Proceedings in the
Birch Room

The House in Committee, Section C.

The committee met at 1:03 p.m.

[Darlene Rotchford in the chair.]

Committee of the Whole

Bill 5 — Budget Measures
Implementation Act, 2025
(continued)

The Chair: Good afternoon, Members. I shall call Committee of the Whole on Bill 5, clause 6, to order.

On clause 6 (continued).

Peter Milobar: I’m just wondering what type of, if any, economic modelling was done by the ministry for moving this tax credit up to $300,000. Is there a targeted goal that’s meant to be accomplished by this move from $120,000 to $300,000, or is it just intended to be reviewed after the fact to see if, in fact, it actually is working? In other words, is there a hoped-for target in the first place?

[1:05 p.m.]

Hon. Brenda Bailey: We did some work in regard to some assessment of the angel investor community in the province through JEDI. Really, the goal of this is to encourage angel investment up to $1 million. We have heard from the community that there is a desire to see this raised. As I answered previously and the member reflected back, we will be measuring this on the other side to see the impact.

Clause 6 approved.

On clause 7.

Peter Milobar: I assure the minister I’m not out to waste time with this upcoming question or anything like that. It actually lumps 7, 8, 9 together. And I do recognize 7, 8, 9 are not material changes. It’s just partly out of confusion, but also it just seems like a confusing way to draft.

So clause 7 is section 3(3) is amended by striking out — and then you strike out a couple of clauses — and substituting in 127.41(3) or 127.44(2).

Clause 8, section 33(3) — so the same section — is amended by now striking out the previously added 127.41(3) or 127.44(2) and substituting in 127.45(2) or 127.48(2).

And then clause 9, the same section 33(3) as amended by now striking out the previously added 127.45(2) or 127.48(2) and adding in a couple other clauses.

Why did we not just jump to clause 9? I don’t understand the legislative need and it could be a total…. It just seems like a lot of in and out movements, one clause after the other, to literally strike something out, add a subsection in, and then literally remove that same subsection and add a different one, and then remove that and add a different one in.

So it just seems like a bit of confusion as people try to read through this.

[1:10 p.m.]

Hon. Brenda Bailey: So 7, 8, 9 together, these sections are about corporate installments for income tax. As the member knows, CRA, we’re aligned with them in regard to income tax, and this is about that alignment. It’s making sure that the corporate installments take into account the federal ITCs, and each of these three different clauses has a different

As the member knows, CRA…. We’re aligned with them in regards to income tax, and this is about that alignment.

It’s making sure that the corporate installments take into account the federal ITCs. Each of these three different clauses has a different commencement date, and so we wanted to make sure that those ITCs were aligned with the commencement dates.

In terms of how that happened — the ins and outs, as the member described it — that’s a drafting convention to do it in that way.

Clauses 7 to 9 inclusive approved.

On clause 10.

Peter Milobar: I wanted to cut down the enthusiastic ayes coming from the government there, so I thought I should ask a question. We’ll wear them down one of these days.

Just for clarification’s sake…. This is my first question on clause 10, because I want to make sure I don’t skip past it. As I was digging in….

We’ve had discussion in previous chambers around DigiBC. Is clause 10 the section that would start enabling some of the changes with the DigiBC tax credits and, if not, which clause would the minister refer me to on those?

Hon. Brenda Bailey: That section is referring to the motion picture section. IDMTC is in clause 26.

Peter Milobar: In terms of some of these changes to the definitions, why were…? We’ve had a film and production industry in B.C. for quite some time. What drove the need to bring in these specific definitions that weren’t adequately covered previously?

Hon. Brenda Bailey: What we’ve done here is we’ve…. First of all, let’s just sort of set the context for this. The film industry is a very important industry in British Columbia. Some estimates are that there are 65,000 people working in the film industry.

[1:15 p.m.]

It’s very high generating in terms of GDP and also benefits that communities all across British Columbia experience, so it’s a very important sector of our economy, and these are important workers.

We saw a downturn happening in that industry due to a couple of different factors, and this is in response to that downturn, to ensure that we remain competitive

and also benefits that communities all across British Columbia experience. So it’s a very important sector of our economy, and these are important workers.

We saw a downturn happening in that industry due to a couple of different factors. This is in response to that downturn, to ensure that we remain competitive and attract major productions into British Columbia. In response to that, in addition to raising the amount in the existing tax credit, we have added an additional tax credit for major production expenditure. You see that defined. And because it’s a new tax credit, essentially, that addition, we make those definitions that you see represented in that section.

I’ll also highlight for the member…. Another proposed change in this section is the question of the regional and distant location tax credit for animation productions. It’s also defined in here. And we’ve included a definition of a physical office.

So those definitions are present in clause 10.

Peter Milobar: Major productions.… When I read through the definition, it’s that the expenditure for production is greater than $200 million. Obviously that’s pretty self-explanatory in terms of what the government is hoping to drive.

I don’t dispute with the minister, to be clear, that the film industry is important to B.C. I’m not asking these questions because I think that the film industry should be ignored. We’re trying to quantify and understand the effectiveness of some tax decisions made by the government overall in regards to not just the film industry but all industry within British Columbia as we move through Bill 5.

In terms of major production definition and the $200 million dollars, what is the expectation that this change and adding in this definition, that the tax changes being provided for under this definition are meaningful enough that it would tip the scales for a decision to be made to locate a movie shoot or a production of over a $200-million-dollar spend into British Columbia?

[1:20 p.m.]

Hon. Brenda Bailey: The work that was done to get to the place of recommending these particular numbers was over quite a lot of time, a long period of time. There was a presentation to the previous Finance Minister, not this April, the April prior. I believe that is the correct month.

I also attended that as Minister of Jobs, Economic Development and Innovation. There were a number of ministers in the room. That particular presentation was from all major industry heads, essentially. The Motion Picture Association of Canada, Wendy Noss, brought heads of studios from Netflix and Warner and National Geographic. Many, many, many heads of studios. And they provided us with what was quite helpful in terms of a schematic on where British Columbia and Canada were falling behind other jurisdictions, so provided us a sort of jurisdictional map.

We’ve also done comparisons internally, looking at competitiveness with other provinces and with the United States. Essentially, the numbers that we’ve reached are those that we feel will keep us competitive and able to attract these important productions into British Columbia, supporting workers in this sector and the many small businesses and hotels and restaurants that benefit from having these productions made here.

There’s also a new line of revenue which is interesting, which is tourism that’s associated with the film industry. We see this as a huge growth area and an area that can continue to drive forward this sector.

I will mention also in regard to the changes in clause 8 for the regional and distant location tax credits, my particular interest in ensuring that that tax credit was in place is that I think it’s really important that these industries are able to be successful not just in the Lower Mainland but in all regions of the province.

Peter Milobar: I recognize we’re in definition, so I don’t want to get too bogged down on more granular, I guess, especially around major productions. So I’ll just ask to make sure I am, once again, reading the bill correctly, so we don’t skip past a clause that I’ll save those more granular questions for.

The bulk of the major production actual tax credits being implemented, though, are in clause 16. Is that correct?

[1:25 p.m.]

Hon. Brenda Bailey: Yes, the actual credit is in 16, the additional credit. But there are subsequent clauses that are relevant to the credit that follow.

Clause 10 approved.

On clause 11.

Peter Milobar: In terms of this, just a question or two. What is the cost expectation of this clause to the treasury? This is retroactive to December 31, 2024.

I won’t relitigate carbon tax and retroactivity with the minister. But I am curious what the overall calculation…. It must be a fairly accurate one, I would assume, given that we should know roughly what had been claimed in the year leading up to where we are right now or was anticipated to be claimed and then what that would mean moving forward.

Hon. Brenda Bailey: Clause 11 refers to the Film Incentive B.C., the domestic film incentive, and that cost is $4 million.

Clause 11 approved.

On clause 12.

[1:30 p.m.]

Peter Milobar: This clause seems to set out the rules for regional location tax credits, which would change what’s commonly known as the 30-mile zone outside of Vancouver.

It appears it’s 12 percent of the B.C. labour cost that’s outside of Vancouver for animation. How did the minister land at 12 percent?

for regional location tax credits, which would change what’s commonly known as the 30-mile zone outside of Vancouver.

It appears it’s 12 percent of the B.C. labour cost that’s outside of Vancouver for animation. How did the minister land at 12 percent?

Hon. Brenda Bailey: The 12.5 percent tax rate was actually introduced in 1998. This section is in regards to reintroducing it for the regional animation tax credit.

Peter Milobar: So its real intention is just to level the playing field, is what I’m hearing.

I was going to get into detail of the QLE times RLE over TLE, but I thought we’ll just leave that calculation for those in the industry that understand what all the abbreviations are.

Same question on 11 as with 12: what is the anticipated dollar figure attached to this tax change?

Hon. Brenda Bailey: Clauses 12 to 15 are in regards to the regional animation tax credit. In total, the cost is $2 million.

Peter Milobar: I take that answer as the cumulative cost of 12, 13, 14 and 15 all added together. And that’s in addition to the $4 million from section 11, I’m assuming.

Hon. Brenda Bailey: That is correct.

Peter Milobar: Just in the interests of time, then…. I’m assuming, then, that the rates set out in 13 14 and 15 are in keeping with the same — just to standardize, essentially, the rates across B.C. It’s what the current rate is, and now this expands it out to the rest of the province as well.

[1:35 p.m.]

just in the interest of time then. I’m assuming then that the rates set out in 13, 14 and 15 are in keeping with the same just to standardize, essentially, the rates across B.C. It’s what the current rate is, and now this expands it out to the rest of the province as well?

Hon. Brenda Bailey: Yes.

Clauses 12 to 15 inclusive approved.

On clause 16.

Peter Milobar: We’re back to the first part of major productions in terms of the actual tax changes. Is this tax change intended to attract one production a year? Does it hope two productions a year? What’s the expectation in those conversations between the ministry and the industry as to what a tax change like this would reasonably attract based on a spend of $200 million dollars plus per production?

Hon. Brenda Bailey: This is an area where the Ministry of Finance and my colleagues in government have had to be very careful. And the reason for that is we can take information from the film industry and other advocates on what their expectations and goals and their competitive analysis and information they want to share with us are.

We cannot share with them what we’re considering, what we may or may not do. These decisions on taxation could be market-impactful decisions. Therefore, there was no such conversation about what may or may not come here should we move forward with these tax changes. Also, it means then it’s very difficult to estimate without being able to have those conversations.

For the purposes of this tax, we have designed the major production tax credit to be a very high bar. Only the most expensive products in the world would qualify. If you think about the most popular things on any of the streaming services, those are the type of productions that we’re targeting to attract to British Columbia. For the goal of estimating the cost of this, we’ve made the assumption that we might be able to attract two of those, and that’s the assumption that we’ve made.

Peter Milobar: I’m assuming that’s recognizing that these productions can take quite some time to actually start and finish. Just to clarify, is that two productions per year or is that two productions under production at any given time or two productions in addition to what we already are seeing arrive in B.C. for production in the first place?

[1:40 p.m.]

Hon. Brenda Bailey: I think probably the best way to describe this is that at any given slice of one year, there would be one to two productions, we expect, and the slice of that year, one to two productions…. It may be, in fact, the same production, but for the fiscal lens, we’re looking at it in a twelve-month period.

Peter Milobar: Is the intention to have that be an additional one to two productions or just to maintain what we currently have?

Hon. Brenda Bailey: I would say that this new major production tax credit is actually to ensure that we continue to have major productions made in British Columbia and my concern that without this, we would go to zero. So it would be to continue what we saw prior to 2001, 2002, a very strong film sector, and to ensure that we remain competitive and can attract those major productions.

Peter Milobar: I’m assuming you need to fall into one category or the other. In other words, you’re either a major production, or you’re not. You can’t be a major production and tap into other levels of tax credits to do with B.C. labour expenditures, and then this is over and above that. Is that the case?

Hon. Brenda Bailey: Yes, this is a top-up for productions that are over that threshold.

Peter Milobar: So just to be absolutely clear then, the tax credits that are attached to the qualified B.C. labour expenditures that are in place — this is 2 percent over and above those expenditures, is what I heard the minister say, which is understandable. And so in terms of this…. It sounds like it’s more of a maintain than expand.

This was perhaps…. Well, not perhaps. This appeared to be the very first course of action. There were, I think, a couple of ministers, several staff that jetted down to L.A. right after cabinet was sworn in. The first big announcement was changes to the industry for tax.

Was this already in the works pre-election? That seems like a pretty fast tax announcement to be making, for a brand new Minister of Finance to sign off on, let alone in a government that is talking about working its way back to a balanced budget with the first order of business. I can understand going down to make connections with new ministers, but it seemed to be a very fast tax announcement in terms of that.

So was this something that had been previously in the works with the previous government and got finalized post-election — which again, I get; governments continue on — or was this essentially done very quickly after the cabinet was sworn in?

[1:45 p.m.]

Hon. Brenda Bailey: There are a couple of things I would like to say in regards to this question. One is my civil service associates have advised me that during the interregnum period, it’s very common for bureaucrats to work on all of the platform commitments from various parties as they make them, knowing that whomever is elected, there will be a rush to accomplish some of those commitments. So yes, there is some work that was occurring even during that interregnum period in a non-partisan, broad kind of way, I would say.

In regards to: was this something being considered, I will share with you, of course, that I was in that meeting a year ago, April, where we received information on our lack of competitiveness. Of course, we had heard from many people in the industry, even knocking on doors in my riding, who were not working and were film workers. So we do know that there were many people who were feeling the lack of films coming into British Columbia.

That, in fact, is the challenge that this legislation is designed to address. So I think those really are the components. This legislation was being considered and was included in budget through consultation and through modelling, and that’s why we’ve included it.

Peter Milobar: I wasn’t trying to give the impression that there would be anything wrong with any of that type of work being done. Like I say, I fully recognize that tax policy has to be developed over time.

In terms of the $200 million being the threshold to trigger the spend, it’s not $200 million, obviously, on B.C.-based labour. What is the expectation or what does the modelling the government based its decision on show the percentage of that $200 million being for B.C.-based, qualified B.C. labour expenditures?

[1:50 p.m.]

Hon. Brenda Bailey: I’m advised that it’s usually about two-thirds of that $2 million, or around $1.2 million, that would be labour.

In regard to what is eligible, B.C. production costs include costs not only related to B.C. labour but any services rendered in B.C., in addition to any goods purchased and used in B.C. in respect of the production. The legislation also includes specified types of costs that are ineligible.

Peter Milobar: Just to be clear then, all of those additional costs would form part of that $120 million, or is that over and above that as well?

Hon. Brenda Bailey: I do want to take a moment to correct. I misspoke and said, “1.2” when I was talking about “120” million. Allow me to reframe that.

So $120 million of the $200 million are likely to be labour costs. Excuse me for misspeaking. And I’ve lost my train of thought. One moment.

Thank you. Pardon me.

The way that it works, I understand, is that the costs that I listed to the member in the previous answer get you to the $200 million mark, but the actual calculation on what you receive for rebate is based on the $120 million labour spent.

Peter Milobar: That was my interpretation. That’s why when I heard the minister’s first answer, I just wanted to clarify to make sure we were all talking about the same thing.

So $120 million worth of labour per shoot, this is hoping for one to two shoots. Even if we just say it’s only one per year, as I read this, this is a 2 percent tax break.

Can the minister then explain why on page 59 there’s only $1 million budgeted for this year? That would be about a $50 million labour spend, which would be nowhere near a $200 million major film production based on the ratios we’ve heard, not even remotely in the realm of hitting that threshold.

How could the ministry create a tax and a tax benefit, based on the answers they’ve just given, and only budget for, essentially, a third of what would be needed even for one production, let alone if we were attaining the two productions, even on a rolling average that the minister was talking about?

[1:55 p.m.]

Hon. Brenda Bailey: I think the component that’s missing in the member’s analysis is just that it’s a question of timeline.

Principal photography goes back to that January 1 date.

Hon. Brenda Bailey: I think the component that’s missing in the member’s analysis is just that it’s a question of timeline. And so principal photography goes back to that January 1st date, but in fact, the actual filming and when the tax credit will be claimed is about 18 months down the line. That’s why you’re not seeing it reflected in this budget. At the time that we’re bringing this in, there are no productions at the level that would qualify. So this is going to be reflected in future years.

Peter Milobar: I’m just making sure that I’m understanding the lay of how to claim these, the ground moving forward. And again, I assure the minister, if I cover it ahead of time, I’m not going to come back to it when we get to the clause.

So the overall concept of this, because as we get into certification and being able to revoke certification and repayment…. Is the intention then for the ministry that film productions will only be claiming this when they finish production or as they are producing on a rolling basis and that’s the reason that we would need those other certifications and an ability to revoke ability to claim back?

Is it a cashflow for the production or is it at the very end, you meet the threshold and we’ll give you a big lump sum payment back at the end?

Hon. Brenda Bailey: I will just direct the member to clause 16, that it is when it’s completed. And yes, it is a lump sum payment.

Clauses 16 to 24 inclusive approved.

Hon. Brenda Bailey: We have an amendment to clause 25. I move that the amendment to clause 25 in my name on the orders of the day.

The Chair: Members, we have an amendment to clause 25.

On clause 25 as amended.

Peter Milobar: It’s quite a lengthy amendment in terms of what got added in. I guess I would ask the minister how such a hefty chunk got missed in the original thing and what triggered the need for this size of an amendment. It’s not a slight formatting error by the looks of it. It’s a whole other section by repealing subsection (2) and substituting the following. And everything, pretty much, is underlined, which means it’s all getting changed.

[2:00 p.m.]

The Chair: All right, just for clarification to you, we are on clause 25, in the amendment.

Hon. Brenda Bailey: I will share with the member that Legislative Council highlighted after the bill was tabled that this change was required. The amendment is intended to provide the Commissioner of Income Tax with the necessary regulation-making powers to implement the changes to the training tax credit for apprentices and the enhanced credit for Indigenous peoples and persons with a disability, announced as part of Budget 2025.

Clause 25 as amended approved.

On clause 26

Peter Milobar: Just a couple of questions around the DigiBC tax changes. Again, I want to make sure the minister hears this, and the public hears it very clearly: these aren’t questions opposed to DigiBC. These are questions trying to….

Interjection.

Peter Milobar: Again, we’re not opposed to DigiBC. We’re not opposed to their lobbying efforts.

Would the minister like the floor?

The Chair: Remember, through the Chair, Members.

Peter Milobar: We’re not opposed, obviously, to the virtual and digital development space, and we recognize that DigiBC is the dominant lobbying voice for that industry. I’ve toured many locations myself and the great work that they do.

This is really, as with previous questions around the film industry and others, trying to understand government decision-making on some tax credits for some and not for others. It’s not about being for or against per se.

I guess the question I have is that going back and doing some of my research on this…. For the public at home, there’s myself and a researcher, and that researcher shares about five or six other critics that are doing estimates at the same times as well. I don’t have the level of staffing the minister does to do some of this research, and that’s not even meant to be…. A statement of fact — and that’s the way it works regardless of who is government and who is opposition. It’s just the way it is across the country, actually.

But the current tax credit for this sector is 17½ percent. There’s been an ask and a thanking to the government for the tax breaks up to 2028. I’m just wondering: is the break, the 17½, what is in effect up until 2028, or have there already been temporary provisions provided up to the 25 percent up until 2028.

[2:05 p.m.]

Hon. Brenda Bailey: The correction I was trying to make to the member inappropriately

Hon. Brenda Bailey: The correction I was trying to make to the member, inappropriately speaking it out instead of standing, was that this is not called the DigiBC tax credit, this is called the interactive digital media tax credit for all interactive digital media companies in British Columbia, of which there are many.

The member’s question in regards to timing of the tax credit changing from 17.5 percent to 25 percent…. That change occurs on September 1, 2025, and as part of this legislation, we’ve also removed the sunset clause for this tax credit.

Peter Milobar: I guess that’s what I’m trying to wrap my head around. Is the current tax rate 17½ percent and without this, it would stay at 17½ percent? Or is it at 25 percent, and it’s really a sunset clause that is being removed with this clause?

Hon. Brenda Bailey: Prior to these changes, the tax credit was at 17.5 percent, which would have continued until the sunset clause date. This change changes the number from 17.5 percent to 25 percent as of September 1, 2025, and there is no sunset clause.

Peter Milobar: Thank you for that, then.

What was the impetus from going…? If the 17½ percent was what was in place and was going to be in place until 2028, what was the impetus, what was the input provided to the government that created the need to go to 25 percent and remove any sunset clause?

Hon. Brenda Bailey: So 17.5 percent is one of the lowest rates — in fact, is the lowest rate — in Canada of provinces that have an interactive digital media tax credit, in comparison with other areas that have a large video game industry. For example, in Quebec and in Ontario, the credits range between 40 and 50 percent

It’s also been made known to us, and it’s something I’m familiar with from my own work in the industry, that a sunset clause is a limiter to investment, and that not having a sunset clause facilitates decisions to invest in the province rather than having the uncertainty as to whether the incentive will continue.

Peter Milobar: I guess what I’m wondering…. There are several tax credits we’ve already discussed and more to come, and I’m trying to get the lay of the land for how best groups and industry have been making their case to government, in terms of tax credits that they’re seeking.

There are a lot of industries out there that don’t see themselves reflected in this budget or in Bill 5, and they’re curious. They’ve asked me, in my conversations with them since Bill 5 was tabled, as to: “What’s our best course of action”? So that’s really the spirit and the intent of some of these questions in terms of trying to figure this out.

Was it presentations to the Finance Committee that drove this change to 25 percent? Was it just individual conversations with people in the sector? Was it formal lobbying by government relations people? What was the discussion that led to the decision point to go from 17½ percent to 25 percent? What was that information request input into the minister and the ministry that led to these specific changes?

[2:10 p.m.]

Hon. Brenda Bailey: Industry representatives have let us know the competitive landscape that B.C. finds itself in. The current 17.5 is quite low when compared to other provinces. Manitoba, 35 to 40 percent. Ontario, 35 to 40. Quebec, 37.5, but there are additional top-ups available if you own the IP. Nova Scotia, 32, as high as 60 percent. In Newfoundland and Labrador, at 40 percent.

In regards to the work to have this change happen, it aligns with industry recommendations on how the government can support the growth of the province’s interactive digital media sector. The tax credit helps interactive digital media companies attract top talent to the province. These people bring technical skills that are in-demand in other related sectors, and they very oftentimes go on to start their own high-tech companies in British Columbia.

Additionally, the tax credit supports the creation and retention of high-value jobs in B.C., generating tax revenue that far exceeds the cost of the credit. For example…. Sorry if there are a couple of different examples, but I think the member gets where I’m going with that.

Peter Milobar: Again, I don’t take issue with trying to make industry and tech competitive with the rest of Canada, let alone North America. There are finite dollars available. We’ve heard government’s want and desire to make sure that film and production are competitive, that the digital space is competitive.

As Bill 5 was being assembled and decisions were being made as to whether or not to remove the sunset clause and increase tax credit to digital media, was there any comparison to any other industries?

I think of forestry in particular. I know when I’ve talked with representatives in there, even at a $5-million-dollar cost that this this tax credit is slated for as an increase, they’ve indicated that they have $5-million-dollar programs that would have greatly enhanced their industry, and the list goes on and on.

So there is a wide range of industries that would say the exact same thing back that the minister just laid out in terms of rates and tax credits and competitiveness on a wide range of provinces versus them in the rest of the country.

Were any of those comparisons looked at when decisions were being made in relation to creating the tax credit increase for digital media as opposed to other industries that have been making the same requests through the same channels for as many years, if not longer?

[2:15 p.m.]

Hon. Brenda Bailey: I would say that there are a number of different tools available in the government toolbox to support different industries and many different ways that we do that. For example, PST reduction on machinery. Specific to the forestry industry, one example would be our manufacturing jobs fund — $185 million fund — half of which was geared specifically to forestry and has made some significant investments in many forestry companies in the province.

I know that the Forests Minister is working very closely with the forestry sector, and there’s more work to do there. It’s a deeply, deeply important sector in our province, in fact, built our province. And I do expect there’s more work happening there.

In regard to this particular question, our budget prepares us to carefully navigate the uncharted waters of tariffs. The lens that we were bringing in as we were making decisions for this budget was really about putting people first and protecting businesses as we build a stronger and more self-sufficient future. That lens was very affixed as we were making decisions about what we can move on quite quickly in terms of supporting sectors that are providing high-paying jobs for British Columbians, family-supporting jobs.

We know that as the threat of tariffs continues and rolls out that Ottawa will have first line and that we’ll be filling in any gaps through our contingencies. I would just add that to the discussion about decisions in this bill.

Peter Milobar: Thank you for that, but the programs listed by the minister are not new. Those are existing, and yet we still have industries that are non-competitive. That’s the whole premise of why the increase to the digital space in clause 26, according to the minister, is to make them competitive.

One could argue in the current realm, based on what the President has said over the last week that suddenly digital and film are under threat of tariffs, but that was not in the forefront of people’s minds certainly back when this budget was being created. It was much more traditional industry that would have been at the forefront.

In fact, forestry has been under a softwood assault of duties for eight years. So it’s not a perceived threat; it’s very real. And in fact, a schedule of increases that were laid out by the Biden administration are set to take effect very shortly. The Biden-Harris administration.

I can appreciate the minister trying to push over to the tariff angle, but nothing in this Bill 5 would indicate that is the case in terms of trying to shelter and weather industries that would be much more highly exposed to tariffs up until what’s transpired in the last week, which was the first time any of that’s been mentioned. And it’s debatable, given the complexities of film production, as we’ve seen even with this bill, how a tariff would even somehow be levied.

So that is an interesting answer. Again, back to the minister on this…. And I’m truly not trying to belabour the digital space here on this, because they do great things. And the minister is absolutely right — a lot of the technology bleeds over to industry. Some of our highest tech areas in the province are mines and forest companies and things of that nature.

[2:20 p.m.]

So I totally agree with that sentiment that it’s not just about video games, it’s about a wide range of crossover and laddering of technologies to do things that maybe people hadn’t thought of in the first place. And then it is a net benefit to B.C.

agree with that sentiment that it’s not just about video games. It’s about a wide range of crossover and laddering of technologies to do things that maybe people hadn’t thought of in the first place, and then it is a net benefit to B.C.

Again, I guess just for clarification though, this sounds like — it’s not necessarily a bad thing; everyone comes with their own history and expertise to this place in terms of various work experience and life experience, education experience that they’ve had in the past — a lot of the tax breaks we’ve previously dealt with and this one are much more in the realm of a space where the minister felt much more comfortable making quick decisions, having more broader knowledge in those areas than some of the others, and has decided that is the first tranche of tax breaks to come.

The $5 million difference in this tax break for the digital space, what has been the modelling done in terms of the overall expectation for growth within the industry and the net benefit to the provincial treasury by providing this $5 million tax break to the digital space.

Hon. Brenda Bailey: There was a historic lens applied in terms of looking at how many jobs would be created, as well as forecasting assumptions on where the industry is.

But I will mention to the member that this is an industry where we’re seeing job losses. This is really about trying to ebb that flow and ensure that B.C. retains its robust and important interactive digital media sector.

Clauses 26 to 29 inclusive approved.

On clause 30.

Peter Milobar: This appears to be a clause reducing the tax if someone’s bringing a vehicle into B.C. There’s also discussion in the budget around removing the rebate to electrical vehicle used car tax and making those fully taxable.

Now I don’t see that specifically in the provisions of this. I’m just wanting to clarify. There’s this section, which is dealing with a standard vehicle or any vehicle coming in from out of province. But this does not specifically deal with removing of the tax exemption for used electric vehicles. I don’t see that reflected in the bill.

Is that because there’s not needed to be a legislative change? Or have I just missed the clause? That could be what happened, so it’s kind of a two-part question.

[2:25 p.m.]

Hon. Brenda Bailey: Correct, this is not in regards to the ZEV exemption that was repealed. This is in regards to a circumstance that…. Essentially, it provides clarification that tax is not due again on vehicles that are brought back to B.C. and re-registered by the same owner.

So you could imagine a scenario where someone leaves British Columbia, lives in Ontario, moves back to B.C. They wouldn’t be required to pay this tax. Essentially, it would be a double tax. So this is a technical amendment. ICBC already doesn’t charge tax again in these scenarios. So it’s not actually a change; it’s a correction.

Peter Milobar: I’ll come back to the EVs after. Let me just make sure I understand the workings of this, because I read it a totally different way. It only applies…. I’ll use myself as an example. I own a vehicle. I move to Ontario. I take the vehicle with me. I move back to B.C. I would be exempt from that situation. But if I buy a vehicle in Ontario and bring it to B.C. with me, I would still trigger the differential of tax though?

Hon. Brenda Bailey: That is correct.

Peter Milobar: And it’s just on the differential, not on the full value of the vehicle?

Hon. Brenda Bailey: To the member: I’ve been informed that it’s a situation where you would attract the tax in moving to British Columbia and attract the rebate in the province that you’ve left.

Peter Milobar: Has any modelling been done then on this taxation, this change, but the existing taxes as well, in relation to the new car EV sales mandate? And I say new car sales mandate because that’s what it is. It was made very clear when the mandate was brought in by legislation that used ICE vehicles, combustion vehicles, coming into B.C.…. There’s no prohibition on their sales, and in fact, that can happen. In other words, you can have a one- or two-year-lease vehicle return from Saskatchewan getting loaded up on rigs and brought over to B.C. for sale, and that’s fine. We can have a lot of used car on sales lots and not a lot of new ones unless it’s an electric vehicle.

But how does this tax then take effect or not take effect if those situations start to happen and we no longer have new vehicle sales in this province, just strictly used vehicle sales that based on this provision, would mean that the Treasury would no longer see that tax coming in?

[2:30 p.m.]

Hon. Brenda Bailey: This provision just makes sure that there’s no duplication of taxes. Just so the member understands, this is a sort of a legislative tidy-up. It’s a

Hon. Brenda Bailey: This provision just makes sure that there’s no duplication of taxes. Just so the member understands, this is sort of a legislative tidy up. It’s a technical change in terms of the administration and the experience of the consumer. This provides no change, and it’s been administrated in this way by ICBC since 2013.

Peter Milobar: In terms of the elimination of the exemption for used EV vehicles, I clearly remember that coming through as a piece of legislation. I’m just wondering why it’s not… Again, I don’t see it reflected in this legislation. I was unaware that it was left to regulation, moving forward.

Hon. Brenda Bailey: That has already been repealed by regulation and has been posted and is not part of this legislation.

Clauses 30 to 32 inclusive approved.

On clause 33.

Peter Milobar: I’m just trying to get some clarification around these changes. It’s a school tax exemption for land owned or occupied by First Nations. What my understanding was that if it was land already considered in reserve, it would be exempt from things like school taxes and hospital taxes, things of that nature. Did I have an incorrect understanding of the current situation?

Hon. Brenda Bailey: The member is correct. In a situation where a school exists on reserve lands, it would be exempt from taxes. That, of course, is in relation to the federal government.

This clause is in relation to exempting the provincial school tax exemption on places where First Nations are on traditional lands that are not part of reserves, and provides the tax exemption in that circumstance.

[2:35 p.m.]

Peter Milobar: Just to be clear, though, this is not about taxing schools in particular. This is about the school tax charged on a parcel of land.

Hon. Brenda Bailey: That’s correct.

This is not about taxing schools, in particular. This is about the school tax charged on a parcel of land

Hon. Brenda Bailey: That’s correct.

Peter Milobar: I assumed that’s what the minister said — a school on reserve land — but I just wanted to make sure we were 100 percent talking about the same thing.

Okay, with a lot of what has been going on with reconciliation over the last several years, there are ever-growing pockets of First Nations–owned and –controlled lands that are not in what would have been under the old Indian Act considered their reserve land or designated as reserve land.

It can be up to a 20-year process to put it into reserve, so I get why that becomes very problematic for Indigenous nations and very frustrating for them once they’ve acquired a chunk of Crown land or private land that they would like to add in.

What does this exemption do overall, then? What is the expectation, on a yearly basis, in terms of school taxes collected by the provincial government, in terms of those revenues? Now, I fully understand this doesn’t impact municipalities. This section in particular doesn’t. I know it’s just a flow-through to the municipalities. Collect the school tax and then transmit it back to the government. I’m aware of how that works at a high level.

What is the overall hit to school taxation? And is the expectation that…? If there’s no hit, is that because there’ll be a readjustment of mill rates for the other properties with their school taxation to make up the difference?

Hon. Brenda Bailey: I’ll just share with the member the notes that I have on this particular clause. The reason for the change. This change is a result of collaborative engagement with First Nations, and it represents an important step forward on the path for reconciliation.

[2:40 p.m.]

The province recognizes that lands transferred through acts of reconciliation are not intended to be a financial burden to the First Nations recipients, and imposing taxes on properties that do not operate in the commercial mainstream is inconsistent with reconciliation objectives. Before the land

The province recognizes that lands transferred through acts of reconciliation are not intended to be a financial burden to the First Nations recipients, and imposing taxes on properties that do not operate in the commercial mainstream is inconsistent with reconciliation objectives. Before the Land Title Act and Property Law Act amendments took effect on May 21, 2024, bands, under the Indian Act, were not able to legally hold land and instead were required to hold land indirectly, with corporation being one of the vehicles. This regulation-making power gives the province flexibility to designate certain organizations as being excluded from or included in the definition of “government organization” to avoid unintended consequences.

Peter Milobar: I appreciate that, but this is going into legislation and it’s the way it will be, moving forward. Again, I’m not arguing against…. I want to be 100 percent clear. I’m not arguing against Indigenous nations finding ways to have their own economic development and growth and land development and all that. I’m not disputing that in the least. I’m really, on a cold, clinical level, trying to figure out what the provincial treasury implications of this clause are, moving forward — and not just in this year, but moving forward — and how well it’s been thought out or vetted by the government.

It shows only a $2-million impact, and that’s not even in this fiscal — it’s for next fiscal — despite the fact that it takes effect on December 31, 2025… So, that makes sense. Sorry, I was thinking December 31, 2024, because everything else has been retroactive to this point. Hey, we’ve got one that’s not retroactive. How about that? There we go. At any rate, it’s $2 million in the first year.

I’m assuming — and perhaps the minister can confirm — that, when this was developed, lands like the Jericho lands which are owned by MST — which would be considered a corporation, I believe, under this clause — would be subject to these provisions and any of that development would no longer be subject to school tax being paid back to the provincial government. Is that correct?

Hon. Brenda Bailey: This exemption only applies to lands that are vacant and are used for cultural and/or community purposes.

Peter Milobar: Okay, so that means no housing, no anything. I missed that section in this lengthy thing, so I will openly admit that side of it. That makes much more sense, then, why it’s at the $2-million range.

[2:45 p.m.]

So, in terms of that, the process

no housing, no anything. I missed that section in this lengthy thing. I will openly admit that side of it. But that makes much more sense, then, why it’s at the $2 million range.

In terms of that, the process for First Nations to apply for this, will it just be a simple waiver that they need to sign? Will it be a yearly waiver, or how will that unfold?

Hon. Brenda Bailey: This is ongoing work. My understanding is that it’s work with B.C. Assessment, and a determination will be made on an annual basis. It’s in a proactive way.

Peter Milobar: Just to jump back a question. I guess I’m just trying to wrap my head around…. I get what the minister says in terms of the explanation. The explanatory note on the side says: “exempts from taxation under the Act specified land and improvements if they are land that has no present use or if they are used by First Nations exclusively for cultural or community purposes.”

The exclusively for cultural or community purposes is pretty straightforward. Land and improvements, however, gets a little trickier because typically on assessments, improvements refers to buildings. I think if you have a property tax exemption in a city, it gets typically at the rate of whatever it was before improvements were made. Either the facade was changed or a floor was added to the building or anything like that. The assessed value goes up. You pay on what it currently was.

In this case, subsection 4 applies to the following: land and improvements that were disposed of for the purpose of reconciliation by government or a government organization to one or more First Nations.

That doesn’t sound like it’s vacated improvements per se, it’s still building. Surely it’s not the expectation of the government that if they transferred, for means of reconciliation, land that had improvements on it, that they would sit dormant or vacant unless they were going to be used for cultural purposes? I’m thinking if there happens to be housing on it or things of that nature or commercial space for that matter.

Can the minister…. It could just be how I’m interpreting, but it seems semi-contradictory or confusing. I’m just wondering how exactly this would reasonably be interpreted by people or First Nations moving forward if they would not be having one expectation that any and all lands and use on that land would not be subject to school tax. But the government’s interpretation is much different when it comes to the word improvements, which for B.C. Assessment purposes, has a pretty specific meaning, when you get your property tax bill or your property tax assessment in terms of land and improvements.

[2:50 p.m.]

Hon. Brenda Bailey: My understanding, and this is the way that it is expressed in this legislation, is really that you can think of it as two buckets, in a way. Either the land is vacant or if the land is not, the buildings on the land would be used for cultural purposes or community, not commercial purposes, not a house that is a dwelling. Those are the two buckets: either could be vacant or could be used for cultural or community purposes.

Peter Milobar: It does say that on (4)(b): “land and improvements that are used by First Nation referred to in (3), exclusively for cultural or community purposes and not for any business, commercial or industrial purposes.”

In (5) though, it does say: “The Lieutenant Governor in Council may make regulations as follows: (a) prescribing corporations or other organizations, or classes of corporations or other organizations, for the purposes of the definition of ‘government organization’ in subsection (1); (b) prescribing societies or not-for-profit corporations for the purposes of subsection 3(d)(i) and (e)(i)(D).”

Those two seem fairly straightforward.

And then: “(c) prescribing land and improvements, or classes of land and improvements, for the purposes of subsection (4)(c).” And 4(c) is “land and improvements that are prescribed or are in prescribed class of land and improvements.”

Is (5), and (5)(c) in particular, enabling by way of Lieutenant Governor in Council to be able to designate different improvements or classes of land that would be exempt? Because for the purposes of subsection 4(c), (4) is: “The following, as described in subsection (3), are exempt from taxation under this Act.”

So is (5) creating the ability, by way of regulation, for some of those uses that may be on land right now to change just by way of regulation not by way of legislation moving forward?

[2:55 p.m.]

Hon. Brenda Bailey: These regulation-making powers give the province the flexibility to designate certain organizations as being excluded from or included in the definition of government organization to avoid unintended consequences. It’s really about the challenge of defining cultural or community purposes and provides us some flexibility to work with nations on that particular aspect.

Peter Milobar: Granted, it was a bit of a longer question, but I get (a) and (b). That, as I say, seems pretty straightforward, and it ties back to the definitions. However, (c) appears, by way of regulation…. Power to the Lieutenant Governor in Council “prescribing land and improvements or classes of lands and improvements for the purposes of subsection (4)(c),” which is to make them exempt. This appears to be worded in such a way that it would enable by way of regulation lands that have other uses on them to be made exempt by way of regulation not legislation. I’m just trying to confirm that.

Hon. Brenda Bailey: To the member, that’s correct. This gives cabinet the ability to work with designations that might not fall exactly into the description but are intended for cultural and community purposes.

Peter Milobar: Well, intentions are great, but governments come and go, ministers come and go. So I’ve always been one to try to figure out what the full-scope of power is in a piece of legislation. And this goes back to even when I was the Environment critic and we had bills come forward. What one minister’s hope or one Premier or one cabinet’s intentions are does not necessarily, obviously, bind future, but the language does, or the flexibility does.

So again, just to be clear, if a future cabinet wanted to…. And I’m not trying to single out any one development. I’m not going to on this because it’s not really about any one development. This is provincewide, obviously.

There’s vacant land. There’s land that would currently be considered exempt from school taxes. It gets slated for development. The government decides, “Well, we’re in a housing crisis. This will help with housing. We are going to enable those types of improvements on land to qualify,” even though they’re not cultural, they’re not ceremonial, they’re not anything like that. They’re housing.

[3:00 p.m.]

Can that be done — by way of regulation, not legislation — once (5)(c) passes, moving forward?

their housing, can that be done — by way of regulation, not legislation, once 5(c) passes — moving forward?

[Nina Krieger in the chair.]

[3:05 p.m.]

The Chair: Recognizing the Minister of Finance.

Hon. Brenda Bailey: Thank you, Chair. Welcome to the chair.

I think the important thing to recognize

The Chair: Recognizing the Minister of Finance.

Hon. Brenda Bailey: Thank you, Chair. Welcome to the chair.

I think the important thing to recognize in the example that the member has raised is that it must still be held and occupied by the First Nation.

Chair, I know you’ve just joined us, but may I request a ten-minute bio break?

The Chair: Members, we will now take a ten-minute recess, convening at 3.15.

It’s now 3.05. We’ll reconvene at 3.15.

The committee recessed from 3:05 p.m. to 3:17 p.m.

The committee recessed from 3:05 p.m. to 3:17 p.m.

[Nina Krieger in the chair.]

The Chair: Good afternoon, Members. I call Committee of the Whole on Bill 5, Budget Measures Implementation Act, 2025, back to order.

On clause 33.

Peter Milobar: When we left, I was trying to get clarification around if housing was put on lands, if future cabinets could, by way of regulation, make those lands then be eligible for the school tax exemption. The Minister’s answer was that, well, the lands will still have to be held or occupied by First Nations. That’s pretty self-evident, frankly, given that this whole act is about First Nations owning land that’s off reserve. So that didn’t really answer the question around housing.

If a development on non-reserve land is created and housing is a part of that, does cabinet, by way of provisions in 5(c), now have the regulatory authority to change the provisions of these tax changes so that those lands, those housing units, could be exempt from the provincial school tax?

[3:20 p.m.]

Hon. Brenda Bailey: To the member: no. Two components. Just reminding the member, we’re speaking about land that has been transferred to a First Nation as part of a reconciliation agreement.

And to the member’s question about whether through 33(4)(c) there could be the ability to build housing that would then be exempted from the school tax, we believe the answer is no. This housing would then be occupied by people, by First Nations or by someone else, and that’s not included here. This is specific to the First Nations governance, so we do not see the possibility of what you’re describing occurring.

Peter Milobar: Again, I can appreciate what the minister is saying, but this is also enabling corporations, as the minister rightly pointed out. These are typically developments that are done, lands that are developed by First Nations, but they do have to set up a development arm to legally be allowed to do it. As strange as that might sound to the public, it’s the weird bureaucratic federal quagmire that First Nations need to navigate through to try to bring some sort of economic stability to their own development wishes and economic growth moving forward in non-reserve land, and the reserve land is a whole other ball of wax for them to deal with.

That’s why I’m just trying to really get to the root of all of this, because I think that’s…. We’ve heard from people, and I think it was with the improvements piece that people have that concern. Because as I say, when you read an assessment thing, “there’s your land,” and “there are your improvements,” are two totally different delineated things within a B.C. assessment. They get added together. Your mill rate gets applied to that.

So what the minister is saying is that it does not matter moving forward. There is no ability other than by way of coming in with new amending legislation to add housing to this as an exemption for school taxation, that that would have to be done full stop by way of an amending piece of legislation. There’s no regulatory framework within this at all to change and start to allow housing, whether it be Indigenous-occupied housing or just market housing that Indigenous companies and corporations are providing by way of, essentially, their own REITs or their own type of rental housing stock to the broader community.

[3:25 p.m.]

Hon. Brenda Bailey: That is correct. There’s a small caveat in that as soon as it becomes

Hon. Brenda Bailey: That is correct. There’s a small caveat in that as soon as it becomes occupied, then it would be outside of this legislation. So essentially, it’s not possible.

Peter Milobar: Sorry, I’m not trying to be difficult here, but the caveat could be quite meaningful. Can the minister explain what she means by “as soon as it becomes occupied?” Again, I’m asking specifically about housing. Occupied can have a lot of different connotations out in the public. Occupied for First Nations could have a totally different connotation.

What exactly is that? My understanding was the land is owned by an Indigenous corporation, i.e. a band or some other Indigenous entity that has a corporation. They’ve acquired a chunk of land that has to either be vacant or being used for cultural and community purposes. That is exempt. Obviously, a cultural centre would be occupied by that company and that corporation that’s operating it.

Again, I’m trying to drill into much more specifics around the housing side. That caveat, I just need some clarification around it.

Hon. Brenda Bailey: I use that term not in a legal sense, but in terms of as opposed to vacant.

Peter Milobar: Again, there’s vacant land that is still owned that would be considered tax exempt from school tax because it’s vacant land under this change. There is land that would have a cultural centre on it, and that would be considered exempt from taxation, school taxation as well.

So both of those could still be potentially owned by that same corporate entity that’s First Nations-owned. That’s where that occupied…. Technically, the vacant land is owned, so it’s occupied. It’s occupied by a corporation even though they don’t have any physical structures on it.

I’m just trying to get 100 percent clarification that occupied does not mean occupied in the sense of as soon as it becomes occupied with housing, it’s also exempt. It’s that it has to stay vacant. It has to stay vacant or it has to stay with a cultural centre on it. It isn’t subject to school taxation if it’s got an industrial park on it or operations or commercial operations.

I say that because when you go into the prescribed classes of property regulation, it’s very clear. If you just read the first start of it, it says housing and hotels and everything is class 1, which would be B.C. Assessment. I get that. However, when you drill into that in section 1(i)(c) of it, very clearly it does not include housing. So that’s why I’m just trying to really get that tight clarification here, that it has been truly exempted.

The root of it all is that it cannot, in the future, be changed by regulation. It has to be some form of amending legislation that has to come to the Legislature.

[3:30 p.m.]

Hon. Brenda Bailey: Yes, it would be true that it would require an amending piece of legislation for what the member is describing and that there are two categories captured here. One is vacant property, vacant building, vacancy, or culture or community use. So, those are the exemptions.

Clause 33 approved.

On clause 34.

Those are the exemptions.

The Chair: Seeing there are no further questions, shall clause 33 pass?

Clause 33 approved.

On clause 34.

Peter Milobar: This is enabling, essentially, TransLink to increase the parking tax rate five percent.

How much is this expected…? I looked on 59, but it doesn’t give you any breakdown. It just says asterisk. So how much revenue is this projected to bring in for TransLink?

Hon. Brenda Bailey: I appreciate the opportunity to speak to this because the member’s party very much misrepresented what this was during second reading debate, suggesting that everyone coming down to Vancouver to have dinner would be paying more for street parking and so on and so forth, none of which was true.

What we’re talking about here is off-street parking. This allows TransLink to increase the amount they charge in their paid parking lots. This is in response to a request from TransLink.

Off-street parking does not include metered street parking, long-term vehicle storage, a resident’s primary parking spaces and parking sites purchased for 28 consecutive days or more for vehicles solely for business purposes.

Where it does apply: the TransLink off-street parking tax applies to the TransLink service area of Metro Vancouver. This includes North Shore, Vancouver, UBC, Bowen Island, Burnaby, Richmond, Delta, a number of others.

So how much will this revenue raise, as the member has asked? The amendment increases the maximum rate that TransLink can choose to charge on off-street parking. Currently it’s 24 percent. This allows them to go as high as 29 percent through the bylaw. If TransLink raises the rate from 24 percent to 29 percent, TransLink would be able to raise approximately $20 million dollars annually.

Just to give the member an example of what that looks like in terms of the experience of a consumer, if they’re paying off-street parking $5, the 24 percent is 92 cents and the 29 percent is 19 cents. Similarly, if they’re paying $15, the 24 percent is $2.76 and the 29 percent is $0.58. So 58 cents. I wonder if that’s an error. Currently it’s at $2.76. It would add 58 cents on.

Peter Milobar: This tax change for off-street parking, though, does apply to hotels, does it not?

[3:35 p.m.]

Hon. Brenda Bailey: It applies to a number of different parking lots. Theoretically, that might include hotels, yes.

Peter Milobar: I’m not sure of the theoretical part. It either applies to hotels or it doesn’t, if you’re TransLink. TransLink’s not picking and choosing which hotel they would or wouldn’t charge it. If my memory serves, every time I’ve parked in downtown Vancouver at a hotel, there’s been a TransLink charge. So one would assume it’s not theoretical. It’s being charged. It’s off-street. It would apply.

I appreciate that the minister is from Vancouver, so might not frequent a Vancouver Hotel very often, but they’re certainly not $5, and they’re not $15. Most are in the neighbourhood of $50 a night, so a 5 percent increase is about $2.50 a night more in parking tax per visitor to the area, on top of the FIFA tax extra that’s being charged to a hotel room, on top of the extra MRDT tax. But I digress.

The minister says it’s off-street parking as well, and she took issue with some of our characterizations at second reading, so I thought we should make sure that we’re very accurate where we’re going with this tax and this tax increase. I’ll use a parkade reference, one that I used to park at frequently if I was down to Vancouver to go for dinner or shopping. On-street parking is getting harder and harder to find in Vancouver, so most people are using off-street and parkades.

The Bay parking — not that The Bay is in existence anymore — is one that gets used quite frequently, either for events…. In fact, they advertise for events at B.C. Place Stadium for event parking, or at the arena, as well as, obviously, Pacific Centre.

Would those parking stalls, if someone pulled in for the day, also be subject to the 29 percent tax instead of the 24 percent tax?

Hon. Brenda Bailey: Yes, we do believe those are included.

Peter Milobar: It’s a pretty wide catchment area TransLink has in terms of service. There are a great many malls that have surface parking. I can think of several in Richmond that are right next to the SkyTrain line. They obviously, for demand, to make sure it’s not a park-and-ride situation, have paid parking lots patrolled by private companies, for the most part. Would those all be subject to the 29 percent as well?

Hon. Brenda Bailey: Yes. If TransLink is successful in passing its bylaw that allows this increase to occur, we believe those would be captured as well.

Peter Milobar: Was there any discussion with TransLink?

[3:40 p.m.]

It appears that if you’re a parking stall and that the revenue goes to a private business, for that parking stall, to maintain, to create, to provide, to operate, there’s no problem levying a tax increase on those parking stalls. But if you’re a parking stall that’s operated and owned, essentially, by the municipality that those same off-street stalls are in, the municipalities have said: “Back off. If there’s going to be a 29 percent increase, we’re going to

There’s no problem in levying a tax increase on those parking stalls. But if you’re a parking stall that’s operated and owned, essentially, by the municipality that those same off-street stalls are in, the municipalities that said, “Back off. If there’s going to be a 29 increase, we’re going to just put it into our own coffers and not put it towards TransLink…”

Was there any conversation with TransLink when there’s agreement to give them the ability to go from 24 to 29 percent, given that they’re cash-starved for hundreds of millions of dollars, that the provincial government would have the expectation that they would treat their own municipal parking spaces under the same tax provisions that they expect private operators to operate under with their customer base?

Hon. Brenda Bailey: Just for clarification, if I could ask the member opposite, specifically is he referring to municipal parking lots or street parking in municipalities, please?

Peter Milobar: Maybe we can get clarification then. My assumption was that municipal off-street parking would be considered off-street and still be subject to the tax. But then there’s the finer granular point around on-street parking that is still about a hefty charge to it.

So my assumption was that those off-street parking lots, municipally run or not, are subject to the tax. I’m talking about the on-street parking revenues, which are not insignificant when you consider what certain cities charge, especially in heavily core commercial areas, to encourage high turnover rate and cars to move along.

Again, we have TransLink that is desperate for cash. These are member municipalities. They’re asking the provincial government for hundreds of millions of dollars of taxes. Was there any discussion with the provincial government trying to make these tax increases contingent on municipalities being willing to look at their own charge structure along street parking?

Hon. Brenda Bailey: At the Ministry of Finance, we’re not aware of that having been part of the conversation. Our piece of this was the question of whether Finance would approve the ability of TransLink to go from 24 percent to 29 percent, which of course we did approve and is what’s reflected here.

[3:45 p.m.]

Peter Milobar: These bills are always a little tricky

this was the question of whether Finance would approve the ability of TransLink to go from 24 percent to 29 percent, which of course we did approve and is what’s reflected here.

Peter Milobar: These bills are always a little tricky, because I do recognize they touch on other ministries and their requests of the minister. But ultimately, the minister, especially with the mandate letter and the economic times they’re in, has been directed to have a pretty tight rein on all ministries and all their directions.

I asked that because we have an unknown revenue stream talked about by government that’s supposed to generate hundreds of millions of dollars for TransLink over the next few years. No one knows what that is. We asked whether or not it was road pricing. We were told, pretty emphatically, no. We asked if it was a vehicle levy. That was a much more ambiguous answer from the Premier and the Transportation Minister. Again, recognizing that’s not this minister’s portfolio.

However, ultimately, you would think that the Finance Minister would be engaged and involved in things that were going potentially impact the treasury or take away tax room that the provincial government might otherwise have. And I say that because…. Bear with me. I’ll set the stage on this, so I’ll take a minute.

Way back in the olden days, when Interior and everywhere outside of the TransLink service area was provided access to funding for B.C. Transit from the provincial government, the trade-off was that they would pay 40 percent of capital for their hospitals. TransLink was to be a stand-alone entity funding itself, and the trade-off was that they would be asked for zero dollars for hospital capital.

That has completely gone away. Pattullo Bridge used to be a TransLink bridge that was taken over by the government on a whim by former Premier Horgan and assumed back into government, and so the cost of replacing and everything fell away from TransLink. That seems to be forgotten that that $1.5 billion dollars actually should still be on the books for TransLink.

But that was absorbed — all the SkyTrain investments, all of that, all the operational dollars that TransLink has asked for over the years. And it’s not a case of begrudging a fast-growing metropolitan area’s transit, but it’s a case of trying to figure out where the heck all the money is going to come from. There’s only so much room for taxation that local property tax owners can absorb.

In the case of in the Interior when we needed to add a hospital — I know this well; I was the mayor, and I was the hospital board chair — we had to double our hospital taxes on property taxes.

What has happened in some TransLink areas is instead of that money being put on to property taxes, extra parks or extra things were built, which is fine. Each city gets to have their own autonomy and figure that out. But then when there’s not enough money to fund TransLink, it comes back to the Bank of B.C. I was going to say, “mom and dad,” but I’ll go: “Bank of B.C.” That’s an old bank as well.

There’s only so much room taxpayers have to absorb, property taxpayers have to absorb, and so it has to be a coming together between the provincial government and the TransLink municipalities as to how that gap in funding is going to be made up. Because it can’t all go on property taxes, I recognize. That that ship has sailed. But it can’t always just be on the backs of the provincial government either.

Was there any discussion, given that we’re dealing with these amendments, and the funding crunch is critical…. It seems like this is a very light touch, overall, compared to the systemic issues going on within TransLink. And it seems like we should have more amendments right now for the South Coast British Columbia Transportation Authority Act a.k.a. TransLink to move forward.

I’m hearing that there were no provisions negotiated or tried to be negotiated to see if there were any extra revenues to pick up on on-street parking, which again…. Conveniently, all the money goes to the municipalities.

[3:50 p.m.]

Were there any other tax provisions that were either advocated for by TransLink and discarded — that would have shown up in and around these headings in Bill 5 — or advocated for by the province and discounted by TransLink? I’m not sure how the public can reconcile that the only provision in Bill 5 we have for TransLink is taking off-street parking from

for by TransLink and discarded that would have shown up in and around these headings in Bill 5 or advocated for by the province and discounted by TransLink. Because I’m not sure how the public can reconcile that the only provision in Bill 5 we have for TransLink is taking off-street parking from 24 percent to 29 percent, with the government openly talking about another revenue source that one would presume would need legislation to change. Because something as simple as changing a tax rate on off-street parking requires that.

We don’t sit again till October. It seems that there’s no alternative revenue stream on the horizon. Was there one that has been removed from Bill 5? Or is that just a work in progress, and if so, what is that revenue stream?

Hon. Brenda Bailey: Thank you to the member opposite. I want to stay focused on the bill at hand, which really is about taxation measures. The member asked the question were there taxation measures in relation to TransLink that were removed. The answer is no.

[3:55 p.m.]

The taxation measure related to TransLink is the one that we’ve been discussing, the room for them to increase parking from 24 percent to 29 percent.

I will also just quickly highlight that this is work that’s being led by the Minister of Transportation and

The taxation measure related to Translink is the one that we’ve been discussing, the room for them to increase parking from 24 percent to 29 percent.

I will also just quickly highlight that this is work that’s being led by the Minister of Transportation, and the Ministry of Finance did approve $312 million to be transferred to TransLink in order to provide stability over the next three years and ensure that they can continue to do their important work and support the transportation needs of the area that they support.

The work coming ahead, that timeline…. That $312 million provides some stability over three years, and it’s my understanding that the work to analyze and identify additional funding mechanisms and stability for TransLink will happen in that timeframe. So it would be premature to presuppose what that work will lead to.

Peter Milobar: Clause 34, when it gets referenced in the budget and fiscal plan…. The minister, earlier on, when I asked to quantify how much money this is expected to bring in, had indicated they didn’t really know. The government wasn’t sure. It’s more to TransLink. It can be up to 29 percent. It’ll be whether they move it from 24 to 26 or 24 to 25. It just gives them a range.

I’m just wondering how, then, the statement in the budget book could be made by the ministry, the minister, that this tax change will have no material impact on taxpayers when they cannot actually quantify what a 5 percent increase, a 20 percent increase to a tax structure will actually have. How could the budget then reflect it as no material change to taxpayers when it can’t be quantified?

Hon. Brenda Bailey: My understanding is that the revenue amount, should they go to the full 29 percent, would be $20 million dollars. But I’ll just remind the member that it’s not reflected in our budget in that this is a tax that is collected and delivered directly to TransLink.

Peter Milobar: No, and I can appreciate that. That’s why I was asking, because I assume that’s why it was asterisks on page 59 and not a number associated with it, because it’s more about enabling a different taxing authority to collect the tax.

But the $20 million that we’ve now heard that wasn’t provided earlier, in the ministry’s mind, is not a material number to taxpayers. So that’s an interesting take on adding $20 million to taxpayers. It may not be a provincially charged tax, but it is nonetheless a taxpayer that is going to be paying their portion of this $20 million dollars or more.

So 24 to 29 percent. I appreciate it wasn’t this government that put in the 24 percent. I always kind of shake my head with some of these ranges that people are given because governments seem loath to have round numbers. I’m surprised it’s not 29.9 percent. That way, everyone could say it’s not 30. We must have somebody that works in the ministry that used to work for oil and gas because that’s how gas stations price everything too — the 0.9.

[4:00 p.m.]

Why was the decision made? Was it a direct ask from TransLink? Because we’ve heard from the minister that this is a range they can go up to. I’m unaware of many municipalities that go to the low end of what they’re allowed to when they’re cash-strapped. Were they asking for 29 percent? Because if so, I think the public needs to know that, because that means it’s not going to be a range. They’re going to go to 29 percent and collect

from TransLink, because we’ve heard from the minister that this is a range they can go up to. I’m unaware of many municipalities that go to the low end of what they’re allowed to when they’re cash strapped.

Were they asking for 29 percent? If so, I think the public needs to know that, because that means it’s not going to be a range. They’re going to go to 29 percent and collect the full $20 million. Had they asked for actually more than 29 percent, and the government capped them at 29 percent? What were the discussions with TransLink around landing at this 29 percent that the minister is approving?

Hon. Brenda Bailey: Just to point out that I agree with the member, and I think the member is right to raise that the language “denotes measures that have no material impact on taxpayers” should be amended. I agree with the member on that, and I think that is consequential.

[4:05 p.m.]

In regards to the question of whether we experienced the ask as a range from 24 to 29 or at 29, there’s two different experiences that we’ve had. It was presented to me

member on that, and I think it is consequential.

In regards to the question of whether we experience the ask as a range from 24 to 29 or at 29, there are two different experiences that we’ve had. It was presented to me as a range, and some of my colleagues received it as a maximum. So I’m uncomfortable saying it’s either/or.

I think that the capacity that we have in the Ministry of Finance is to set the maximum, and we’ve set that maximum at 29.

Peter Milobar: Thank you, and I appreciate that. I do understand, again, from my local government days, how flexibility can be built into the range once it’s set. I guess the question was more: had TransLink asked for something even higher than 29 and was rebuffed by the province? Or were they seeking only 27 and the province said: “Look, we’re not going through this every year. Let’s just put it to 29, and you can step it up as as you see fit.”

Hon. Brenda Bailey: I’m not aware of those discussions. If any such discussion occurred, it would have happened within Transportation, and the Ministry of Finance did not participate in any of those discussions.

Clause 34 approved.

On clause 35.

Peter Milobar: Just a few quick questions on 35. I guess the first one is that I’m assuming when I read medical practitioner in this that in the other acts and the other definitions, that’s referring to what would commonly be thought of as a medical doctor, an MD of one designation or another within the province of B.C.?

Hon. Brenda Bailey: Yes, that’s correct. We’ve also included nurse practitioners.

Peter Milobar: The minister tried jumping into my next question. So obviously nurse practitioners being added…. But there’s an ever-growing array of levels of medical advice and diagnostics that can happen now when you look at, say, pharmacists and things of that nature. There’s an ever-expanding role out there for a great many people in the medical professions.

[4:10 p.m.]

Frankly, I think the ever-expansion is speaking to a lack of access to health care in B.C. that people are finding. That’s what we see in Bill 11 reflected right now in terms of sick day notes and things of that nature. So recognizing that there seems to be a move to try to ever expand.

I think the ever expansion is speaking to a lack of access to health care in B.C. that people are finding. That’s what we see in Bill 11 reflected right now, in terms of sick-day notes and things of that nature.

So recognizing that there seems to be a move to try to ever expand who can provide that access point, partly for access and partly not to bog down people’s highest and best use of their skill sets for the tasks they’re being asked to provide….

Much like you wouldn’t want a highly trained police officer to be solely directing traffic in an accident scene — you’d want to get traffic control there at some point and let the officer get on with their day — we don’t need to necessarily tie up doctors and nurse practitioners around exemptions for the speculation and vacancy tax when we’re starting to expand scope of practice for a great many medical professions.

Why at this time, with these changes being made and so many other changes being made to the speculation and vacancy tax at the same time, was only nurse practitioner decided upon and not some of those other professions that have started to actually be expanded within the medical realm as well? I’m not asking about maybe going totally outside the bounds of what the colleges and the Health Ministry are doing, but when I look at, say, a pharmacist, in particular, and things of other nature, they’ve had a pretty expanded scope of practice. Why only nurse practitioner specifically highlighted?

Hon. Brenda Bailey: It’s a fair question. I’ll share with the member opposite that the decision to sort of draw that line…. You have to draw the line somewhere on who’s able to give this advice on whether someone is needing to live in a particular area for medical treatment.

We’ve included the nurse practitioner and put the line there largely because nurse practitioners really have that expertise. The member hasn’t doubted that. They’re registered nurses with additional education at a master’s degree level. Nurse practitioners were introduced in B.C., in 2005, to fulfil additional roles in areas like primary care and chronic disease and health promotion. They’re very well suited to do this type of assessment.

[4:15 p.m.]

But importantly, I’ll note that throughout the years, the province has amended a number of pieces of legislation to accept medical certification from nurse practitioners, including the Employment Standards Act, the Motor Vehicle Act, the Mental Health Act and the Homeowner Grant Regulation Act. So the current amendment aligns with the Speculation and Vacancy Tax Act — pardon me, aligns this

throughout the years, the province has amended a number of pieces of legislation to accept medical certification from nurse practitioners, including the Employment Standards Act, the Motor Vehicle Act, the Mental Health Act and the Home Owner Grant Regulation Act. The current amendment aligns this Speculation and Vacancy Tax Act with those other provincial statutes.

Peter Milobar: What drove the need for this change? Was it a backlog of people seeking exemptions that were not able to get them? Was it nurse practitioners asking for this added scope of practice? What was the underlying impetus?

Hon. Brenda Bailey: It really is about that alignment piece that’s driving this change and taking full use of the expertise of nurse practitioners in British Columbia.

Peter Milobar: How many exemptions are granted by this way in any given year, and is there an expectation by adding more access to medical personnel that that number may increase?

Hon. Brenda Bailey: We don’t have that data with us, but we’d be happy to provide it to the member as soon as we’re able to access it for him.

Clause 35 approved.

On clause 36.

Peter Milobar: This is increasing the tax rate from 2 percent to 3 percent for foreign owners. I’m just wondering…. It’s booked at $12 million for this year, this fiscal; $47 million for next fiscal. How much of that is accounted for with this change versus the change in the next clause?

[4:20 p.m.]

Hon. Brenda Bailey: One of the great pleasures of being the Minister of Finance is having people do very fast math on my behalf. Thank you to my team.

To share with the member, the folks that are going to be captured by the 3 percent, that’s 70 percent of what’s represented in that 47 million number annual increase because of this tax. Those that will experience the 1 percent, that’s 30 percent.

So each of those categories, 33 million for the 3 percent and 14 million for the 1 percent.

Peter Milobar: How many homes are currently being assessed the 2 percent tax rate, and how many are they expecting that number to be with the 3 percent?

[4:25 p.m.]

Hon. Brenda Bailey: The member asked the question: how many people are paying the 2 percent currently? That number in absolutes is 2,625. These are owners. The member framed the question in terms of homes, but we categorize by owners, 2,625.

We do not have the data in terms of how many people will be paying at 3 percent. There has been research done. I know that the Minister of Housing has this data. I don’t personally have it, but I’ve heard reference to quite a lot of research that’s gone into the question of what rate would lead to what behaviour.

Of course, the goal of this tax is that people don’t pay this tax, because we would like to see these homes brought onto the market and people living in them on a long-term basis.

Peter Milobar: Well, based on that answer, though, it seems like the driver of this tax change is for revenue, not to drive more homes to be opened up for people.

If two-thirds is essentially the increase going to be coming from this 1 percent increase, from 2 percent to 3 percent, is the minister saying that the Ministry of Finance is just simply a flow-through when it comes to a tax that’s going to generate $34 million a year? And no questions were asked about going to 5 percent and what that would do, in modeling and saying, “okay, but 5 percent will actually take it from a $34 million net increase to a decrease”?

I guess I’ll ask the question this way, because then I can do some backwards math. If it’s going to increase $33 million by going from 2 percent to 3 percent, how much is the 2 percent currently generating in this year?

[4:30 p.m.]

Hon. Brenda Bailey: The first thing I would say to the member opposite is that, no, this is a tax that’s designed to address a housing challenge. This is not a revenue tax. This is a tax that is about behavioural change. It’s about addressing a challenge, a very significant challenge, that our province struggles with in terms of housing.

Part of the question was in regards to the folks who are paying 2 percent. What amount are they currently paying? The most recent data that I have available at our fingertips is 2023, and that number was $52.8 million or $53 million.

In terms of the modelling and work that we’ve done in regards to increasing the tax, there was a regression model based on historical data that does in fact show that behaviour change is happening. The changes in behaviour in terms of bringing more houses onto the market as rentals or being sold have been factored in through those numbers.

I’ll also just mention that I have a table that reports data in the SVT annual mayor’s consultation and demonstrates that, except for 2022 when the housing market peaked, SVT revenue has been declining since 2019 as the tax incentivizes property owners to sell or to rent out their empty units, which of course is the objective of this tax, or to use them as their home.

Despite the SVT expansion to six new communities in 2023, the revenue decline continues, mainly because of the decrease in the number of foreign owners and untaxed worldwide earners who are subject to the tax and the decrease in the average value of the properties they own. So 2018 SVT revenue was $68.3 million; 2019, $85.8 million; 2020, $80.6 million; 2021, $78.4 million; 2022, $81.9 million; 2023, $75.2 million.

Peter Milobar: The problem with those numbers is that we’re going from 2 percent to 3 percent, so it’s actually a pretty straightforward calculation to figure out what the increase is. The minister has projected to add $33 million in revenue based on that 1 percent change, from 2 percent to 3 percent. Yet we’re only collecting $53 million based on latest numbers; 2 percent to 3 percent on a $53 million revenue source would actually get you to about $27 million more.

The number of units or the value of the units — the desire to create space with this tax — seems to be stalling if we’re now saying…. I accept that the $53 million is a year-old number, but to project $33 million, you’d have to be collecting, at a minimum, $66 million in this current year. If you’re expecting, actually, fewer units to be taxed next year, to generate that $33 million, that would mean your starting point right now is even higher than $66 million.

[4:35 p.m.]

In the space of a couple years, even though the value has held at 2 percent, you’ve gone from $53 million to north of $66 million, on a tax the minister says is not about generating revenue. But it very much appears to be generating revenue, over and above

so in the space of a couple of years, even though the value was held at 2 percent, you went from $53 million to north of $66 million. The tax administrator says it’s not about generating revenue; but it very much appears to be generating revenue, over and above any housing units that flip from being charged speculation and vacancy tax to being occupied and no longer triggering that tax.

The ratios seem a little skewed as well, with the $53 million and the $75 million — not too much off, but a little bit. That appears we’re going from two-thirds of it being offshore speculation taxpayers to 75 percent or…. Anyways, I won’t get too far into that rabbit hole. Bottom line is this: it very much appears that going from 2 to 3 percent is not fundamentally changing the housing landscape in British Columbia; it’s just generating revenue for government.

The premise of speculation and vacancy tax is supposed to be to actually generate housing, not collect revenue. I accept the minister’s rationale on that, because that’s what I’ve heard from government ever since it’s been introduced. But the numbers would indicate something different. The numbers with this tax change would indicate that this is strictly a way to generate revenue for government, or the government would be modeling much less than $33 million in the anticipation that housing units were going to get back into the housing market and not be subject to the speculation and vacancy tax.

Can the minister explain then, why — based on that very high-level, very quick overview, based on the numbers that she provided, that her staff would have as well — 3 percent was landed on if the true intention of this tax is to, as the minister says, not have anyone pay it? If that’s the intention, this is the exact opposite of that: this clause. This clause is a revenue generator for government, but it is not actually achieving the stated goal of having no one pay the taxes. It’s having the same amount of people pay the tax, just a little bit more tax to government.

[4:40 p.m.]

Hon. Brenda Bailey: I have been focused in my answers on the behavioural change aspect of the SVT, but of course, there is another aspect which is how the revenue is used. It’s important to understand that any revenue from the SVT goes directly into the housing priorities initiative special account, and that funding is used to build affordable housing in regions where the SVT applies.

I’ll also share with the member that there was an independent review done in 2022 that showed that increasing the tax rate would further incentivize those paying the SVT to rent or to sell.

Peter Milobar: The problem is that’s the old chicken and the egg argument. Should government be the one to build housing — and how long will that even take, and at what cost, despite revenues coming in from speculation vacancy tax — versus is it not much faster and easier and cheaper to government to free up what they are deeming to be an otherwise empty home that is sitting there ready to be occupied? One is immediate; one is the “Lord knows when it happens” plan.

I say that as someone in a city with a 42-unit housing complex that was supposed to have people living in it in September of 2023 that still doesn’t have people living in it. And that just needed a renovation by B.C. Housing at a cost of about $500,000 a unit between purchase and renovation. So one could suggest maybe not the most cost-effective way to generate housing.

All that said, I guess really…. At the core of it all, what is the projection then? Because I’ve tried to find speculation and vacancy tax in the budget. I’ve looked at the tax projections on page 23 to 27. I’ve looked in the back tax tables. I’m not seeing it. I’m sure it’s in here, and it’s probably on a page I’ve just totally skipped past doing scan reading over the days that I keep looking at this bane-of-my-existence book — just like the Finance Minister’s, I’m sure.

Anyways, what is the long-term projection, then, overall, for speculation and vacancy tax? Is it slated to start to decline, or is it just this ever-increasing dollar value to government?

Hon. Brenda Bailey: I’ll direct the member to page 138. Speculation and vacancy tax is included on table A5, material assumptions revenue. It’s not fair; I have people helping me. Budget estimate 2025-26, 102; ’26-27, 137; ’27-28, 137.

[4:45 p.m.]

Peter Milobar: Thanks for that. I’ll save the rest of those questions for estimates. I’ll just let the Chair know I have no more questions until clause 40.

Clauses 36

questions for estimates. I guess I’ll just let the Chair know I have no more questions until clause 40.

Clauses 36 to 39 inclusive approved.

On clause 40.

Peter Milobar: As I read this…. This is taxation in the rural area, again very similar to what we had with the School Act as I read it, in terms of Indigenous lands that would be out of reserve and used for cultural and community usage as well as vacant land.

Can I just confirm with the government that this is around taxation for the rural areas — in other words, unincorporated areas, commonly referred to as electoral areas within regional districts — and not municipally held land within what would be defined as a municipality?

Hon. Brenda Bailey: Yes.

Peter Milobar: So my understanding of how that all works is essentially that the regional district is the tax collector for the province, and then the province returns back to the regional district the tax they need to run their services for each electoral area.

Every electoral area has a different basket of services they provide. Some have library services. Some have literally streetlights for six defined houses. Some have a wide range — fire services — and some don’t, even within the same electoral area.

Is this just removing any provincial rural property tax charge and leaves the regional district, the electoral area, whole in their taxation, or is it removing all property taxation related to that property in an electoral area?

Hon. Brenda Bailey: It’s actually the other way around. But you know, fair; it’s late on a Thursday.

It’s the province that collects and remits to the rural district, and the exemption does flow through to these other rural district taxes.

[4:50 p.m.]

Peter Milobar: Sorry. Yeah, that is how I phrased it, too. So we’re on the same page, at least. Okay, so it sounds like regional districts, electoral areas, will lose taxation, lose assessments that these properties

That is how I phrased it too. So we’re on the same page, at least.

Okay, so it sounds like regional districts electoral areas will lose taxation, lose assessments that these properties would have. A great many of these falling under this act would actually be in electoral areas, not in defined municipalities.

Is the province intending then, to provide those regional districts, those electoral areas, specifically? Because each electoral area operates on its own budget. It’s not like it’s a cumulative budget like a municipality does, where one neighbourhood chips in for a park in a different neighbourhood. These aren’t global budgets. These are very…. As I reference, these are very defined service-related budgets that get very granular within a regional district.

You can have, within one electoral area, literally, a streetlight service where only the ten homes on that one rural road want to have a streetlight on and neighbour 11 never opted in, and they don’t pay it. The cost gets calculated and managed by the regional district and away it goes. There’s a wide range of services. Some are mandatory like library services which can get quite expensive. Some have administrative costs, where everyone pays into that global administrative cost. But that goes into that total cost that the regional district has.

Some of these areas would have pretty significant, potentially, utility corridors on them that generate a lot of money for that electoral area, where if that piece of land as a chunk of land may not have, say, a huge dollar value attached to it, and it gets acquired by a First Nations corporation. To the regional district, on a taxation level, because of the utility corridor running through it it actually has a significant tax implication.

Has that been thought through in terms of those potential revenue drops to a regional district and, more specifically, to a very small population base electoral area that would literally cover, you know, 10,000 square kilometres and could very easily see a large portion of their revenue source drop by a chunk of fallow land being acquired by a First Nations corporation?

[4:55 p.m.]

Hon. Brenda Bailey: In clause 40 (a), we’re talking specifically about foreshore area. The nature of the amendment is that it adds new exemption from property tax for land and improvements in rural areas with a treaty-designated foreshore area.

The proposed change is a new paragraph that’s added to provide a property tax exemption for lands and improvements in rural areas with a treaty-designated foreshore area that are owned or held by the modern treaty First Nations, so specifically those eight nations or their public institutions.

The reason for this change is that the exemption brings the property tax treatment of modern treaty First Nations in line with other local governments, which are typically exempt from property taxes in the areas where they exercise governance authorities.

Currently, modern treaty First Nations are subject to property taxes in foreshore areas. The amendment will allow modern treaty First Nations with foreshore agreements and their public institutions to benefit from the exemption beginning in the ’26 property tax year.

Peter Milobar: Sorry. I didn’t add in the foreshore, and I appreciate that. Again, I guess we sometimes just internalize in our head our own local knowledge of areas. But it’s an agreed-upon foreshore area.

In my part of the world, in my former riding that went from Blue River all the way down to Kamloops — that’s about a third of Trans Mountain Pipeline’s run from Edmonton to Burnaby in that riding — there’s a lot of river. There’s a lot of what would be considered foreshore.

That’s a utility corridor. There are a lot of hydro lines, transmission lines that run in similar corridors. There’s no actual definition. It’s an agreed-upon foreshore area. It doesn’t say how far back from the foreshore. There are a lot of fields that go right up to those river lines. The rights-of-way for these utility corridors go right through there. That’s why I ask.

So I guess I’ll frame it in this way, a two-part question: I’m assuming no consultation with UBCM, then, to make sure that regional districts and electoral areas would be properly looked after if there was a revenue drop?

And is there any contemplation, then, that if there is, the government can commit that there would be grant-in-lieu as there would be if it was a provincial courthouse or provincially-owned lands? Where there is a revenue hit to the municipality or the regional district for that provincial-owned piece of infrastructure that would otherwise be exempt from paying tax, there’s a grant-in-lieu to offset that.

My concern is, again, not so much losing $1,000 of taxation on what would be a bit of foreshore area and a field but just because it’s foreshore — and an undefined distance from the foreshore; so it could be one contiguous piece of property that has a foreshore chunk to it — does not mean it could not have significant utility corridor taxation value to that regional district.

[5:00 p.m.]

Hon. Brenda Bailey: We’re not seeing a scenario that the member has described, the example of, I think, Blue River to Kamloops. There are no treaty First Nations in that stretch and no utility.

Well, let me back up. The foreshore is defined; it’s not undefined in this case. It’s defined as “the low tide mark to the high tide mark.” So it would be very unusual for a utility corridor to be impacted. I won’t say impossible, but it seems unlikely. So I don’t think the characterization or scenario that the member has described is one that would be impacted by this clause.

Clauses 40 to 45 inclusive approved.

Title approved.

Hon. Brenda Bailey: Before I close, I would just like to thank the member opposite. I found this exchange fruitful, and the member offered a number of suggestions that I personally found helpful. So I just want to thank the member for the nature of the exchange on this section of this bill. Thank you.

Also, just to thank my team for their support, as always. I’m very lucky to be a minister that works with such a strong and supportive team.

I move that the committee rise and report the bill complete with amendment.

Motion approved.

The Chair: This committee stands adjourned.

The committee rose at 5:04 p.m.