organization and, heaven knows, we need research. So we’re going to go through those items that are noted.
I would like the minister, if he could, to confirm then for me that he as minister, or the ministry, was approached by the Ministry of Finance and asked to identify candidates for the use of the surplus.
Hon. A. Dix: I think the answer is yes. I think, on the research question…. I think we’ll have the opportunity, and I know the member and I will, I expect, be discussing this at some length during the main estimates coming up, with respect to the cancer plan and other issues, which are immediate and operating issues.
I think this is, from my point of view, a very appropriate way to use the kind of funding for supplementary estimates that the Ministry of Health has asked for in the past, for Michael Smith and for Genome B.C., which I think has been quite effective. It allowed us to significantly increase investments in both those institutions to the benefit of all people in B.C. and, again, this is the same thing.
But yes, were asked. At the same time, we’ve been engaging with the foundation in these very priorities in the recent period and obviously consulting with the foundation widely because of its deep understanding of cancer issues and because of its role in cancer care in the province.
That’s the circumstance, and I think that’s the response that the member was looking for.
S. Bond: I appreciate the answer was yes — that ministries were asked to come up with ideas, basically, to use the surplus.
Were there any…? I would like to follow up with the minister about…. Was there a framework for bringing forward recommendations? Were ministries simply told: “Here; we have a bucket of money”?
One of the things I’d like to point out to the minister is that I have been here, as he has, for a significant period of time, and a supplementary estimate isn’t unusual in and of itself, but I can assure you, then, that when we’re approaching literally…. I think we’re over $2 billion in supplementary estimates. That is not a minor issue. So understanding how the Health Ministry was given approval to spend $150 million that was not identified in their previous budget is actually pretty important.
Could the minister outline for me: was there a framework? Was there any suggestion of criteria that might be used to identify the issues to bring forward for those surplus funds?
Hon. A. Dix: I think this is exactly the kind of funding that’s envisioned by supplementary estimates, because it is one-time funding by definition. When we present a cancer plan again, and we’ll debate that at some point later, the issues at B.C. Cancer and issues in cancer care now and into the future that are appropriately operating funding are initiatives that are ongoing.
If you’re going to, I don’t know, increase services, increase the number of surgeries, whatever the plan you would have for any area of health care, then you would have that in the base of operating funding. That’s what will be discussed in the main estimates.
In this case, this research provides, I think, long-term supports and benefits to British Columbians. It’s being situated with the foundation, and the member and I agree…. I’m not suggesting, by the way, that she doesn’t agree with this. I’m just saying that the B.C. Cancer Foundation, which is an excellent place to support all the work that’s being done in cancer….
In addition, it’s consistent with previous supplementary estimates for this kind of research effort, including with the Michael Smith Foundation and Genome B.C. So on all of those grounds, this represents, I think, the exact, appropriate use for a supplementary estimate.
S. Bond: Thank you to the minister for that response. We’re certainly…. The good thing is that there is consistency in terms of the answers from ministers who are facing supplementary estimate debates, because it has been made clear that a call went out. It was: “We have surplus funds, and we’re going to spend them. What are your candidates for that amount of money?”
As I said, it is not an insignificant amount of money. It is, I think, in excess…. Actually, I will have that here when I look at the homework that I did. Yes, we’re at $2.7 billion in appropriations that are being considered in the supplementary estimates. That is not, by any stretch of the imagination, a small amount of money.
The call went out. The minister, obviously, was asked to look for a way to invest in something. Can the minister describe for me how the need for this one-time expenditure was identified? I know the Cancer Foundation does great work. How was it identified? Had the Cancer Foundation made a request for additional funding of $150 million? How did the minister get to the place that this was the item that he took forward for spending of surplus dollars?
Hon. A. Dix: Of course the B.C. Cancer Foundation — the member will know this, because we’ve talked about it before — has come forward with the largest, most ambitious fundraising campaign in history, with high ambitions in terms of what can be achieved with that money in terms of building research in the long term.
Again, we’ll be discussing this at a later time, so I’m not going to go into what we announced and make the case or anything like that. We’ll have the opportunity to have that discussion later. But obviously, the issue of cancer is a central focus of mine and of British Columbians, all the time. So when we look at supplementary estimates, what can you do at the end of the fiscal year under these circumstances?
Just like with Michael Smith and with Genome, this seemed to me — in my meetings with the foundation, my work with cancer — a natural opportunity to advance that work. It’s of fundamental importance. Sometimes what happens, I think…. One of the reasons why research sometimes gets left to the side is because there’s so much urgency in the present. The member and I have had some of these discussions, so we know there is urgency in the present in the Legislature this week. There’s always urgency in the present.
This is an opportunity to do something in the coming years in terms of building out the highest level of research capacity. Many of our top clinicians in cancer care value and see research when you’re recruiting people to the province, when you’re building out your network, when you want to be on the cutting edge of a change, which is constantly on the cutting edge. This is such a positive thing for patients. This was a real opportunity to do this.
Certainly I engage with the B.C. Cancer Foundation often. Last year they fully briefed me on their campaign that they were coming forward with and the ambitions of that campaign and the possibilities of that campaign. Concurrently, of course, we were working on these issues, as the member will know.
I saw this as a real opportunity that probably, I’d say, I was thinking of before the call went out. When the call went out, this was, obviously, with our team, the exact kind of thing you’d want to do for such a call: boost research in cancer and to put B.C. on the cutting edge of cancer research. This supports our whole effort in cancer, I’d argue. That’s why we put forward this amount of money.
S. Bond: Thank you to the minister for that response. I certainly understand and have experienced the list of requests that come to a minister. But it is about choice.
I also understand the nature of a grant and the process of year-end funding. So that does provide some limitations in terms of the kinds of things that can be funded. But it is also in the context of a health care system where the needs are overwhelming.
The minister knows that every single day, both he and I hear stories, and my colleagues and his colleagues, about the desperation that exists, especially in cancer care, at the moment.
Just to pursue the process for a bit longer, if the minister would indulge me. Could the minister identify the point in time or a rough timeline for when the call went out in terms of looking for projects for additional spending?
Hon. A. Dix: I know the member knows this, having been a minister, but the broader community may not know that the process for year-end actually begins the previous fall. In the absence, even in advance of a call, when it is looking at year-end requests…. I will give the member an example of such a request that we did for multiple years, last year, for the Alzheimer Society for the First Link program, which has traditionally been funded by our government and then by the previous government at year-end.
What you’re looking at is there’s a look at year-end that begins, probably…. I would look at, first, in the mid to early fall, I’d say. In that period, that September, October period. We’re looking at, “Okay, where are we at, and what are the opportunities here?” What are the things that we’ve traditionally funded at year-end? Some of them going back decades at year-end…. What are the opportunities for that? We start that process. What are the possibilities.
We’ve done this a number of times in the past. For example, to support capital expenditures by physicians, we did a year-end grant, which is not part of a supplementary estimate process. So the Doctors of B.C., for example, which has served them well as they’ve dealt with issues around the province with respect to primary care. That process probably starts September and October of every year.
As we go through, we get requests from different places in that process, including from members of the opposition. I have some good news for one or two of them, I’ll just say, but that’s a different process. It’s not the supplementary estimates process, so I will not be distracted from my laser focus on that process. That’s the process, and then, obviously, with the new Premier and with the fiscal position of the province, the call-outs subsequent to that here.
We were, in that sense, ready for it and looking at the opportunities, particularly in cancer, because there are the immediate concerns, which are appropriately what we debate in the main budget and the main estimates. What this does is support that and invests in the long term, which sometimes is a challenge for governments when faced with immediate demands, particularly in health care. I think this was exactly the kind of research support we provide.
Often, year-end requests — again, I know the member knows this, but for the benefit of the House and the people watching — are research requests at year-end because of this very reason. We get those every year as well. As for the priority given, I think we’re going to go through the details of this, but I know the member understands, as I know all members understand, the priority that has to be given to this area and for B.C. to be in the forefront of cancer research, which is deeply connected to the delivery of cancer services in our province and always has been. That’s why this was an obvious priority.
I’ve had, myself, meetings with the B.C. Cancer Foundation on some of these very questions well in advance of that process. Of course when the situation went out, we were able to act on that and come forward and ultimately have this $150 million approved. I’m obviously very pleased and grateful for that.
S. Bond: I appreciate the minister walking through the fact that ministries and ministers do keep a list of things that in many ways they are hopeful there will be year-end funds. I can understand that the Ministry of Health was at the ready when the call came. Obviously with a new Premier and the opportunity to spend that request, at least for specific asks, was likely made post the swearing in of the new Premier, so from the November time frame.
Could the minister identify for me what process was used? For example, was a Treasury Board application or presentation made? Did this go through the Treasury Board process?
Hon. A. Dix: Yes.
S. Bond: Could the minister remind me: is he a member of Treasury Board?
Hon. A. Dix: Yes, I am. It’s sitting right now.
S. Bond: I don’t know whether to congratulate him or not. Could the minister tell me whether it was a minor item?
Hon. A. Dix: Well, it was an item. I mean, the member will know — she’s very experienced — that the Treasury Board process is a confidential process, but it’s obviously approved by Treasury Board. I believe very passionately in the item.
She was a member of Treasury Board. I’ve been a member of Treasury Board since 2017. The first Minister of Finance that I served with on Treasury Board told me that they didn’t usually allow the Minister of Health to be on Treasury Board. I don’t know why that was; anyway, they let me on. So yes, I’ve been through that process.
The issue is that there was clearly an item on the Treasury Board agenda, and I think you would characterize $150 million as important.
S. Bond: I certainly would, when you think about the size of some ministries in this government. In any government, that is a substantive amount of money. Again, that’s why this discussion is important, when we’re talking about supplementary estimates, when the total spending is $2.7 billion of supplementary estimates — funds that were not part of the budget process previously. It is important that we have substantive discussion about this.
I’m interested. If the minister could just expand on the amount for me. Did the ministry decide that $150 million was the number and then go and make that ask? Or was it the reverse? Did the Ministry of Finance say: “Here’s an allocation. What would fit from your wish list?”
Hon. A. Dix: What we did I went over earlier. I will just briefly again lay out what the funding is for. We’re going to go through, I think, each of these lines as we go forward.
It’s $55.7 million for clinical multidisciplinary research. Significant work was done, obviously, by the Provincial Health Services Authority and the B.C. Cancer Agency. We had discussions with the B.C. Cancer Foundation and our ministry to determine these numbers. Then $34.3 million on research equipment and infrastructure, $19 million for start-up and seed grants, $13.5 million for recruitment and retention initiatives, $4.5 million for training and then the endowed position of $23 million.
The endowed position and all of these items are based on: “What do we see ourselves doing?” In discussing this with the foundation, $150 million was seen as the appropriate number. We put forward this request based on that and not on: “Oh, Health is getting X amount of money.”
The member has talked about $2.7 billion. This is our one item in the supplementary estimates for $150 million. Obviously Health gets a good share of the main estimates budget, which we will be discussing in a little while. So $150 million, based on the work we did, was the right amount. We didn’t start with the $150 million; we started with what we wanted to do. The $150 million became the number, based on all these different items that we wanted to achieve in supporting the foundation in this contribution.
S. Bond: I appreciate that. I have another question in terms of how the minister landed on this particular amount. There’s one thing that would be most helpful. Obviously, I do not have the advantage of having the breakdown of the $150 million. I can certainly wait for the Blues to come out, but I would prefer it if the minister could share those specific amounts, so that as I go through my questions — and my colleague is going to be asking some questions today as well — we have the advantage of knowing what the breakdown was.
I’m wondering. The minister has described the process of trying to figure out…. There are so many needs and so many worthy places that money could be allocated. Were there other considerations made by the minister? He, obviously, and his team landed on B.C. Cancer Foundation with a number of things. We’re going to go through those. Were there other alternatives considered when looking at where to land on additional funding that would be available?
Hon. A. Dix: The member will know that in the year-end process, there are a number of priorities. This particular priority — to my way of thinking, because of what we’d done before on research — for a supplementary estimates request seemed to be the appropriate investment.
Obviously, we’re concurrently doing work on the B.C. cancer plan. I think it’s fair to say to the member: we don’t want to characterize what $150 million is. It’s a breathtaking investment in the cancer research future of the province that comes, I think, at the right moment for that. As I described the year-end process earlier, there are a number of requests that one looks at, but for this supplementary estimates process, this was certainly one that we gave priority to in support for the research.
Of course, because the foundation is doing that research, just as with Michael Smith or the genome…. We make research-dependent decisions that are independent but, really, support our overall effort in cancer. We want to follow the answers where they are. This was, I think, therefore, for this process, an investment that made a lot of sense.
We also have to continue and are continuing to support — we gave a very large contribution to Genome B.C., the Michael Smith Foundation through supplementary estimates two years ago, I think. That’s also an excellent way to promote research. Both our government and previous governments have done that, including during supplementary estimates. For all those reasons, it made sense for one time.
B.C. Cancer Foundation is an outstanding organization, able to receive such an amount of money, to manage it and to deliver what we all collectively want it to do. It gives momentum to a part of the cancer plan that isn’t immediately about services or demands or the increasing number of people with cancer. It focuses on improving cancer care and supporting excellence in cancer care. For all those reasons, it made a lot of sense.
S. Bond: I appreciate that response. Certainly, the minister, as I have been, is a member of Treasury Board. I want to just have the minister confirm for me that a regular process was followed through Treasury Board, that this was an item that was reviewed, rigorously debated and considered. That is the job of Treasury Board when we are expending public dollars.
I fully understand the nature of Treasury Board, having been there as vice-chair for a number of years. I understand the confidential nature of it, but was the process followed in presenting a request to Treasury Board: a rigorous review, with, ultimately, Treasury Board staff reviewing it; political approval; and the allocation given final approval?
Hon. A. Dix: Yes. The process, just in general, for Treasury Board. Again, I know the member knows that; I know the former Minister of Education knows this. Just because we’re having the debates and so that we understand, generally speaking, what happens in government….
This can happen even if money is already allocated, because you still have to come back with the detailed submissions. It starts with…. In this case, we were doing work in the year-end — and, obviously, doing the work that everybody knows about — in developing a ten-year cancer plan.
The call went out. We felt this was an excellent proposal and engaged with Treasury Board — in advance, even, I suspect, of the proposal coming forward. The treasury support submission goes in. It’s developed by staff. Version 12 gets signed by me. I’m kidding. It gets developed by staff. I’m very easygoing about these things. It’s developed by staff. Then I sign off on the Treasury Board request. It goes to Treasury Board.
Sometimes the analysis, as the member will know, would be concurrent. Because Treasury Board staff, especially in the budget season, are so busy, we don’t surprise them. They don’t have to wait for the sign-off to begin the work. They do the work together, the people who are in Treasury Board.
I don’t want to describe it as some sort of special, secret chamber. What happens is what happens ordinarily: you have a proposal that goes forward. It gets analyzed by staff, and then a decision is made, either by the Minister of Finance sometimes and then later approved by Treasury Board, or by the Treasury Board itself. Then all of those decisions are ultimately reported out to cabinet. That’s just the general process.
There used to be something called an after-school special. They had a thing in the United States: “How a Bill Becomes a Law.” Well, that’s my after-school special for Treasury Board.
S. Bond: Thank you very much. I do want to see, I will look forward to seeing, the breakdown of the $150 million. It will probably be helpful to some of the questions, because we have a long list of things that are attributed to this $150 million.
I want to just reflect on the fact that this grant has now become one of the key components of the ten-year cancer plan. It is noted in the press release that the minister and the Premier proudly announced. I just want to point out that, again, supplementary estimates are about expenditures that were not considered as part of the main budget estimates. In fact, they require authorization of this chamber, retroactively.
The ten-year cancer plan…. Again, I’m going to keep saying it, because the last thing I want is to have someone tweeting out that the MLA for Prince George–Valemount doesn’t think that money going to the B.C. Cancer Foundation is worthwhile. Nothing could be further from the truth. But our job is to look at it. When you have $2.7 billion of spending, and when you line up what the spending is on, they literally have been the foundation of the press releases that have been pouring out of the Premier’s office.
The ten-year cancer strategy was not a surprise. In fact, the previous Premier announced that it would be in place. He announced it in 2020. Now, the grant that we are speaking about today forms a significant part of the background of a program that was announced in 2020: there would be a plan coming. I admit that this is a lot of money. We will discuss the virtues of the breakdown, of how that money is going to be spent, but this strategy is not a surprise. It was announced three years ago.
Now, we find that one of the key components of the cancer strategy is actually a supplementary estimate. That is a concern for me. Obviously, British Columbians were promised a ten-year cancer strategy. Here we are in 2023. We’re finally seeing a ten-year cancer action plan.
Let me start with this, then. The amount that we are discussing today in supplementary estimates is actually $150 million being granted to the B.C. Cancer Foundation.
The cancer action plan was announced, which is a grant to the B.C. Cancer Foundation to support cancer research and all of the things that minister outlined. We’re going to go through them, because the minister put them on the record. The amount announced is $170 million. Can the minister describe for me the difference between the supplementary estimate of $150 million and the announced $170 million?
Hon. A. Dix: The difference is this. We’re seeking $150 million of that amount, the research component, through the supplementary estimate. The other $20 million will be covered through existing resources, and that money is for travel and that, but that’s part of the existing resources of the Ministry of Health.
We made a request for a supplementary estimate, and the other $20 million in this fiscal year would be to support travel, and that’s within the existing estimate of the Ministry of Health. That’s the difference between the two.
The $170 million…. We’re asking for the $150 million today, which is the research component. The travel component, which is a further $20 million, is in the current main budget of the Ministry of Health, and the money had been allocated against that budget.
S. Bond: Thank you very much to the minister.
Can the minister just confirm for me what should be a fairly obvious answer? Did the Ministry of Health expend its entire budget allocation?
Hon. A. Dix: Clearly not. I don’t want to do one of those answers which is cute.
We’re at Q3-and-a-half. We’re 11/12ths of the way through the fiscal year. We’re spending $2 billion a month. We’re obviously not there. It’s often a challenge managing that budget. We do a lot of work, and that’s why we started the year-end very early, just to make sure that we’re on track.
I think the budget of the Ministry of Health is on track, but $150 million contribution to the B.C. Cancer Foundation I think met the criteria of what the Premier was looking for. It meets a major public priority. It makes things better for people in the province, and it met the standard of the supplementary estimates.
So I don’t think that’s correct to say. I expect, and it’s my obligation, in fact, to bring the Ministry of Health budget in on budget. I can tell you that it will be brought in on budget.
What you do…. Remember, we have that. We also have…. There are some contingency budgets, particularly with respect to COVID-19, to continue to do significant effort with the vaccination campaign that continues to be provincewide, for example. So we have those multiple budgets, but I would expect the budget to come in on budget, but we are, as I say, not through our budget yet.
When you’re spending, as you do in the Ministry of Health, a significant amount…. I could break it down by day and by hour, but it’s a significant amount in that budget, obviously. We’re 11/12ths of the way through, and managing the budget at year-end is an important matter. That’s why governments, dating back a long time, probably, I would guess, back to the 1970s, have used year-end in the budget in this way — to fund the priorities.
The challenges is — and we’ve had this discussion, the member and I and, I think, her predecessors from Kelowna–Lake Country and from Kelowna-Mission — the important issues that happen consistently at year-end, year unto year unto year. First Link is an example of that, and whether it’s better or not to put those into the base of a ministry expenditure, that’s been typically how we’ve done it.
We’ve taken advantage of opportunities where there’s room in the budget to ensure that the Alzheimer Society has a couple of years. I’ve tried, in the case of that funding allocation, to make sure they always had a couple of years in advance so they weren’t coming up to a fiscal cliff for a program that is so vital to British Columbians, for example. So that’s the kind of work that happens at the end of fiscal year.
I think our budget in the Ministry of Health is fine, but this is a significant item and appropriate for a supplementary estimate.
S. Bond: I know that the minister will forgive me for reminding him that some governments, if they didn’t bring their budget in and balance a) their ministry and b) the government budget, paid a fiscal price for that. This minister will not face that should his budget not be balanced.
I want to just pursue with the minister for a moment…. It is devastating to hear the word “cancer.” I understand, and the minister has provided me with a sense of his rationale for the choice he made here, but I remain deeply concerned about the day-to-day situation in our health care system related to cancer care and physicians and a whole bunch of other things, which he and I will debate and discuss in the main estimates.
Again to the minister, what was the tipping point for making a decision to focus on research — $150 million of money that was made available when the Premier’s office put out a call — and to not make the choice to think about what helps us in the immediate term?
Hon. A. Dix: Well, I think the short answer…. Again, we’re going to have this debate about assurances we have. But this is also an opportunity to take some very significant action working with the foundation to improve things now but also in the near term. Having this, I think it’s fair to call it, breathtaking investment to the foundation and in research supports all of our efforts. I think sometimes we have this debate, and we hear it sometimes around the Provincial Health Services Authority. You’ll say that there are this many people, and most of the people earning the top dollar…. Nineteen of the top 20 people earning at the PHSA, including B.C. Cancer, are doctors; six of them are oncologists.
What you want to do is recruit some of the best researchers and clinicians in the world. Often our clinicians are 70 percent clinicians and 30 percent researchers. So this opportunity to drive and demonstrate a long-term commitment in cancer research, to use this opportunity in March — and you can’t do that for operating funding, really, in a supplementary estimate of this kind — is, I think, an excellent way of improving recruitment and retention, driving research and bringing about the kind of change you want.
The foundation is ideally suited to house that effort and is engaging itself in a major fundraising campaign on the same initiatives, to which this gives even more momentum. I think this is building support for cancer care, for research in the community that goes well beyond even the expenditure of $150 million.
I’m not going to announce their priorities, but I can tell you they are ambitious. They will build off this. As someone who feels, as I know that the member opposite does, passionately about cancer, I saw that this was a real opportunity for us to drive the research side but also the recruitment side and the opportunity for patients in every part of B.C. to take part in clinical trials and to support that.
I thought this was an opportunity that really is what we should be doing with this kind of supplementary estimate money in the Ministry of Health. I think it’s the right initiative. Those were the frames of the decision.
I don’t disagree that there are other major expenditures to be made in cancer care, and we’ll be debating those, but this was an opportunity in this process, something we were looking at with the foundation, how we could help them achieve their exceptional goals. This is a real opportunity that will help us today, tomorrow and well into the future.
S. Bond: Thank you to the minister for walking through the process with me. I may have a few other questions as we work our way through this related to that.
I’d like to now start to think a little bit about the….
Thank you to the minister and his staff for that.
I’d like to pursue something that is incredibly important, and that is results and outcomes. It’s also about measurement and accountability. So let me begin with this.
Was there a process, working with B.C. Cancer, to attach a terms of reference, a set of guidelines in terms of how this would work, a sense of expected outcomes?
I won’t ask the minister to do that specifically yet, because I have a number of questions about the actual items that are being attached to the $150 million. We may not get specifically to those today, because I am also going to cede the floor to my colleague to ask some of her questions this afternoon.
Was there a terms of reference, a set of expectations that are attached to this grant?
Hon. A. Dix: I think in this case, a lot of the work was done for us in advance. We’ve been meeting regularly with the foundation, at the staff level, and I have as well, on their very ambitious goals.
They were laying out their goals, what they could achieve if they raised — let’s just take a number; this is not the number — $50 million. “So here’s what we can do with that.” You see that in their fundraising efforts around the province as well, which often talk about the things that they can do.
I think the reason they have focused on these, as well, in enhancing research is that a huge amount of the workforce is made up of research trainees. There is also, in addition to that, intense competition to recruit mid-career clinician investigators with academic institutions in Canada and the United States, and so on.
What the B.C. Cancer Foundation has done is already identified some of these needs. They already had a campaign, and this, to a certain extent, supercharges that effort.
But you have an organization that is prepared, that can house these research teams within its ranks and that is deeply connected, though, of course, to B.C. Cancer. It would be our expectation that they would deliver, as they have consistently done over time, on what they said they’d deliver, including, by the way, an expectation — and there’s not a number on this — to continue their efforts of fundraising.
It wouldn’t be any good if we said: “Well, here’s $150 million, and now you can stop fundraising.” That’s not the idea. The idea is to do more fundraising. Believe me, if you’ve met Sarah Roth, you know that that’s what she does, in sort of an exceptional and dynamic way. I think this will actually build out those efforts and the possibility of those efforts.
They’re developing that effort. Obviously, they deeply connect — as all foundations do, in every hospital around the province — with both the health authority and the hospital that they’re connected to about need. There’s an exchange of information, but they house expertise. They laid out what their priorities are, and then we saw this and saw these opportunities of what we could do together by adding to that.
In this case, the work is constantly happening by a foundation that is deeply engaged in this and is, I think, not uniquely qualified. There are many charities that obviously deliver a high level of service and success both in fundraising and delivery from that fundraising. The B.C. Cancer Foundation is definitely one of them.
S. Bond: So in essence, the B.C. Cancer Foundation had a plan, an action plan, and things that they wanted to accomplish. The ask was to government to help support that. I know that they will certainly continue to keep raising funds. What I want to ensure is that when we’re sending $150 million…. Well, in fact, we’re sending $170 million, just out of two different pots, in essence, but $170 million of taxpayer money — albeit, to a worthy and great organization.
What are the measurables, in terms of reporting back to government, and most importantly, laying out for British Columbians…? When I go back and look at the supplementary estimates list, there’s a staggering amount of money going out the door here. None of them…. You know, obviously, we’re going to have questions about all of them. For example, there’s $1 billion going out the door from the Ministry of Municipal Affairs, and there’s $150 million here and there — half a billion in other places.
So what is the reporting mechanism? The minister has agreed that this is a priority. There’s an action plan being provided by the organization. What is the reporting mechanism? How will we know that that money has been successful?
We’ll go through, as I said, probably on Monday, the specific items, because I’m very interested in things like clinical trials and regional access. Those things really matter to the people of British Columbia. What are the reporting mechanisms? How are deliverables going to be documented so that the public knows where their money went?
Hon. A. Dix: As with all year-end grants, there are requirements for reporting here, and some of the reporting is easier. There are four research chairs that we talked about that are being endowed. That’s not straightforward. It’s obviously…. All of the things that go into that, the member will know, but it’s pretty easy to determine that. They’ll be reporting out on that.
Clinical trials around the province — similarly, they’ll be doing that for some of the items. They’re committing to buy equipment, and they’ll report on it.
So what you’re going to see is a requirement. There is a requirement in the funding agreement for the foundation to report on their use of public funds.
It’s my expectation — and this is the important part with this foundation — that they’ll be spending actually vastly more, because of their fundraising capacity, than the $150 million we’re authorizing in the time of the agreement.
There are specific items, and we’ll go through those and how they will report on them, on the chairs. They’ll show progress. They’re endowed. This is the recruitment process, etc., for that.
For the clinical trials, they’ll be able show: where are the clinical trials? Are they around the province? Are we meeting our requirement to allow patients around the province to take part in that? With respect to equipment, when was it purchased? All the issues around which the foundation will be judged on this $150 million….
But I am, to say the least, confident in the foundation’s ability with its partners to be able to deliver on what they’re committed to do and, in fact, deliver well beyond this $150 million.
S. Bond: Can the minister tell me whether, for example, would the expectation…? What I am concerned about is that we are allocating $150 million of taxpayer money, and I want taxpayers to know what that money is going to do. I want to understand when we would consider that having been successful. So yes, I would certainly hope that the spending exceeds the $150 million, but it’s also important to be able to measure success and look at outcomes.
For example, will results be made public through the foundation’s annual report, or is there another reporting mechanism that would outline: “Here’s the grant we got, here’s what we did with it, and here’s the progress made to date”?
Hon. A. Dix: This is, I think, the real value in having such a trusted partner as this, who’s worked with us on huge initiatives in the past and performed successfully. Yes, they’ll be reporting to the foundation and to their board. They’ll have all their internal reporting, and they’ll be reporting to the Ministry of Health and the province with respect to the grant.
We’re going to go through in detail what it supports. What they are proposing to do — we’ll deal with the money, should it be approved, but obviously, that’s our expectation — is significant in every part of the province.
We’ll get into this discussion, but I think it’s particularly focused on communities around B.C. — the involvement in clinical trials, the embedding of research around the province of B.C. That, I think, is something I’m very, very proud of, not on my own behalf but on their behalf and for the work that’s being done here.
The work that’s being done in Indigenous communities and in support of the Indigenous cancer plan and on those important areas is here as well, including ensuring that First Nations British Columbians are involved and are part of the research process and employed in the research process and working in the research process. That’s a key part of what they’re doing.
I’ll just give one example of the kind of initiative that’s being done, which is to support B.C. Cancer’s BioCancer initiative. It embeds regional coordinators at regional cancer centres to enhance participation in outcomes research and will support blood and tissue sample collection and biobanking support for clinical research across the province. They will be able to report on the details of what they do. Some of the outcomes of that won’t become obvious for some time because it’s research, and it’s supporting us now and into the future. That’s an example amongst many. We’ll get into the details of the kind of work that’s being done.
I think what the foundation has done successfully is support people around the province. That’s very important. You see that in the initiatives here.
Often I think there’s a concern with organizations that are centred in Vancouver — and the member will know this — of whether they’re reaching or representing the whole province. Well, this is an organization that represents the whole province. It’s as active in Prince George as it is in Vancouver.
S. Bond: Thank you very much to the minister and his staff. I look forward to continuing the discussion.
I’m going to ask, and thank, my colleague from Kelowna-Mission, who is going to work through some of the questions that she had. She obviously has a lot of experience as the former Health critic and has done a lot of work on the cancer file in particular.
In terms of a bit of foreshadowing, I would like the minister and staff to come back and…. One of the things that government has really focused on is the issue of gender analysis, for example when we look at policies, grants and the allocation of funding.
I’d like to have some sense, although my colleague is the critic for that area — she may well be asking that question — of how that lens was applied. I can wait till next week to get those answers. I’ll just give you a bit sense of that.
We also have an Indigenous cancer strategy. I don’t see, in the specific items that are linked to this grant, a sense of what element or consideration has been given to the whole issue of the Indigenous cancer strategy, for example.
With that, I’m going to turn the floor over to my colleague from Kelowna-Mission.
R. Merrifield: Nice to see you again, Minister. I’m going to just piggyback a little bit on the questions that my colleague has already been starting and just ask for a little bit more detail.
Once the money has been delivered to B.C. Cancer, who has signing authority? Does that fall within the organizational structure? That would be, as we mentioned before, Sarah Roth and her team? Or is there another check and balance that’s actually done with any provincial funds?
Hon. A. Dix: Broadly speaking, it’s the B.C. Cancer Foundation. Once the money is expensed…. The B.C. Cancer Foundation is outside of the GRE, for people enjoying this discussion at home. They would have control of the money.
Obviously, there’s a funding agreement connected to that, but the control of the expenditures, based on that agreement and our collective understanding of what we’re going to do, is the responsibility of the foundation.
You mentioned Sarah Roth, who’s outstanding. The member may know her. Obviously, the team is outstanding as well.
R. Merrifield: I fully agree with the minister; the team is absolutely unbelievable. They’re awesome. A question that wasn’t fully canvassed with my colleague: when did B.C. Cancer first submit their plan? We know from the previous conversation that there was a promised plan, as in 2020. When was the minister actually delivered the first B.C. Cancer plan?
Hon. A. Dix: As you know, this vote is connected to this grant to the B.C. Cancer Foundation. The member will know the B.C. Cancer Foundation, in 2022, laid out a huge campaign, a new campaign which they announced. I’m trying to remember. I can get the information for the member, but I know I met with the foundation myself. Obviously, there are a lot more meetings than the ones that I’m involved in, in advance of that time.
They laid out their vision of what they saw for the future and, obviously, they’re closely working with B.C. Cancer as well. But I think the B.C. Cancer Foundation talked about this, and then we saw the opportunity here to build on those efforts, to build out those efforts and do something that is, I think, in terms of cancer research and the work being done by the B.C. Cancer Foundation, really breathtaking.
The great thing about this is they developed their priorities working with clinicians and the broader community around cancer, and then we worked with them on that. That came together in an exciting way with this supplementary estimate. I would say the Cancer Foundation, which does this work all the time, and we can list off, I think — I did earlier on; I don’t need to do it again — all the things that we’ve been working on together, from cancer screening to other things that the foundation has been heavily involved in.
In its fundraising, they raised $77 million last year in B.C. That wasn’t from the government of B.C. So $4 million came from us and one of our partnerships we do with them, and $77 million they raised, which is an exceptional achievement for a foundation. They had an even more ambitious goal for this year. If you know the foundation, you know that’s the way they operate. This adds to that, and I think will do something truly significant.
Many of the priorities came from that. Of course, we have broader priorities for cancer and cancer research that are supported here and by Michael Smith and by Genome and others. That’s how it came together, but I think they’ve been working on this. They do ongoing work, but their latest campaign stems from, I’m guessing, the early fall of 2022, but it would have been planned long before that.
Remember, the foundation works very closely with B.C. Cancer on what those research priorities should be or what those equipment priorities should be. That’s the work we do together. I would say I probably met personally with Ms. Roth. It might have been in July or August. I know it was on Joyce Street.
R. Merrifield: If it was July or August, then the Beyond Belief campaign. That was what it was. But if it was July or August, then what was the reference to the B.C. Cancer plan that was in 2020, and then canvassed by myself in estimates in 2021 and then my colleague last year?
Hon. A. Dix: This supplementary estimate…. The government announced last Friday a ten-year cancer plan for British Columbia, pursuant to what we said we would do. The successful campaign led by Premier Horgan, the member for Juan de Fuca still…. There you go. I haven’t made that mistake in a while. I apologize — led by the member for Juan de Fuca.
The member will know, of course, that we made contributions in Budget ’21 and ’22, some of which she and I discussed in the estimates in terms of in addition to the increases to the base investments in cancer, which allowed for the hiring of doctors, and so on. That’s all the discussion for the main estimates, but I just didn’t put it in context for a specific question.
There’s the B.C. Cancer plan. This is part of that, but the decision to include the foundation in that…. We’ve had talks with them. Obviously, this is a great opportunity, and a great opportunity through the supplementary estimates program, to make a one-time investment that’s truly breathtaking, to advance those efforts. I think that makes a lot of sense.
So there are a few. One is the B.C. cancer plan, which we’ll be discussing in the main estimates, I think, at some length. I don’t know; I never want to anticipate the member for Prince George–Valemount. But I believe “at some length” is a fair prediction. Then there’s this $150 million, which is the subject of the supplementary estimates.
R. Merrifield: What I’m understanding from the minister is that the B.C. cancer plan has both. It has B.C. Cancer, as well as the health authorities and the foundation, and they’re all working in lockstep to achieve the priorities that are put forward. I also understand, through the course of estimates, etc., that a significant amount of money has already been spent towards many of these initiatives.
My understanding, though, from what the minister is saying, is that there was a cancer plan that was created by these entities, in lockstep, including the foundation — in terms of establishing these priorities, establishing the amount of funds that would be required.
Then through the iterative process, which the minister acknowledged, with Treasury Board, this has been kind of back and forth in different iterations. I think the minister sort of jokingly said version 12 was the one he finally signed off on. Maybe it was 11, though; I’ll give him credit.
My question is: when was that first plan actually created?
Hon. A. Dix: Again, the ten-year cancer plan was tabled last Friday. It was presented and laid out last Friday. Obviously, in successive budget years, there have been significant investments in cancer that we’ve seen, demonstrating the priority that we all have for cancer and the significant demand facing that. That’s the main estimates debate; we’ll have a significant opportunity to debate all this.
This $150 million is, I think, an opportunity, especially on the research side. We’ll go in, with the member and with the opposition Health critic, on the details of that. It’s an opportunity, especially, to invest in research, which is critically important to aspects of the plan. This is a real opportunity to do something significant.
Obviously, the foundation has a plan to raise a significant amount of money to support that very research but also to support other initiatives that the foundation supports, including equipment and others. They’re pursuing that — we work together on that — and made a presentation. Then we’re here today with the supplementary estimates for that $150 million, which goes to the B.C. Cancer Foundation to support all of the good initiatives that we will describe in subsequent questions.
[S. Chandra Herbert in the chair.]
R. Merrifield: I do understand, but I don’t believe for one moment that last Friday was the first moment that the minister saw the plan and it was tabled.
We’ve already discussed that iterative process of how those plans actually are presented and then get all the way through the process of the financial aspects, as well as the priorities, etc. Understanding that this $150 million is a key component of the larger plan and a key component to the research aspects of the larger plan, my question, again, is: when was the minister presented the first comprehensive plan?
Hon. A. Dix: Well, obviously, with respect to the significant demand for cancer, you’ve seen the significant operating fund increases that go for all kinds of purposes at the B.C. Cancer Agency over the last number of years. You go through processes in government that include committees of government. Those committees include Treasury Board. It might include other committees of government. You present those, and then they’re approved and presented on occasions, such as last Friday, and on occasions such as the budget.
The ten-year cancer plan was presented last Friday. Concurrent with that, I think, an opportunity — hopefully, one that the House will support unanimously — to provide support to the foundation for our joint initiatives was there, and that’s why we sought approval for that money as well. That money, obviously, was approved, and it’s here in the supplementary estimates.
R. Merrifield: The first time that the minister saw the plan was last Friday. Is that correct?
Hon. A. Dix: Obviously, we don’t see or develop a plan on one day, and the member knows that, so I’m not sure what the purpose of the question is.
I’ll say that, with respect to this $150 million supplementary estimate, I’ve gone through a couple of times the process by which it was developed. I’m happy with those responses, but obviously, I appreciate good parliamentary debate.
The member knows that we are working on these issues all the time. We had extensive discussions when the member was the Health critic for cancer. You’ve seen in successive budgets now significant funding in addition to base funding increases for cancer in order to hire staff, etc. That’s part of another process.
We do all that, and then we have this proposal that’s coming through the supplementary estimates process that we’re debating today.
R. Merrifield: I wasn’t meaning to insult the minister but, rather, reiterate the answer that I’m receiving, because I don’t believe that the minister saw the cancer plan for the very first time last Friday.
I am asking the minister: when was the first time that the B.C. Cancer Foundation, of which this $150 million — $170 million, but $150 million of the supplemental estimates is a part…? When was the first time that the minister actually saw that plan?
Hon. A. Dix: The supplementary estimates we’re debating today came through the process I described. We start to look at year-end funding for this particular proposal, which is in the supplementary estimates. Obviously, we’re working with foundations all the time. We looked at the potential for year-end funding, I think, on a number of occasions in these debates.
Now, already I’ve referred to the Premier’s decision, which he publicly called for, to seek ways to assist British Columbia, especially with one-time funding such as this.
The Ministry of Health, in response to that, and as part of the work that we’re doing, came forward with this proposal. It was obviously approved by government, and it is being presented as a supplementary estimate today.
The Chair: Of course, we are on the supplementary estimates 32(S). As long as questions are related to that estimate, they are appropriate here.
R. Merrifield: Thank you, Chair, for the reminder. Absolutely, that is exactly what I’m asking about, this $150 million. What plan is this a part of, and when did the minister see that plan for the very first time?
Hon. A. Dix: I have now answered this question on a number of occasions. I’m happy to do so again.
This proposal, the B.C. Cancer Foundation, which we’re debating specifically in supplementary estimates, is part of the B.C. cancer plan which was presented to the people of B.C. — to everyone, including the opposition — at a press conference last Friday by Premier Eby and myself.
The Chair: No names, Minister, of course.
R. Merrifield: I do find it interesting that the minister doesn’t want to answer this particular question. It’s not meant to be any form of indirect questioning, actually — in fact, just the opposite. I’m asking very directly as to when the B.C. Cancer Foundation brought forward the plan and asked for this specific money.
Hon. A. Dix: I can answer the question again, I guess, if that’s the wish of the member. The B.C. Cancer Foundation is working on these issues, as the member will know, all the time. They have announced an ambitious campaign.
Concurrently with that, we’ve been doing work on a ten-year cancer plan. We saw the opportunity to supercharge the research process and other initiatives in B.C., especially around B.C. We worked with the foundation on this. Obviously, the $150 million got government approval. It was included in the budget, the supplementary estimates, and in what was presented last Friday.
The Chair: The questions are starting to get a little repetitive, so I would ask the member just to keep that in mind.
R. Merrifield: Yeah. Thank you, Chair. Well, you know, if the minister would answer the question directly then it wouldn’t get repetitive. But in the interest of time, I do want to move on, because I do have quite a lengthy list of questions here. I’m going to keep moving forward.
The minister has mentioned that some of this money is actually for additional oncologists and oncology capacity. In the breakdown, I would just ask the minister which line item those oncologists are found within and if the minister could just describe what number that relates to.
Hon. A. Dix: I think we’ve shared with the opposition the category breakdown. So you would see those opportunities in several of these items. As the member wishes to ask questions, go through them, line by line….
However, you would see in the recruitment and retention initiatives, you’d see in the training and education, you’d see in the endowed research positions, you’d see in the clinical and multidisciplinary research all of those aspects when you have a broad effort to expand research that involves across those lines efforts. We’d be happy to go through each of those lines in detail.
R. Merrifield: Understanding that there are different positions in each of these line items, does the minister have a breakdown of all of the different positions that are found in each of these line items by staff?
Hon. A. Dix: Why don’t we start at the beginning, on the list that I provided, with clinical and multidisciplinary research and talk about what that $55.7 million will fund. That may assist the hon. member and elicit more questions.
The first priority under that clinical research support funding is to improve support to conduct and manage clinical trials at regional cancer centres, provide enhanced clinical research finance and operations support, enhance support for research ethics and funding for statisticians to support clinical trials’ design, such as real-world trials and adaptive trials.
Secondly, support B.C. Cancer’s BioCancer initiative, which embeds research coordinators at regional cancer centres to enhance population participation in outcomes research and will support blood and tissue sample collection and biobanking support for clinical research across the province.
Third, support provincial clinical trials and radiation oncology, notably to improve access to radiotherapy by studying treatment approaches which require fewer visits, which I think all of us can understand the value of, and precision radiotherapy research to enhance efficacy while reducing toxicity from radiation treatments — also the kind of real-world research that makes a difference for patients and their families.
Support the implementation of a theranostics program at B.C. Cancer across the province, rapidly expanding new treatments using radioactive drugs that were recently approved by Health Canada. Our cancer system needs to adapt to deliver the PET-CT scans required for patient selections and form the teams that will deliver those treatments.
In terms of the multidisciplinary research funding, it will support the sustainment of B.C. Cancer’s flagship programs in breast cancer research, cancer genomics, gynecological cancers, among others, which have been strong drivers of research excellence and are recognized internationally. These programs have been highly successful in securing research grants.
Again, this contribution plus the other contributions plus the research grants that are won can mean that this $150 million is the start of a much more significant level of training. They also, of course, drive philanthropic donations, as we previously discussed.
The enhancement of their ability to translate research into practice. This includes programs in lymphoid cancer research, leukemia and multiple myeloma, gastrointestinal cancers and others. B.C. Cancer has a number of emerging new multidisciplinary research programs. They’re reaching a critical mass of successful early- and mid-career translational and clinical researchers. In that area of funding, you see the significance of that.
I think I’ll stop there. There is significantly more, but what I would suggest and will suggest to the opposition Health critic, as she’s going to come back next week, is that some of the details of this we can then share, and that will assist the process. But that gives the member a sense of the kind of research that’s being done. Also, I think, fundamentally, in each of these lines, and if we were to continue on, we’d see the importance of that happening in Kelowna, which is obviously important to the member because she’s an MLA from Kelowna, but also in Prince George, also in Victoria, and so on.
I think what I find compelling and what the foundation does is that it raises money everywhere in B.C. It also ensures that research is done everywhere in B.C., and that’s really important for different communities around B.C.
R. Merrifield: Just to ask more specifically and as a follow-up to the minister’s answer, is it possible for us to just get a breakdown of all the FTEs that are within each of the line items? That would help us, I guess, to not spend as much time kind of going through this process in that way. Is that possible?
Hon. A. Dix: I don’t think FTEs is the right way to describe it, but what we can do is provide more detailed information to opposition members and be happy to do that. In some cases, it’s the upgrading of equipment that’s involved here, as noted and as I described at the beginning. In some cases, it’s FTE and research dollars. Some use its money for equipment and processes such as biobanking. In other cases, it’s other scholarships and other support, which is critically important to recruiting in a highly competitive field of recruitment, the students and the younger researchers that we need amid this process.
So I don’t think the process of the B.C. Cancer Foundation is best described in FTE terms. It’s best described in describing what they plan to do, and that’s what the initiative does. I’d be happy to share all that information with the opposition.
R. Merrifield: Excellent. Thank you so much. I appreciate that breakdown. Even if the breakdown is: here are capital expenditures, here are FTEs, here’s scholarship money, here’s…. Absolutely, understanding that it’s a very comprehensive plan. It’s a very exciting plan. I agree with the minister wholeheartedly that this is a desperate area that we need to see grow. Our diligence in this way is actually to make sure that those dollars are being accounted for and that we are seeing them go where they’re most needed, and where, I think, we can all agree we are excited about seeing it as well.
Obviously, this is supplemental estimates on this $150 million, so it is a little bit of a surprise. It is a little bit outside of the normal estimates process. So we’re trying to have as much diligence as we possibly can in this way.
Is the minister satisfied that both the critical positions as well as the capacity are being acknowledged within this $150 million and, obviously, the contribution that the B.C. foundation is also coming forward with?
Hon. A. Dix: I think it’s an extraordinary package of investment that will serve to — whatever the word is — supercharge, whatever, the work that’s been done by the foundation in this area. I think, from my perspective…. One of the honours I had last week was to, again, as I have from time to time but less so during COVID, be able to meet with B.C. Cancer staff in a town hall, and I think their interest in that is fundamental as well.
You go to B.C. Cancer, and there are profound clinical parts of their work, which we all know, and we all know from our families’ experiences and everything else, and then the research component. Everyone at B.C. Cancer is supportive of both and understands the profound links between the two.
What you have here is something that… And it is, yes, my expectation that they’re going to raise more money. I know they will. They have consistently, and they have a demonstrated ability to do this.
I think the excitement for all of the people that support the foundation — and those are thousands of people in B.C., in the tens of thousands of people in B.C. — for what’s happened here, this moment…. They feel, with their efforts and their links to the community and their links to the international community of clinicians and researchers around cancer….
This is an exciting moment for B.C. and for them, and all of the elements here that you see in it, from start-up and seed grants to the research chair foundation endowments, which is a significant item, to the recruitment initiatives, to the training bursaries — all of those items reflect the serious thought that’s been given to: “Well, what can you do? What could we do if it was more in terms of research? What can we do?”
Well, we’ve given a lot of serious thought to that, and that’s reflected in this proposal. I think it comes with it — the partnership between B.C. Cancer, the B.C. Cancer Foundation and British Columbians.
R. Merrifield: Thanks, Minister, for the answer. I so wholeheartedly agree on the tremendous work and efforts of the foundation as well as all of the people that make not just the foundation happen but are serving within the foundation in terms of research and treatment. We talk about research, but every research and clinical trial that they are performing is actually on people and making sure that we are moving forward in our cancer technology, etc. So I’m very excited about that.
One of my concerns, though, in looking at the list that we have here is that most of this is kind of building on the soft capacity or the people capacity but not necessarily on the infrastructure. What I don’t see in here are the actual facilities.
I’m very interested to know: do we have enough capacity within the system currently to accommodate what this is going to bring in this extraordinary grant?
Hon. A. Dix: Yes, we do. Obviously, the discussion of health capital will also come in the main estimates. I will save the member from my speech on the subject for then, but I’m sure she…. I’ll give her advance notice so she can come in for that if she’s not already there. I know she’s very interested in these areas.
I think, on infrastructure, just to note…. A significant part of this money is for research equipment and infrastructure, and I’ll give the member an example of this just to give a sense of what we’re doing.
Part of the first year of funding — they’ll be, obviously, spending this money over a period of time — will be used to support the acquisition and installation of a state-of-the-art, ultra-high-sensitivity, long axial field-of-view PET-CT scanner, which can upgrade one of the instruments to be installed at the Vancouver centre.
That’s one proposal, and that’s part of what we’re doing. The estimated total cost of all of that — I won’t describe it in more detail — is about $20.8 million of that.
In the second year, there’s a further proposal to fund the acquisition installation of an MRI simulator that’s available in most academic radiation oncology facilities but is currently unavailable in B.C. This is something that we’ve been waiting for.
Such a simulator allows clinical research on improved radiation planning methods to account for a patient’s motion during and between treatments, with potential benefits to reduce undesirable effects on normal organs. The absence of MRI simulation capability has been identified as a major impediment to the recruitment of radiation oncologists at B.C. Cancer.
Again, it does connect with those issues. It’s not an FTE response. But when we’re recruiting, it’s saying to people we’re going to provide this equipment, which other people have, that we need to have it to recruit the best, and that’s why we’re doing it. That’s how it’s been identified and why it’s such a good vote to vote for.
R. Merrifield: Oh, that was so sly. That was so sly.
Interjection.
R. Merrifield: I will take my lessons from the master. Absolutely.
The minister brought up radiation oncologists. I’d wholeheartedly agree, again. If we do not have the best technology, we are not going to be able to recruit and keep the best. We need to be on some of that cutting edge and really encourage those to keep learning within our organizations.
The minister brought up radiation oncologists. One of the other asks is: are there any moneys for medical physicists?
Hon. A. Dix: Again, all through the plan, all through this spending, this grant to the B.C. Cancer Foundation, you see different aspects of the health care team that are necessary, from the scholarships for younger researchers, to the support both to recruit and to support investigators in the system, to people involved in all aspects.
We have research chair endowments — part of their teams. We have all of the elements described. Again, we’ll be sharing that information. So that is there as well, and it’s building out the whole team. As the member knows, having worked in this area, you need not just oncologists but technologists and others. You need a team. We’re obviously building out team-based care in cancer, as with everywhere else in health care. So all elements are there.
Yes, you can see that again, as with oncologists, found in various aspects of the $150 million.
R. Merrifield: So I’m to understand that within each of these line items, there are medical physicists.
Hon. A. Dix: Essentially every part, but not part of the infrastructure, to put it that way. You see that in all aspects, from clinical research — obviously benefiting from the infrastructure research, but not directly — to the start-up and seed grants, the recruitment and retention initiatives, to the training and scholarships. Yes, all those aspects of cancer care are found throughout those, because we need a team of people, and the team generally works on all of those aspects.
Other than infrastructure, which is obviously equipment infrastructure, the rest is about people, in large respects, and supporting their work in research. That research is in all aspects of cancer care.
R. Merrifield: I understand that within each of these line items, there is both capital and the actual people that it takes. I guess I fail to understand — maybe I’m just slow — which line items the medical physicists are found within.
Hon. A. Dix: Let me go through. I think you see them found in all of the work, some of which I have already described about clinical and multidisciplinary research. You see it there. You see it, for example, in the bursaries and scholarships. This is funding. It’s an important aspect of the funding, the training and education part — to support the creation of bursaries and study scholarships to create incentives for new trainees and funding for ongoing educational needs of staff across B.C. Cancer.
There are currently significant challenges that we all know with health human resources in multiple areas. This would include, in that case: the team; radiation therapists and technologists; medical physicists; unit clerks; and others. Those training bursaries and scholarships are a way of assisting in our recruitment in a competitive field across North America in getting the best people in a number of areas, from medical physicists to technologists to oncologists to others.
R. Merrifield: With $150 million that we have — $170 million; the $20 million in the one bucket, $150 million in this bucket — this is a little bit vague right now in terms of where the money is going, how it’s going to be spent and where it’s going to be spent. I know that the member before me also canvassed deliverables. Like, what have been the stated deliverables of these different buckets and the outcomes that we should be expecting from this funding?
Hon. A. Dix: I feel like, when I’m asked about being vague, testing my 15-minute level of response here with more detail than can be imagined. But in what I have said to the hon. member, I’m not being vague at all. We could be very precise. But I think that what would be more useful in the exchange is to answer the member’s questions to provide more detail, as I’ve obviously agreed to do. I can be more precise and not vague.
I’ll give a couple of examples if the member would like. On the research chair endowments, for example, which are very specific, funding will be for four new endowed research chairs, with two being staffed in ’24-25 and ’25-26. These are processes that take a while to develop. Endowed chairs creates sustainable salary and funding support to recruit and retain key clinical researchers that are vital to the long-term success of B.C. Cancer. Such researchers attract other emerging talent, etc.
The endowments will create permanent and sustainable funding for clinical researchers at B.C. Cancer. The revenue from the endowments will further support the research component of their salary, and they are hiring key personnel to support the research activities of the chairholders, so four, and the process around them. That’s a specific, not vague, part of the initiative, which is, of course, one of the things that’s specifically laid out. We can do that for all of them. But I think, in the interests of time in the exchange, I’ll leave it at that one.
R. Merrifield: Well the minister could just submit the entire plan over with all the details in terms of the FTEs and the capital expenditures, etc. I’m understanding that the minister is happy to do that. But I’ll just wait for that to go on Hansard.
Hon. A. Dix: I’ve already said to her colleague the member for Prince George–Valemount that I’d do that. Members of the opposition know that I always share lots of information with them. I’m happy to do so in this case, and I’ve already said that we’re doing that. What we’ll do, because I know that the member for Prince George–Valemount has said that she’s coming back on Monday, is allow her time to consider each of those parts of the package, which have been developed here. We describe them in detail in some cases here. But it’s sometimes better to have them on paper as well. We’re happy to do that.
R. Merrifield: Thank you. If we could have them on paper, that would be that would be great in preparation for Monday as well. I just wish the minister didn’t look so relieved when he said that the member for Prince George–Valemount would be back on Monday.
The minister mentioned the genome science funding that’s within this package. I’m going to forgo some of my really specific questions and hope that the information the minister gives me over the weekend will suffice. But the genome science aspect — I’m curious. Is the Michael Smith Genome Sciences Centre part of the funding? If so, how much?
Hon. A. Dix: I’ll take the member through the cancer genomics part of it and what it will support. There are two major parts of it. There are others, but two major parts.
Yes, it would be our expectation that the very significant research funding that we provided in a supplementary estimate a couple of years ago to the Michael Smith Foundation and to Genome B.C., which were two separate and significant buckets of money that have happened over…. That support for those foundations has happened over 25 years and proven to be unbelievably successful for B.C.
The member will know the foundation of that work started under the previous NDP government, supported subsequently by the Liberal government, and has continued to be supported by our government since then. Again, the use of supplementary estimates a couple of years ago was incredibly valuable.
With respect to cancer genomics: that funding will include the improvement and development of cost-effective gene panel assays for cancer, for which treatment options are driven by genomic information. The continued development of novel gene assays that are performed on blood samples rather than biopsies — which will reduce health care costs, of course; will allow longitudinal monitoring of patients — are becoming an emerging standard in cancer practice.
Cancer is a disease of the genome. The identification of mutations that are present in cancer cells is increasingly driving treatment decisions, as many new drugs will only benefit patients whose cancer harbours specific mutations. If you’ve dealt with any cases or people dealing with that, you know this is a significant issue in cancer. The cost of gene testing is low compared to the cost of delivering treatments. Yet introducing these assays into clinical practice remains a challenge. The development of cost-effective, high throughput assays requires financial support. That’s part of what the plan is about.
Also, in terms of recruitment, I’d say there’s a recruitment package for genome science leadership. Funding will support the recruitment of an internationally recognized researcher in genome sciences for succession planning and the continued international success of the Genome Sciences Centre, which I believe the member referred to.
R. Merrifield: If the minister could provide just a breakdown. What the minister read off was a great statement of what was going to happen. I would hope that in the breakdown we would see sort of allocations of what that’s going towards.
My specific question on this is actually on the amount the researchers are currently being paid. Some of our researchers are at very low pay scales. They are there because they love the work, and they believe in what they’re doing, and they believe that they are saving lives, because they are. Is this part of the funding actually going to correct some of those low wages, or is it just to recruit, into succession, the leadership?
Hon. A. Dix: There are lots of initiatives. Included as part of these initiatives is what you describe as upskilling for people at B.C. Cancer. It’s not just people from the outside who will benefit, but it’s people working at B.C. Cancer who we’d want skilled. That’s a significant part of the health human resources plan as well, as the member will be aware.
I think what she’s getting at are some of the issues that we deal with in the recruitment at B.C. Cancer. Recently, we increased essentially the core wage for oncologists significantly. We’re looking at other areas of B.C. Cancer to ensure that we remain competitive.
In that case, it was from 410 to 472, but that’s a separate issue and one we’ll canvass in the estimates. There is a lot in this plan to address, for example, start-up and seed grants for researchers. That is significant training, bursaries and scholarships, including for people, existing staff, who would be able to upskill based on that, and all of the other initiatives that are part of this.
[R. Leonard in the chair.]
There are things…. If the member is asking if there are issues around the remuneration of people at B.C. Cancer, that’s a separate question. Obviously, that’s an operating fund question, and it’s not dealt with here.
R. Merrifield: The question was, actually, specific to the research and the researchers that are within some of these aspects.
As we were canvassing the genome science…. Specifically, inside of some of these research clusters are researchers who are being underpaid.
Am I to understand that the top-up or rescale of some of these researchers would be found more in the general funding for B.C. Cancer, or is it part of this funding, the $150 million that we’re discussing today?
Hon. A. Dix: That’s the general funding. That would be the main estimates discussion we’ll have on B.C. Cancer.
R. Merrifield: My next question is actually on performance monitoring. Are we going to have, attached to the entirety of the cancer plan that was released on Friday, a comprehensive performance-monitoring system, similar to what we find in other provinces, that is transparent and easily accessible?
Hon. A. Dix: I think, in terms of the monitoring of this expenditure in the supplementary estimates….
I went through that process earlier, and I won’t give the same lengthy answer again that I gave to the member for Prince George–Valemount. Suffice it to say that there is accountability of the foundation, both internally to the foundation and to the government, for the expenditure of money.
The answer to the other question is yes. It’s one that, obviously, we’ll canvass in the broader estimates debate.
R. Merrifield: Attached to this particular funding, this $150 million…. Is there transparent accountability that would be attached to it? I don’t need a reiteration of the question previous or prior. Is there going to be a public interface that will actually be reporting out on these measures?
Hon. A. Dix: Yeah. The B.C. Cancer Foundation, and I think the member will know this, is not just transparent but uses its successes and what it’s doing as a promotion for more activities, more fundraising, more support, more grant applications that it supports.
The answer is yes, to the government. There is an obligation to report to us, under the grant, within the foundation. Obviously, that is a very public process. They make it their business to make it a very public process.
R. Merrifield: The transparency would be the responsibility of the foundation to relay that information out publicly. Am I understanding correctly?
Hon. A. Dix: There’s a requirement for them to have accountability and to demonstrate the success of the work they’re doing.
Yes, this is a grant to them. They will have not just the requirement, but they’ll have, I expect, the strong desire to want to report out on their successes and what’s happening under the plan to them, including what happens not just with this money but to the money that they raise and then the further knock-on grants that support B.C. Cancer researchers in the province.
R. Merrifield: I’m watching the clock. I really appreciate how quick the minister is being. I love how quick you are to your feet. Also just the brevity of your answers has been phenomenal. So I appreciate — thank you — the brevity of the minister’s answers.
We spoke earlier about the PET scanner that’s going in and the MRI simulator and some of the capacity increase on the radiology as well as the oncology and radiation oncologists as well as the medical physicists.
My question is: what is the minister’s expectation on a reduction on radiation wait times?
Hon. A. Dix: As the member will know, we’ll be debating both the cancer plan and the BC Cancer Agency and the Provincial Health Services Authority during the main estimates. We’ll have an opportunity to do that then, as we have, on occasion, in question period as well. I’m sure we’ll have that opportunity again. This is not a broad debate on BC Cancer but a discussion of this supplementary estimates allocation to the B.C. Cancer Foundation.
I appreciate the question and look forward to having that exchange with the member in the main estimates.
R. Merrifield: My question is actually very specific to the $150 million. Right now, we’re sitting at 82 to 83 percent on the waits for decision to treat for radiation. That 82 to 83 percent is actually the worst in the country. My ask is actually on this $150 million. With the capacity increase that we’re going to see with this spend, what should be our acknowledged anticipation of a reduction of that wait at this point with this spending of $150 million?
Hon. A. Dix: I think I’ve gone through in considerable detail what the expenditure on research in this plan is. This is absolutely a fair matter for debate in the Legislature in the main estimates, and we’re going to have that debate around the actions we’re taking now, which are not this $150 million, to address those very issues. Those issues include issues of compensation and other issues.
I look forward to having that debate. We have it from time to time in question period as well. Those exchanges are important as well. We’re going to have that discussion. That’s the B.C. Cancer. That’s the Ministry of Health main vote. We’ve described in detail what this $150 million is for, what purposes it serves, the advantages it has and the extraordinary supercharging of research, and that’s what this vote and this discussion is about today.
I appreciate the member may want to make that point. She’s now made it, of course, but it still doesn’t change the fact that it’s main estimates debate, and there are other occasions in this House to have that debate as well.
R. Merrifield: I wasn’t trying to debate. I was actually trying to give the minister an opportunity for a victory lap. We’ve talked about this $150 million and how it’s going to actually fund radiation oncologists, how it’s going to fund medical physicists and how we’re going to fund these teams of treatment that are, yes, going to be performing research, but in that research, they’re also performing medically necessary radiation treatments.
My question, actually, is what expectation of reduction in wait times are we going to see with this expenditure of $170 million from the two buckets?
Hon. A. Dix: I think the strong purpose of this…. There are aspects of what the member talks about, and we’ll have the occasion to debate this in the B.C. Cancer plan. The work around cancer also includes important works of research that people benefit from, including things such as clinical trials, that this will promote. Again, the member has, of course, every right to make whatever point they want about the debate, but this debate is about this supplementary estimate.
I’m absolutely going to respond in detail to questions about the supplementary estimates I’ve had. I want to provide information to the member, but the opportunity to debate the performance of B.C. Cancer and the immediate efforts taking place to improve outcomes for patients is in the main estimates debate, and I look forward to it.
R. Merrifield: Am I to understand that the minister does not anticipate any reduction in the wait times based on this $150 million spend?
Hon. A. Dix: What you do when you invest in clinical trials, in research is you recruit people to the provinces. You improve overall cancer care for people in the province now, but most importantly, in the future. Sometimes it’s the failure to act in advance that yields negative results in the present.
We know this. We know this in our lives and in everything we know about the benefits of what we’re doing, which I’ve described at length. I’m very proud of them. I’m very proud of the proposal of the B.C. Cancer Foundation. I think it’s going to improve cancer care, especially into the future, beyond the important discussions around issues in the present, such as wait times. That’s its extraordinary value, I think, to people in B.C.
I understand that other people may say, “Well, this isn’t what you should be investing in,” but I obviously think it is. It’s why I brought this issue forward, why I’m so proud of the investment, and why it’s significant in the long-term provision of cancer care in the province in the medium term and, in some cases, in the short term: to allow us to better recruit, support and build up our community of cancer researchers — all of which is going to benefit British Columbians now, but especially in the future.
R. Merrifield: In the interest of time, I’ll try and combine a couple of my questions.
These dollar figures are an increase of about 9 percent. While I’m excited, and I could get into all the breakdown of all of the numbers, this $150 million is inside $270 million that’s over three years, which is about $90 million per year. Based on a base budget of $971 million. It’s about 9 percent per year, but the cancer costs are actually going up by 10 to 12 percent. That number was canvassed in estimates two years ago.
Back to the minister’s point about actually investing today for the future, are we investing enough, I guess, in order to actually see a reduction in wait times with the tsunami of cancer that we are seeing starting to arrive at our hospitals’ doorsteps?
Hon. A. Dix: Well, again, it’s an operating fund question. The member, in describing that as 9 percent, is actually incorrect. What you do when you add that money is that it’s on top of the lift, the systemwide lift for cancer. I’m not going to get into that, because we have an opportunity to discuss that in the main estimates.
This is, on the operating side plus the research side, a significant step, as have been the previous years. When you announce, for example, $270 million over three years, that’s on top of the lift, right? Health care has a higher rate of inflation in general, but it’s on top of the general lift, and we’ll have that discussion later. Just to leave that there. So we’re not talking about 9 percent.
I think when we were talking about that level of inflation earlier, we were seeing a significant increase in the cases, such that we announced the plan of going from 30,000 new cases of cancer a year to 40,000. We’ve got to meet that and improve care. We do that in two ways: by expanding, but also by making the care better, more efficient and easier, and less radiation treatments, and so on. There’s a number of ways that you do that. Over a ten-year plan, you have to do both of those things.
I think that’s what makes the overall budget lift for the Ministry of Health — which will be discussed later, and which the member just discussed — so significant in this area and in others. Sometimes, I think it’s fair to have those discussions but, again, that’s the main estimates discussion.
What is clear is that there’s significant demand — a drive in demand like we’ve never seen before — in our public health care system. I’m very proud of the system responding to that by delivering more of everything right now than it has ever done before. That doesn’t mean…. For patients who are struggling to get care, it’s not easy. I understand all that.
Again, that’s the main estimates debate, around the overall lift to B.C. Cancer — which, I’m sure, we’ll canvass at length.
The Chair: I’d just like to remind the members that we are on the supplementary estimates for the $150 million for the B.C. Cancer Foundation.
R. Merrifield: Yeah, absolutely. These are all questions related to this $150 million.
The $150 million that we are currently investing — the minister indicated that this is an investment in the future of where we’re going with our wait times. In the future, what should be the reduction, based on this $150 million, in the radiation wait times?
Hon. A. Dix: I have answered this question a number of times. The opportunity to discuss those issues around wait times are issues for the B.C. Cancer Agency and are contained in the main vote for B.C. Cancer.
To describe what this vote is: it’s a very significant increase, a turbocharging of cancer research, which is critical to the cancer system. Many clinicians work significantly on research and as clinicians in our system. That’s how you recruit them. So to build out that system is an extraordinary thing.
Again, I’m looking forward to the main estimates debate on these questions because I think they are important questions that the member raises. We’ve been very specific about this $150 million, what it’s expected to achieve, and we’ll continue to be. I look forward to getting questions that are relevant to that, while appreciating and respecting the questions that the member has. Certainly, I’ll be looking forward to answering them in the appropriate moment.
R. Merrifield: This is just about the $150 million. This is just about what the minister has already stated it’s going to do, which is to build the foundation and allow those wait times to reduce. My question specifically about this $150 million is: how much will the anticipated decrease of wait times be and when?
Hon. A. Dix: We’ve described at length these initiatives, and we’ll obviously continue to do so as the debate goes forward. When you, for example, provide multiple start-up funding packages for new clinical investigators, that’s of extraordinary value for people, much as you have cancer diagnosis but will have cancer diagnosis in the future. It isn’t related to the immediate issues around wait times, which are addressed by the B.C. Cancer Agency in the main vote.
[S. Chandra Herbert in the chair.]
When the member asks about 9 percent, that’s not a question about the $150 million. The member, I think, is well aware of that. I think she said $90 million, which is the other number. When I’m answering that this isn’t about the $150 million, it’s because it’s not about the $150 million. We will go through in detail the justification for all of these initiatives, as we have been, and then we’ll answer questions about wait times in the appropriate debate, which is the main estimates for the Ministry of Health.
R. Merrifield: The minister has stated that the investment of this $150 million in the six areas that were given is specifically to build the foundation for the future. I’m going to ask it more broadly. Does the minister expect that wait times will go down at all, at any point, with this investment of $150 million?
Hon. A. Dix: Well it’s, of course, one of the issues in the cancer plan that we’ll be discussing in the main estimates before the Legislature.
I’m happy to take the member through, in whatever detail she wants, the extraordinary proposals before us, all of which will benefit patients with cancer now and in the future in B.C. To do so, to use this means of a supplementary estimate to supercharge the already supercharged efforts of the B.C. Cancer Foundation, to build out seed grants and research chair endowments and support training bursaries and recruitment initiatives, the supporting efforts in terms of funding of research and equipment: all of this is of obvious benefit. I’m happy to talk about it in detail, and I have been talking about it in detail.
We will also be happy to talk, as the member knows, because we’ve worked through estimates in the Ministry of Health together on a couple of occasions. We’ll have the opportunity to do so in the main estimates debate.
The Chair: Of course, we are on supplementary estimates 32(S).
R. Merrifield: Yes, it’s all about this $150 million investment. This $150 million — $170 million investment, because we’ve already talked about the other $20 million bucket — how is that going to actually be coordinated with the B.C. cancer plan? I wanted to just clarify. How will this bucket of money be coordinated through the entirety of cancer care and a patient’s experience?
Hon. A. Dix: The B.C. Cancer Agency and the B.C. Cancer Foundation work very closely together on their activities. We’ve described, I think, in detail already the positive impact of new equipment, both equipment for research and equipment in the system that’s of value that’s on that side.
When you look at the newest immunotherapies, that’s at one end of the scale, but it’s also the work on prevention and the work in the community, which is at the other end of the scale of research in different parts of the research continuum and, indeed, the continuum of care. All of this is integrated — the work of the foundation, the work of the agency and the work of the broader community around cancer. It’s also in the health authorities, also in the universities. It is work that will be dramatically promoted by this.
I think that it represents a very important part of the plan. You cannot simply…. There is a significant portion of it, which we’ll get to later, that addresses both the here and now and the immediate needs of patients. That’s important, and we’ll have an opportunity to debate that. But to have a plan that also focuses on research, making care better, bringing in new precision technologies, reducing the number, for example, of radiation treatments that a person might need — that kind of development is something that benefits us and integrated in the system all along.
You want research that does big-picture stuff, in a way, and deals with breakthrough, but you also want research that supports precision activities that benefit patients. I think the foundation here and in its work with the agency is identifying both.
R. Merrifield: It’s good to hear that those will be integrated funds and working in lockstep, as those two agencies usually are. So that’s great news.
Of this $150 million, are there more funds to be allocated, past the three-year announcements, to B.C. Cancer Foundation, or is this $150 million the entirety? I know it’s $170 million, because there’s the other $20 million bucket. But is that $170 million, $150 million today out of this amount, the entirety of the funds that are required to enact the ten-year plan for the B.C. foundation?
Hon. A. Dix: Well, the short answer is: the B.C. Cancer Foundation is raising money all the time. In the last year, for example, that amount of money was $77 million they raised, $4 million of which came from government in the last year. So a portion did come.
But essentially, that shows their fundraising capacity is very high, and I would expect, if I know Ms. Roth, that that number will be exceeded as we go forward. The foundation and all the people are really committed to it.
What this does is provides one-time funding. Because this is a supplementary estimate, this is one-time funding to the foundation that will benefit the foundation and people in the research community around cancer, and patients, as well, in the next number of years. This money is there.
In addition to that, this money will lever other money, in terms of the money B.C. cancer researchers win in national and international competitions for funding and in the funding that the B.C. Cancer Foundation raises for these purposes, which is exceptional and I expect will grow because of this. All of that benefits, ultimately, patients everywhere in B.C. but also B.C.’s role as a leader and continuing leader.
We’re seeing this in life sciences, which, if we recall the COVID-19 pandemic, was profound in the world community. I mean, we’re not necessarily doing this as promoting life sciences, but it does, and it will.
I think we’re looking, in this case, for a supplementary estimate for a one-time investment. This is the right place, the right foundation, the right goals to be investing this money now. Just as the last time, as the Minister of Health, I came to supplementary estimates, our significant investments in the Michael Smith Foundation and Genome B.C. had that same vision in mind. It is not immediate to the debate that we’ll have in the main estimates around issues but fundamental for things to be better three, four, five or six years from now, as well as now.
Some of them will benefit us in the immediate. But if we don’t take some of these research steps now, then our ability to integrate those new systems, those new…. I don’t like to necessarily use the word “cure,” but it’s those that both provide support for patients and improve care in the future. You have to make the investments. This was an opportunity to do it, and I’m very proud that the government put it forward and supported it and that we’re here debating it in the supplementary estimates.
R. Merrifield: The $150 million in the one-time funding grant, $170 million total in the one-time funding grant — does this reach all of the expectations of the research component? When I say that, the provincial funding of the research component in the B.C. cancer plan, understanding they fundraise outside and they have their own other funding mechanisms…. In the B.C. province’s ten-year cancer plan, is this the funding expectation, conclusive?
Hon. A. Dix: Well, considering they got $4 million last year and this is $150 million, I think it’s a pretty good boost. It’s a pretty good boost. I don’t want to describe that in percentage terms, but that’s quite a bit. This is an expensive area of research, an important area of research, but this builds up our strength in one effort that’s organized and thoughtfully presented, that focuses on some of the real needs.
It’s not the Michael Smith Foundation, which we gave money to a number of years ago in supplementary estimates. They will need more support at some point in the future. No question about that. And they will have it, I think, as they have from governments on both sides of the House. It may have been an NDP initiative, but it became a government initiative, and then we built it out.
I don’t think this is the last contribution to cancer research in B.C. Obviously, research is a significant part of what the operating B.C. Cancer Agency does. But $4 million to $150 million — that’s a good increase.
R. Merrifield: I would say it is a very significant boost from $4 million to $150 million.
One of the previous comments the minister had made talked about the regionalization of the funds. Are there specific requirements from the province on this $150 million for regional aspects or regional distribution of the funds?
Hon. A. Dix: I think the member will see this as we go through, and we’ll share information about this. I think the one that I described before but that I think will be important to people across regions is the ability to conduct and manage clinical trials at regional cancer centres, including, obviously, the one in Kelowna — but others.
I think for cancer patients in the member’s community but also communities around the entire region, from the North Okanagan down to the border, are significant. In a series of these initiatives….
One of the many things I’m impressed with the foundation about is that it’s a B.C. foundation, and it acts like a B.C. foundation, not a Vancouver foundation with a B.C. name in front of it. So you’re going to see activity from this $150 million across the province — obviously, most focused in regional cancer centres such as Prince George, Kelowna, Vancouver, Surrey, all those others. But also, we have a 41-community oncology network, so some of that work will go there and around the province — the work we’re doing to support the Indigenous cancer plan, and so on, which is part of this research effort as well.
I think that part of it is significant, and I think the member and members of the House will have some confidence in the foundation, which has demonstrated this before, and at B.C. Cancer, where we have seen a return, and we’re seeing a return, to more regional models of care and support — the PET-CT scanner in Kelowna.
I mean, I walk around the streets of Victoria…. We do one there. That innovation in technology, which on the capital side was supported by foundation dollars, in both places…. The operating side, obviously, is B.C. Cancer. People come up to me as much about that as almost anything else, because of the difference it makes of not having to make that drive to Vancouver to have a test that has so much at stake for you, and to be able to do it in the community. So that’s one of the most important things we have to do.
We’re going to see an increase in the number of people with cancer. It’s hard to think of things in these ways, but it does mean that the ability to provide care to larger groups of people in the region will, unfortunately…. And fortunately, because we have excellent survival rates for cancer in B.C. But that also means people living with cancer for long periods of time. Having those things around the province is critically important.
We’re going to see more of that. Because we have an aging population, there will be more age-related cancer. The result of that is, I think, a system which contracted, to a degree, to Vancouver. That’s not a political argument; it’s just what happened. It’s now expanding back out. I think that’s a positive thing.
R. Merrifield: I thank the minister for his answer. It is encouraging to hear that it is going to be a distributed model on the clinical trials.
The minister mentioned the PET scan, which is absolutely a game-changer for communities that receive them. The minister had also talked about the PET scan that was going to go into Vancouver. Along with some of these additional elements that the minister is going to provide, are there also going to be capital upgrades to some of those areas in terms of the equipment and the actual physical structures? I know that Vancouver is fundraising right now for a new facility because theirs is quite aged.
I know that Kamloops is still waiting for a facility. I would be remiss, and I would probably not make it past the twins, if I didn’t actually acknowledge that Kamloops is still waiting for their cancer care clinic. I know that even Kelowna’s was built in the ’90s and bursting at the seams. I welcome the minister to come for a tour at any point.
It is absolutely critical to even some of those clinical trials and some of the research capacity that this $150 million represents…. As the minister said, from $4 million to $150 million. It’s supercharging clinical trials and absolutely critically necessary for the future. Does this also represent some capital capacity increases?
Hon. A. Dix: I’ve described the capital aspects for the equipment and capital aspects of the plan. I failed to mention a third aspect of that, which is that the funding will support the acquisition and installation of a state-of-the-art stereotactic body radiotherapy system to improve capacity for clinical research and precision-guided radiotherapy. That’s another capital investment that will be supported by this plan and by the foundation’s fundraising activities around it. Those are significant capital investments.
Again, I appreciate the member’s caucus management there in raising the issue of the capital plan, which I am sure…. In fact, I think I can win a loonie from the hon. member. I’m going to bet that those issues will be raised in the main estimates by either the member for Kamloops–North Thompson…. Maybe we can bet on which one raises it with me. But I’m sure those issues will be raised.
Obviously, that’s exactly what I was saying. Nanaimo…. The new Surrey hospital also includes a cancer centre. All those issues, I’m sure, we’ll be discussing in the main estimates when we discuss those capital issues.
R. Merrifield: So just to clarify, this one-time grant is not part of the capital plan for B.C. Cancer Foundation. Those would be carried into the normal budget of the ministry. I’m seeing a nod, so I’ll put on Hansard that there’s a nod there, which is good. That’s very good information.
As the minister knows, we’ve got new centres required in Burnaby, Kamloops and Nanaimo, all having been promised. Then upgrades are desperately required for Kelowna as well as for Vancouver. So definitely eagerly awaiting those aspects.
On this particular grant funding, was this a lesser or a greater amount than what was actually asked for by the Cancer Foundation? Then I’ll just…. Am I to only take one more question left, or are we still good?
The Chair: I believe we’re going to note the hour after this question.
R. Merrifield: Okay. I’m going to tag my very last question, and that is: can the minister also supply, either tonight or right now — I’ll take them from him if he has them — the supplemental materials, just so that we can get started on those? If necessary, you can email them tonight. But just a commitment to a time frame on those.
Hon. A. Dix: We’ll have something tomorrow morning. We’ll send it over to the opposition Health critic, and I’ll leave it to her to distribute it to the whole team. I’m sure that she will. I’ll ask her to forward it all.
I think it’s fair to say that the B.C. Cancer Foundation was delighted, and that we managed, even though they have very high expectations, to exceed those expectations. I think that’s a fair description of it.
With that, I move that the committee rise, report progress on the supplementary estimates of the Ministry of Health and ask leave to sit again.
Motion approved.
The committee rose at 5:18 p.m.
The House resumed; Mr. Speaker in the chair.
Committee of Supply (Section B), having reported progress, was granted leave to sit again.
Committee of Supply (Section A), having reported resolution and progress, was granted leave to sit again.
Hon. R. Kahlon moved adjournment of the House.
Motion approved.
Mr. Speaker: This House stands adjourned until 10 a.m. Monday, March 6.
The House adjourned at 5:20 p.m.
PROCEEDINGS IN THE
DOUGLAS FIR ROOM
Committee of Supply
SUPPLEMENTARY ESTIMATES:
MINISTRY OF
INDIGENOUS
RELATIONS AND RECONCILIATION
(continued)
The House in Committee of Supply (Section A); A. Walker in the chair.
The committee met at 1:06 p.m.
The Chair: Good afternoon, Members. Thank you for joining here.
I call Committee of Supply, Section A, to order. We are meeting today to continue the consideration of the supplemental estimates for the Ministry of Indigenous Relations and Reconciliation.
On Vote 34(S): treaty and other agreements funding, $75,000,000 (continued).
The Chair: Seeing no further questions, I now call the vote.
Division has been called.
A division is about to be taken. Before putting the question, I remind all members that it is understood pursuant to sectional order dated February 28, 2023, that only permanent members of Section A or their duly appointed substitutes are authorized to vote.
Vote 34(S): treaty and other agreements funding, $75,000,000 — approved on the following division:
YEAS — 8 | ||
Beare | Elmore | Fleming |
Ma | Olsen | Paddon |
Ralston |
| Rankin |
NAYS — 3 | ||
Letnick | Milobar | Ross |
The Chair: We will have a brief recess while members rearrange their seats.
The committee recessed from 1:16 p.m. to 1:21 p.m.
[A. Walker in the chair.]
SUPPLEMENTARY ESTIMATES:
MINISTRY OF TRANSPORTATION AND
INFRASTRUCTURE
The Chair: Thank you for your patience, Members. I call the Committee of Supply, Section A, back to order. We’re meeting today to consider supplementary estimates for the Ministry of Transportation and Infrastructure.
On Vote 45(S): ministry operations, $500,000,000.
The Chair: As the Committee of Supply examines the supplemental estimates, please remember that the debate must be focused on the additional funding request for the ministry. Consideration of supplemental estimates does not allow for an expansive look at ministry operations in the way that the consideration of the main estimates does.
I would ask members to hold off on any broad questions for the upcoming main estimates process and to keep their questions to the minister focused on the supplementary funding request, an overview of which has been provided on page 1 of the supplementary estimates book.
Does the minister have any opening remarks?
Hon. R. Fleming: I’ll be very brief in respect for the questions that the opposition members will have.
We will get into the issues as to the funding and how it will be used by B.C. Ferries and how this fits in with our government’s initiatives around affordability and keeping costs down for businesses and people who live along B.C.’s coast. Seventy-five percent of British Columbians live on our coast.
B.C. Ferries is one of the largest ferry fleets in the world. It served 21 million passengers last year and carried about nine million vehicles to communities from here, down the southern tip of Vancouver Island, all the way up to our north coast.
Facing some uncertainty and a record high 40-year global inflation rate that is battering prices of all kinds of goods and services, including transportation…. I’m very pleased that this money has been made available to defray costs, giving certainty to coastal residents in B.C. going forward; supporting goods movement; keeping down the costs of other daily essentials, such as food, that are also being impacted right now; and supporting tourism recovery at the same time.
There was a strategy by our government to rebuild, following the pandemic, the kinds of economic jobs and businesses that are supported by a robust tourism organization, which was growing quite significantly before COVID-19, and to get us back on track and to welcome visitors from around the world. Again, obviously, B.C. Ferries is critical to transporting individuals and families who visit our country.
P. Milobar: Thank you to the minister for the introduction.
I’m, obviously, not the Transportation critic these days. Our critic has had some family issues to deal with, so I will be filling in today in his place. He has provided me a lot of his background and work that he had done leading up to today.
First off, I guess, how exactly was the decision made to include this $500 million, specifically for ferries, into a request for supplemental estimates?
Hon. R. Fleming: The item before supplementary estimates today was decided upon by the Minister of Finance, working with the Premier to identify an opportunity to use the province’s surplus to fit in with one of the government’s key priorities, which, in this case, is around affordability for B.C.’s coastal residents.
P. Milobar: Sorry, just for greater certainty, then, from the minister. It was the Minister of Finance and the Premier’s office that came to the Transportation Minister and said: “We will be authorizing $500 million, and it needs to go specifically to Ferries.”
Hon. R. Fleming: The issue of potential shocking rate increases as we end what is called performance term 5 of the current province and B.C. Ferries service contract and the beginning of a renegotiated performance term 6, a four-year contract that will run from 2024 to 2028…. It was certainly an issue on our radar. We saw earlier this fiscal year, or late calendar year last year, a submission by B.C. Ferries to the independent ferry commissioner.
The Minister of Finance was certainly made aware — and was aware herself, and her office, of this process — that this presented an affordability challenge. Affordability is a policy area for our government to prioritize. The Ministry of Finance, working with the Premier’s office, made this a funded source to protect coastal residents through this supplementary estimates process.
P. Milobar: What was the time frame, then, from even the potential of a request for extra funding to the Minister of Transportation and the decision to actually go ahead with this particular allotment of money?
Hon. R. Fleming: The process for renegotiating a new performance term was publicly made, and there were public electronic postings about it by both the ferry commissioner and the B.C. ferry corporation going back to about September.
I think myself and the Minister of Finance and others would have been aware that we faced a challenging new performance term coming up, given what had happened with the cost of fuel, contributed to by the Russian invasion of Ukraine and other supply issues by the oil-producing nations that were made. There were a lot of cost increases. Thinking back to last summer, inflation was already beginning to rise.
What I would say, though, is that the Finance Minister, having become aware that there’s an affordability issue around B.C. Ferries moving forward and having clear direction from the Premier that we would use surplus revenues for the fiscal 2022-2023 year to help British Columbians with affordability challenges, in particular….
That issue was decided between the Minister of Finance about which areas would be funded to protect British Columbians’ pocketbooks. In this case, it’s around assisting B.C. Ferries to weather 40-year high inflation rates and not have to rely upon exorbitant double-digit, potentially, fare increases.
P. Milobar: Again, I guess the bigger question is around the actual timeline, though, of the decisions around when to allocate this funding for the one-time expenditure. Was it in November? Was it in December? What was the timeline when the discussions started about the potential of this $500 million and then the final decision actually made?
Hon. R. Fleming: Just to build on the last answer, I mentioned to the member that the formal process that started between the B.C. ferry commissioner, whose role it is to create price caps for performance terms under legislation, and B.C. Ferries, which is the service provider and makes submissions to the commissioner….
That was known in about September. I tried to put it in the context of globally high record inflation rates that were the worst in four decades owing to a number of international factors. That’s point one, that this was going to be an unusual, new performance term, given all that background that was happening in the global economy.
The second date — when the Premier and the Finance Minister publicly announced a broad direction about opportunities to shield British Columbians from cost increases and promote affordability in our province, in our economy — came on the heels of the second quarterly fiscal report. That was sometime in November. The member probably has the exact date. It escapes my mind right now.
Following November, following the direction from the Premier’s office — his office working with the Minister of Finance’s office about the positive news, quite frankly, around the second quarterly report and the opportunity it presented, with promoting affordability being the number one priority — the opportunity to protect, going forward, harsh rate increases potentially for our coastal ferry service was identified by the Finance Minister and the Premier’s office.
P. Milobar: I can appreciate there were already cost pressures potentially recognized by the ferry board in September, but as the minister rightly pointed out, there would have been no ability to request anything extra in September because there was no surplus at that point. It was a break-even budget. So it was November, moving forward.
Was there a specific request, then, from B.C. Ferries for this $500 million, and if so, when was that received?
Hon. R. Fleming: No, there was not. But just for additional context for the member’s benefit, one thing that we did during the COVID pandemic — understanding that we had specific health orders in place and that travel was being reduced in all modes of transportation, whether it was inner-city buses, public transportation, ferry services or air travel — was we created, jointly funded with the federal government, a significant COVID restart and recovery plan that included $308 million.
B.C. Ferries worked with the province well in advance of the period of time that we’re talking about now. I should also mention that the next performance term takes effect April 1, 2024. The process around determining a price cap that is administered by the ferry commissioner runs for a fairly extended period of time, allows for public input and allows for the ferry corporation to begin engagement that happened in September 2022.
P. Milobar: Just to be clear from the minister, then: the April 1, 2024, start date would be PT6 that kicks in, in 2024, I’m assuming? Okay. The minister is nodding, so that’s fine. Yeah, just so we’re all on the same page.
Again, it sounds like this was a very top down–driven process, where the Premier and the Finance Minister — I think most people would assume the Premier ahead of the Finance Minister — came up with a list of priorities. That’s the government’s prerogative. That’s fine. But the Minister of Transportation is in charge of all transportation modes around the province.
Did the minister make a pitch for splitting up this $500 million to be in other areas of need as well, or was it just strictly a conversation with the Premier’s office that: “You’re being given $500 million, and it has to go all to ferries, regardless of what other priorities might be needing funding within transportation”?
Hon. R. Fleming: As I described, I think the coming challenges for B.C. Ferries, based on the commissioner opening up the price cap process, was a public issue by September. I’ve mentioned that already.
I think his question was really around the process that the Premier’s office and the Minister of Finance looked at. I think they publicly disclosed that areas of acute challenge where government is able to make a difference in the lives of British Columbians to promote affordability was kind of the key lens on priorities for supplemental funding within the last fiscal year.
Three-quarters of British Columbians, as I mentioned, are coastal residents. Many people live in absolutely ferry-dependent communities. That is undoubtedly how the Minister of Finance and the Premier’s office saw this opportunity to look at a much smoother, more predictable rate structure and to positively influence the independent exercise that’s carried out by the commissioner, with public input, as well as the ferry company, on looking ahead at the next performance term, which runs from 2024 to 2028.
P. Milobar: I’ll come back to the first part of the question, but at the very end there, the minister said, “in conjunction with the ferry corporation,” around upcoming cost pressures. Could the minister please clarify? Is the minister now saying that the ferry corporation was being consulted on this? I thought the previous answer was that they made no request and, in fact, that the announcement was just given over to them.
Hon. R. Fleming: To clarify, if I wasn’t clear there, the ferry corporation is in a process with the ferry commissioner, who ultimately determines what the rate cap looks like. That’s her job under legislation. And that’s a…. How do you say every four years? Whatever. Every four years that occurs.
It fell into this period at this point in time in the fiscal year, just in advance of the second quarterly surplus being reported, after which the Premier announced an interest in using the surplus to promote affordability where economic headwinds, driven by inflation and other factors, were conspiring against the pocketbooks of British Columbia. He saw that opportunity to work with the Finance Minister, and that’s why we’re here today.
P. Milobar: Again, I’m just trying to get to the thought process around this disbursement of all these dollars, because it’s very significant dollars. They’re being pushed out the door in very short order, with very little description around them, not just with this ministry but with all.
The process that resulted in $500 million going to the Minister of Transportation specifically for ferries seems to have been very top-down, no real option other than the $500 million, and it’s going to ferries.
However, for the previous minister that was just in on their supplemental estimates for MIRR, his answer to similar questions on the background was: “The Ministry of Finance, working with other ministries in the Premier’s office, asked us what opportunities.” So they asked that minister what opportunities could advance some of the key priorities of the government.
It seems like MIRR was asked specifically where they would see the ability to move some money around. They requested $75 million. It sounds like it went to five or six different areas of need within their ministry. Yet here we have $500 million being top-down.
I guess my question to the minister is that when I look at the current budget…. When you have public transportation at $143 million, certainly there might have been some need for extra operational dollars there. I’m sure they wouldn’t have said no.
Maintenance and operations for highways. As someone representing a riding…. I know the minister is very well acquainted, probably, with the corridor I’m about to mention next. When you look at what’s going on, on Highway 5 north and the pure chaos…. We unfortunately had another two people die on that corridor last night, with another three critically injured.
Road maintenance does come into play on some of them. Yesterday wasn’t necessarily road maintenance, but that is an issue around this province, especially with the late spring and the way the weather’s been hammering away.
I know my drive down on Sunday…. I drove from Kamloops down here. There were no lanes plowed. There was only the inside lane, actually, outside of Hope. That was because of traffic wearing a path. The shoulder lane was a foot of slush. One plow running through it would have cleared it off, and there were no plows to be seen. But no extra supplemental dollars for highway maintenance requested by the minister, apparently.
CVSE for enforcement. Again, operational dollars. I appreciate we’re trying to look for quick hits here. Apparently no extra dollars. Inland ferries, no extra dollars.
Again, why strictly ferries? Was the minister not able to lobby or ask for other dollars in this supplemental budget that he’s bringing forward, as apparently other ministers were able to do? Or was it strictly the Minister of Finance and the Premier’s office telling MOTI it’s 500 million, and it has to be for ferries — full stop — no other option for any other dollars?
Hon. R. Fleming: Again, the answer really is the same. This might not satisfy the member, but supplementary estimates — in this case, as determined by the Premier and the Minister of Finance — was for challenges around affordability where one-time-only money from the anticipated significantly larger surplus than what was budgeted — there was no surplus budget — presented itself.
That process I’ve outlined…. I’m sure we’ll get into more detail about it. The process that comes around every four years around price caps, the iterations and back-and-forth between the commissioner and B.C. Ferries at the early end of the process last September signalled that moving forward beyond March 31, 2023, there would be significant affordability challenges based on the cost of providing this vital transportation service.
All of the other issues that the member mentioned in his preamble — those have annual budget opportunities. I know we’ll be back in this very room in a few weeks’ time, talking about them line by line in the actual budget, in the actual estimates process, and I look forward to that.
I just want to stress that a one-time-only payment in nature promoting affordability…. That policy direction was determined by the Finance Minister and the Premier. Obviously, the concern about what the future might hold for the price cap responsibilities of the commissioner, absent the pre-payment that we’re discussing here this afternoon, was unacceptable to the government.
P. Milobar: Well, the MIRR estimates weren’t based around affordability. They were based around settlements with First Nations. The Solicitor General is in estimates right now, talking about public safety supplemental dollars, not to do with affordability. There are other estimates coming forward that are of similar ilk.
I guess I’m asking that question because there are lots of areas of need within the Transportation budget that are operational, much like Ferries in terms of yearly funding.
It’s important, I think, because this is $500 million. I think it’s important for the public to understand, if I’m reading the budget book correctly, that the minister’s budget for B.C. Ferries in this current fiscal year is $200 million. So this is not a small bump to B.C. Ferries. This is 2½ years of usual funding that this minister would be providing to B.C. Ferries as a supplemental add-on. So it’s very significant.
Again, was there no opportunity, given the wide range of other topics that other ministers are dealing with, with the supplemental items, for the minister…? I guess I’ll phrase it a different way. Did the minister ask for any top-up money on any of these other operational areas in his budget? If so, was he told no? Obviously, he must have been.
Hon. R. Fleming: The member is correct, and this gives me an opportunity to clarify that.
I have spoken exclusively about affordability, because that’s where this initiative fits in, but it’s not the only priority for the use of supplementary estimates. He’s absolutely right. It’s opportunities that would accelerate or promote reconciliation, modern treaty-making — I think we’ve just concluded that set of supplementary estimates — and obviously health, which is upcoming and I think will be discussed in this room next week, with payments to the B.C. Cancer Agency to boost and improve cancer services and research in the province.
So it’s not just affordability. If I’ve given the impression…. I was kind of fitting where this is in the priorities that the Premier and the Finance Minister made as it relates to the Ministry of Transportation and Infrastructure.
The other things he mentioned are all opportunities which have been taken in regular budget-making. This, and I’ll say this again, was an extraordinary challenge based on external global forces, fluctuations in fuel prices and other cost drivers that were going to be part of the ferry commissioner’s price cap process that would be at odds with everything this government has done to promote affordability on our ferry service, including restoring things the previous government took away, like free travel for seniors Monday to Thursday; including a 15 percent reduction we brought in, in 2019, on smaller and northern routes to promote affordability for rural British Columbians and Indigenous communities.
We didn’t want all of that to dissipate and go away. There was a threat, and this was somewhat publicly known because the process had begun. When the second quarterly results, as I mentioned before, showed a significant surplus opportunity to protect British Columbians from this going forward, that’s something that the Minister of Finance and the Premier identified, the payment under discussion today, as being a very good opportunity for government to not just let it happen and evaporate all the gains we made on improving service, adding routes and schedule and protecting affordability — not let that all be put at risk but to continue that moving forward.
P. Milobar: Again, I guess, the public safety aspect of areas within the Ministry of Transportation will not see any of the supplemental money. I guess if Ferries weren’t consulted or talked to about the $500 million, how did $500 million get calculated as a number that B.C. Ferries actually needed?
Hon. R. Fleming: The number, the prepaid funding that this supplementary estimate allows — the opportunity to provide rate stability, going forward, to the year 2028 — was arrived at by looking at information that was known to government, that was provided by B.C. Ferries and is under review by the commissioner right now.
The member probably received or obtained the news release that was put out last Sunday. It indicated that — and this is quite a shocking number — it could be as high as 10.4 percent per year, every year, going forward. Having a 40-percent-plus cumulative impact of those types of rate increases was totally unacceptable to government.
Obviously, the Finance Minister was alive to this possibility earlier in this fiscal year and, as the process has unfolded, became aware that these were the types of increases that were being applied for by the company to the commissioner.
Now, what we would like to do, as government, with this funding is to keep that number down. We’ve suggested that below 3 percent is where we would like to see it. We have a performance term currently that is capped at 2.3 percent, which gives fare affordability and predictability. By the way, there’s a year of zero in there when we were in the pandemic. We want to keep rates low, as I mentioned in my previous answer, to protect all of the rate reductions and service improvements that were funded in the last performance term.
This amount of money will allow, following the commissioner and B.C. Ferries doing their work and doing some thinking about what rate-increase drivers there are, what is reasonable to assume that money will be applied to, to keep rates low over the entirety of the performance term.
P. Milobar: As has been assumed and, I think, clarified by the minister, this is intended to be a multi-year bump of money. It sounds like it has to be out of the government books by March 31, over to B.C. Ferries, to be able to be completely off the books for year-end as a spend.
Is the minister just turning this over to B.C. Ferries, no strings attached, or are there terms and conditions that have been agreed to by the ferry corporation? If so, will the minister table those terms and conditions that, to this point, have not been made public?
Hon. R. Fleming: There will be an agreement, but it requires that the supplementary estimates be approved first by this committee in the Legislature. An agreement will then be put in place, with terms, to B.C. Ferries.
As I mentioned, this issue became alive to us at the early end of the price cap process that is administered by the commissioner. When this is approved by the Legislative Assembly, the commissioner will take the agreement that is struck with B.C. Ferries and use that agreement to make a final determination on what the price caps look like for performance term 6. That decision is due September 30 of this year.
P. Milobar: Again, my understanding is that the money has to be off the government books by March 31. It seems there will be a preliminary public release by the commissioner by March 31, as well, in terms of the price cap review that’s being undertaken right now.
So just to be clear, is the minister saying that the terms and conditions of this $500 million with B.C. Ferries will be signed, sealed and delivered before March 31, because this money, in theory, will either be approved today or Monday, yet approved without terms and conditions attached to it at this point by government?
Hon. R. Fleming: The member is absolutely correct. A contribution agreement will be drafted and completed following the legal authority for these funds, and that will be done and completed by March 31.
P. Milobar: Our understanding is that the price cap submissions to the commissioner at this stage are typically confidential between B.C. Ferry Corp. and the commissioner. In fact, the only public comment we can find talking about a 10.4 percent fare hike is actually from the government.
Can the minister explain (a) how the government came to have information that is typically confidential and not shared with government at this stage, and (b) why it would be releasing that information publicly ahead of any preliminary commissioner report that typically won’t be coming out until March 31?
Hon. R. Fleming: The submission which was posted by B.C. Ferries did not contain a number. The member is correct. But B.C. Ferries regularly meets with the Minister of Transportation and Infrastructure and the division that works on the marine sector and this service contract that we hold with B.C. Ferries. They do that regularly, and the member can imagine all of the reasons why they would regularly report to us, considering that we are their major funder other than the travelling public.
We are in this process that comes around every four years, and those numbers were shared. They were also anticipated to a certain degree, because we’ve seen what’s been happening in the travel and transportation sector around the world. Certainly, some of the main drivers around labour and fuel costs are part of this.
The ferry corporation, the member will, I think, appreciate, was in very close communication with our ministry when we went through the COVID-19 pandemic — first of all, in the early stages, around what a health and safety regime would look like, working with the provincial health officer, working with Transport Canada on all those sorts of things and accounting for the precipitous and steep drop in revenue to come up with a recovery plan.
This is not unusual to share information like this. This was not done on a confidential basis. That’s why that number was in our news release — just to outline the known challenges that the ferry corporation is facing and our government’s interest in helping resolve that problem using the ferry commissioner price-cap process that we’re midway, underway right now.
P. Milobar: Well, again, my understanding is the ferry corporation would have submitted to the ferry commissioner in September, so just a few months ago. One would like to think the ferry corporation was aware of things like inflation in September, future fuel cost pressures, labour cost pressures, what was going on with ridership — some would say already somewhat phasing post-COVID, somewhat not phasing post-COVID, but either way, aware of COVID and the potential impacts, moving forward.
Is the minister saying that the update that the minister received from B.C. Ferries around their submission was based on the September 2022 submission, or was there an updated submission that suddenly raised this 10.4 percent worry within B.C. Ferries? Again, they’ve not publicly talked about having a concern around 10.4 percent anywhere.
Hon. R. Fleming: I think because staff in the ministry and B.C. Ferry Services executive staff meet regularly and have strong working relationships, information is exchanged all the time. That doesn’t change the different roles that the partners have in providing the ferry service on our coast. It does not constitute going over the line on to operational decisions for B.C. Ferries.
The information that was shared about the challenges and the likely impact on fares in the next performance term was done as the analysis was continually updated and as they were working with the commissioner.
Neither does the announcement that we made last Sunday nor the estimates that we’re discussing today in any way interfere with the commissioner’s distinct role in the whole scenario in making determinations on the price cap. It will be taken into account by her when she continues her work and makes a final decision.
So we had some estimates of what fare increases would look like. There’s going to be additional scrutiny — that is the commissioner’s role — around all aspects of B.C. Ferries’ submission. But knowing this was a challenge and certainly at odds with government’s objectives on affordability and would present an unacceptable risk to coastal economies and families and people trying to get to and from medical appointments, all the things that are part of life for a significant number of British Columbians who live on our coast, we wanted to avoid all that.
I think that challenge would become harder as government in a couple of months’ time. The supplementary estimates process and the unanticipated large surplus that was reported in the second quarter was obviously an opportunity to address the challenge that was — to mix transportation metaphors — coming down the tracks at us.
P. Milobar: Was the $500 million calculated by the Premier’s office and provided to the ministry and the minister? Or did the minister and the ministry come up with the $500 million figure and provide that to the Premier and the Finance Minister?
Hon. R. Fleming: To the member in regards to his question. If I can put it like this — and this builds on answers to his questions earlier this afternoon — they, as in the Ministry of Finance and the Premier’s office, pick the objectives. It’s a wide-ranging number of objectives.
But in the case of this set of supplementary estimates before us, the one that fits under the affordability objective — and that was around fare affordability — of course, we provided the analysis and the costing to the Minister of Finance of what a number would look like for that.
Now I should say that the commissioner is the one that ultimately determines the price caps for the next performance term. So this is a number that we have confidence in, in terms of what it might take to get below 3 percent and hopefully closer to something like 2 percent, which is the predictability that coastal residents have enjoyed for the last performance term.
Ultimately, at the end of the day, the commissioner will decide on the price caps. We’ve already covered how that will work. There will be a contribution agreement with terms completed and negotiated with B.C. Ferries by March 31.
That will, of course, factor into account for the commissioner to do her job, which is to come up with the final price cap decision for performance term 6 by September 30 of this year.
P. Milobar: Just for greater certainty then, the $500 million has been calculated by ministry staff to potentially take a rate from 10 percent down to 3 percent or even lower, potentially. It is intended strictly to be, as the minister has repeatedly said, on an affordability side around rates. So B.C. Ferries will not be eligible to use any of this $500 million for capital or those types of expenditures. This is strictly around rate control to try to keep it in that 2 to 3 percent rate range.
Hon. R. Fleming: I’m going to make a wild prediction that the member will have some follow-up questions on this. But if I can try and put it all together big picture, all of the activities of the corporation, all of the costs associated with running a ferry service determine, really, the amount of fares that need to be recovered, based on the revenue sources.
[The bells were rung.]
The Chair: Members, division has been called in the main chamber. We will take a short recess.
The committee recessed from 2:26 p.m. to 2:47 p.m.
[R. Leonard in the chair.]
The Chair: I call the Committee of Supply, Section A, back to order. We’re currently considering the budget estimates of the Ministry of Transportation and Infrastructure.
I now recognize the minister.
Hon. R. Fleming: Thank you so much, Chair.
Apologies to the member if the ringing of the bells for a vote has led me to forget anything from his question. I think what I was trying to explain was that the price cap is determined, ultimately, by reviewing the submission made by B.C. Ferries. The costs of fares for the travelling public are really determined by the sum total of all activities and areas of costs of the corporation — fuel, labour, capital, all of those sorts of things.
We know that the supplementary estimates that are being debated here today are necessary for influencing, in a positive way, towards affordability, what that price cap will look like in the end. That would be defined, as we’ve already discussed here, in part, through the contribution agreement that we signed with B.C. Ferries, by the end of March this year.
A. Olsen: Thank you for the opportunity to ask a few questions here in supplementary estimates for Transportation and Infrastructure.
I guess it’s important just to start by acknowledging the challenging year that was 2022 for B.C. Ferries as a corporation and, as well, for anybody who relies on B.C. Ferries to get home and to work and for their transportation needs. It was one of the most challenging years, I think, that users of B.C. Ferries have faced.
One of those issues that, I think, plagued the ferry service throughout 2022 and leading up to it, was staffing issues. There are the affordability issues that….
Well, I’ll say this as well. Thank you on behalf of all of the constituents in my riding who use ferries. Affordability is important to them. It allows them to access their homes and their businesses. I think this announcement last week, or just a few days ago now, went over very well amongst the constituents that I have that rely on the ferries. That’s all of them here on the Saanich Peninsula and then, as well, the southern Gulf Islands.
What was considered around whether or not there could be an opportunity to support the Ferry Services in recruiting and the staffing issues that they had, to increase reliability and the rates and affordability? Was there any conversation or discussion that happened around that?
Hon. R. Fleming: Thank you to the member for the question. I’m not sure if he was in the room, but we were just starting to talk about how you bring down the cost and how the commissioner establishes price caps and how, essentially, fares are set — what the cap will look like in the next performance term.
The member knows full well that the current performance term is capped at 2.3 percent, so it gives the kind of affordability and predictability that we want. When that was brought into being, almost four years ago now, we even had a year of zero increase when we faced the uncertainty of COVID and were worried about people struggling with the loss of income and challenges to their small businesses.
The overall fares are determined by the overall activities of the corporation, what those cost. Maybe I’ll give a couple-of-part answer here, going back to a previous answer.
The ministry and the government meet quite regularly with the ferry corporation about the types of things the member might anticipate around scheduling and around different challenges. Fuel costs, obviously, came into effect last year as an area of concern. Then, of course, we were in this renewal period, going forward, to a new performance term, so lots of information being shared back and forth there.
Crucially, to the member’s question, were some of the labour challenges, some of which are borne by having, I think, for most of last year and possibly continuing into this year, the lowest unemployment rate in Canada. It’s labour shortages across a number of sectors, but transportation labour shortages and marine transportation labour shortages, as well, owing to retirements, owing to…. Crewing challenges were experienced by variants of COVID infecting crew, all those sorts of things. There were some really tough parts of the last year that challenged, on the service side, having every sailing as scheduled in fact occur.
So we have had a number of discussions where B.C. Ferries has shared their strategies. There is a fairly extensive section in the B.C. Ferry Services submission to the commissioner if the member wants to look it up. It’s the September 30 submission of 2022, pages 128 and 129 in particular.
If I can just read from some of that, because it is a public record submission that might be of interest to the member.
They’re planning to establish a centre of excellence for training, for recruitment. They’re planning to increase their investment on workforce development, so promoting from within and hiring the positions that are vacated — succession planning basically. They’re looking at bursaries and scholarships — so a series of incentives for young people to pursue a lifelong career in a good company like B.C. Ferries, which continues to be rated one of the top employers in our province.
They’ve committed to working with the B.C. Ferry and Marine Workers to look at different schedule and shift arrangements that might also be additionally attractive for new employees, and also reducing stress and workforce pressures and improving work-life balance to additionally retain members. So that’s positive.
They’re looking at employment partnerships in industries that are related to B.C. Ferries — leadership capacity development for people who are working in certain parts of the corporation that might take on additional supervisory or managerial duties. There are a number of strategies there. I’ve cited the reference for the member to take a look at.
Those all cost money, and those will all be part of B.C. Ferries’ overall budget. That is part of the submission, as I’ve mentioned, for the commissioner to scrutinize and make a determination with regard to the price cap.
The $500 million that’s before us this afternoon is something that’s going to help promote affordability, because it’s going to address some of the cost pressures around fuel, around taking a deferred capital plan and reactivating it and making investments in fleet and facilities in the company around labour costs that are negotiated — all those sorts of things. That’s every cost driver there. The money that is being debated here this afternoon is to promote affordability within those activities of the ferry corporation.
A. Olsen: I appreciate the response and appreciate the contents that the minister read back with respect to the plans that the ferry corporation has with respect to their workforce and the worker shortages that they face.
Hopefully, what’s addressed are the systemic issues where there was, I think, an evolving, as it has been described to me, culture of having a lot of casual workers rather than creating a pipeline within the organization to promote. Over the last number of years, to keep costs down, many people who normally would be promoted from within were in casual. Anyway, I appreciate that that’s being addressed and that the corporation itself is addressing this. I look forward to the positive outcomes.
I think when the minister and I were much younger people, the ferry corporation was…. When I went Stelly’s, it was one of the two places that people always looked at as having a good…. Butchart Gardens and the ferries — everybody wanted to work in one of those two places. I think part of that culture is gone now. I really think that while B.C. Ferries still remains a good employer, the idea of having a career there and being able to move from the galley to the wheelhouse is something that I think needs to be re-established.
The minister talked about facilities. He’s well aware that there’s quite, I think, a growing vocal group on some of the southern Gulf Islands, Salt Spring in particular, with respect to terminal upgrades that are needed. I think, actually, what I’m going to do is I’m going to leave that for the next…. I’m not going to try to put it in here and ask the minister a question as to whether or not there was a consideration of upgrading terminals with this $500 million, because I think the last answer the minister gave highlighted the affordability measures.
I will, though, because as part of this supplementary estimates…. It clearly highlights that there are two things that are trying to be accomplished here. The first thing is ferry fare affordability, and the second aspect of it is the climate initiatives to reduce greenhouse gas emissions.
I’m just wondering if the minister can highlight the amount that’s being spent on the affordability measures and the amount that is being invested in achieving the greenhouse gas reduction measures that are needed by 2030.
Hon. R. Fleming: It’s a very good question. It kind of goes to this place where…. We certainly look at the submission of B.C. Ferries, and the commissioner’s job, ultimately, is to scrutinize that. It’s not a case where we only care about fares and that they should make a choice between keeping those low and perhaps avoiding investments on greenhouse gas reduction activities. We want to support the whole plan.
The whole plan is costed and given to the commissioner. A major source of revenue, obviously, is fares, and that’s what we want to protect with our money, but we want B.C. Ferries to achieve its strong and ambitious goals for greenhouse gas reduction by 2030. The commissioner will determine what that investment exactly looks like, because they review the capital plan and make a determination about what kind of activities are going to happen there.
There are some very good initiatives that are moving the company forward around electrification of Island class vessels. They need some infrastructure there around the use of renewable fuels, biodiesel, renewable diesel. Those are very important to GHG reductions. Anytime a terminal or facility is improved, obviously, using strong green and low-GHG building practices and mechanical systems and those sorts of things. Those are all part of the capital plan that the commissioner will rightly review and make a determination on.
When she makes that determination, she is also going to set the price cap, and it is going to include the contribution agreement that we will have with B.C. Ferries by the end of this month, which will utilize and put into action, once authorized by the assembly here, the money that’s before us this afternoon.
A. Olsen: There is, I think, a lot of conversation — or there’s some conversation, perhaps — about the electrification of the fleet. That would be something, an initiative, that I think many people, certainly in the southern Gulf Islands, would be very supportive of.
There’s also the reality that you can have an electrified fleet, and if they have nowhere to plug into, that’s going to be a problem. You might be able to find access to enough power to supercharge a ferry, the battery packs in a ferry, at Tsawwassen and at Swartz Bay, but the reality of being able to plug that in on Galiano or on Mayne or on Pender or on Gabriola, trying to be inclusive of the other Gulf Islands, is going to be challenging.
Has the minister thought about the infrastructure investments, maybe in a partnership with the federal government, to ensure that we can continue to encourage B.C. Ferries to make the investments in an electrified fleet because the investments are being made, the plugs are there for them to plug into, rather than maybe investing in LNG, say, for an example, where you don’t need to have those plugs?
Hon. R. Fleming: Thank you to the member for the question. There’s a very recent ruling by the ferry commissioner that the member might be interested in. It’s publicly posted. If he has any trouble finding it, I can get him a copy outside of this process. But it’s a ruling by the ferry commissioner to approve the latest iteration of B.C. Ferries’ electrification plan. It’s basically exactly that. It’s moving forward on the plan to fully electrify four of the Island class ferries on the routes that they are currently serving.
In terms of the strategy to lower greenhouse gas emissions with the 2030 target — the 2050 target, by the way, is a 96 percent GHG reduction — it’s not going to be entirely electrification. There are going to be bio and renewable diesel. There are simply some routes currently, anyway, where we can’t contemplate battery power that would be reliable and capable of creating the continuous service. Those would be typically longer routes.
But there are some great opportunities, and there are some ships built to specification that can be electrified. We do need the shore power infrastructure to do that. The commissioner agrees. We want to be part of that.
We’ve certainly had a number of engagements with the federal government to do that as well. The federal government in the past has been involved in electrifying cruise ship terminals for when they’re in port and reducing emissions. So there’s a broader discussion about British Columbia’s interest in federal support for marine battery electrification.
We have a cluster of great companies here. The Island class vessels I mentioned — their battery systems were created by a Richmond-based company. There are a lot of suppliers that are part of that electrification value chain. We think that we could scale that up, and B.C. would have a great innovation success story to be a leader, as we already are, in the world.
I’m fully supportive of the federal initiatives and what they’re doing in the automotive sector in Ontario and the parts sector in Quebec. We think that marine battery support here would be an excellent candidate for additional federal support. Regardless of that, there is movement towards electrification in the manner that the member inquires about.
A. Olsen: Just a comment. I appreciate the responses from the minister. I appreciate the questioning from the member from the opposition with respect to all of the, I guess, judgment decisions that a minister has to make when you’ve got a Finance Minister saying: “We’ve got X number of dollars to spend. Where would it best be spent that aligns with the priority of the current government?”
I think the minister knows that just in my riding alone, we hear about road maintenance; we hear about ongoing upgrading of roads to increase the capacity for multimodal transportation; the improvements to ferry terminals. All of those things, I think, we’re going to discuss at later stages in the further estimates about the Transportation budget.
Those are all decisions, though, I think it’s important to just note, that could have been the decision that was made. That doesn’t diminish the fact that at least a third of British Columbians rely on this ferry service to be affordable. So I think that this is a good investment in making sure that we’re able to maintain that affordability. Definitely, on behalf of my constituents, I’m appreciative of the investment that’s been made in order to keep the prices affordable and accessible for people.
HÍSW̱ḴE SIÁM.
P. Milobar: Picking back up my question around the calculations of how we got to the $500 million. Was the $500 million presented to Treasury Board, and did it get Treasury Board approval?
Hon. R. Fleming: Yes. Treasury Board approval was secured for this fund.
P. Milobar: Our understanding of the PT6 submission and the initial calculations that B.C. Ferries was using was that they were anticipating a 4 to 5 percent fare hike with their submission to the commission and that the PT7 was going to be closer to the 7 to 8 percent range as they projected forward.
That was predicated on a $32 million to $48 million hit for wages, which would be a big component, obviously, of the cost structure moving forward. Has there been a major jump, then, in the anticipated wage structure within B.C. Ferries for them to suddenly be worried about a 10.4 percent rate hike?
Hon. R. Fleming: Since late last year, the modelling that was shared by B.C. Ferries with the ministry, and perhaps in formal discussions with the commissioner, was for a sustained four-year increase of over 10 percent each year over the four-year performance term.
That was very definitely shared with the ministry, and there were a number of cost drivers in there. Yes, labour was one of them, fuel prices and their fluctuation was another and, of course, some investment in fleet terminal upgrades and capital activities that had been deferred during the pandemic.
P. Milobar: Then what was the dollar figure of the calculation to take the fare from 10 or 10½ percent down to that 2 to 3 percent range?
Hon. R. Fleming: The amount that we’re debating this afternoon that is designed to protect affordability, going forward to 2028, was based on discussions and information shared by B.C. Ferries about all of the cost pressures that they were facing and what they would likely seek to recover in fare increases from the commissioner.
The commissioner will make the determination and will scrutinize the submission that the B.C. Ferries company has made to see whether, in fact, she agrees with those estimates or not.
That’s an awesome responsibility, but it’s designed on a price-cap model that was developed looking at international best practices, and it has been in place for a significant amount of time.
The tool that was available for our government, irrespective of that process and where they land at, in terms of a final number…. The tool we could use to nudge things towards an affordable range of what we think is much more acceptable for fare increases is a contribution agreement, which I have described this afternoon and which is made possible and legal if the Legislative Assembly agrees with the supplementary estimates before us.
P. Milobar: I appreciate all of what the minister just said, and I understand all that. But the question was around: what is the calculation that the ministry has used, dollar value–wise, to bring it from a 10.4 percent rate hike that the government is concerned about down to more the 3 percent that has been quoted as the target in the media?
Our calculations would say it’s nowhere near the $500 million, so the only way that calculation spikes is if it’s unknown labour costs that we’re not aware of that have either not been announced yet or just haven’t factored into previous calculations.
So again, what was the calculation base to make that yearly, basically, 7 percent shift downwards, and what was the actual dollar value that the ministry arrived at?
Hon. R. Fleming: Government, based on information that was shared by B.C. Ferries, established a goal and a range there.
He’s correct that in the 2 to 3 percent annually would be acceptable to this government, and 10 percent times four years would not be.
That was the information that we were given, and it was based on a whole number of cost drivers and risks going forward. Fuel cost is obviously a significant one; also collective agreement costs, absolutely, as the member has mentioned. It’s a whole number of other factors, too, getting back to GHG reduction activity, greening the fleet, electrification, vessel procurements, investments in terminal facility upgrades that are necessary for a variety of reasons. Either they’re updated or have significant deferred maintenance or they’re unable to support the capacity of passenger use, as is the case on a lot of the routes in B.C.
The sum total of that is why B.C. Ferries gave us the number that they were going to go forward to the commissioner with. The commissioner may disagree. That number could be lower. Heaven forbid it would be higher. But I think in those instances, if, for example, the money was — I’ll put air quotes on this — “too much,” then it would be possible to push forward that funding to PT7 or to accelerate some initiatives within the plan around GHG reduction or those sorts of things.
It wouldn’t be the case that the province would be overcompensating the corporation and enriching it. It would always service affordability and keeping the fares low, which will be defined in the contribution agreement that we negotiate.
P. Milobar: The minister touched briefly on where I was going to head a little bit anyway, so I’ll jump in with it now.
My understanding is the ferry commissioner is an independent body. Their decisions are completely independent of government. I guess the question is: how can the government continually state to the public that the fares will be 3 percent or lower when it’s actually not for the government to make that decision?
Hon. R. Fleming: Government has the ability and has, in fact, used occasions to buy greater affordability through our service contract with B.C. Ferries.
We did that in 2018 when we reduced, by an average of 15 percent, fares on smaller and northern routes. We did that when we restored the previously cancelled seniors free travel, Monday through Thursday, on routes and schedules across the province. We did that when we put in previous price caps that were supported by further government resources, including the safe restart money of $308 million during the COVID pandemic, which kept, in 2020, fares at a zero percent increase.
Yes, we take a different approach, but it doesn’t amount to interference. I mean, the hands-off approach previously, where the previous government just left it to B.C. Ferries to raise fares as they saw fit and have them approved by the commissioner because the government wasn’t going to support it with additional resources, was disastrous for British Columbians living on the coast.
It was unacceptable that, for example, from 2004 to when we assumed government at the tail end of the 2016-17 fiscal year, fares went up in the North by 90 percent. Fares on smaller routes like Nanaimo and Gabriola Island also went up 90 percent. Even on the major routes, fare increases were 60 percent.
One of the first things we did was make investments in affordability on B.C. Ferries. They had gotten out of hand, and it was a travel and business barrier for workers and businesses on Vancouver Island. We reduced those fares, and then we made them predictable and affordable.
Now, times have changed in the world. The commissioner will reflect upon this. She’s an economist. She has a background in price cap administration and, obviously, is an expert in administrative fairness as well. We will in no way interfere in her determination.
What we will do, though, is insert into the process — I think this is perfectly valid, and it has been done previously — a contribution agreement that will allow the price cap that she determines to be brought down into the range that we announced last Sunday, between 2 and 3 percent, taking us to a predictable and affordable future from today until March 31, 2028. That’s what we’re trying to do. That’s what will happen.
We’re voting on this supplementary estimate right now, admittedly in the middle of the process, but we have an idea of where things are going. We know what B.C. Ferries is asking for, and we know how the commissioner makes an independent determination. Our government’s goal around affordability for coastal communities, as it relates to ferry fares, is going to be positively influenced by the funds that are being sought here in the Legislature.
P. Milobar: Again, to the minister, if the commission is truly independent and can make those determinations….
We don’t have the terms and conditions released yet, let alone negotiated with B.C. Ferries. Based on previous answers by the minister, there is going to be flexibility around capital and other areas that they can move the dollars to if needed. If B.C. Ferries, once they sign the terms and conditions…. If the commissioner views the $500 million however she chooses to view the $500 million….
There’s no guarantee that, in fact, this will actually accomplish what the minister has repeatedly made as an emphatic statement of a 3 percent cap. The commissioner would be within her rights to make it a 5 or 6 percent cap, thus freeing up B.C. Ferries to access more of the $500 million on other projects that they may want to. That would not have the same impact to rates, in the short term, that they might otherwise if they were directly going against fares.
Hon. R. Fleming: This goes back to the previous discussion. The costs of B.C. Ferries are applied forward to the commissioner over the performance term. The sum total of the corporation’s activities determine what needs to be recovered from fares. There are other contributions, our government among them and a very small one from the federal government.
The price-cap determination is based on what the overall budget is, the expenses anticipated for the ferry corporation, of which ferries are a major input into their revenue. This buys down an overreliance on fares that would have seen average fare increases, by the company’s own figures, which they shared with this government, of over 10 percent a year for four years. Totally unacceptable.
It was done previously, under the previous administration. We had years where fares went up 7½ percent, 8 percent, 9 percent a year, year after year after year. That’s why affordability started to slip away from B.C.’s ferry system.
We’ve worked very hard, with targeted investments, to get those fares back down, starting with a 15 percent reduction on northern and small routes and fare caps that were affordable for major routes, helping certain types of passengers who are retired to be able to afford retirement here on our coast. We want to protect those. That’s what we’re doing in performance term 6, knowing that we had warning signs, which were driven by global inflation, which were driven by cost drivers well beyond our control, around fuel costs and other input costs, including labour. We’ve talked about that.
Those were the numbers. That is why we came up with this approach — to make sure that we have, until the first quarter of 2028, predictability and fare affordability.
P. Milobar: I will loop back again. We still actually haven’t gotten the number. It has been a few questions now around the number.
What was the dollar figure that the ministry used to bring rates from that 10.4 percent down to the 3 percent range per year? What was the actual dollar figure that the ministry has calculated would be needed to make that subsidy work, to get the rate from 10.4 down to 3?
Hon. R. Fleming: It’s $500 million. We believe it’s $500 million to get to the ferry submission and the price-cap determination of the commissioner, which will not be exactly as B.C. Ferries requests, likely, but could be very near to it. We believe that $500 million is what is needed to get fare predictability and affordability down in the 2 to 3 percent range per year for every year of the next performance term.
P. Milobar: Within those calculations, was the ministry using the estimation of the $32 million to $48 million for increased wages within the PT6 submission as a base around the wage side of the equation?
Hon. R. Fleming: We’re not looking at each of the inputs. We’re looking at the sum total of all the inputs that created the number that was shared with our government.
The commissioner’s job is to look at the operations specifically and the underlying reasons for the number that was estimated and requested by B.C. Ferries, of the commissioner, for the next performance term.
We looked at the number — around 10-plus percent per year times four years. So $500 million would allow us to get down to the range of 2 to 3 percent per year.
P. Milobar: Well, the reason I’m trying to figure out what inputs the ministry used to come up with their calculation....
The ministry said they did not consult with B.C. Ferries. B.C. Ferries didn’t ask for this $500 million. It wasn’t a request. It was all Premier-driven that this needs to happen. The ministry then went out and crunched their own numbers to come up with a dollar figure to submit to Treasury Board, and then after Treasury Board approval was when B.C. Ferries found out they were going to be the benefactors of $500 million.
It’s important for us, as opposition and the public, to understand the inputs that the government was using on their calculations to come up with $125 million a year as a needed subsidy when you consider that the complete subsidy for B.C. Ferries right now is $200 million a year.
Somehow a $200 million subsidy a year works for the current ferry fleet, but a 10 percent rise to rates needs $125 million just to knock it down 7 percent. So the numbers aren’t actually meshing right now in terms of what would actually be needed to go from 10 percent to 3 percent when you look at the overall budget of this current fiscal year that this supplemental budget is being attached to.
Now, our calculations, based on a $32 million to $48 million settlement for wages over the PT6 time frame, would indicate that you need around $45 million a year to go from 10 percent down to 7 percent. That would leave around $300 million left for other spending within B.C. Ferries. So there seems to be a wide gap in the numbers right now.
Our numbers are calculated with the help of people that are very knowledgable about the operations of B.C. Ferries. They understand how things work. It’s not my calculation, believe me, but I have no reason to discount numbers. We have former ministers as part of our group. We have all sorts of people that can help us in terms of rough calculations. That’s why I’m trying to understand best where the government came up with the need for the extra $300 million.
I can understand totally if our calculation is off by even $100 million, because again, we’re just kind of trying to do a rough calculation to get into an order of magnitude. But when an actual yearly budget is $200 million for the whole ferry service to help offset fares and capital and all of those costs, is the minister honestly saying that to stave off a 10 percent fare increase and keep it at a 3 percent fare increase, the $200 million actually has to become $325 million a year?
Hon. R. Fleming: The member just talked about labour costs potentially going up. That was his sole calculation on fare pressures.
I’ve mentioned all of the other inputs that B.C. Ferries is facing, including significant fuel price increases that can be anticipated over the next performance term, including the need to get back to investing in terminals, new vessels, electrification, GHG reduction activities — all of the things that, in the crisis and uncertainty of the COVID-19 pandemic, were understandably deferred. So there’s a lot more than just the wage pressures that the member has mentioned, and those form the global number that was given to us by the ferry corporation and is, in fact, before the commissioner right now.
Now, scrutinizing every input cost into the ferries submission is the job of the commissioner, and I expect she will do it very well. That will ultimately inform her decision on what the price cap looks like. Our contribution agreement that we will develop with B.C. Ferries is based on what we think is required to get it down to an acceptable range of 2 to 3 percent per year fare increases.
P. Milobar: Well, again, B.C. Ferries wasn’t consulted in conjunction with the $500 million because they didn’t ask for it. This was a direction by the Premier a couple months ago.
I appreciate everything that goes into the cost of B.C. Ferries, as the minister is talking about. If I read the voter appropriations description in the main budget that this supplemental is being attached into:
“This subvote provides for annual government contributions of payments towards public transit and coastal ferry services, including costs incurred for providing public passenger and transportation services in and between various communities throughout the province.
“This subvote also includes provincial investments in transit capital infrastructure and operating expenses. Costs may be recovered from ministries, the B.C. Transportation Financing Authority and other Crown corporations, other levels of government, agencies, organizations, individuals and private sector partners for activities described within this subvote.”
The subvote contains two areas: public transit at $143.6 million and the coastal ferries services at $200.6 million.
Is the minister saying that this $500 million that’s being asked for is going to fund things different than the $200 million that’s in the current fiscal plan?
Hon. R. Fleming: Yes, it will. It absolutely will fund it differently. What’s before us right now is this text: “Ministry of Transportation and Infrastructure — $500 million to B.C. Ferries to support ferry fare affordability for coastal ferry users during the next performance term, 2024 to 2028, which includes climate initiatives to meet greenhouse gas reduction targets by 2030.”
Things have changed dramatically around the globe: highest inflation rates in 40 years, unpredictability, fuel costs. Everything that has come with that surprise, in this fiscal year, has caused us to look forward at pressures coming at us and to use the unprecedented surplus opportunity to guarantee that instead of uncertainty or “10 percent times four years” fare increases that will absolutely cripple the economy on Vancouver Island…. You can imagine trying to build homes or have workers and firms come over here adding to that cost of business.
I think the last time I checked, we grow maybe 10 to 15 percent of our food on Vancouver Island. So the costs of what we could have been faced with if we took no action were simply unacceptable for the government.
That’s why we’re here this afternoon. That’s why we worked with B.C. Ferries. They shared their information. We calculated what a year-end opportunity might look like to avoid all of that over the next four-year performance term. That’s the amount that’s before us this afternoon.
P. Milobar: Again, I’m not questioning the concept around fare reductions. I fully understand all of that. But we are faced with supplemental budget estimates right now, with very large sums of money that have been scrambled and cobbled together in very short time frames, to the point that we don’t even have an agreement with transit signed by the government on what this $500 million will actually definitively go for or not.
That’s still being worked on and hasn’t been signed off and negotiations finished for a sum of money of half a billion dollars that ferries didn’t even ask for in the first place, on goals for the $500 million that sound very much in line with the goals and deliverables that are expected in the first place of transportation systems, especially under trying to drive down emissions around environmental initiatives and GHG emissions and making sure that routes are open for people. All of that seems to be in play.
Is the minister suggesting that none of that $200 million that currently goes to B.C. Ferries in this current fiscal year is supposed to or have an expectation around any of the goals and ideals that have been laid out for the $500 million?
Hon. R. Fleming: A couple of things. In the recent past, we’ve talked a little bit about COVID and how unusual it was and how it required additional government resources that we supplied, $308 million. That was on top of the service fee.
That was in recognition of disrupted passenger volumes because of the virus and the health restrictions, but it was also in recognition that B.C. Ferries was designated an essential service. It had to sail. It had to be there to get people to health care appointments and get to work, and to be a dependable, reliable service. I suppose other governments would’ve done it differently, and they might’ve drastically cut service and not worried about that. But ours didn’t.
This is not unprecedented, what we’re doing this afternoon. That’s the point I’m making. We created an additional supplementary funded amount of money for the ferry corporation to survive and get to the end of the COVID pandemic in good shape. We are now confronted with an inflationary pressure the likes of which we haven’t seen in 40-plus years. What we’re doing here is sending a positive signal to the commissioner, whose job it is to determine the ultimate price cap by signalling our intent to preserve affordability in the face of the cost pressures that are coming at B.C. Ferries corporation.
If we were to do what I think the member suggested we do — that we should’ve negotiated the contribution agreement with B.C. Ferries first and then maybe come somewhere else and asked for the money…. I don’t want to presuppose how the vote will go in the Legislature, but if we’d got it wrong and it was somehow voted down, we’d be on the hook for a contribution agreement that we’d put a legal signature to. That would be the cart before the horse.
What we’re doing, having identified a major financial challenge to affordability, is taking the steps to anticipate what performance term 6 will likely look like, with accurate information that B.C. Ferries has provided us, not presupposing the independent commissioner’s role, but also trying to put into the mix for that determination a contribution agreement that is aimed at affordability for the travelling public.
P. Milobar: Well, given the government outvotes us 2 to 1, that’s a pretty pessimistic view of the minister — that he’s worried that he might lose a vote in the chamber when it comes to budgetary issues. But that’s good to know. It’s good to know that attendance is a worry for the government.
Here’s the thing, though. There are the signed-off terms and conditions, and then there’s a draft copy that could be provided so people could understand what exactly is allowable or not allowable. I say that as this is being rushed out the door. This is half a billion dollars that was not in the budget last year and that did not go through the scrutiny that we would at estimates. That’s why we’re all here today. In fact, it doesn’t even span into this fiscal year that we’re about to embark upon.
I’m trying to be respectful of the preliminary reading in by the Chair, but this is actually a supplemental item that won’t take effect until fiscal ’24-25 and forward. It’s a little tough to talk about it in only ’22-23 when we have ’23-24 sitting on the books. The one advantage we have with ’23-24 sitting on the books is that’s locked in, in black and white.
What we do know is that the current fiscal year budget for coastal ferry service is $200,647,000. What we also know is that for this current budget that’s about to start to be debated, the number is almost identical for the coastal ferry service.
They haven’t seen a spike in operational costs, apparently, to be able to keep their rates where they’re at right now, then come to government and say, for fiscal ’23-24: “Even though we agreed with the rate cap from the commissioner for this current four-year cycle, we need a little extra help from government to make the numbers still work.” Because they’re getting the same amount of money.
Around the same time that was being baked into the budget, because of the advanced warning that spending actually has to happen to make the budget documents actually all click and be cohesive, the Premier’s office picked up the phone to the minister and said: “You’ve got half a billion dollars to throw at ferries.”
So we’re here trying to figure out how that number was actually arrived at. The explanation is to move rates from a potential 10.4 percent increase down to 3 percent. Somehow, that 7 percent shift equates to $125 million a year, despite a budget that even this coming year is only $200 million. That 7 percent increase — the numbers simply don’t match up with how we got to $500 million. That’s simply all I’m trying to figure out.
How does a fare increase of 10 percent…? If you assume the government is doing the same cost help to B.C. Ferries, that would require the government to chip in their $20 million on their $200 million, for the 10 percent increase. How does that equate to $125 million a year? What were the inputs that skewed what is an existing $200-million-a-year subsidy to B.C. Ferries to requiring $125 million a year to offset a 7 percent rate hike?
Hon. R. Fleming: A couple of things. Maybe I’ll start, I think, where the member was ending, around the why now. Why this fiscal year when the performance term 6 doesn’t come into effect until April 1, 2024?
Now is the time when the commissioner is making determinations for that process. We missed doing anything about that this year. The cap is determined. Absent government action, you can’t put the genie back into the bottle. So we have to do it this year, and we want to do it for all the reasons that we’ve stated in this debate.
I’m not trying to disrespect the member, but if I’m wrong in this suggestion, I think he’s confusing the service fee, which is approximately $200 million, with the budget of B.C. Ferries — not the same thing at all. I know he knows that, but this might give him some food for thought. I appreciate he’s substituting for his colleague, the ferries critic, who is unable to be here this afternoon.
Ferry fares represent $800 million dollars of annual revenue for the corporation. That’s where the pressure on this 10 percent company financial pressure per year, every year for four years, could seek to alleviate that. That’s where the affordability threat to the travelling public lies. That’s why government is taking action in the manner that’s before this House right now, which is the $500 million in prepaid ferry fare affordability going forward, which will give the kind of certainty that island communities want and need for their own economic success, going forward.
P. Milobar: Well, now we’re getting somewhere at least. This is meant to offset $800 million worth of fares. A 10 percent lift would be $80 million, and 7 percent of that would be $56 million. That’s what the minister is trying to drive down — this $56 million on the fare side of things, on the 10 percent lift. That still leaves about $70 million a year, over the four years, unaccounted for in terms of the overall fare structure.
Again, how did we arrive at $125 million a year when, on $800 million worth of fares, to drive it down you need $56 million a year.
[M. Dykeman in the chair.]
Hon. R. Fleming: Just a couple of comments to the member’s question.
We talked about the amount that ferry fares account for in terms of the corporation’s revenue. That goes up and down. That was a rough amount. But the compounding effect of 10.4, 10.4, 10.4 over the years…. I can well imagine that the member can anticipate how that would magnify the pressures throughout the performance term.
We also have a year prior to PT6 where costs will go up, as the member expressed some interest in. So it’s not just the completion of this fiscal year. It’s the addition of the last year of PT5 that will set the stage for a different set of costs beginning in April 2024 of PT6.
I mentioned the description of the item that is before us for debate. It’s fare affordability, and it’s also supporting the company with specific GHG activities as well. That’s a part of the $500 million of supplementary estimates that we’re discussing this afternoon.
P. Milobar: To get clarification on the description of compounding 10.4 year over year over year, is the minister suggesting, then, that PT6 is calling for a 10 percent increase in fares in 2024, then a 10 percent increase on top of that in 2025 and then a 10 percent increase on top of that?
In other words, just to use round numbers, it’s $100 and it’ll go to $110. Then it’ll be 10 percent on $110 in year 2, and then it’ll be 10 percent on what would be $121 in year 3. So it would be 10 percent on $132. Is that what they’re saying is going to be staved off, or is it just the initial 10 percent fare that’s being requested that gets set in year 1, and that’s the fare for the next four years?
Hon. R. Fleming: When all of these precise calculations…. It is the job of the independent regulator, the ferry commissioner, to look at exactly that. We anticipate and have information of what B.C. Ferries is seeking from that regulatory process.
She will set the price cap. She will look at all the inputs. We’ve discussed this — a significant amount of deferred capital and rising costs anticipated for the ferry corporation. What we want to do is get a signed contribution agreement that’s going to positively influence us to a range of fare affordability, of increases more like 2 to 3 percent per year.
It may be the case that some of that money moves forward even into PT7, but it’s in service of fare affordability for ferry users. That’s what the intent of the supplementary estimates is.
P. Milobar: Sorry. Again, I’m not trying to be thick on this. I’m just trying to get a better understanding, so it frames up the rest of my questions. The answer back was about the compounding, which I understand if it’s year over year. I was under the impression that when the rate gets set, it’s more of a locked-in four years.
The expectation is that it will be 10 percent a year, per year, each and every single year over the next four years from 2024 moving forward, not a flat 10 percent that then maintains for that four-year period.
Hon. R. Fleming: The answer is yes. It is every year, each and every year of the four-year performance term. It’s not just 10.4. It’s times four plus compounding impact. That’s what B.C. Ferries, to our understanding, before the commissioner’s office, is looking at right now during the price-cap determination, and they will review every aspect of the ferry corporation’s submission.
It’s a very extensive submission that calls for investments on a number of areas. We were concerned by the prospect, based on rising global inflation, fuel prices, perhaps wage pressures and other extraordinary expenses that are increasing, that amounted to Ferries’ determination that it would be seeking 10.4 each and every year during the entire performance term.
P. Milobar: The current $800 million of fares that get collected in a year…. Is that to cover off any capital charges against the carrying cost of that, the fuel, the wages, all of that, in addition to the $200 million it gets provided by the government every year?
Hon. R. Fleming: Yes, that is a source of ferries’ revenue. It’s not the only one. It’s there to cover off the expenses of running what is one of the largest ferry networks in the world.
P. Milobar: When we’re talking about B.C. Ferries…. We’ll just use 10 percent as a round number. Talking about a 10 percent fare increase, they would be looking at, with the same amount of passenger traffic and vehicle traffic, taking that $800 million worth of revenue to $880 million. Is that what the intention of this supplemental item is meant to offset — that $80 million dollar increase?
Hon. R. Fleming: The plan that B.C. Ferries has presented has a lot in it, and it’s not just about status quo service this year. It’s, in some cases, about expanding routes and schedules, which we agree with.
Populations are growing. There are a number of ferry users that have multiple ferry waits. Those kinds of things need to be addressed. There will be additional vessels procured and brought into service. There will be terminal improvements made. We agree with most of that.
Ultimately, it will be the commissioner’s job to decide what is necessary and what is not necessary for the running of the ferry corporation.
On the GHG side, obviously our government is very interested to work with the ferry corporation to reduce its greenhouse gas emissions, because that is an overall commitment through CleanBC and through the targets we have. This sector plays an important role in achieving those targets.
What we’re trying to do is stop an overreliance on the travelling public and quite drastic pressure on fares as the main recovery of that. So knowing that the plan, which has all of these elements to it that cost money and require investment, is putting that upward pressure on fare affordability, that was the key for the Finance Ministry, the Premier’s office and our ministry, sharing information that we had from the B.C. ferry corporation, to do something about it, to essentially make a contribution that will allow the independent price cap process to arrive at something much, much more acceptable for coastal British Columbians.
P. Milobar: But all of that, in that answer, would have been part of the submission that B.C. Ferries put to the commissioner to justify the 10 percent rate hike. Expanded service and GHG fleet change-outs and all of that would have gone into the cost pressures — fuel prices, labour prices, expected growth of ridership, all of that. That would have had to factor into all of their calculations to get to a 10 percent fare hike.
A 10 percent fare hike would mean that they were trying to collect — and that’s based on current revenues — an extra $80 million, which means this plan is to try to drive that down so they only have to collect an extra $24 million with rate hikes and the rest gets picked up by the government, which I understand the concept of.
I’m just trying to get to how we arrived at $500 million, because all of those inputs are the same in the commission’s submission. That submission would be based on the $800 million worth of fare revenue, or thereabouts, depending on the timing of when they had that number versus when they made their submission.
I’m not expecting it to the dollar, obviously, but we’re massively apart here. Even if you account for the compounding factor of 10.4 percent a year or 10 percent a year, that gets you out, based on $80 million worth of increase, to $260 million in four years.
I know the staff don’t agree with me on that, but $80 million is 10 percent of $800 million. So that’s what a fare increase would be in the first year. So 7/10 of that is $56 million. Then when you keep going the next year, 10 percent of that extra added on would be $61½ million, around $68 million, around $75 million. That’s your compounding every year. That comes out to $260 million. That still leaves almost half of this money in this supplemental request unaccounted for, given that everything else in that fare structure….
I understand the concept, again, that the minister is striving for with this supplemental injection of cash to try to keep rates lower. But if it’s around keeping rates lower and that rate structure is based on all of those same inputs that the minister just mentioned, why the need for the extra $250 million, $240 million — pick a number — $200 million?
Again, we’re trying to, with very short notice and very light on detail, figure out why this government is requesting half a billion dollars in spending on something that very clearly appears to be achievable with somewhere in the range of $250 million to $300 million.
Hon. R. Fleming: We can disagree a little bit on the math. Ultimately, as we’ve talked about this afternoon, it’s the commissioner who is going to determine and scrutinize the submission and arrive at a price cap based on the numbers presented by B.C. ferry corporation and determined by her to be necessary for the entirety of performance term 6.
What I would say is the math is a little bit like this: whatever is needed in year 1 of performance term 6 has to be built and then becomes part of the base for each and every year. Year 2 increase becomes part of the base for that year and every remaining three years of the service contract. Year 3 is on top of those two base years, and then has two additional base years, until you get to the final year of the performance term.
That’s what it looks like in terms of the $500 million. Of course it would be allocated differently for each and every part of the four-year term. There’s a lot in the submission as well that is over and above a simple fare increase that is a cost driver that will be considered by the commissioner.
We’ll let her do her work to see which route expansions on unprofitable routes are approved and not, where the per-passenger subsidy becomes that much more exacerbated. They’re needed to be transported. They’re oversubscribed. They do not make money at the fare rates and never have and never will, but they’re part of our marine highway system. She’ll make a determination on those kinds of things that are all part of the submission.
P. Milobar: Again, those are all part of the submission that is already…. Well, when we first heard it, it was going to be in the 4 or 5 percent range. Now we’re hearing from the government that it’s apparently in the 10 percent range. We’ll take it at the 10 percent. That’s what we’ve all been talking about today. I’m not taking issue with that.
I don’t want to get too hung up on the math, but the math leads us to the dollars of the $500 million. Again, from $800 million, you go to $880 million. That’s $88 million extra added on, as the minister points out. You’re at $968 million. Add another $97 million, you’re at $1.065 billion. Add another $107 million on, you’re at $1.172 billion. You add another 10 percent of that on, and that’s another $118 million. You take the seven off of all of those that we’re trying to save down with this supplemental budget item, and you’re still in the $270 million range. That’s with compounding, either way you want to calculate it.
Again, I’m not trying to get too hung up on the exact dollar figure. I concede that it might not be 270. It might be 280. It might be 250. But we’re talking about $500 million here. Even if we can all agree that at most you need $300 million to offset from 10 to 3 percent, there’s still $200 million, which is a significant dollar figure when you consider that the yearly subsidy from government right now is $200 million to Ferries.
Is the intention of government, then, with this $500 million to dictate to Ferries that although it sounds like they’ve put in a submission that includes increased routes, the only way they get this $500 million is if they actually expand what their submission to the commissioner already was? Or how does the government, who made the calculation very quickly, just as I had to do here today…? Obviously, you have a little more detail than I do to make the calculation.
What was approved at Treasury Board was $500 million. I would hope that Treasury Board had a fulsome presentation of the justification of how $500 dollars was calculated. Because if it didn’t, and we’re talking about a whole bunch of other supplemental budgetary items that come close to $3 billion, it puts into question the decision-making of Treasury Board and this government on all of these supplemental items in terms of the oversight that we can expect of what went into the calculations to tie up hundreds of millions of dollars, if not billions of dollars, of taxpayers’ money simply to rush out announcements.
The fundamental premise that we’re talking about here, today, I haven’t spoken against. I’m trying to figure out the $500 million. Can the minister shed some light, other than compounding interest, on how we go from $300 million to $500 million?
Hon. R. Fleming: Let me just go back to our goal here. That is to purchase fare predictability and affordability in the next performance term using this opportunity, while we’re in the middle of a price-cap process that’s independent of government, which we used before to do exactly what we are doing this afternoon. This isn’t new.
It’s also to let the commissioner do her work, which is to scrutinize the information and the request of B.C. Ferries and get it to a credible plan. It’s not agreeing with all of it. It’s sorting through what needs to happen to sustain good, reliable ferry service that’s investing in its own fleet renewal and all those kinds of activities.
Without government action, the commissioner would look at the 10 percent per year request of B.C. Ferries and say: “Okay, 10 percent.”
Again, we’re using round numbers. They’re not the right ones. I know the member acknowledges this.
Ten percent of $800 million of fare revenue is $80 million. That $80 million will be required in each of the four years. It will be built in the base, straight across. Then we come to year 2 of the performance term — another $80 million that will be needed for each of the three years across. When we get to year 3 — $80 million, $80 million. Then when we get to the final year, another $80 million on top of that. By the end of it, using the member’s math, we would need $800 million.
Now, I don’t think we do. I think $500 million was chosen…. We expect back-and-forth between the ferry commissioner and the ferry corporation. It’s informed by contributions we’ve made through the safe restart agreement and other affordability initiatives that we’ve pursued before — for example, reducing fares on smaller and northern routes by 15 percent. We had to cost, obviously, restoring free weekday travel for seniors and pay for that as well.
Again, the determination is going to be made by the commissioner. These supplementary estimates, this $500 million, is going to help do exactly what we want it to do, which is to make sure that ferry fares remain affordable for coastal residents who need to get to work, who need to bring materials over to build houses and who need to have refrigeration trucks come over to the Island and buy food from producers in the other parts of the province to support our integration as an island and a series of islands with the mainland economy.
It’s our marine highway system. It’s one that if we were to have done nothing when we formed government in 2017, we would have seen the astronomical increases that we saw — at 7, 8 sometimes 9 percent a year — under the previous government, when it just got out of hand and got to be too much.
We don’t want to see that happen, especially at a time when global inflation is driving a lot of hardship to Canadian families and right here in British Columbia as well.
P. Milobar: Well, I’ve never once suggested it’s $800 million. If the minister truly thinks it’s $800 million that’s needed, based on compounding, then they have not funded adequately their target goal.
If we can get back to the realm of even remotely close, I did factor in the year-over-year increases when I said it’s around $300 million. Again, verbally walking through the numbers might be cumbersome, but I’ll stand by the $300 million.
I guess the question I have for the minister, though, is around this $500 million. Is there anything attached to the $500 million contemplated, going to be worked into the terms and conditions, that would actually compel B.C. Ferries to take actions that are over and above what their submission to the commissioner was for the overall operation and expansion and day-to-day routes and everything else that made part of their submission to the commissioner?
In other words, is the government now requiring B.C. Ferries to do things that they have otherwise not contemplated doing with their submission to the commissioner?
Hon. R. Fleming: The short answer is no. We are not influencing B.C. Ferries submissions by insisting on certain operational or scheduling inputs. B.C. Ferries has made a submission that has some of that, where they have identified overflow routes, where they’ve identified some problems, particularly during the peak season.
They will be working with the commissioner, and she will make a determination on what is valid and what she feels may not be necessary.
P. Milobar: Part of the reason I’m trying to dig around and find my way around this extra couple-hundred million dollars is because of potential extra costs around electrification and things of that nature that may rear up.
Now, it’s our understanding that B.C. Ferries had an agreement with the federal government in 2019 that had the federal government contributing $130 million. B.C. Ferries was going to need to contribute $30 million. That would have seen the completion of the Island class electrification already without provincial moneys other than the B.C. Ferry contribution.
However, our understanding is that the previous Premier’s chief of staff said, “absolutely not interested,” and now those types of projects will be borne without any federal dollars.
Was that project contemplated and rejected and now possibly available with some of these funds?
Hon. R. Fleming: Let me just answer as fulsomely as I can to the member. This government is absolutely interested in the electrification of B.C. Ferries and the marine sector more generally. We talk about this very frequently with the federal government, with the Minister of Infrastructure in particular. It’s been a long conversation. We have no contribution yet for B.C. Ferries for this purpose on electrification to date, nor has there ever been a commitment by the federal government to do so.
What I would say is while I…. The member’s information is incorrect that there was an agreement. There was not. I would say, just to be positive about this, that we do feel that we have the attention and potentially the support of the federal government closer now than ever before.
P. Milobar: Can the minister share: when does the most current collective agreement for B.C. Ferries and their workers expire?
Hon. R. Fleming: I haven’t had to do this and haven’t wanted to do this before, but we are here to talk about the supplementary estimates. The question he’s asked is, in my view, outside of it. I am sure that it’s easily available via Google.
Certainly the Labour Relations Board has a copy of every collective agreement in the province. I don’t have that before me. Neither does the province of B.C. negotiate with unions that are represented by B.C. Ferries. They do as an independent company. So it’s not part of our ministry’s area of responsibility.
The Chair: Just a reminder for everybody that broad questions should be saved for the upcoming main estimates process and that this is supplementary estimates, so we’re looking at the consideration of that very specific and narrow area.
P. Milobar: Thank you for that, Madam Chair. The supplemental item we’re talking about actually doesn’t take effect until 2024 through to 2028. So that’s why I’m asking, because in all likelihood, a collective agreement will expire sometime in that time frame that this supplemental $500 million is being requested for from this chamber.
The reason I’m asking…. It truly isn’t meant to be a gotcha question. It was meant to try to ascertain, in terms of the flexibility that B.C. Ferries might have…. They’ve obviously had to make a submission to the commissioner — that’s what this item we’re dealing with is also trying to address — of 10.4. They would have had to make assumptions based on labour agreements to arrive at a 10.4 percent fare hike request of the commissioner. Somewhere in there, they would have had to calculate a potential job action or renegotiation.
Again, this isn’t trying to insert the government in the middle of those negotiations. I respect people’s right to free and collectively bargain. So again, I don’t want to have the government misconstrue what I’m trying to get at and ask.
Does B.C. Ferries have the ability with this top-up money, this extra $500 million, if they are faced with a strike situation or a labour situation that would start requiring dollars far in excess of what they may have already budgeted for within their submissions, to tap into any of these dollars as a workaround, instead of dealing within the negotiations?
Hon. R. Fleming: To the member and his question, the area of discussion that he’s just advanced here is contemplated in the submission. It is in the submission. I would direct him to some discussion about dates for contracts to be renewed and those sorts of things, because it is contemplated in the submission.
P. Milobar: Thank you for that, then. How much, if any, extra calculation went into the ministry’s submission to Treasury Board of the $500 million, contemplating potential wiggle room that B.C. Ferries may need to solve contract disputes as part of the $500 million?
Hon. R. Fleming: I think we’ve covered this with a different leading question, though. The answer is the same. What we took was the global number, based on information being exchanged between our ministry and B.C. ferry corporation of what they would be seeking at the commission.
It is the commissioner’s job to look at every single input and cost pressure that the corporation is facing that is part of their submission to make a determination about which ones she agrees with, which ones she disputes and, ultimately, to come up with a price cap recommended for the entirety of the performance term 6 based on the work that she will do.
P. Milobar: I appreciate that, but the question, frankly, wasn’t around the price cap. The question was around how the ministry and the minister came to the calculation of $500 million as the needed sum of money for B.C. Ferries, given, as to the minister’s previous answer, that they would have the ability and the flexibility to tap into some of that $500 million if wage settlements were unexpectedly high.
I’m just merely trying to ascertain out of the $500 million, how much out of that was calculated for those types of labour possibilities.
Hon. R. Fleming: That’s a lot of ifs and ifs and ifs. It is ultimately, as I’ve said, the job of the independent commissioner to review the submission. The corporation runs its own operations. This ministry does not.
What we are doing here with the supplementary estimates is we are taking the sum total of cost pressures that B.C. Ferries believes it is facing to run a sustainable, reliable ferry service on the coast, which puts ferry users at risk of exorbitant fare increases. We do not want that to be the outcome, so we are using this opportunity in the year that the commissioner is doing their job and making their determination for performance term 6.
I will reiterate that if we had waited a year, I think, as the member suggested earlier in this debate, we would have missed that. It would have been after the fact. The price cap would have been determined, and it would not have been able to be positively influenced by the use of supplementary estimates, in a year where the province’s surplus forecast was unexpectedly large and this opportunity presented itself.
It’s as simple as that. I implore the member to understand it. This money is to buy down where fares might be and to get it into a range of affordability. I don’t know if it’s going to be 2.1 or 2.9, but we want it to be within 2 and 3 percent.
P. Milobar: Again, I understand all that, but that wasn’t the question. My question is really and is directly on the….
Interjection.
P. Milobar: No. My question….
The Chair: Through the Chair, Members.
P. Milobar: My question really is around how the ministry and the minister came to the $500 million, how they managed to present that to Treasury Board and how it was calculated so Treasury Board could approve it to bring it forward here.
I understand the concept from 10 to 3, and I understand the commissioner will make that decision and is an independent arbiter of all this process. I’m not taking question with that whatsoever. But the commissioner doesn’t negotiate the collective agreement for B.C. Ferries and neither does the government. I fully recognize that, and I accept that as well.
My question earlier on…. The minister acknowledged that B.C. Ferries would have the flexibility with this money to help use it to offset an unexpected collective agreement that they weren’t expecting to cost in a level that they were originally contemplating. I’m simply asking for confirmation if that’s not the case.
If it is the case, how much of the $500 million was used in that calculation to submit to Treasury Board on the potential that B.C. Ferries could tap into, if needed, to settle collective agreements, moving forward, given the time frame of the submission is 2024-2028?
Hon. R. Fleming: Maybe I can begin by stating that perhaps the member should correct the record. I don’t believe I stated what he said I did. I did not speculate about collective agreements and that sort of thing.
What I have talked about consistently through this debate is that government has become aware that B.C. Ferries believes that it needs double-digit increases to fares in order to sustain its operations going forward, in order to deal with the ravages of global inflation and rising fuel prices and all the inputs. I’ve said: all the inputs.
B.C. Ferries has made a submission and shared the number that they will be requesting from the commissioner. Obviously, they continue to communicate with the commissioner. There’s some back-and-forth there on all the risks that it foresees over the next performance term.
What we looked at was what 10.4, each and every year for four years, would look like, what an affordability target between 2 and 3 percent would look like and how we might take this opportunity, with a record surplus that was unanticipated, to prevent that from happening to residents of coastal British Columbia and to the negative impact it would have on the tourism industry and the contribution it might have to food inflation at a time when Canadians are already struggling with that — all the negative things that would come with double-digit fare increases.
That’s what we did. We came up with the money that we’re asking the Legislative Assembly to approve in order to avoid all those negative social and economic impacts that would come with runaway fare increases in the neighbourhood of 10 or 10.4 percent per year.
The Chair: Thank you, Minister.
Just before I recognize the hon. member, just listening to the questions and the answers, the debate is becoming a little bit repetitious. So as we are heading into the last 20 minutes of our time here today, I just encourage the hon. member to ensure that there isn’t repetition in the line of questioning.
P. Milobar: Thanks for that guidance, Madam Chair. The clearer the answer, the less the repetition, I guess.
The Chair: Hon. Member, please ask your question.
P. Milobar: We have a $500 million request. I’ve tried several different ways to try to get what did or didn’t make up the calculation, discounted by the minister or not, in terms of how we arrived at $500 million in the supplemental request.
It’s for future years, so it won’t even be actioned in this coming fiscal. We’ll have to wait another fiscal before it even gets actioned. Fully recognizing, again, the role of the commissioner and that is…. Maybe the minister can just…. For very clear, clarity’s sake, then, the $500 million can only be used to offset costs for B.C. Ferries for PT6 and potentially PT7, moving forward.
Hon. R. Fleming: Let me just simply confirm the member’s question. The funding is for affordability over performance term 6. That’s what it’s for. That’s the estimate, based on the information we were provided by B.C. Ferries, of what we think it would take to get that range down to something much more acceptable — in the 2 to 3 percent instead of double-digit fare increase ranges.
I think we’ve had some discussion about how you land exactly on that number, but that number is the one that has been generated based on the information B.C. Ferries has shared with us on this application. It will be used to avoid fare increases that would be devastating for coastal communities.
P. Milobar: But that fare submission is PT6, and then the following one will be PT7. The minister even referenced PT7 earlier on and said that if it’s not all used in the first four years — you never know — they may have enough money left over to use it in a few future years. Again, is B.C. Ferries bound by only using this $500 million for PT6 and/or PT7 if there’s money left over?
Hon. R. Fleming: The intention is for this funding to stabilize predictable and affordable rate increases for the duration of PT6 and, if there is any left over, to do so in performance term 7. But this is based on the submission and the information we received on the pressures facing the B.C. ferry corporation over the course of performance term 6.
P. Milobar: I’m truly not trying to be repetitive, but will B.C. Ferries be allowed to spend any of the $500 million on anything other than PT6 or PT7, or is that the full extent of what they are allowed to expend this $500 million on?
Hon. R. Fleming: The funds would be restricted to activities that are approved in PT6 after the commissioner makes their decision. That’s it. That’s what the funding can be spent on.
They can’t take funds outside of what their operation is and what PT6 describes as the activities of which they’re obliged to do and, I don’t know, make investments in real estate. I don’t know where the member is going with this, but they would not be allowed to buy a casino with this $500 million. It’s for performance term 6 — full stop.
P. Milobar: Well, it’s because we don’t have terms and conditions available that we need to ask these questions. Again, it’s our job to scrutinize and understand how half a billion dollars is going to be expended over the next several years.
The reason I was asking that is because, unless I’m mistaken…. The minister always enjoys correcting me if I am mistaken, so I’m sure he will if I am. According to my wife, I have been wrong before in my life, so you never know.
PT6 would be in effect for the four years, so the submission by B.C. Ferries would be that that was their vision for the next four years in terms of what they need to be whole, for fares, for potential route expansions that they’re planning, for electrification, for all of those types of projects. That’s why I was asking.
It wasn’t about going out and buying a casino. It was about whether or not — and not like any agency would ever do this: “Oh, we’ve got a little extra money. Now we can finally tackle a project that we would have liked to have done, but we just have never been able to swing or justify why it would be part of a PT6, a PT7, a PT5, because it would be hard to justify fares going up to renovate the boardroom and things of that nature.” That’s why I was asking that question.
In terms of what is happening here, I think the concept is very understandable, but we are talking $500 million that could be used for four years, maybe five. We seem to have a dispute about how much money is actually needed to offset the fares for the four years.
Has the government done a calculation on what the gap will be when this agreement ends after year 4 of PT6, in terms of the shortfall that will have to be made up or the spike to fares if they haven’t had those 10 percent year over year over year?
Again, I’m not advocating for that. I’m just wanting to know so the public understands what type of rate shock the government has already calculated in as PT6 comes to an end.
Hon. R. Fleming: The member’s question…. I can understand why he would be curious about it, but it really is a little bit outside of the scope of the debate. We’ve come here in the final year of PT5, looking ahead to PT6, asking for funding to address, head-on, the cost pressures that will erode affordability initiatives that we’ve undertaken over the last six years and really compromise people’s economic and social well-being — on ferry-dependent communities, in particular, but throughout the coast.
It is not about PT7, but I understand the member’s interest in that. What it is about is getting the funds necessary to avoid the 40-year historic increase in inflation, the global pressures that are battering different sectors of British Columbia’s economy, including the provision of what is meant to be an affordable, accessible and comprehensive ferry service on our unique coastline. This company is facing pressures not unlike other transportation companies, but unlike other transportation companies, it is operated under a contract with the province that tries to promote other goals that the province has.
One of those is around economic activity and supporting the viability of island and coastal communities. It is in that vein that we are debating the use of supplementary estimates funding to protect us going forward to 2028. I don’t think it’s useful or in the scope of the debate this afternoon to start talking about a PT7 which is really going into the next decade.
P. Milobar: Well, I only referenced PT7 because the minister said this money could carry over into PT7, but obviously, the endpoint of PT6 is the beginning of PT7, so it was in that reference that I was using it.
The questions I’m asking…. I mean, this is obviously not a large chamber, so it’s pretty easy to read people’s facial expressions. I’m not offended, but staff obviously haven’t always agreed with every number I’ve thrown out here today. Fair enough. I’m not offended by that. We can agree to disagree.
But we’re talking about a $500 million supplemental item that went to Treasury Board, according to the minister, and was approved by Treasury Board. One would think Treasury Board did a proper, rigorous questioning and needed defence by the minister in terms of the justification of the dollar figure involved and how it was arrived at. That’s really what I’ve been trying to drive and dig into all day: how was the $500 million arrived at?
The question, really, is what modelling was done by the minister and the minister’s staff around what the end point of PT6 looks like for rate shock for people in terms of what B.C. Ferries will be faced with, because this is a finite program. This is not permanent funding. This is a one-time injection, which is why we’re here in supplemental estimates, which is why it has to be out the door by March 31.
It does nothing to address the $201 million that is baked into the budget this year and next year’s fiscal. There had to have been some modelling, I would assume, to justify half a billion dollars knowing…. I would think…. I would hope government would want to know the impact, because they could have viewed it as a positive. You’re deferring and avoiding so much in rate increase.
What does that number look like to the public on year 4 as this program goes off into the ether? With my calculations, I would say you actually might have about six years’ worth of money, but your staff are insisting it’s only four, so I will take them at their word. It’s only four years’ worth of money. What does that year 4 endpoint look like for rate shock for B.C. Ferries?
Hon. R. Fleming: I’m trying to figure out how to answer this to the member. We’ve been going back and forth on this all afternoon. The number is the right one. It’s based on what we heard from B.C. Ferries. It’s based on credible information of what we’re seeing around the globe and what we’re seeing in terms of rising costs for transportation companies of all types, be they airlines, ferry corporations or other ground transportation businesses.
I suppose we could have sat back and done nothing, and we could have let the B.C. ferry company ask for whatever they want and for the commissioner to make a determination. But I think the commissioner would probably see the same things that we’re seeing: unprecedented inflation, new records being set that we haven’t seen in 40 years, global instability, war in Ukraine, fuel price fluctuations, all kinds of things that are part of the backdrop to the submission that’s being made and that will factor into the price-cap determination that is the commissioner’s job.
We decided not to do nothing; we decided to do something. That was specifically to protect all of the affordability of investments that we have made since we formed government in 2017. That includes rolling back prices on small and northern routes by 15 percent, which had to be done because costs and fares had got out of control under the previous government. It included restoring free travel for seniors who have retired in communities like the one I represent or on the Sunshine Coast or all up and down B.C.’s coastline. That’s the right thing to do, and that’s what we’ve done.
We have secured, during our time in government, a PT5, at a time when inflation and costs were a lot more predictable. The backdrop and the international context of PT6 are different, and governments have to respond to changing circumstances, especially when they are beyond our control and are driven by global factors. That’s what we’re doing, and that’s why we’re making this investment.
This is what is going to help coastal communities get through an extraordinary time and not suffer things like reduced housing starts because of the cost of shipping materials like sashes and doors, and skilled labour, or seeing food inflation worsen on Island and coastal communities because we did nothing. We’re going to do something. That’s what we’re doing this afternoon, and it builds on a record that I’ve outlined.
I move that the committee rise, report resolution and completion of the estimates of the Ministry of Indigenous Relations and Reconciliation, report progress on the estimates of the Ministry of Transportation and Infrastructure, and ask leave to sit again.
Motion approved.
The committee rose at 5:14 p.m.