Proceedings in the
Douglas Fir Room

The House in Committee, Section A.

The committee met at 1:04 p.m.

[Jennifer Blatherwick in the chair.]

Committee of the Whole

Bill 7 — Economic Stabilization
(Tariff Response) Act
(continued)

The Chair: Good afternoon, Members. I call the Committee of the Whole on Bill 7, the Economic Stabilization (Tariff Response) Act, to order. We are on clause 7 as amended.

On clause 7 as amended (continued).

[1:05 p.m.]

Kiel Giddens: I’m very pleased to rejoin discussion again. Picking up off of a discussion that the member for Kelowna-Mission was having earlier today, and then actually last night as well. Although I couldn’t be in the House because I was in the larger chambers yesterday evening…. I just want to thank the folks in Hansard broadcasting services and written for the excellent work so we can continue debate. I knew exactly what was going on, and indeed, the public does as well.

We’ve been discussing for quite some time now in regards to procurement directives on community benefits agreements, restrictive labour agreements and then ensuring that the rights of all workers are upheld to work on projects in the public realm. That’s been a subject of much discussion throughout this clause.

We’ve also been discussing the challenge of certain union dues being paid to the United States leadership. The member for Kelowna-Mission had raised some concerns that the Confederation of Canadian Unions had raised recently on union dues going towards American headquarters, in some cases even to the campaign of President Trump and his counterparts as well.

I just want to pick up on that regard, because it is related to procurement. It’s related to how we have an open, fair procurement. It’s also about how we’re protecting Canadian workers to make sure that they’re aligned with the intent and the values of what we’re trying to achieve in legislation, if we’re trying to achieve a Team Canada approach. It is very important for us to align and make sure that our procurement is meeting the objectives.

I’m just wondering if as well we can go through a little bit of the comments from the Confederation of Canadian Unions just to frame a little bit of the context for this.

Canada remains the only country in the world where a number of its labour unions pay dues to unions…. Sorry, this is a quote, rather. I’ll speak again. “Canada remains the only country in the world where a number of its labour unions pay dues to unions based in another country, in our case the United States. This practice doesn’t only lead to poorer accountability, lack of national sovereignty, autonomy and local empowerment, it causes the loss of tens of millions of Canadian dollars each year to union offices in the United States, many of them working actively against progressive values and the rights of Canadian workers.”

In this context of this conversation, I’m wondering if the Attorney General can confirm that it’s something that would be possible — to ban Canadian union dues on public procurement projects in British Columbia through the authority of clause 7 and overall within the context of Bill 7.

Hon. Niki Sharma: So another shot with a new person at this question. Let me answer again.

[1:10 p.m.]

The net effect of this line of questioning and the use of the powers as the members direct would be uncertainty and lack of access to procurement opportunities for thousands of workers in B.C. I can’t imagine that’s a result that the member opposite is interested in even pursuing.

I’m going to take another approach to answering this question, which might help explain. For example, through this procurement policy, there are many companies that have subsidiaries in Canada. They may be based in America, but they have a subsidiary. You can think of a number of tech companies that are in that situation.

Our procurement policy would be targeted not to harm B.C. workers. If we were to put, for example, a procurement policy in place that said if you have a head office that’s based in America, even if you have a subsidiary here, you can’t access our procurement policy, the net effect of that would be thousands of people potentially laid off because of, already, the tariffs and now the government excluding them from procurement.

You can follow the exact same thread of reasoning to what the member opposite is suggesting, which is that unions that have been around in our province, some since 1889 and even earlier, with members who have helped to build this province and who have, maybe, been generational members of these unions…. If we were to have a directive to say that if you want to bid on procurement, none of your union fees can be directed towards American unions, we could piece through all the catastrophic things that might happen because of that — one of them being freedom of association.

People have a right in this country, which has been well established through our courts, for freedom of association in the unions that they choose.

Another one is the effect that I’ve already talked about, which is the direct cutting off of access to the companies that might have that unionized workforce in them so that those companies wouldn’t be able to access procurement, even though they’re based in B.C. and they’re employing B.C. workers through those unions. That could result in the exact opposite of what the procurement policies would intend, which is to have a stabilization effect on our workforce and our economy.

Although we might dislike what the unions and the way that individuals have associated themselves through unions…. As the member suggests, there are some distasteful contributions to the Trump administration through those union dues — and that may be true — but we have to focus on supporting B.C. workers, B.C. unions and B.C. companies as much as we can. We will use the procurement directives to do that.

Kiel Giddens: I think maybe the minister misinterpreted my comments, but that’s completely fine. I do believe that the unions — building trades unions, in this case in particular — do have a long and proud history in British Columbia. I’m not suggesting that they should be excluded in any way.

But under the authority of this provision and the government powers given under this, we’re trying to decipher whether a mechanism like this would, in fact, be possible to do. The Attorney General went on to say that people have a right, obviously, and I fully agree with that right to organize in a collective way for workers. They have that right.

I’ll maybe just quote the federal Labour Minister. This request from the Canadian Confederation of Unions was rejected, actually, by the federal Labour Minister.

Interjections.

The Chair: Members, the Chair is having difficulty hearing the questions and answers.

Kiel Giddens: Thank you, Madam Chair.

As I was saying, the federal Labour Minister did reject this. But the reason for it was: “Under the Canada labour code, employees have the freedom to choose their union representatives, some of which may be based in the U.S. Employees who are concerned about being represented by a U.S.-based union or having their dues used outside of Canada have multiple options.”

[1:15 p.m.]

Then he went on to say, later on in this letter: “Even after a union is certified, workers have options.” But in the context of B.C., workers do have less options, because public procurement has been limited to only workers who join one of these specific unions.

So we’re trying to decipher how, within our procurement practices and directives as a part of this clause, we can protect that right of workers of all different affiliations to be part of the right to work in this province, making sure that we have it — whether that’s someone who’s in the building trades or whether that’s someone non-union or some other form of collective organization of workers — making sure that they have the ability to work on public procurement projects.

I guess I’m having a hard time getting an answer. I don’t know if I’m going to get one on this specific topic of the union dues. I’m going to move on from that, but I will just continue with a few more questions on the types of directives and ones that could be perhaps restrictive under procurement directives.

We’ve talked a little bit about community benefits agreements, as well as restrictive project labour agreements. I’m wondering if the minister could describe if there are any other procurement directives that could be used under this clause that would restrict non-union or alternative union workers from public procurement, aside from community benefits agreements, which we’ve already discussed, or project labour agreements.

Hon. Niki Sharma: The line of questioning is really…. It sounds like the members are really against unionized labour, because the questions are all about that. It’s interesting.

I answered before that the tools of this act and the way we’ve approached procurement…. I think I was asked a direct question about this. We already have the ability as a government through Crown agencies to direct the procurement. The goal of these provisions and the way we’ve structured this section is to make sure that there are immunity provisions for when we direct our Crown agencies and the government procurement entities to do something that may actually be against trade agreements that are at play right now or increase the liability of their actions. That’s the goal of this.

The line of questioning that I’m getting is very much about whether or not…. Maybe they prefer that we make sure that no unionized labour gets procurement. I’m not sure if that’s the line of questioning that we’re getting to here. I’ll just say that our goal, just in general, is to support B.C. workers, and this procurement process helps us to direct government resources towards those companies in a more direct way and also helps us respond to the trade war and the threat coming from the States.

Kiel Giddens: I certainly reject the assertion that myself or others are anti-union — or anti-worker, for that matter — at all. We’re trying to stand up for workers.

[1:20 p.m.]

I’ve described earlier in the course of this discussion my experience in working in large construction projects. I’ve seen that the best model is when we have an open competition, the ability to compete between all types of different labour models. Certainly, the unionized construction sector has an excellent value set. They have excellent training. They have excellent ability to compete and work on public and private projects.

So I certainly have to just reject that notion that we are anti-labour in any sort of way. We’re trying to protect workers and, at the same time, trying to make sure that taxpayers are protected and ensuring that there is best value for the taxpayer and that procurement directives are being used in the appropriate way.

With that, I’m going to move on a little bit from this and focus on other types of mechanisms of procurement and specifically would like to ask the Attorney General, respectfully, about direct awards and whether this clause would give greater authority for direct award procurement than currently exists in legislation. If that could be elaborated on further, that would be appreciated.

Hon. Niki Sharma: This particular power as drafted doesn’t increase or affect our ability to do direct awards. We couldn’t do direct awards through this directive policy. There is a direct-award policy that’s already in place in government, and it’s complicated. I believe it’s for under certain amounts that that’s possible.

Kiel Giddens: I appreciate that. Just to confirm, this doesn’t give any additional authority to that direct-award process over and above the existing process — just to clarify.

Hon. Niki Sharma: That’s correct.

Kiel Giddens: Okay, so just moving on from that. With regards to procurement directives that are used under this power, I’m wondering if they will be published publicly, and in the same vein, will they be subject to legislative or judicial review process?

[1:25 p.m.]

Hon. Niki Sharma: There are two clear mechanisms in this section for the public availability of this. So once it…. Since it’s through regulation — so it’s an LGIC…. Those are publicly available.

But the added one is the amendment that we put in place that a directive issued must be published as soon as possible. So it makes it clear that it should be done as soon as you can.

Kiel Giddens: Thank you to the Attorney General for the response.

I guess the other aspect of procurement directives and policy and regulations that surround it, just for the public, I think they…. Again, transparency and making sure of fairness and accountability is very important.

I’m wondering if the government could describe…. Are there mechanism safeguards in place to prevent abuse of centralized procurement authority? For example, how will government ensure that this clause is not used to politically favour certain contractors, unions or regions — say it was an election year, for example? How can that process still remain transparent and fair, and is there anything that the Attorney General can provide in that regard?

[1:30 p.m.]

Hon. Niki Sharma: We have a few lines of response here that set out the protections against the type of behaviour that the member is describing.

The first one is under subsection 2. This section particularly exempts two sections of the Financial Administration Act, and no other sections, so that those two sections give the power to issue directives, as we want to do under this act.

But this piece of legislation, the Financial Administration Act, supersedes all of our other types of legislation. Unless you specifically exempt provisions, it applies to everything. Under that act, we have policies that are in place that talk about how procurement should take place — just all the things that you would want under procurement policy that would make it so you’re adhering to fair practice and process that are under those policies.

The other thing that I would say is that there are strong laws, apart from this legislation, to protect the public against types of behaviours that the member describes, including misfeasance of public office and other offences that are out there.

Kiel Giddens: I appreciate that response. I think it’s helpful to understand.

Is that the totality of the specific problems or inefficiencies in the current procurement process that this clause is, in fact, attempting to solve, or are there any other problems or inefficiencies in the current process that this clause is trying to manage?

Hon. Niki Sharma: This is under one of our tariff response bills. The goal of these directives is to make sure that we can unlock the potential of procurement in an economically unstable time. That means issuing these directives to direct procurement away from American companies or American suppliers and hopefully, through all those processes, really stimulate the economy here in B.C.

Kiel Giddens: Of course, being from Prince George–Mackenzie, I do have to put the rural lens on things, from time to time, and my own constituency.

I appreciate the response from the Attorney General about how we’re looking at trying to unlock economic growth. That’s, I hope, what we can get to in this province, and job creation as an effect of that. I’m thinking, as well, in resource-based communities as well as urban centres.

I’m wondering if there is anything within this clause or any analysis, perhaps, that has been done on the impact to rural contractors, Indigenous-owned businesses or firms in regions like, for example, Prince George–Mackenzie?

[1:35 p.m.]

Hon. Niki Sharma: That’s exactly the power of this enabling bill. In the uncertain times — and we don’t know which regions or what areas or what sectors will be impacted the most — it gives the ability of government to use these tools to respond. You can imagine a situation under a procurement directive where if there is a particular area of the province that is especially hit, then you could design something that responds to that.

Kiel Giddens: Thank you, and I do hope we can respond quickly.

I think of the forest sector, for example. It’s certainly an area where it’s under threat right now not just from tariffs but from unfair duties as well. As a province, collectively — this is not a partisan thing by any means — we need to fight back however we can to support our forestry sector.

Places like Mackenzie are really hurting right now, and I’ve spoken with the Minister of Forests previously and noted that we have to do whatever we can to support the last mill standing, so to speak, in Mackenzie — the Conifex mill. Thank you very much for clarifying that.

Maybe I’ll change a little bit. Just on the internal government decision-makings and processes that result from the procurement directives, I’m wondering if the Public Service Agency was consulted on how procurement directives may affect the chain of command of internal decision-making processes within ministries? Because that work certainly is across ministries. How will that kind of work between agencies?

Hon. Niki Sharma: Maybe we have another line of clarity on that question. PSA doesn’t have a particular or special role in directing procurement. If there’s another question that the member has on that, I’m happy to answer.

[1:40 p.m.]

Kiel Giddens: That’s fair. That’s perhaps an error on my part. The Public Service Agency perhaps doesn’t need to be included in there. But I guess the latter part of my question was really around the chain of command within government and internal decision-making processes between ministries. Are there any changes that would occur because of that? Can that be described a little bit further, perhaps, on how…? Obviously, it’s enabling legislation. It overrides existing. But how does that decision-making flow happen from the legislation to the regulation and…? Sorry, I’ll leave it there.

Hon. Niki Sharma: What this process allows the opportunity to do is, I think, in line with the question that the member is asking. It would allow government internally to…. Not midstream, but at the beginning of a procurement, if there was an opportunity to streamline a process, a minister would bring that to cabinet, and it would be a cabinet decision to issue a directive.

So for example, if there was a procurement going through a ministry and there was a way to make it so that it was very clear which minister was leading and what the decision-making authority is and how that procurement would be approached, then this could be a tool that’s used for that to unlock the maximum potential for our economy.

Kiel Giddens: I appreciate the Attorney General’s response.

In issuing those directives, I understand that would be cabinet, and the directives being made there. I’m just wondering if any of those would bypass the normal statutory reporting obligations to the Legislature. Or would those existing reporting obligations remain in effect and unchanged?

[1:45 p.m.]

Hon. Niki Sharma: This process is done by OIC. We talked about the public reporting requirements that would go along with that. Sometimes we table reports at the Legislature, and that's the way things are made public for people to see.

In this circumstance, there’s a different mechanism for that. It would be the OIC, which is made public, and then there’s also a specific clause in there, as amended, that says that it would be publicly available on a website.

Kiel Giddens: I appreciate that response.

Along the same lines, would normal requirements to document and archive all decisions, including internal memos, implementation steps…? Would that all remain the same? Or are there any different, extraordinary powers under clause 7, or overall in this section, that would change anything?

[1:50 p.m.]

Hon. Niki Sharma: There are many ways to protect against, I think, what the member was talking about. I think what he’s saying is: could you direct under a directive to, say, destroy all your records, raise procurement or whatever?

The first protection is the clear one, I think, and then there’s other ones. The clear one is that the procurement directive can only be used in relation to the procurement of goods and services. So, on that legal basis, I can’t here think of a legal reason why the destroying of records or anything else you put in that directive would fit within the use of this directive. It would probably be easily challenged that that was outside the power of this.

Then another level of protection…. Let’s say that somebody does go outside of that or wants to go outside of that legal authority — it would be clearly outside, I think, if it’s things like destroying records and stuff like that — they would have to expressly put that in the directive. And that express notion in that directive would be public through the OIC and put on a publicly available website.

So I think there are many ways to…. Then, I think, there are probably many legal opinions that could be made about whether or not the rule…. There are many other laws that relate to budget accountability and transparency and the rest of the FTA that would govern things that would probably make…. You’d have many legal opinions on that — whether or not that was a possible thing to do. So there are a lot of different protections in that.

Kiel Giddens: That’s a very helpful response. Thank you to the Attorney General.

Just to make sure I captured it correctly: there would be no changes to records retention, information management or archival procedures that would be subject to regular FOI rules that would be changed.

Hon. Niki Sharma: That’s correct.

Kiel Giddens: Excellent. Thanks for the confirmation.

So maybe just as a dutiful Public Accounts Committee member — I sit on Public Accounts — along the same lines, I just want to confirm on behalf of my fellow committee members: will this affect any timelines, structure or reporting frameworks that the Auditor General would use in their regular performance audits?

I know public procurement would be a very standard kind of audit and very needed. I’m just wondering if it would change anything that would result in what goes to the Auditor General, as well as change anything that the Public Accounts Committee would, in effect, see later on then.

Hon. Niki Sharma: No.

Kiel Giddens: A quick response. Thank you very much to the Attorney General.

Again, I’ll maybe just go back to that interministerial coordination when we’re moving quickly and making sure that decision-making is done properly and records managed and decisions within the system proper. Has the ministry prepared a risk register, perhaps, of any of those effects on coordination? Or is that needed or required at all?

[1:55 p.m.]

Hon. Niki Sharma: Government has many areas within where procurement is managed, so we have those kinds of teams.

But the real thing about procurement directives that would give it the ability to manage risk is that the procurement directives have been issued or drafted in a way that says we’re in revival. So the structures that are in place to assess the risks that may be posed through adhering to the directives and/or affect the front-line services or cost-effective nature of that delivery are all risk-managed, through not only the wording of the directive but the things that might come through that directive and the decisions made on the particular procurement decisions.

Kiel Giddens: Thank you to the Attorney General.

I appreciate that this line of questions is just around transparency and documentation and trying to keep an understanding of the normal course of how that currently exists.

There are a number of, kind of, whistleblower protections in other legislation, I guess. That is one where, say, there was a hypothetical example that within a public procurement project, there was a whistleblower who felt that a certain directive was unfair or something like that. Would those current protections remain in effect, or could there be enforceable actions against that individual that are changed in any way under this clause or bill?

Hon. Niki Sharma: Those protections would very much be in place.

I’m actually really proud of the work that we’ve done as a government to strengthen whistleblower protections throughout. Apparently, the expert, or one of the experts, is sitting right beside me.

The Chair: The Chair will call a recess until 2:10.

The committee recessed from 1:58 p.m. to 2:11 p.m.

[Jennifer Blatherwick in the chair.]

The Chair: I call the Committee of the Whole on Bill 7, Economic Stabilization (Tariff Response) Act back to order. We are on clause 7.

Rob Botterell: The question that I have for the Attorney General on clause 7 is: how will the impact of directives be measured and monitored as they’re implemented?

[2:15 - 2:20 p.m.]

Hon. Niki Sharma: I have a whole bunch of ways that this is going to be overseen. I’ll start with the actual procurement directives.

The procurement directives will have specific language in them to ask the entities that they’re directed at to assess the viability and/or impacts on front-line services for any procurement process that they have underway. That’s going to require an entity-specific analysis of how they’re directing procurements and how viable they are or how they’re going to affect their ability to deliver with services. In that analysis, you’ll have an organization-level understanding of the impacts and how it’s going.

In terms of government, we have a few ways that we track procurement policies and their impact. One is, I would say, just the general working of government. Citizens’ Services has a procurement plan that provides oversight to current policies and how they’re being used and how they’re being impacted. There’s a team there that is seized with that. And then there’s the Ministry of Finance, which is always there to assess economic impacts of all of our actions, particularly when there’s procurement and money going out.

But I think, more than that, what this whole situation with Trump’s big threats to us and Trump’s actions on our sovereignty have necessitated are new ways of working together.

Along with the implementation of this bill, we are working on a governance structure of how…. It’s taking shape in many different ways. We have a tariff response committee in government where ministries are responding, and JEDI has given us regular updates of what’s happening on the ground or what we’re hearing. And then we have our TEST committee that is giving us their expertise, where their perspectives are from, on what’s happening in their sectors on the ground.

What we’re developing is some kind of governance structure and tracking structure that will go along with the implementation of this bill to make sure that we’re harnessing our abilities and the powers under this in the best way possible.

Kiel Giddens: I was just looking to see if the Third Party House Leader was getting up again. No, I appreciated him joining the discussion. I listened to the question and listened intently to the answer.

[2:25 p.m.]

Before we took a pause there, we were talking about whistleblower protections. I did appreciate the Attorney General’s response, and I want to commend the staff here in the room that were involved in whistleblower protection. I think that’s important work. British Columbians are very proud of that.

I’m wondering if the Attorney General, with the help of this expertise that we do have available, could explain this a bit further. Which legislation specifically protects procurement directives, and how does it relate to clause 7? It would be helpful just to get clarity for the public on which legislation applies in this case.

Hon. Niki Sharma: The legislation that we’re referring to is the Public Interest Disclosure Act, which is the primary piece of legislation that is commonly called whistleblower legislation in the province. There are other whistleblower-type provisions scattered throughout other types of legislation in the book, but it’s the primary one.

Through that act, we’ve covered the public sector and the public service. That includes our Crowns, the tribunals, K-to-12, health authorities. Basically, it’s whistleblower protection that’s available for the public service and the public sector.

Kiel Giddens: I appreciate having such expertise in the room, so thank you.

Maybe just moving along here, I want to talk a little bit about Crown corporations. First of all, within directives under clause 7, I’m wondering if the Attorney General can guarantee that decisions affecting Crown corporations or other arm’s-length agencies of the government will still be subject to full accountability before the Legislature as normal.

[Nina Krieger in the chair.]

Hon. Niki Sharma: All the transparency provisions in each of the acts that set up a Crown agency would still be applicable. Through that, there are still legislative requirements that would still be applicable, which would be the tabling of annual reports and those things that happen on a regular course to ensure transparency. None of that would change.

[2:30 p.m.]

I guess, on top of that, it adds a level of, again, transparency through these directives with the public reporting and the OIC’s public nature.

Kiel Giddens: I appreciate the response. Just to clarify so I understand correctly, would these procurement directives apply to all Crown corporations and to arm’s-length agencies of government, or are there any exclusions they wouldn’t account for?

Hon. Niki Sharma: I would just refer the member to the extensive conversation we had on the last clause. Really, we talked a lot about what’s included — what is a government procurement entity, what is a government reporting entity, so what is included under procurement directive — which is, I think, a full answer to the question.

Kiel Giddens: I appreciate the clarification. I think that’s useful. Crown corporations in particular…. There are complex supply chains that Crowns do utilize as well.

I just want to maybe touch on an example, just so we can elaborate on it, with the challenge that Crowns and their procurement process might have in being intertwined with a U.S. company — a policy directive government presumably would have to try to deal with, I guess.

This is just by happenstance. A constituent of mine sent an email to me this week — didn’t know that I would be actually participating in this discussion whatsoever. But he did say that ICBC has partnered with a group called IAA. This is an insurance salvage company that assists insurance companies with the disposal of salvage vehicles. Obviously, that’s a big part of what ICBC has to look after.

Well, an interesting thing here is that it is an American company. They don’t have any Canadian locations, and all their operations are in the U.S. This constituent of mine has been really in the auction business. I think he worked for Ritchie Bros. for a period, so that’s why he’s very fully aware of this particular business. They generally make up their revenue through service fees, so about 15 percent of the sale of a salvage vehicle.

All those funds would be flowing into a U.S. location, part of the supply chain. I guess, procurement directives…. Where an existing relationship is in place, where there is no Canadian alternative in this case — there could be, but if the Crown is using an existing U.S. company and they get a procurement directive, what would change for a Crown like ICBC in this case? Would they have to repatriate or cut that contract or sever it if that was the directive? If that could be clarified.

[2:35 p.m.]

Hon. Niki Sharma: I think the question goes to the heart of all the complexities related to procurement and the many different ways government procures and why we’ve taken not only a strong approach but an approach that takes into account the complexities related to procurement.

This tool gives us the ability to respond in a way that does that. So right now, procurement directives would have some kind of viability assessment. We would be directing, in the example, ICBC through a viability assessment to exclude American suppliers, if possible, through their procurement processes. Obviously, that doesn’t mean breaching contracts that might be existing, because of the law-abiding nature that we expect ground agencies to adhere to.

That viability assessment would help understand and make sure that any changes in procurement that would exclude American suppliers don’t disrupt services, are viable in terms of their ability to achieve it and don’t result in breaches of contract or any other things.

But still, we think that that ability to unlock that potential for procurement with those checks and balances…. You can imagine if there is a hospital that needs to supply a mask that — at this stage, this is all hypothetical — is coming from a U.S. supplier, we wouldn’t want the health authority to feel like they had to change midstream. But if there is an opportunity that’s viable with their procurement to do that, then we would expect them to.

There’s a viability assessment that would happen with the undertaking of the directive.

Kiel Giddens: I appreciate the Attorney General’s response. I don’t know, in this particular example, if ICBC put this tender out to include Canadian companies for this software service. But I guess within this current example we’re discussing, could an example of a procurement directive be to — recognizing that we don’t want to breach any contracts or anything like that….

But in the initial tendering process, could a procurement directive be that tender to look for Canadian companies first to handle the business, I guess?

[2:40 p.m.]

Hon. Niki Sharma: Yes, the tools of the procurement directive give us an ability to design procurement in a way. But also I think we’re in lockstep with other provinces to make sure that, as a jurisdiction, we’re directing an exclude-U.S. approach.

We were just looking at Alberta and Ontario’s approach. It’s similar to ours, in that we are also in trade agreements with other countries, including Mexico under CUSMA, and we are looking to diversify our trade opportunities. So in that scenario, we have to also be careful not to infringe upon any other of our trade agreements when we’re designing our procurement.

Kiel Giddens: Thank you for the response. I think, just to clarify, that risk of managing any legal risk of violating some of these trade agreements, those mentioned, obviously, with Mexico, CETA, for example, and others…. All that has been thought out and is being contemplated in this, is what I’m hearing. Is that correct?

Hon. Niki Sharma: Yes.

Kiel Giddens: Okay. I just want to look at another complex example that we just want to ensure the public protection on, and it would be data storage. I actually have data storage in my own riding. We need more of that in Canada, in British Columbia, in fact. I think my own riding would be an excellent area for it if we could get them the power. So all members in the chamber, if we can figure that out, I think we’d have some really good solutions.

But there is a lot of Canadian and British Columbian data stored on U.S. servers. In terms of any risks to Canadian and British Columbian data of members of the public, of government data and of business data that could be on U.S. servers, are there any risks that were contemplated or contemplated and procurement directives that we need to mitigate? If so, what are the mitigations?

[2:45 p.m.]

Hon. Niki Sharma: Yeah, interesting question. I think it’s at times like this where we realize how integrated we are with the States. We were commenting how we’re all using Microsoft right now, which is not a bad thing; there are lots of people that are employed with Microsoft right here in B.C.

But I think that what the member describes is a security-risk scenario, which…. I’m hopeful that it won’t, but let’s say it escalates to the point where we, as a jurisdiction, have reason to believe that our data crossing borders is a risk.

This tool, as an enabling piece of legislation, would give the ability…. You can contemplate using it if that comes up, and a minister feels or the government feels like there is a real data security risk. You could issue a directive to particular Crown agencies that hold that data, or if there’s a particular threat in a certain area, direct how they use their data away from crossing the border. So it is one of the things that could be contemplated with the powers under this bill.

Kiel Giddens: I appreciate the very direct response. I think that’s exactly the risk to be looking at. I think that I can appreciate the mitigation mentioned and how that would be handled.

I do think overall, you know, with the integrated nature of our trade relationship, our business connections, this is incredibly complex, this part of it. Yeah, obviously that’s why we’re asking so many questions on this, because it is such a complicated matter. I appreciate the time we’re taking on this.

Along the same, I guess, complex supply chain piece of things here, there are a lot of cases where there are specific services that are not available in Canada, so a Canadian provider contracts to a U.S. company, whether it’s technology or…. In the case of one very high-profile example, Starlink is one that certainly could impact things. I believe it’s Rogers that has the exclusive kind of contract to use Starlink. In rural B.C., a lot of the connectivity that is currently being integrated by Rogers is actually, in effect, using Starlink technology. So I guess that is something.

Just wondering if the government has a response on a procurement directive where a network that government procurement is involved with — if that is a risk, if it has been contemplated, if it’s something that needs to be managed further.

[2:50 p.m.]

Hon. Niki Sharma: It’s right that the member says we have a very integrated system. So a couple of things to answer this question. The work that’s happening to bring better connectivity to, especially, remote areas of northern B.C. is vitally important for emergency services communications. I think we canvassed that a lot, and everybody would agree that that’s an important initiative of government.

When we look at the integration of the economy that we have right now between America and the states, the approach we’ve taken is if there’s a Canadian subsidiary, even if it’s an international company, an American-based company, that we wouldn’t exclude procurement from that subsidiary because it’s set up in Canada under Canadian laws and incorporated in it. There’s a complicated, bigger corporate structure. And that’s solely with the intent of ensuring Canadian jobs and B.C. jobs are maintained and understanding that integration.

I understand the Starlink and the connection there. I think people feel a really strong reaction against the particular individual, Elon Musk, and the impact he’s having, along with Trump, on the world, in fact. In this circumstance, the work underway is so critically important. And we would expect that there would be a viability assessment each time there is a different procurement decision made.

In this circumstance, Rogers, a Canadian company, is positioned to change things through the use of Starlink in a way that we…. I think the assessment is that through that viability assessment that it’s a provider that’s going to provide those services at this stage.

I think that viability assessment that we would expect all Crown agencies to do once they’re directed would help us, or help understand, with the kind of public interest in mind at all times, the efficiency of resources and the jobs lens, how we make those decisions.

Kiel Giddens: Appreciate that. That’s a very helpful response, I think, for the folks in rural B.C., companies working in the area. I think that’s useful knowledge for them and including, indeed, for Canadian companies who may have to understand how this could affect them. So thank you.

Actually, I think, with that, I may be out of my questions. I’m going to yield my time to the member for Richmond-Queensborough, but I thank the Attorney General for the time to speak.

Steve Kooner: I want to thank the Attorney General for answering our questions today. It’s really helpful, and I know for the people that are listening, the extra information is going to go a long way. So thank you for answering those questions.

In my line of questioning, the questions that I now want to ask are about the wording and content of these directives. I’ll start with clause 7(1) that states that: “The Lieutenant Governor in Council may issue directives in relation to the procurement of goods and services by the government or government procurement entities.”

Specifically in regards to directives here, the first thing that pops to my mind is how would this directive be phrased? How would it look when there’s a government procurement entity and then there’s a decision by cabinet vis-à-vis Lieutenant Governor in Council? What would the actual directive look like? Is there a sample of how it would look like, wording wise?

[2:55 p.m.]

Hon. Niki Sharma: As mentioned, this bill gives us new legislative tools to do this.

A likely directive could be flexible. A likely directive would identify the government procurement entity. That would give the directive the flexibility of designing that directive specifically for that entity and/or the space it’s in or the sector or whatever. So it could be designed for that.

It would identify, likely, which goods or which services are in there. There would be some kind of viability assessment that puts what we were talking about in effect, that we would expect them to, where viable, make moves to exclude American.

There would likely be some kind of legal and financial framework and general rules of application that we would put in there.

Steve Kooner: Thank you for that answer.

For clarification purposes, in regards to these directives, would they only be negative directives? I’ll give an example. A government procurement entity X — let’s just call it X — shall not purchase X country goods. That could be a negative example.

Or would it be more like a positive-framed directive? Such as: should a government procurement entity X purchase X goods, they can only do so from X corporation or X country. How would the wording or phrasing look like? Would it be in the negative form or would it be in the positive form?

[3:00 p.m.]

Am I missing something? Is there a better example than what I just presented?

Hon. Niki Sharma: Actually, there’s nothing in here that limits it. It could be a positive or a negative, in terms of it. I think that we talked about the law a little bit earlier, about the directive being about excluding U.S. procurement.

Just to say, we also talked earlier about how there’s no power of direct awards. You couldn’t put in the directive, “Crown agency, you will contract with this company,” because that, in essence, would be a direct award, which is not allowed.

Steve Kooner: Thank you for the explanation that was just given by the Attorney General.

That response leads me to my next question, in regards to limitations about wording. Is there any limitation in the legislation that would prevent a procurement directive from telling a government procurement entity that they must buy X number of goods — referring to quantity, amount — of a certain product from a specific source? Would it go as detailed as that?

Hon. Niki Sharma: Maybe some clarity…. Can the member clarify the meaning of “source”?

Steve Kooner: Source could be a corporation or a non-profit. It could be any entity that’s producing those goods or supplying those goods. That’s what it refers to.

Hon. Niki Sharma: Yeah, then the answer would be no, because that would, in essence, be a direct award to a particular company or non-profit. There would be no power to do that.

Steve Kooner: Where is the limitation wording in regard to direct awards? Where is that wording in this legislation?

Hon. Niki Sharma: Asked and answered. Thanks.

Steve Kooner: If the goal of directives is tariff response — I believe that wording was supplied earlier in an answer by the Attorney General: “The goal of directives is for tariff response” — then why isn’t there any legislative provision in this Bill 7 legislation that differentiates or signifies that these particular directives are only to be addressed in terms of limiting any sort of trade with the U.S.?

[3:05 p.m.]

Hon. Niki Sharma: The enabling viewpoint of this is exactly to give powers to ministers to respond in different ways.

Unfortunately, in an escalating global trade war, we’ve seen other actors come to the table with imposing tariffs on Canada, which includes China, who has, I’m sure the member knows, really put into place tariffs against our seafood industry. That is, unfortunately, very damaging to them. We actually don’t know where the other places may or may not come as the global stability of international trade is now uprooted in many ways.

This will give the flexibility…. When you design legislation — and I’d say especially with this type of legislation — you want to give the powers with maximum flexibility and then the ability of responses to be flexible enough to change and amend as situations change, which is a big thrust of this legislation, because I think we’ve talked many times about the uncertainty that we’re facing right now. The powers that are in here are to stabilize and also give the flexibility of response.

We wouldn’t specifically, in name, exclude U.S. Although right now, it is certainly the biggest threat to us right now with Trump and what he’s talking about and what he’s doing and what he’s saying about the 51st state. But we may have other actors step into the tariff, as China has as well, that we may have to respond to.

Steve Kooner: The Attorney General would agree with me that this legislation was created in response to the U.S., and this was specifically designed to deal with tariffs coming from the Trump administration, correct?

Hon. Niki Sharma: Yes, that’s very true. And I think we’ve talked at length — all of us have talked at length — about the threats that Trump is putting upon us, and Canadians have a newfound patriotism that was always there but is more vocal now, and we’re all very happy about that. So of course this was designed in response to the Trump tariffs.

What Trump has done is destabilize the world economy. The tariff threat and the trade war that’s escalating leaves everybody really uncertain as to where the next few months…. Where the next threats will come from. So we’ve designed this bill to be with the maximum flexibility for a response to stand up for British Columbians in any way that we may need to.

Steve Kooner: I would suggest the messaging that’s out there in the public is Bill 7 is to deal with U.S. tariffs, but what has been stated here today is that this legislation will be adaptable for other countries as well. That’s not the information that’s out there in the public. When people think about this particular legislation, they’re thinking about U.S. tariffs.

So the question back to the Attorney General is that: when exactly will this legislation also start targeting other foreign countries in addition to the U.S.?

Hon. Niki Sharma: I’m not saying it will. I think, definitely, our biggest threat is America and the actions that they’re having upon us. What I am saying is when you design legislation, you design it with the maximum flexibility to respond.

So in the uncertain times with the escalating trade war and also escalating tariffs from China against B.C., you would make sure that the legislation was clear and had enabling powers clear enough to be able to design whatever response would come.

But yes, I think we can all agree that the threat is from the States.

Steve Kooner: Can the Attorney General tell us what discussions were had amongst different ministries about not only the U.S. being a target of this legislation but also other countries being a target of this legislation?

Hon. Niki Sharma: I just want to be clear. I think I’m saying this, but I’ll say it again. There haven’t been any in this circumstance. There’s no reason or position that the government is taking against another jurisdiction with these powers.

[3:10 p.m.]

My point was that we are in uncertain times right now, and we want to make sure that the legislation is designed in the way for us to maximize our ability to respond with the tools that are flexible and in place.

Actually, you might have reasons where there are positive procurement directives you could put in place, as the member suggested. We may have other trade agreements or diversification opportunities that come up through this process that are happy things that we could use these tools to direct towards. So in the nature of assembling these tools, both positive and negative, it’s better for them to be broad in their application so they can be flexibly applied.

Rob Botterell: The line of questioning from my colleague relates to the scope, content and detail of directives. My question is that…. These directives, presumably, will be subject to legal review before they’re issued and will also be subject to laws of general application, such as conflict-of-interest legislation or broader across-government purchasing type of legislation.

There’s a very extensive and sophisticated regulatory framework for purchases and procurement. So I just would appreciate…. I’ll make it shorter. It would be helpful to have a bit of a sense of the umbrella legislation that will guide these directives.

Hon. Niki Sharma: Thanks for the question. Yes, there would be a legal review after every procurement directive comes into place. There are many laws and processes that would apply to these directives, and I’ll just start by breaking down some of them.

The first confine in the use of these directives is that they must be in relation to procurement of goods and services. So the scope of the use is squarely on that.

The second one is under the Financial Administration Act. There are only two sections that are specifically named. That is a piece of legislation that applies to everything unless it’s exempted. So it supersedes everything else. Therefore, underneath it, any of the financial administration policies that would apply — I think the member mentioned some of them in the question — would apply to the processes that were in place here. Legislation like FOIPPA and all those other ones are still in place.

Then, thanks to the member and some of the additions, there’s an added transparency level in this particular section with subsection (5), which would make sure that it’s very clear to everybody that the procurement that was directed was directed at where wanted, too, and wasn’t in foul of any of the laws that it shouldn’t be.

Steve Kooner: Earlier, we were talking about foreign countries other than the U.S. and how the Attorney General said that this could be adaptable to those other foreign countries, because there are other disputes going on.

I have another question in regard to that. Has there been any form of…? I know that a reference was made. Maybe there haven’t been discussions. But has there been any sort of governmental action or brainstorming of how this act could become adaptable to other foreign countries?

[3:15 p.m.]

Hon. Niki Sharma: Again, there have been no active conversations anywhere about any actions against other jurisdictions, but I just want to reiterate that one of the real powers of this tool is for positive outcomes for our procurement.

Let’s say, for example, not all procurement is subject to trade agreements. Or even if they are, if we are able to form diversification or access other markets or do anything that is actually a positive thing about diversifying with other countries — and I know that JEDI and a lot of our ministers are hard at work at trying to figure out how to do that — then the beauty of the flexibility of this tool is that it would actually help you design a procurement directive that may be in a positive way with another country besides America, and thereby help us with our economic stabilization.

Steve Kooner: If there haven’t been any discussions about adapting this legislation, is the Attorney General willing to commit that this specific piece of legislation in Bill 7 will not be applied to other foreign countries other than the U.S.?

Hon. Niki Sharma: No, and actually, I wouldn’t be the one that’s a decision-maker on that, to commit to that, nor would I want to bind any future ministers or any actions.

I think what’s clear is that we are in a very uncertain time when it comes to global trade, and what we’re seeing is an escalating trade war in different parts of the world. I think it would be wildly irresponsible for me to say how a minister or the cabinet may have to respond in the future, because even in the past three months, where we’ve faced what Trump has been doing to us and the executive orders coming at us pretty quickly, we face the uncertainty.

So I can’t make that assurance, and I wouldn’t. I think it would be irresponsible to do that. I’m hopeful that there will be positive things that come out of our discussions, as I mentioned, that actually could be a useful thing for these procurement directives.

Steve Kooner: The only reason I asked whether the Attorney General could commit is because this legislation was designed by her department. It’s coming from the Attorney General’s department, and the Attorney General seems to be the authority here that we’re dealing with in terms of this legislation. So that’s why I was asking.

The other reason why I was asking this line of questioning…. Yes, we need to protect British Columbians. We need to protect the residents that live in B.C., and we need to make sure there are protections for them.

There’s also a thing called accountability. Accountability is also important in this province, and people want legislation to be transparent. They want to know what they’re getting themselves into. They don’t want any sort of executive overreach. They want properly debated legislation, and they want public discourse to happen. They want conversations to happen.

When I heard earlier that this could be adaptable to other foreign countries, that was the first time I was hearing that, so that’s why I brought up those points.

[3:20 p.m.]

If that was the first time I was hearing that, I’m pretty sure for a lot of people in the public, that would probably be the first time they’d be hearing it as well.

The Chair: Do you have a question?

Steve Kooner: Yeah. The next question I have, I want to move to what the member from…. The Third Party House Leader had a question, and I have a follow-up to that question.

He was talking about how these directives fit in with other pieces of legislation. The Attorney General did mention that with certain legislation, there would be legal review to make sure that this legislation worked hand in hand with other legislation.

But a follow-up question to that. If we go a little bit further in this clause, in clause 7, subsection (3), it states that if there is a conflict or inconsistency between an enactment and a directive issued under subsection (1) — that’s the section that we’re looking at — the directive prevails. How does that fit in with the answer that was provided to the Third Party House Leader?

The Chair: Members, we will take a ten-minute recess, reconvening at 3.30 p.m.

The committee recessed from 3:22 p.m. to 3:32 p.m.

[Nina Krieger in the chair.]

The Chair: I call Committee of the Whole on Bill 7, Economic Stabilization (Tariff Response) Act, back to order.

We are on clause 7, and it looks like the minister is consulting with her team.

[3:35 p.m.]

Hon. Niki Sharma: We need to understand the subsection that the member is talking about through the section in its entirety. Then we get to where that subsection fits into the legal mechanism that exists there.

I went over…. When the House Leader of the Third Party asked the question about all the protections that are in place…. But maybe I’ll go through them again just so we have them, in the context of subsection (3), in place.

The first one is off the top. Subsection (1) says the directives can only be issued in relation to goods or services, by government or government procurement entities. It’s narrow in its scope. A directive that steps outside of that particular section wouldn’t have the power of this and would be not upheld by this bill.

The second thing is subsection (2), which very clearly only exempts two sections of the Financial Administration Act. The Financial Administration Act, along with acts like FOIPPA and PIPA, is held above every other piece of legislation. They, no matter what, apply unless they’re specifically exempted.

The Financial Administration Act really is the tool of how we administer government finances, and it has underneath it all these policies and directives that — we talked about it at length before — protect how we use government services and avoid improper procedures and processes. So that’s in place.

Then we come to subsection (3). Subsection (3), in the context of all of that, is there…. If there are any laws that are in place that are related to procurement of goods or services, they have to be related to that. In that context, there could be in who knows what number of statutes, or maybe not many but some that are…. There are sections in there that are related to the procurement of goods and services. It’s narrowed to that.

Even in that circumstance, there’s a legal doctrine that’s called the presumption of coherence. Legally we presume that legislation is not enacted to work against itself, or two pieces of legislation aren’t enacted to conflict with themselves. If that isn’t true, and there are circumstances where these two provisions related to the procurement of goods or services can’t operate together — because it doesn’t make sense that they would both be in power — then the guidance of this legislation is that the directive would prevail over the enactment.

That’s how it fits into the entire procurement powers here.

Steve Kooner: Is the Attorney General saying that because one of the aspects of this piece of legislation limits to goods and services, that provides a level of accountability? Is that what the Attorney General is saying?

Hon. Niki Sharma: In response to the question, just to clarify, it’s the procurement of goods and services; it’s not the goods or services. The directives are related to the procurement of goods and services.

[3:40 p.m.]

The next thing that I would just add, which I think is a good example of where subsection (3) might be triggered, is that Destination B.C., I’m told, has a part of their legislative makeup that is about being able to issue directives as well. In that, there may be a direct conflict where the presumption of coherence just wouldn’t apply. What we’re saying, then, is that in that instance these directives prevail over that power under Destination B.C.

Steve Kooner: I understand the bit in terms of directives for procurement of goods and services. But when you provide directives for procurement of goods and services, essentially, those directives are attached to the goods and services. These directives for procurement are limited to goods and services. Is that what the Attorney General is saying — because there’s that limit, that’s one level of accountability?

Hon. Niki Sharma: The way I would explain it that maybe will bring some clarity to this conversation is: the qualification under section 7(1) is how the power of issuing directives can be used. So the power of issuing a directive can only be used in the relation of procurement of goods or services by a government or government procurement entity. That power doesn’t extend to — we talked about it at length earlier — directing somebody to destroy records or directing somebody to change their accounting principles or all those other things, because they are not related to the procurement of goods or services.

Steve Kooner: When we speak of procurement, there are some financial implications of doing that because procurement involves procurement of goods and services. Goods and services can be very costly. If you have lots of directives — you’re purchasing a lot of items; you’re purchasing a lot of goods and services — that could be in the millions. It could be in the billions of dollars.

When the suggestion was provided that there’s a level of accountability because the directives are limited to procurement of goods and services…. I would suggest that that limit alone is not good enough, because we’re not only talking about a subject matter that’s in the millions, maybe not even just in the millions; we’re talking about subject matter that might be in the billions in terms of goods and services.

My question is, again: is my understanding correct that the Attorney General is suggesting that because the directives are limited to procurement of goods and services, that is a level of accountability to these directives?

Hon. Niki Sharma: I think that’s a little bit of a different question from the one earlier…. We’re losing the conversation a little bit.

The question that was posed to me that started this line of questioning was: how does subsection (3) fit into the rest of this part? And I went through how subsection (3) fits into the whole regime. So when I was referring to subsection (1) about the legal power of issuing a directive being confined to procurement of goods and services, it in a sense limits subsection (3), because it’s only certain types of legislation, and it’s only…. We went through that earlier. So that’s what I was referring to.

But generally speaking, the member is right in the sense that what we’re hoping to do is unlock…. I think it’s up to the point of $600 million in procurement that sits there through government services that could be used in a way that supports our economy and excludes U.S. businesses in the time of the tariff.

[3:45 p.m.]

Very rightly so…. We should, I think, in our view, be doing what we can as a province and a jurisdiction that can support B.C. businesses in a different way, in a new way, and can use a tool like this to unlock those millions of dollars in a different way.

Steve Kooner: Also, in the earlier discussion, I believe it was one of my colleagues that was asking the question, and an answer was supplied. I believe the answer was that clause 7 is a type of enabling clause. So if it’s an enabling clause, my understanding is that…. And I believe the words may have been used, “it has a broad authority” there. Would the cabinet not have sweeping powers as a result of this enabling clause?

Hon. Niki Sharma: I know what cabinet would have the power to do is unlock procurement in a way that effectively drives the economy, that effectively makes sure that all Crown agencies, all government reporting entities, all of us are working together to ensure that we’re responding and stabilizing our economy. That’s what it would have the power to do, which is exactly the power that it needs at the time that we’re in.

Steve Kooner: Going to that point that was just mentioned, I understand the intention of the government is to work to see what would be better for the economy, but where is it in the legislation that refers to certain criteria that this legislation has to follow in order to better the economy? What are the criteria? Where is the criteria? Where is the regulatory framework for that?

Hon. Niki Sharma: I have walked through all the powers in subsection (1), (2) and (3) and (4) and (5) with the public accountability measure there that was amended, thanks to work with the Green Party. So I’ve gone through the regulatory and legislative regime that describes all the guidelines, all the laws, everything that applies to this power, in detail.

Steve Kooner: With all due respect, I do understand all five subsections with the amendment. I do understand all of them. I’ve read them. I understand them.

But what I’m getting at is accountability. The Attorney General suggested that the government would follow through with these directives to help the economy or to stabilize the economy. But what would help guide them? What would be their limits? What would be the framework that they would be following to actually carry through that agenda?

Hon. Niki Sharma: Okay, so I’ll take another shot at this, because I have answered this question before.

Subsection (1) talks about the directives only being able to use in relation to the procurement of goods or services by government or government procurement entity. All these things are defined clearly in the act. Subsection (2) talks about, except for those sections 4 and 4.1, the Financial Administration Act applies and all the guidelines and services related to that act that put in all of the rules about how the finances of government are to be used that still apply.

I mentioned before, the other pieces of legislation that would guide us — FOIPPA, PIPA — that are also in there. And then in the circumstance that there…. And we’d mentioned this in where subsection (3) would be, the next one is that an OIC is public and would be public when it’s made. And then there’s an extra measure in there to make it clear that if any directive was issued under here that it would be made publicly available on a publicly available website.

Steve Kooner: I thank the Attorney General for her response.

I was looking at the Financial Administration Act earlier, and I noticed that the provisions that are referred to under sections 4 and 4.1 have to deal with accounting principles, standards that are put forward and accounting principles that the government should be following. But these accounting principles that I can maybe refer the Attorney General’s attention to….

[3:50 p.m.]

I was reading section 4, and I did read section 4.1. As I was reading it, it does refer to accounting practices, and I believe those are based upon Canadian standards.

How does this help? Like, when you’re just chopping those sections out, how does this help with accountability? When you’re chopping those specific sections out that have to deal with accounting principles that are generally accepted in Canada…?

[Susie Chant in the chair.]

[3:55 p.m.]

Hon. Niki Sharma: I have many levels of response to that question, and I’ll just talk through them.

The member points to the Financial Administration Act and within that, the sections that are listed there, 4 and 4.1, give a power to Treasury Board, which is also a committee of cabinet. It is a committee of cabinet that is empowered under that provision to do certain things.

The essence of this is to also give the authority in this circumstance to cabinet instead of Treasury Board to issue these directives. So you see what happens with this provision is it says the section is Lieutenant Governor in Council. So then cabinet is making…. We’ll go through the filter that I already talked about before. It’s only related to procurement of goods and services. It’s only a directive that goes to government and government entities.

I want to note a very important part of the legislative drafting in this section. It says: “This section applies despite….” So this section applies despite these sections, which allows them to exist unless there’s a conflict between them.

[4:00 p.m.]

What this opens up room for in our legislation is for cabinet to issue these types of procurement directives, related to goods and services, to these entities.

I’ll just give you an example. Let’s say Treasury Board — and, again, Treasury Board is another cabinet authority — has issued a directive that says, not that it’s out there, but that the procurement process has to be the lowest bidder. What this power does is it gives cabinet the ability to issue a directive that may go against that Treasury Board power, in order to enact the provincial directives that are related to procurement of goods or services.

Steve Kooner: I thank the Attorney General for the response. It was a thoughtful response.

When I was reviewing sections 4 and 4.1 of the Financial Administration Act, I understood…. I read the sections. I understood the Treasury Board is essentially a creature of the cabinet. I get that. But what I was referring to is that there are some accountability mechanisms there because even the Treasury Board has to follow certain accounting principles inside this legislation.

This legislation doesn’t just stop here. In section 4 of the Financial Administration Act, subsection (3) refers to section 23.1 of the Budget Transparency and Accountability Act. It states: “A regulation or directive under subsection (2) respecting accounting policies and practices must be consistent with section 23.1 of the Budget Transparency Act.”

The Budget Transparency Act goes further. Under section 23.1, it says: “Despite any other act, all accounting policies and practices for the government reporting entity, the government as reported through the consolidated revenue fund and government organizations must conform to the set standards and guidelines that comprise generally accepted accounting principles for senior governments in Canada or if the Treasury Board makes a regulation under subsection (2), the set of standards and guidelines that comprise generally accepted accounting principles.”

When I was reviewing these sections, I understood that: the Lieutenant Governor in Council, cabinet; Treasury Board, cabinet. I understood that aspect. But when I was going a step further, I was looking at what are the limits placed on cabinet, and I saw that there are specific accounting principles that were set as limits.

There’s a difference in where I was going with my question and the answer that was applied to me by the Attorney General. With that provided, does the Attorney General have a further explanation of how there’s accountability when you’re taking away some of these accounting principles that are in here? I understand that, you know, you’re taking decisions away from the Treasury Board, but the Treasury Board had to comply with certain accounting principles.

Hon. Niki Sharma: Again, there won’t be a conflict here, and there won’t be anything that overrides accounting principles.

I’ll just go back to the different filters in this section. It has to do with issuing directives in relation to the procurement of goods or services. Accounting principles are not that. That’s the first lens you have to apply when you’re doing your analysis of what applies or what doesn’t.

The second one is that it says: “This section applies despite….” There are many subsections related to that particular section. I was looking at some of them just now about personnel decisions and all those types of things. Of course they wouldn’t be relevant because they’re not relating to procurement of goods or services, along with the accounting principles.

Once you filter through all of that, there is a clear pathway to there being the power to issue a directive, and only if there is anything that conflicts with the issuing of that directive in the procurement of goods or services would there be an issue with another enactment.

[4:05 p.m.]

Steve Kooner: What recourse, if any, does a government procurement entity have if a directive compels it to act contrary to its legislated mandate, contractual obligations or good procurement practices?

Hon. Niki Sharma: The first thing that would kick into place before a directive was issued was that there would be an ability to do a policy, fiscal and legal review of any directive before it’s issued. What that would do is help really understand what that government reporting entity’s situation is and how a directive would apply so that you could design that directive for that entity.

The other thing to make clear is that subsection (3) does give a power, in the case of a conflict, for the directive to be the one that’s followed instead of a statute, if there’s an enactment that conflicts with the directive.

I gave the example of Destination B.C. Destination B.C. has, under its legislation, its ability to procure in different ways and issue some levels of directives. In that case, you actually may need the directive that’s issued under this procurement directive to be the one that overrides, in a way, that legislative power.

[4:10 p.m.]

The next one is that there is no…. We don’t expect our government reporting entities to violate contracts or their other legal obligations that are in place. That’s why, when we talked about the way this would be approached, there’s a viability assessment that would obviously need to happen in the context of anything that’s under there.

Then the ultimate way that we can make sure all those entities know that we have their backs is the immunity provisions in sections 8 and 9, which say to them: “If you operate in good faith under these directives, we will protect you.”

Steve Kooner: From that explanation, I just have a follow-up question to that. Ultimately, a procurement entity cannot say no to the government. They can’t say: “Look, we’re not proceeding forward with that.” The government’s decision will override. Correct?

Hon. Niki Sharma: That’s correct.

Steve Kooner: What safeguards are in place to ensure that the procurement directives power is not used to award contracts or direct procurement — you mentioned direct procurement — in a way that circumvents competitive, merit-based or non-partisan procurement standards?

The Attorney General got into a little bit about that, but this goes directly to the basis of how…. Would there be tendering? How would that process actually work? If there are a few people interested in supplying goods and services, and they come within the criteria of being able to supply those goods, how would these directives work towards those goods and services?

Hon. Niki Sharma: In order for these procurement directives to have the effect that we intend, for the example of excluding the U.S., we would be directing these agencies to say: “Exclude the U.S.” We would be directing certain things within the procurement directive, but we wouldn’t be directing the procurement process.

If they have a…. Like the viability assessment that I mentioned earlier, which would have to go into whether you can or can’t have a viable exclusion.

The next thing would be that you can frame your procurement directive before you’re issued. For example, if a procurement directive goes at the start of a procurement process, it gives that government reporting entity an opportunity to design their procurement processes in a way that, in this circumstance, would exclude a U.S. supplier. But it wouldn’t step in, in the case of midstream or contracts that are underway.

In that way, we’re able to unlock the potential of all of these agencies that procure millions and millions of dollars of contracts in a way that is more effective for the economy.

[4:15 p.m.]

Steve Kooner: I guess the concern is that if the definition of a government procurement entity is pretty expansive and broad to include many different categories of entities that could be included, and then there are directives for procurement of goods and services, and there’s more involvement from the government in terms of procurement….

I guess the exact question is: what safeguards are there in place in terms of clause 7 that protect from a government procurement entity going further and exercising favouritism and avoiding certain competitors that have fit in within the Canadian market — just deciding to go with a person, a supplier, that they may know and have good relations with? There may be some favouritism there. How do you avoid that situation? What safeguards are there in here?

Hon. Niki Sharma: In the instance described, it would be that they wouldn’t be complying with the directive, and then they wouldn’t have the protection of the immunity if they did something that was as the member describes.

Steve Kooner: Would the government be willing to commit to publicly disclosing all procurement directives issued under clause 7, including their rationale and legal basis, to ensure transparency and public trust?

Hon. Niki Sharma: That is precisely what the amendment in subsection (5) does.

Steve Kooner: I did read that section as well. I’ll read it again: “A directive issued under subsection (1) must be published as soon as practical by the minister on a publicly available website.”

I get that. You list the entities. I get that much. But the question actually goes a little bit further. The question says: “Including the rationale and legal basis to ensure transparency and public trust.” So not only just listing the directives but also listing the rationale and legal basis.

Hon. Niki Sharma: The rationale will be very clear on the face of the directive. I think we went through earlier what the directive would include. We wouldn’t disclose, publicly, legal advice.

Steve Kooner: Just going a little bit back, on the relationship between directives and government procurement entities. Just going a little bit further in the discussion, I believe I asked a question about Crown corporations. It may have been yesterday. The Attorney General did explain that Crown corporations can be included as part of government procurement entities.

Today we’re talking about directives in regard to government procurement entities. I believe it may have been brought up earlier in terms of a specific Crown corporation. But there are Crown corporations that actually do business in the United States.

What safeguards are in this legislation that will encourage whatever business they’re doing in the United States to, kind of, bring it home so that we have our workers busy working here in B.C. when the economy may be suffering as a result of tariffs?

[4:20 p.m.]

Hon. Niki Sharma: It’s exactly why this power is designed flexibly. I think I mentioned earlier that you could design your procurement directive or choose not to issue it to certain Crown agencies or government reporting entities based on their situation. And then the next level of protection is that even if you do, you…. We talked about the viability assessment. We would be asking them to undertake that or to do things where viable.

Steve Kooner: So would the Attorney General agree with me in terms of Crown corporations that fit in the definition of a government procurement entity that are currently doing business in the United States but could be doing their business here and hiring British Columbians? Would it not make more sense that they move some of their operation back to B.C.?

Hon. Niki Sharma: Just to describe what this tool is. It’s not a tool to tell an organization how they hire or where they’re located; it’s a procurement of goods and services tool. As a procurement of goods and services tool, it would be there to direct the procurement of that entity for their goods and services. That’s the power that’s been given.

You know what? Of course, we all want jobs to come and stay in B.C., and that would be clearly something that we would all support. But this is a legal tool for procurement of goods and services.

Point of Order

Rob Botterell: Madam Chair, I’d like to rise on a point of order.

This line of questioning is focused on items that are unrelated to procurement directives. This is a line of questioning that relates to ancillary matters that are not on topic. So I’m rising on a point of order because the line of questioning is not on topic. I invite the member to take a different line of questioning.

The Chair: I will confer. Just everybody hold, please.

[4:25 p.m.]

The Chair thanks you for your information and your suggestions. At this point, we hear the member for Richmond-Queensborough exploring the directives component of things. We’re prepared to continue that line of questioning for a wee bit longer, as long as it remains relevant to the clause. Thank you.

Steve Kooner: With all due respect, it’s my submission that it’s the Chair’s determination to determine rather than a member’s determination to determine.

The Chair: Thank you, Member. If you could stay with the clause, that would be great.

Interjection.

The Chair: Thank you, Minister.

If we can stick with the debate related to the amendment to clause 7, please.

Steve Kooner: As I was stating earlier, Crown corporations are a part of the government procurement entities, and we are talking about directives to government procurement entities, which are Crown corporations as well. Crown corporations do provide services. They do hire labour as well. So there are services that are supplied by Crown corporations, which comes under the clause of procurement — goods and services has to do with goods and services. So Crown corporations can be providing services and getting services, procuring services.

At this point, I’d like to introduce an amendment to this section. Essentially, I’d like to move an amendment to clause 7 to add a subsection (6), which states that the Lieutenant Governor in Council may issue a directive for Crown corporations to relocate offices back to the province of British Columbia from specified foreign jurisdictions.

The Chair: At this moment, the committee will be in recess while we assess the amendment to see if it’s in order, and then we will carry on.

We’ll take a five-minute recess, please. I’ll see you back in your seats at 4:31 on my watch.

The committee recessed from 4:27 p.m. to 4:34 p.m.

[Susie Chant in the chair.]

The Chair: Okay, Members, thank you for coming back to order.

We have an amendment on clause 7 as amended in front of us.

Interjections.

The Chair: We will take another five minutes for the review of the amendment. Thank you.

The committee recessed from 4:35 p.m. to 4:39 p.m.

[Susie Chant in the chair.]

The Chair: Okay. I call the committee back to order.

All right. We have an amendment to clause 7 as amended. The amendment is noted to be in order.

On the amendment.

[4:40 p.m.]

Steve Kooner: As I mentioned earlier, the amendment would read: “(6) The Lieutenant Governor in Council may issue a directive for Crown corporations to relocate offices back to the province of British Columbia from specified foreign jurisdictions.”

This wording is permissive. It’s not obligatory, but it allows for a mechanism to have the Crown corporations that are government procurement entities to come back in this trade war that we’re experiencing right now, that we’re in the middle of. What this amendment would essentially allow…. It would provide authority for cabinet to make regulations demanding that Crown corporations move their offices back within Canada. This would provide that authority.

Currently B.C. Hydro has a subsidiary business in Boston called Powertech USA. Also, InBC has offices in New York and London. This wouldn’t mean that they would have to shut down. Whoever gets requested to shut down their offices…. It doesn’t mean that they’d be obligated to shut down their offices right away. But it would give the cabinet the authority to do this type of manoeuvring in the middle of a trade war.

If we’re serious about bringing interprovincial trade and jobs back to Canada and B.C., then we should be considering bringing our provincial public sector Crown corporations back within our own borders. So I feel that this clause fits right in with clause 7. It allows another tool to deal with government procurement entities. They can be directed to bring back some of their operations that are happening in other places. All of this would be a good thing within the trade war that we’re experiencing right now.

So those are my submissions, and I urge all people on both sides of the House — all sides of the House — to support and vote in favour of this amendment.

Hon. Adrian Dix: Just to say, the issue of Powertech Labs and its subsidiary was dealt with in estimates last Thursday, and detailed answers were given to the opposition’s questions. The purpose of that entity is to create jobs in British Columbia, to sell the innovations that we create in British Columbia in the American market, which makes a lot of sense for developers, for innovation in B.C. That’s what we want to do with innovative organizations like Powertech Labs, which plays a unique role in hydrogen.

The amendment is not necessary to the bill. B.C. Hydro is there to promote British Columbia and to promote Powertech Labs and to promote the people working for it and the businesses associated with it, which creates jobs in B.C.

It’s not the case that we’re performing activities outside of Canada or outside of British Columbia that we would normally be producing or doing in British Columbia. Rather, we’re using this as a means, in that case, of using technology developed in British Columbia, developed at Powertech Labs, to sell in other jurisdictions. So to shut it down in that way would be counterproductive to the interests of the people of British Columbia.

Trevor Halford: I think it’s important to note that this is about optionality as well. The Minister of Energy can laugh. I don’t find it that funny. We’re talking about…. The fact is we’re dealing with unprecedented times in a trade war.

We’re not naming specific entities in this. He’s citing them; I’m not. And that’s fine if others cite them as well. We know what they are. It’s not a secret. Government has offices outside of British Columbia, outside of Canada. It has done that for decades. We understand that.

But the fact of the matter is that these are unprecedented times right now. The Minister of Energy and others have said that; the Premier has said that.

[4:45 p.m.]

This amendment here is about flexibility. This whole bill, this government keeps getting up and talking about being able to act quickly, nimbly. We’re trying to be productive here and give options.

If that’s humour, I don’t know. I don’t get it. The fact of the matter is there are other Crown corps that, eventually, could be looking at expanding in other areas. I think that this talks about that precedent. So I see nothing wrong with this amendment.

We’re talking about wanting to keep things in British Columbia as much as possible. The minister didn’t reference the offices that are in B.C., Invest B.C. — offices in New York, offices in London, I believe. But at a time right now….

We want to be promoting B.C. I get it, yes. But we have to be able to look at how we’re doing that, where we’re doing it, who we’re employing. This isn’t a decision that…. We are not saying in the amendment…. It says we can relocate back, right? I’m not sure why the minister is taking such great offence to that.

Hon. Niki Sharma: I don’t support this amendment, and it’s for various reasons, and I’m going to go through that.

I’ll start by saying that I do find the proposal and the wording of this amendment quite shocking from a party that is talking pretty clearly about checks and balances and guardrails that are needed in an exercise of power. What’s being presented here under this amendment is vague. There are no guardrails or understanding of how that power would be used or in what circumstances.

It creates a huge level of uncertainty for, I think, Crown…. First of all, “Crown corporations” is not the right term, so it’s not defined properly. But it creates huge uncertainty for all those Crowns that are out there in the world doing work that we want them to do.

For example, the Minister of Energy and low-carbon solutions mentioned one, but there are trade offices that are now needed more than ever across the country, and yes, also in America. Right now, we have a trade and innovation B.C. office there that’s helping to support B.C. businesses in this really critical time. There are good reasons for us having our reaches out in foreign jurisdictions, particularly in the time that we’re in right now.

The other issue with this amendment, along with the stuff I already mentioned, is that it’s very awkward to situate this under clause 7. Clause 7 is completely constructed to deal with procurement of goods and services, along with all of the very clear checks and balances that would be needed to exercise such a directive, including which acts are exempted and how consistencies would work and how the power exercised by Lieutenant Governor in Council would work and what transparency is included.

What’s included in this amendment is zero level of transparency, zero level of understanding how this would be used, zero level of legal analysis of what the implications would be, needed or not needed, for such a thing. If there was a directive that was issued to move a Crown from a foreign jurisdiction, that would be a costly endeavour.

Would it be necessary or would it not be necessary to have cabinet have the power just to direct that without the certainty and other ways that we’ve constructed other levels of the bill? I’m actually quite shocked that, given the way the debate has gone over these last few years, this is the amendment that they’re proposing.

Kiel Giddens: I’d have to disagree with the previous speaker, the Attorney General saying this is an arbitrary amendment. We’re talking about this in the context of a bill where the entire thing is arbitrary. The overreach is arbitrary, and that is not just me saying that.

We’re talking about this amendment in the context of part 2 of this bill, and I’ll read about part 2: “Part 2 allows the cabinet to issue procurement directives that are arbitrary without legislative scrutiny, bypassing financial controls and shielding officials from liability.” That’s not me saying that. That was a quote from the Business Council of British Columbia.

[4:50 p.m.]

To say this is arbitrary is in the context of an entire bill that’s arbitrary, so I take that argument out.

I think that as we’re looking to create jobs in British Columbia, we should be directing our Crown corporations, like B.C. Hydro, to be directing jobs here and generating power here and opportunities here.

I talked in the context of this debate about data centres, for example. My riding has the opportunity for data centres, but it’s constrained by the ability for us to get power generation. So I think in the context of this, let’s do things that can actually repatriate some of our opportunities to British Columbia.

That’s why I think this amendment can help within the context of this very arbitrary bill that is flawed in itself, but we’re trying to come up with other solutions as the official opposition.

Rob Botterell: I rise to speak against this amendment for several reasons. I don’t take issue with my colleague’s desire to look at ways to see offices in particular circumstances relocated back to British Columbia, but the particular drafting of this clause is of concern to me.

The Lieutenant Governor in Council may issue a directive for Crown corporations to relocate offices. This doesn’t allow for the flexibility that seemed to be indicated in the remarks for a Crown corporation or a particular office. It’s broader than that. It may issue a directive for Crown corporations to relocate offices.

That would suggest all Crown corporations, all offices, back to the province of British Columbia from specified foreign jurisdictions. Who specifies the foreign jurisdiction? I mean, normally what you would use is prescribed foreign jurisdiction. So from a drafting perspective, it raises significant concerns for the Green caucus in terms of potential misinterpretation.

The second point…. I fully respect the decision of the Chair to rule this section in order. But this is not procurement. This does not relate to procurement directives, which is the whole purpose of this section or clause of the act. So it doesn’t fit within the scheme of this clause.

The third thing is that government has the tools it needs if it wishes, if the Lieutenant Governor in Council wishes to look at ways in which, in particular circumstances, to encourage relocation of offices of Crown corporations. We’ve talked about labour mobility. We’ve talked about other potential tools in the government’s toolkit to deal with tariff threats and how to improve interprovincial trade.

There’s no need for this section in this act in order to enable a government for public policy reasons to incentivize or direct a Crown corporation to take certain actions. We see this all the time, for better or for worse, with ICBC and other Crown corporations where the government looks at the public interest and directs that Crown corporation to undertake certain actions.

So for all of those reasons, I will not be supporting, and the Green caucus will not be supporting this amendment.

Amelia Boultbee: I’m speaking in support of this amendment. I thank the member for his comments, but I’m going to respectfully disagree, especially on the matter of it being thematically out of line with procurement. In order to have offices, I think there’s procurement involved in that, so it is thematically related.

[4:55 p.m.]

In addition, as we’ve talked about ad nauseam, this is enabling legislation. It isn’t something that goes into the level of detail of a regulation. The word “may” is important here because it signals that this is permissive. So in terms of introducing a lot of uncertainty to Crown corporations, that could be telegraphed other ways and communicated that it’s something that’s being thought about. It gives the government the flexibility to repatriate jobs back to British Columbia, and I think it’s an important signal as well to the public of the intention and the spirit that the government says they want this legislation to be.

Gavin Dew: I also rise in support of this amendment. I appreciate what I believe is a good faith amendment brought forth by my colleague for Richmond-Queensborough.

Firstly, to address the comments from the Minister of Energy, I think there is or should be broad agreement that the effort of selling innovation and technology around renewables in the United States has always been a good thing. We want to be doing trade. We have wanted to be doing trade. We have historically had a very positive trade relationship. I think that that’s something that is good.

But you can believe that at the same time as you believe in the importance of optionality and believe in the importance of tools in the toolbox for all manner of different purposes. I think what we’re hearing during the course of this debate, and in particular this section, is a level of inconsistency from the government around optionality, flexibility. There is simultaneously a desire for great optionality but a discomfort with introducing more optionality in the form of this amendment.

I still am mildly confused. The Minister of Energy and Climate Change suggested that such an action would be counterproductive to the people of British Columbia. If that is counterproductive to the people of British Columbia, I would return then some time back on this debate to the matter we discussed around community benefits agreements and around whether or not there should be enabling powers in here to address community benefits agreements and to address the fact that hardworking Canadian union labour workers are paying dues that are rolling up to the United States and being donated to Donald Trump.

So I’m a little bit confused by the inconsistency around the optionality tools in the toolkit and the approach taken here. For those and other good reasons and in the spirit of adding optionality and the spirit of a good faith amendment designed to produce more tools in the toolbox, I’ll be supporting this amendment.

Ward Stamer: I concur with my colleagues in support of our member from Richmond-Queensborough. We’ve talked about…. We’ve heard about tools in the toolbox, and I think it’s important that we have the opportunity to be able to react not only to what’s happening to the south of us but also any other foreign jurisdictions in the world.

I think by allowing this amendment to the bill in clause 7, it gives us the opportunity, it gives the government the opportunity to have the checks and balances provided with the Lieutenant Governor in being able to seek that advice and to be able to have that opportunity with the Lieutenant Governor in Council and obviously the cabinet to be able to make those choices necessary for B.C. if other foreign jurisdictions are going to be hostile to British Columbia’s interests.

I disagree that we have the necessary tools now. I think that this whole bill and the clauses associated with it have such a broad scope in understanding exactly how things are supposed to shift with the wind in the economics of the world. I think this is an important step in being able to have those additional checks and balances in our system so that if the government needs to be able to bring those resources back to B.C., as my colleagues have mentioned, then maybe that’s the best course of action. That’s why I will be supporting this amendment.

The Chair: Shall the amendment to clause 7 as amended pass?

Amendment negatived on division.

The Chair: Shall clause 7 as amended pass?

[5:00 p.m.]

A division has been called.

[5:05 p.m.]

I call everyone back to order.

Before putting the question, I remind all members that only members of Section A or their duly appointed substitutes are authorized to vote.

Clause 7 as amended approved on the following division:

YEAS — 7
Sunner	Wickens	Choi
Routledge	Dix	Sharma
	Botterell
NAYS — 5
Kooner	Dew	Boultbee
Mok		Williams

On clause 8.

Hon. Niki Sharma: I move the committee rise and report progress and ask leave to sit again.

Motion approved.

The Chair: This committee stands adjourned.

The committee rose at 5:07 p.m.