The House met at 1:32 p.m.

[The Speaker in the chair.]

Orders of the Day

Reporting of Bills

M202 — Eligibility to Hold
Public Office Act
(continued)

Darlene Rotchford: I move Bill M202, entitled Eligibility to Hold Public Office Act, as amended, be concurred in at report stage.

First, I’d like to thank all members of the Select Standing Committee on Private Bills and Private Members’ Bills again for the discussion and examination of Bill M202, Eligibility to Hold Public Office Act. More importantly, I would like to thank them for making themselves available, under short notice, to help strengthen the bill by amending the bill and addressing unintended drafting errors.

As I said before in this House and during the committee process, I feel it is an important piece of legislation that deserves to move forward in a timely manner because it closes a loophole most British Columbians likely didn’t know existed. To do either job while representing our community municipally or provincially, it’s a full-time job. That’s the expectation of the people who elected us.

There will also be, obviously, conflicts of interest that will arise on any issue where jurisdiction overlaps between municipal and provincial responsibilities. I am surprised, as I am sure many British Columbians would be, to learn that there was a loophole in this province that allowed, for some people, what would have been called double-dipping or holding both positions at the same time.

Again, I’d like to thank the Select Standing Committee on Private Bills and Private Members’ Bills for their work on strengthening and improving the bill so that it will do what it is intended to do and close the loophole. Many other provinces have.

Trevor Halford: I want to respond respectfully to the member that tabled this bill. It was the first in one of our processes, and I think that that’s an important fact here.

The MLA mentions the word “loophole.” What I find in this is that we have had a government side of the House that has completely manipulated an all-party committee, because they put in inadequate legislation. What did they do? When one member couldn’t attend, they subbed one member in for one meeting. I’ve never seen that happen before.

[1:35 p.m.]

What did they do? They had the Attorney General then weigh in with correspondence after we had done the committee stage, after we had presented and voted on amendments. Then there’s panic that ensues. Then what did they do? They forced the committee to go back — the first bill we’ve ever done — to fix the mistakes that were pretty much obvious through Google searches.

Now, if the government was so intent on getting this bill through the House, which they are today, you would think that they would be intent on actually getting this right the first time, knowing the difference between Community Charter in local government and, maybe, understanding that Vancouver has its own community charter.

We have now rushed through and put through amendments, through the government’s majority. Again, we’re struggling with consultation in this House — no proper consultation done. I don’t even think they consulted the ministers responsible for this legislation, because we’ve heard nothing from the Minister of Municipal Affairs, and the Attorney General weighed in past the point of no return.

So we see the panic that ensues. Quite frankly, it’s an embarrassment to be able to manipulate a committee for one single bill that was fundamentally flawed from the beginning. The amendments that have come through completely change that bill.

I find it astonishing. I understand the piece of legislation that they were attempting to do. We on this side got it right. The member for Langley-Willowbrook did the due diligence. She put forward a bill. There were amendments that were brought forward on the government side, which we supported because they made sense. There was no manipulation with that. Today is outright manipulation.

Amna Shah: I’m perplexed, absolutely perplexed and disappointed, to hear the member’s words. It’s incredible that the member, in this House, in the last third reading, can yell out and say that we wouldn’t take the AG’s recommendations, when clearly we are, and can continue to attempt to stall the process during committee stage — when we’re trying to get through the amendments that put the bill into what the member knows is now in good form and full well reflects the principle and the intent of the sponsor of this bill.

Quite frankly, none of the members on the committee could say with certainty that they understood that this did not include some of the municipalities, through which the amendments were brought into the bill.

Interjection.

Amna Shah: Were you not there in that meeting?

You know, the member wants to heckle, and he can sure do that, but I still have one minute and 30 seconds.

This type of flip-flopping is really rich.

Interjections.

The Speaker: Members.

The member will continue.

Amna Shah: The member wants to hurl insults at a Chair who has attempted to uphold the integrity of the committee as it does its work. The member knows full well that, as the Deputy Chair, the member has a responsibility, as well, to uphold the integrity of that committee.

Interjections.

The Speaker: Shhh. Members.

Please continue.

Amna Shah: Quite frankly, the flip-flopping, from what I can see, is really that of political convenience. You know what? On this side of the House, our responsibility is to ensure that we uphold the integrity with which we serve our province. I appreciate the sponsor for bringing the bill forward.

The Speaker: Thank you. Is the member finished?

[1:40 p.m.]

Amna Shah: I will finish, hon. Speaker, but this form of disrespect is absolutely unacceptable. Thank you.

The Speaker: Members, before recognizing the next member, for the clarity of members, I confirm that Bill M202 has been called under orders of the day this afternoon. Under the standing orders, we have up to six minutes remaining for report stage debate on Bill M202.

Peter Milobar: Thank you, Mr. Speaker. I will respect the time to make sure that the Green Party gets up and speaks as well.

I just want to clarify a couple of things, because the Chair of the committee, who takes great offence to us pointing out how bungled this bill was, seems to not understand. Maybe it’s indicative of the mindset of this government currently and what they feel proper consultation is.

The point being, first off, it’s not the opposition’s job to make sure that a government bill is actually in order. Every time we do point that out, the government tries to thwart our efforts.

Secondly, the government’s view of consultation is to go out and consult on a bill that did not talk about the Community Charter. It’s not some communities; it’s every single community in British Columbia that’s a municipality, other than Vancouver or the Islands Trust, that falls under the Community Charter.

They were not consulted with the wording of the bill as it’s now in the form, so there was not proper consultation out to the broader UBCM community. No wonder UBCM is adamantly opposed to other things this government is doing and feels like they’re getting railroaded all the time.

That is what we are talking about when we are talking about a bungling of this process and a manipulation of the process: not having adequate and proper consultation once the amendments were known, going back out and consulting with UBCM to find out what their member municipalities actually felt about the bill, because they weren’t talked about in the previous bill.

They can use the words “mayor” and “council” all they want. If they don’t reference the Community Charter, municipalities would not have felt compelled to need to comment, because they fall under the Community Charter. But the government’s rush and haste to manipulate the processes got us to where we are today, instead of taking the time to properly consult, based on those consultations, and then bringing the bill back to vote.

I have a newsflash for the Chair. They have the majority. They were going to win the vote. What they needed to manipulate to win the vote today was rushing through the process and not properly consulting with UBCM. That is the fundamental flaw of the process and the manipulation that we are talking about here today.

Jeremy Valeriote: I’ll be brief. In all fairness, I have to say, I’m not seeing the manipulation, the catastrophic impacts to the private member’s bill process that the opposition is talking about.

This was not a perfect process. However, from the beginning, the intent was clear. Whether it read Community Charter or Local Government Act, there was no ambiguity about who would be disqualified from holding public office.

I’ve listened to the discussion, taken input from the entities that submitted their input to the committee. I did want to delay the implementation of this until the next local government elections. That amendment was not supported by government.

However, I still think that the process that this has gone through doesn’t change the overall intent. It has flaws, but I’m not seeing that the flaws are fatal in this. I have intended to support this. I think it’s a positive step. It does put us in line with other provinces, and I don’t see the doom.

Obviously, a lot of lessons learned in terms of private members’ bills, and it was going to be a learning experience no matter how we did it. And yes, some advice came late, but in the end, this has been adapted to where it needs to be, and it is now in the right place to go to third reading.

The Speaker: Thank you, Members. Noting that the time has now elapsed for report stage debate, I will now put the question to Bill M202.

The question is that Bill M202, intituled Eligibility to Hold Public Office Act, be concurred in at report stage.

[1:45 p.m.]

Could somebody call division? Then we can really determine correctly.

Interjections.

The Speaker: You already called?

Division has been called. Just to clarify, the member for Esquimalt-Colwood did call division. I could not hear it at that time because of some other noise in the chamber. So that’s why we have called the division. Thank you.

[1:50 p.m. - 1:55 p.m.]

The Speaker: Members, the question is that Bill M202, intituled Eligibility to Hold Public Office Act, be concurred in at report stage.

Motion approved on the following division:

YEAS — 48
G. Anderson	Blatherwick	Elmore
Sunner	Toporowski	B. Anderson
Neill	Osborne	Brar
Davidson	Kahlon	Parmar
Gibson	Beare	Chandra Herbert
Wickens	Kang	Morissette
Sandhu	Krieger	Chant
Lajeunesse	Choi	Rotchford
Higginson	Routledge	Popham
Dix	Sharma	Farnworth
Eby	Bailey	Begg
Greene	Whiteside	Boyle
Ma	Yung	Malcolmson
Chow	Glumac	Arora
Shah	Phillip	Dhir
Lore	Valeriote	Botterell
NAYS — 41
Sturko	Kindy	Milobar
Warbus	Rustad	Banman
Wat	Kooner	Halford
Hartwell	L. Neufeld	Dew
Gasper	Day	Block
Bhangu	Paton	Boultbee
Chan	Toor	Hepner
Giddens	Rattée	Davis
McInnis	Bird	Luck
Stamer	Maahs	Tepper
Mok	Wilson	Clare
Williams	Loewen	Dhaliwal
Doerkson	Chapman	McCall
Kealy		Armstrong

The Speaker: Members, the House will now proceed to third reading of Bill M202, intituled Eligibility to Hold Public Office Act.

Third Reading of Bills

M202 — Eligibility to Hold
Public Office Act

Darlene Rotchford: I move third reading of Bill M202.

The Speaker: Members, the question is third reading of the bill.

Member for Abbotsford South.

Bruce Banman: Thank you, hon. Speaker. I won’t take much time.

As a former mayor, as a former councillor, there are some problems, in my opinion, with regards to this bill. It is actually a problem…. Not only, as was pointed out a few minutes ago, were there errors in rushing this bill through, but this is an attitude of this government that they know best, and they are going to take autonomy away from local municipalities and cities by pushing this through.

I have a personal example where I had said to my mayor when I was elected that I would do everything in my power not to trigger a very expensive by-election.

[2:00 p.m.]

On the whole of it, people look at this, and they say: “You know what? Politicians shouldn’t be allowed to collect two paycheques.” However, when those people also understand that in Vancouver, it’s a $3 million by-election — or close to $400,000, as it was in my city — they go: “Well, that doesn’t make any sense. We’re not really saving any money. It’s costing money. That’s money that could go into our parks, for our kids. That’s money that could go into infrastructure that we need to repair.”

It’s not like the province is going to pick up the tab. It will fall on behalf of the cities and the municipalities.

This takes away the autonomy. I was whipped when there was a change in leadership. I was told to resign, and it created a very bad feeling with the mayor and council that I had at the time, because they did want to spend that $400,000 on better things than a by-election.

This is nothing more than cheap political points. Quite frankly, there are far more important things for this House to be working on and discussing than this.

I cannot support this bill, because it takes away the power of local cities and municipalities to be able to make a decision as to what is best on behalf of the taxpayers in their neighbourhood, in their cities, that are going to have to pay the bill. This takes away a tool that they could work out with each individual case, and I just cannot support it.

The Speaker: Seeing no further speakers, I ask the member for Esquimalt-Colwood to close the debate.

Darlene Rotchford: I’m grateful to have the opportunity to close debate on this bill. As a private member who is the first to follow the new process of private members’ time, it was an honour to bring my bill forward.

I will be supporting my bill because I do believe closing this loophole is very important. I think your average British Columbian doesn’t know this exists. I can tell you, talking to my four municipal local governments, they were quite surprised.

I had that conversation before I ran — because if you’re running and you’re serious about running, you’re serious about this being a full-time job, and you’re serious about supporting British Columbians, you should be having those conversations. I didn’t do so lightly. You’ve heard me here at the mic talk about my council and how hard it was to leave them behind because I had those working relationships and I love the work I do for my community.

That’s why I ran provincially. I ran provincially to make this a full-time job to better support the people in my community. Closing the loophole in this bill ensures that everybody, not just my riding of Esquimalt-Colwood but across this province, gets what they deserve, and it is an MLA working full-time in the best interests of them. So I will be supporting my bill.

I feel really sad for a group that stands there and talks about doing the right thing, called us out on this bill, are not supporting the bill, because we made the fixes. My intentions were very clear all along: that this represents each and every area of this province.

With that, I will thank again everyone who is going to support my bill and for all British Columbians to know that this side of the House wants to make sure that our MLAs are here, giving you 110 percent.

The Speaker: Members, the question is the third reading of the bill.

Motion approved.

The Speaker: Members, Bill M202, intituled Eligibility to Hold Public Office Act, has been read a third time and has passed.

Hon. Mike Farnworth: In this chamber, I call the estimates for the Ministry of Finance, to be followed by the estimates for the Legislative Assembly and officers of the Legislature and, if we get through that, the estimates for the Ministry of Attorney General.

In the Douglas Fir Room, I call committee stage on Bill 15 to continue.

In Section C, the Birch Room, I call committee stage on Bill 14.

[2:05 p.m.]

The House in Committee, Section B.

The committee met at 2:07 p.m.

[Lorne Doerkson in the chair.]

Committee of Supply

Estimates: Ministry of Finance
(continued)

The Chair: Thank you, Members. We’ll call this committee back to order, and we’ll call on the Minister of Finance to read the vote.

On Vote 26: ministry operations, $426,950,000 (continued).

Peter Milobar: I asked a few questions yesterday about potential cuts, leadership that might be shown by the Ministry of Finance and the Minister of Finance in terms of efficiency reviews or expenditure management. It was in regard to GCPE and their $3.5 million advertising budget. No commitment from the minister of any type of action or direction taken on something as basic as that.

I mention that because we have agencies of government across this province that are having to make hard decisions based on funding envelopes in this budget provided by the government. You have universities reaching out to us and indicating they have massive strains.

You have school districts…. DPACs were on the back steps of this place yesterday. The minister and the government can try to say that there are not cuts to education. They can say that it’s up to districts to decide. Well, the districts are a creature of this government. The districts get their funding from this government. The districts are told what a large portion of spending will be based on contracts of teachers that are primarily negotiated by this government. Yet they’re held to a balanced budget by this government.

In my riding, when that district has to make the hard choice of cutting 80 jobs, 80 unionized workers, off the workforce, they didn’t have the luxury or the time to say: “Wait for a first-quarter update on September 15.” They didn’t have the luxury of time and saying: “Well, we’ll get to it in six or seven months.”

[2:10 p.m.]

They didn’t have the luxury of time and saying: “Well, we’re working on it. We’ve booked it, but we’ll tell you how, ministry, we’re going to balance our budget moving forward. Just trust us; we’ll do it.” They actually had to make the hard choice.

In Kamloops’s case, it’s a reduction of band programs. One is a gold-medal-winning national band program from last year that has now been cut, is my understanding. Another school is cutting their band program. There’s talk that they will dip into and no longer have the travel fund available for coaches to be covered to go to provincial competitions with their sports teams that might qualify for a provincial play now. The list goes on and on, as well as 80 support staff that got pink slips.

To the government, that’s not a cut in education. To the government, it’s okay that a locally elected school board has to weather those costs and make those hard decisions at the local level, staring down local parents.

Yet in this chamber, we can’t even get a clear answer from this minister on where $300 million on a $94 billion spend is going to come from. A refusal. A complete refusal. We literally just watched the government applaud and pass a bill that will trigger in Abbotsford a $300,000 extra cost on a school district — a cost they aren’t asking for, at a time when districts across this province are having to make cuts because they don’t have enough funds coming from this government.

But they’re making those hard choices. They’re being upfront about it. They’re weathering the heat at those public school board meetings with the parents that are coming in and pleading for the band program not to be cut, pleading that the programs for special needs children don’t get cut. The district is saying: “Our hands are tied. This is the funding envelope we’ve gotten from the province.”

It doesn’t matter how the government wants to spin it; that’s the cold reality in those school board rooms. In fact, the DPAC isn’t blaming the school districts, if you listen to what they’re saying. In unison, they’re saying across this province that they don’t have enough money from this government.

I say all of that as the backdrop to the complete lack of want by this government to even remotely talk about what they’ve already booked, which is a $300 million cut. They can try to spin it any way they want. It’s a cut. But they won’t say where; they won’t say how.

The interesting thing is the way they’ve booked it on page 22, because the minister likes to use the term: “It’s been booked.” We go from a subtotal of government expenses of $95,215,000,000, they subtract off the $300 million of these phantom savings that they may or may not have, and they say we will now have a total expenditure of $94,915,000,000. When I asked the minister last night if that would change the deficit if they didn’t meet the $300 million, she said: “No, it wouldn’t.”

So I’ll ask this question a different way. Based on the numbers of total expenses of $94,915,000,000 on page 22 and total revenue on page 23 of $84,003,000,000, if the government only finds $200 million in savings, will that not change the overall calculation between total expenses and total revenue and actually see us go to an $11 billion deficit, based on these two pages?

[2:15 p.m.]

Hon. Brenda Bailey: The member can talk about refusal all he wants, but in truth, the only refusal happening is the refusal of the member to accept the answer. It is not uncommon to use a tool like this. We’ve been very clear that this is an expenditure management tool.

[The bells were rung.]

This is an expenditure management tool which was designed intentionally to enable judgment to be used by ministries to get the best outcome. We’ve talked about how the tool was put in place. We’ve talked specifically about where the tool will be applied. We’ve talked about how, obviously, if we have a larger result using this tool, it will impact, and if we had a lesser result, it would impact. That is clear.

We have no concern about that, frankly, because the estimate of $300 million, $600 million and $600 million is achievable with the tools that we are using, and we feel very confident in these results.

Peter Milobar: The minister says this is a very common way of doing this practice. Can the minister say when was the last time the government showed a budgetary line item like this in a budget?

Hon. Brenda Bailey: There are a number of examples. In B.C., it was used in 2009. A current example is Quebec, which has booked $616 million in the 2025 budget.

Peter Milobar: Well, that certainly is pretty frequent, if we are going national and using a 16-year time period. I’ll give the minister that, given that there are two references being cited. That would be — what? ten times 16 — 160 provincial budgets, just provincially, and it has been used twice.

Just to get better certainty, then, on the $300 million being sought this year, is the $600 million for next year this $300 million plus $300 million, or is it a stand-alone $600 million? Then likewise, in the following year, is that a new and additional $600 million? Or is it just a carry-forward of the findings into the next fiscal?

Hon. Brenda Bailey: It would be the three carrying through to the six, carrying through to the six, so not additional but continued savings.

Peter Milobar: So the actual bulk of the savings will be this year and next year. In year 3, it’s actually no new savings; it’s that whatever was found in year 1 and year 2 will just continue forward. Again, it’s not net new dollars we’re finding.

I ask this because we’re supposed to be on a path to a balanced budget. We’re talking about finding, actually, $600 million of operational savings. On a budget that has a $10 billion-plus operational deficit, $600 million is the net actual find that is being looked at. There’s $300 million in savings in this year, an extra $300 million next year, and that’s it, operationally.

[2:20 p.m.]

You can add them all together and, yes, $300 million each year and then the extra $300 million, so that you still get to the $1.5 billion, but that’s cumulative. The actual impact to individual line items of expenses on page 22 is really $600 million of actual, real, year-in, year-out spending by government.

Just so we’re clear, that’s the level of seriousness this government is taking in tackling a $10.9 billion operational deficit — to find $600 million in operational savings over a three-year period. Shocking when you look at what school districts are having to find right now, in the here and the now.

The minister can say “it’s not true” all she wants. She literally just confirmed it in her previous answer. And if I’m wrong, the minister can reconfirm, then, if she is insisting.

Is the $600 million in plan ’26-27 the same $600 million in plan ’27-28, or is the government going to find an additional $600 million in ’27 and ’28 the way it’s laid out in this book and intended in this book now?

Hon. Brenda Bailey: It’s $300 million in savings in the first year, $600 million the next, $600 million the next. This is ongoing reduction. These are very prudent numbers. They’re part of our efficiency work.

The first part, as we’ve described, is the expenditure management. That’s where these numbers come from. We know they’re achievable. We used the design of the expenditure management to project the $300 million, $600 million and $600 million.

[2:25 p.m.]

Obviously, that would not be enough for us to get back to balance. That’s part of the work. There are additional parts of the work to get back to balance, including the review that we are doing now with all of the ministries. Every single ministry is participating in this significant review. In addition to that, work to grow the economy. So there are multiple things happening.

The member is specifically looking at the expenditure management program, which is $300 million, $600 million and $600 million. Of course, each year, you add them together for the fiscal plan of $1.5 billion.

If we’re able to continue to bring — and we will be — spending down, that will have impact over time. That is the goal. Part 1, expenditure management. Part 2, the ministry reviews. That’s ongoing right now.

Peter Milobar: The point being it’s not a new $600 million that’s being found in the third year. To use a round number, if something was at a $700 million expenditure this year, it would drop to $400 million. It would drop to $100 million next year, and it would stay at $100 million. There would not be a second area that was suddenly looked at to find another $600 million.

On page 23, switching to the revenue side, has there been any significant concerns the minister has on any of the taxation revenue side of that ledger that gets us to the $84.003 billion? If so, what would those revenue sources be?

Hon. Brenda Bailey: Of course, with every budget, there are risks. We are two months into the fiscal year, and there are puts and takes, of course, that occur throughout the year.

This particular fiscal plan has additional risk, obviously, because of global trade and the uncertainty that comes with the moment that we’re in. I will share with the member that some of the prudence and risks are outlined on pages 56 and 57 of the budget.

Peter Milobar: Oh my, my. This is going to be a long afternoon.

Has the minister made any legislative changes since this budget was introduced that might have any fundamental impacts to the taxation revenue listed on page 23? She doesn’t seem to want to talk about the over–$3 billion of carbon tax. I’m assuming she’s still expecting to collect that from industry, then.

[2:30 p.m. - 2:35 p.m.]

Hon. Brenda Bailey: The numbers on carbon tax are as follows. In 2025-26, revenue would have been 2.760, less the CATC — which, as the member knows, we cancelled — of 0.769 $769 million, and the net revenue loss before other offsets is $1.991 billion. Those are the actual numbers.

It’s important to recognize that that amount is notionally funding programs. There is a review going on, looking at other trade-offs that we might have to make from having this revenue no longer available to us, but I want to back up to the bigger view for a moment. In any fiscal plan, there are changes that happen to revenue and changes that happen to expenses. This, obviously, is a significant one.

There are also significant pieces that have come forward in regard to the revenue side. For example, through the work of our Attorney General and our Premier, when he was in that role, there has been a successful outcome for the tobacco legal case that we were involved in. We’re expecting more than $3 billion to come in, and it’s just being looked at for how that accounting treatment will be.

All of that to say, yes, there are significant pressures on this fiscal plan. There are also positive intakes coming in on the fiscal plan. This is important, and it’s why we do Q1, Q2, Q3 updates. It allows us to flesh out new information as it comes in, and we’ll have those updates, as we always do.

Peter Milobar: Just under $2 billion of net revenue loss. To be clear, then, what is the remaining industrial carbon tax that is still projected to be collected?

Hon. Brenda Bailey: For ’25-26, that number is $286 million.

Peter Milobar: What is the overall cost, in what gets paid out to industry? That’s the revenue side of the carbon tax, under the OBPS and other programs that industry can tap into. There’s also money outlaid to industry for emissions improvements. What is the cost of those programs to industry?

[2:40 p.m.]

Hon. Brenda Bailey: What was taking us a little bit of time there is that OBPS and the programs that are in place for industry…. This is not a tax question, and so it doesn’t actually fall under my ministry. But we’re happy to take this on notice and reach out to ECS for information if the member would prefer that.

Peter Milobar: Well, I would have hoped there would have been modelling done when decisions like removing a net $2 billion of tax revenue…. And the implications of that program-wide, not only what it’s funding, what CleanBC initiatives were being funded by that $2 billion, but also on the industrial side…. Lots was being funded there. Heck, we had contingencies last year dedicated to CleanBC, $320 million.

The decision-making was pretty fast to cut out the low-income tax credit. That’s the only fast decision this government made in relation to removing of carbon tax.

When did the government start modelling the potential implications of removing carbon tax from this budget?

Hon. Lisa Beare: I seek leave to make an introduction.

Leave granted.

Introductions by Members

Hon. Lisa Beare: In the House, we have Wood Elementary School joining us with their teacher, Jeven Gill. We’ve got 25 grade 5 and 6 students and their parent volunteers.

On behalf of the Minister of Health, who’s in meetings right now, I get to welcome you. Thank you so much for joining us today.

Would the House please make them all feel very welcome.

The Chair: Welcome, everybody.

Debate Continued

Hon. Brenda Bailey: I’ll join the member in welcoming the students from Wood Elementary. We’re in the budget estimates for the Ministry of Finance. I’m here with a respected colleague on the opposition who’s asking the Minister of Finance questions about our budget. Thank you for being here.

[2:45 p.m.]

The question, as I understood it to be, is: when did we start modelling this out for the budget? The answer to that is that we didn’t model this out for the budget. This decision was a post-budget decision.

Peter Milobar: Did the ministry themselves do any pre-modelling around what would happen if carbon tax would be removed ahead of the minister becoming the minister?

[2:50 p.m.]

Hon. Brenda Bailey: There’s a reporting mechanism that goes throughout the carbon tax regime and its history, including annual reporting through the Climate Change Accountability Report. The member is asking about modelling specifically on removal of the carbon tax. That modelling did not occur until we had the direction that we’re, in fact, moving that way.

Peter Milobar: Well, that’s remarkable.

On page 59 of the budget book, we have changes that happened to the Income Tax Act: an increase to Film Incentive B.C., introduce major production tax credit, amend regional and distant location tax credits for animation productions, increase the interactive digital media tax credit to 25 percent and make permanent. Those all together total $53 million. In fact, there’s no actual material impact to taxpayers in this fiscal. It’s actually next year’s fiscal that that $53 million would be an impact, according to the government’s chart on page 59.

I say that because when I asked questions about some of those tax measures on Bill 5, this is what the minister had to say:

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

There was apparently work being done in that period, in a non-partisan, broad kind of way, on four or five tax measures that resulted in a grand total of $53 million, and not even until next tax year, on campaign commitments that were only referenced by one of the parties running. I checked. Our campaign didn’t make any of those commitments.

Yet on something that collects almost $3.1 billion of tax revenue…. That was a political hot button federally and provincially that saw the Premier do a 180-degree turn in the space of a couple of months, from saying he would never back down and that if the rest of Canada got rid of carbon tax, the NDP was going to $170 a tonne, to a few months later, in the heat of an election, saying: “Oh no, no, we’ll get rid of it.” Pretty clear the B.C. Conservatives have always wanted it gone.

The minister is trying to now tell us that the civil service was doing no non-partisan, broad-kind-of-way work on campaign commitments around carbon tax and the potential implication of removing carbon tax because, you know, there’d be a rush to accomplish some of these commitments. No work was done on $3.046 billion worth of tax revenue that both parties had committed to removing, but there was work done and preplanning done on the impact of $53 million of film and digital tax credits that only one party campaigned on and that actually don’t even hit the financial plan until next year.

Is that what we’re honestly supposed to understand is the level of preplanning that was going on within government moving forward?

[2:55 p.m. - 3:00 p.m.]

Hon. Brenda Bailey: The work to understand the implications of cancelling the carbon tax doesn’t really require in-depth modelling, in fact. The numbers are quite straightforward, and those numbers, as I mentioned to the member, are available through the annual reporting in the Climate Change Accountability Report. Those numbers are available to us.

The hard part is now, in fact, the careful work that’s happening on the other side of it, the implications of not having that revenue on those programs that were notionally funded by it, and that’s work that is underway now.

Peter Milobar: So is the minister saying, then, that the cut of over $1 billion to low-income households was of no concern to the government, didn’t require modelling, had no economic impact assessment done on what it would mean to those individual homeowners on the low-income side of the scale? That was just a throwaway, easy-to-make decision that didn’t require any advanced modelling because it’s pretty straightforward?

Yet trying to figure out how to balance off the needs of industrial users or EV rebate programs or electric charging station programs or municipalities and their transit funding needs that come out of carbon tax or bike paths…. Those are much more complex. Those actually require months and months of study and a long-term thought process by the government as to whether or not those programs will still be funded.

But low-income people, you’re on your own. We can just make that cut, and we don’t have to worry about checking in and making sure we understand the impact to that household on that cut.

Hon. Brenda Bailey: To the member, I couldn’t disagree with his characterization more strongly. To mix the question of complexity of a financial decision through economic modelling and suggest that that means that a policy implication is easy or not important or not impactful…. You’re mixing two entirely different things.

Something can be relatively simple in terms of its math and deeply important and meaningful in terms of policy, which obviously this is, and we took this very, very seriously. We also looked very carefully at what the numbers were for people who were receiving CATC and what the implications were, and we continue our very important work to ensure that we’re addressing affordability in many other ways.

So I reject the premise that in saying that something is not complex mathematically, it somehow equals not being important in terms of policy. This was deeply important, and it was deeply meaningful. We understand that it had implications for people, which is why we continue the really important work on affordability.

[3:05 p.m.]

Peter Milobar: Well, it’s not complex to decide whether or not to continue to pay for EV charging stations. It’s not complex to decide whether or not to continue to subsidize EV sales. It’s not complex to decide whether or not you want to continue to fund transit from carbon tax or bike lanes from carbon tax. None of that is complex. All of that is a straightforward, simple mathematical calculation. In fact, it’s at least $1.991 billion dollars.

The simple math on low income was that it was a little over $1 billion. The implication and the modelling which I was referencing that the minister said did not happen…. The minister can’t have it both ways. It’s not like there are other affordability measures, after carbon tax was removed, that have been added for those in the low-income side of the equation. This was removed from the basket of services and tax credits and supports that they receive.

Any of those other measures the government was planning on doing while actually promoting, in language around carbon tax going up in this budget book, those same supports for low-income households to go up at the same time…. This is why I’m focusing in on the carbon tax aspect of support for low-income households. The rest of it was happening. It’s happening whether carbon tax is there; it’s happening whether carbon tax was removed.

I’m asking about the modelling and the impact on the everyday lives of those low-income people. The only decision this government seemed to make about the removal of carbon tax revenue is removing the support to those low-income households.

So the minister, just to confirm, is saying that the quick and easy mathematical decision, although obviously gut-wrenching for the government to remove that support from low-income households, was to remove it without doing any economic modelling in a time of extreme affordability crisis, at a time when we see food bank usage going up and up and up, one would hazard to guess by the same people that get that low-income carbon tax credit.

There was no modelling done about the overall impact to that household by losing their carbon tax credit. It was just a mathematical decision, as gut-wrenching as it was to make that one decision. And we’ll have to wait, at a minimum, until the first-quarter update in September to find out if anything else is going to change that carbon tax is funding. Am I understanding that?

[3:10 p.m.]

Hon. Brenda Bailey: I just want to take a moment to talk a little bit about the reality of what people were paying in carbon tax and what they were receiving, those who were receiving the CATC credit.

Now, the reason that we designed this repayment to people who are most impacted by the carbon tax is to provide a levelling out to ensure that the most vulnerable aren’t having to experience this tax, and we structured the tax credit in that way. I’ll share with the member opposite that the average family paid about $410 in carbon tax, and through CATC, the average family would receive $485. So I’m certainly not saying that $75 a year is nothing, but it’s also important to recognize that that’s the amount that we’re talking about.

Peter Milobar: Just to be clear for the viewers at home, when the minister says, “We structured,” this tax credit was structured back when carbon tax first came in. It went up every time the carbon tax went up. It goes back to the days of the B.C. Liberals. I believe 2008 would have been the first tax year that it actually came into effect, and it continued on.

[3:15 p.m.]

Then it plateaued out when it was plateaued at $30. Then when the NDP got power and they started to put up carbon tax, long before the federal government mandated it to go to $50, it increased as it went up.

It froze the one year, during COVID, when then Minister Carole James acknowledged, essentially, that carbon tax does impact affordability. Under COVID, she was worried about cost and impact. So they froze carbon tax for a year. Then the next year, apparently not as worried about it impacting affordability, and the march went on.

Then the feds changed the rules, and we started to see the $15-a-year increases after it got to the $50. So that’s the Coles Notes version of the history of carbon tax in B.C. But the Low Income Climate Action Tax Credit has been around since the inception of it.

My point is this: decisions were made. You know, the minister has made it very clear that on other tax measures, the public service had no problem modelling out and thinking about the implication of a tax change happening. Something as significant as $3 billion — $3 billion, I would point out — out of just under $50 billion of overall taxes collected. So about 7 percent of the tax revenues of this province were openly being talked about by both parties in a campaign. Yet there was no pre-modelling done by the ministry to figure out what the implications of that would be.

Here we are. What are we? Almost three months post-budget being introduced, seven months post-election, changed since April 1. That was brought in and rushed through pretty fast — 14 hours worth of debate. With all those various timelines and checkpoints, still no clear direction from this government on what they’re going to do on the missing $1.991 billion worth of revenue.

So by my math, at a minimum, that makes our deficit now go from $10.9 billion to $12.8 billion. We’ll continue on throughout the rest of the day to figure it out, because bond-rating agencies have already pegged it at $14.3 billion. That didn’t seem to bother the minister, who shrugged it off as not a problem, instead of trying to defend and explain why, no, it’s not really $14.3 billion, because here’s our plan to deal with the revenue shortfall.

I’ll likely come back to carbon tax in a little bit, but there’s a whole lot of revenue sources. We touched on property transfer tax yesterday a little bit. That’s $2.247 billion. So we established last night that the budget accounts for 13.2 percent of projected sales growth, with an average price going up by 2.4 percent. The minister says sales volume is actually 1.7 percent, not 13.2, and that sales are actually negative 3.6 in value percent, not positive 2.4 percent.

It seems like that will be…. I agree with them. The minister said, when I asked the first question about sales volume and number of transactions: “Well, it also depends on what the purchase price is.” I totally agree with that statement, except the purchase price is 6 percent lower than we were projecting, as well, in the budget. It’s not exactly the way you want those two numbers to go when they’re both tanking.

So you jump forward to page 27. Property transfer tax revenue growth is expected to average 7½ percent annually over the next three years, consistent with expected annual changes in residential sales values and an assumed response to the expected lower mortgage rates. Well, we know the sales values are dropping, and we know the actual sales volume is dropping and way below anything projected. However, the line above it is property tax as well. That’s $4 billion.

Now, I recognize that not all of that will be lumped in with this. But its description is “expected to grow by an average of 5.5 percent annually over the next three years, consistent with gross assumptions on housing starts,” which we know are lower.

[3:20 p.m.]

Yes, it incorporates speculation and vacancy tax increases, but those — as we saw on page 59 — really only account for $12 million this year and $47 million next year. When you’re talking $4 billion, that’s not really what’s going to stabilize things, one way or the other.

With the $4 billion of property tax, and recognizing not all of it is directly tied to the housing starts, how significant a part do housing starts actually play in that $4 billion worth of projected property tax revenues?

[3:25 p.m.]

Hon. Brenda Bailey: I do just want to begin this part of the conversation by reminding the member of something I’m sure he knows, which is that we’re seeing volatility in the market. It’s important when we’re talking about an annualized budget that we recognize that just taking data from two months at the start of the year doesn’t really tell us the full story. I just want to ensure that we’re recognizing that.

For example, yesterday we talked a bit about how housing starts are down. We also know that we’ve got the numbers in for April now, and while housing starts were quite low in the beginning of the year at 30,000, April housing starts were 53,000. The number we used in the budget is 46,000.

We are seeing volatility, and it’s premature to make assumptions about what the year will look like. Of course, this is what we track very closely, and again, it’s why we report out every quarter on what we’re seeing in terms of both revenues and expenses.

The member asked specifically about how this revenue impacts the budget, and I’ll bring the member to table A5 on page 138, under property taxes. On the far right-hand side, there’s a sensitivity analysis in regard to property taxes, which I believe the member was asking about. I’ll just read it out: “Plus or minus one percentage point change in 2025 new construction and inflation growth equals up to plus or minus $30 million in residential property taxation revenue.”

Peter Milobar: Thanks for that. Yeah, there are a lot of charts, so it’s good there’s always staff to point to the charts.

[Mable Elmore in the chair.]

In terms of the overall other taxation areas, what studies have been done on tobacco taxation? It’s kind of a static $450 million across the board. However, we’ve heard repeatedly from industry…. Again, I’m not trying to be an advocate for big tobacco by any means, but there is a very real-world reality out there of black market cigarettes. We can pretend they don’t exist. We all know smoking is not great for you, but the reality is, just like with illegal gaming, it’s a revenue hit to government.

What does the government typically forecast as the revenue hit of illegal cigarettes, and how does that impact our tobacco taxation number over this budget and in coming years?

[3:30 p.m. - 3:35 p.m.]

Hon. Brenda Bailey: We’re talking about the black market in regard to tobacco and how we do estimates on revenue from tobacco. I’ll tackle this in two parts.

First, it’s very difficult to get data for the black market. Of course, they don’t fall under the same disclosure rules, and we don’t have access to information, but it’s important to know that we take this very, very seriously.

In fact, within our ministry, we have an enforcement branch that works on this. I’ll share with the member opposite that on May 15, we had what the police described as a very significant amount of illegal tobacco and cannabis confiscated. There was quite a significant bust.

As to how we do forecasting for tobacco, without strong data, obviously, from the side of the black market, what we use are prior revenues that come to us through taxation, through the legal market. That number, for ’25-26, is $450 million.

Peter Milobar: I guess I’m asking because when government is looking for every penny under the couches, one would think that there’d be a cost-benefit analysis — and not just on the public safety side, for obvious reasons, in terms of organized crime. These are not people, dealing with illegal cigarettes, that are not tied in with some form of organized crime somewhere. It’s a pretty large operation that happens across Canada and across North America.

There’d be the public safety cost-benefit analysis, but one would think, given the dire financial straits of a government that is now apparently running a $12.8 billion deficit, that they’d want to be making sure that illegal activities that are taking away from tax revenues were being properly investigated and cracked down on. I’m hearing from an increasing number of businesses out there that they’re feeling like they’re being targeted with PST audits and other audits.

I’m not going to pick one side or the other, but there definitely seems to be a feeling, anyway, that there’s an uptick in that or a more aggressive attitude from the ministry, hunting for those pennies under the cushions.

Then you have other operators, like the small businesses that run the corner stores and gas stations and that rely heavily on tobacco sales. You can argue the merits — the health, or not, of it — but it is a legal product, and they are allowed to sell it under certain conditions. They feel they’re not being supported while they’re still, in unison, being audited for other issues within the tax branch.

They don’t feel they’re actually getting much support on the enforcement side. Has there been any direction? Have there been any enhancements to the enforcement side with the ministry, around things like the caving of revenues due to the black market tobacco that’s out there?

[3:40 p.m.]

Hon. Brenda Bailey: I can certainly understand the sentiment from the businesses that the member has spoken to who feel that they’re doing everything right and by the rules, and they’re held to account and paying taxes and being good citizens, and down the road, somebody is selling tobacco illegally, and that’s really frustrating.

I’m happy to share with the member that, in fact, my reference to the May 15 significant enforcement that occurred, occurred in Kamloops. I hope that the member can share with the businesses that the member has spoken to that we take the enforcement very seriously and that we understand the concerns that they’ve raised, and they’re very valid. Perhaps the member would like us to get some information about that particular bust, as they say.

I do want to share with the member an answer to the question: have we seen an increase in enforcement? In fact, we have reallocated internal resources to this investigations unit within Finance to increase their capacity.

Peter Milobar: Moving on to cannabis revenues, what is the overall cannabis taxation revenue net to government for this coming year, or at least anticipated?

Hon. Brenda Bailey: To the member’s question in regard to the cannabis revenue, I’ll share with the member that this is a federal excise tax that is collected by the federal government and then shared out. It shows up on page 141 under “Other federal contributions” — the second line. B.C.’s share of the federal cannabis excise tax is $110 million.

Peter Milobar: How much of that has been agreed upon to go back to UBCM and municipalities? There was supposed to be a funding agreement agreed upon with the provincial government when cannabis first came in. What is slated to go back to municipalities this year?

[3:45 p.m.]

Hon. Brenda Bailey: The province does not share cannabis revenue with the municipalities.

Peter Milobar: Well, that’s concerning. When cannabis was first introduced, that was the deal: that there was going to be revenue sharing.

Is the minister saying that that agreement has never happened with UBCM and that there has, in fact, not only never been cannabis revenues shared with municipalities but that there’s absolutely no intention of the province to make good on that commitment to share cannabis revenues with local government?

[3:50 p.m.]

Hon. Brenda Bailey: The member has said that was the deal, and that is not my understanding. The federal-provincial-territorial agreement on cannabis taxation was signed in 2017. It did not outline any specific requirements for the province to share cannabis revenues with municipalities; nor was there mention of any such expectation included in the federal releases or ministerial statements in regard to the agreement.

Peter Milobar: Well, it’s going to be news to UBCM that the government has changed their tune, because there was very clearly…. It’s not the federal side. There was a commitment made, and there were negotiations made. In fact, the current Transportation Minister, who was then the Solicitor General, was frequently quoted talking about it. I know the former mayor of Kamloops was always wondering when the agreement was going to be made.

I had assumed, with as many years as have passed, that the government had fulfilled that commitment. It has been quite a stellar couple of weeks for this government with UBCM. That’s for sure. I’ll move on though. Obviously, that doesn’t seem to be something that’s going to be moving forward. I’ll leave it to UBCM to decide if they want to press that any further or not.

In terms of the illegal cannabis side of the equation, though, there’s a lot of talk about grey-area cannabis. But my understanding is that you have to go through the same government warehouse that you would for B.C. liquor. It gets shipped through that. It gets tracked that way. You get a licence, set up your store, and you operate.

Now, private liquor stores operate the same way. They get licensed by the government, and they move forward, and the government gets their revenues off that. A liquor store, whether it’s operating in a municipal boundary or on reserve lands, would still need those provincial licences. In fact, if they didn’t have those provincial licences, every drop of liquor would be deemed to be illegal in that store, and they wouldn’t last very long. It wouldn’t be open very long at all. I can say that as a former liquor store owner. That’s what would happen.

Yet cannabis, which is regulated and controlled by the exact same organization in government and operates the exact same way, seems to be treated differently. The on-reserve stores do not have access to those government warehouses. They do not have access to the government-controlled supply of cannabis. So, by virtue, it’s not grey. Everything in that store would be considered illegal under the law. But very minimal enforcement gets taken, usually only if the host First Nation asks for some intervention to happen.

What is the lost revenue? Surely that’s been investigated by the Minister of Finance, given they have the investigative crew with tobacco and cannabis. She mentioned cannabis when she answered about the illegal tobacco. These are stores that are up and running, physically there. We know what we’re taking in on the legal stores. We know roughly what is happening for volumes in those illegal stores.

[3:55 p.m.]

What is the revenue loss that the Minister of Finance has calculated, on a yearly basis, by not enforcing the rules as they pertain to cannabis, unlike trying to enforce the rules as they pertain to tobacco or liquor?

Hon. Brenda Bailey: There’s sort of a question of overlapping jurisdictions here, so I just want to provide a point of clarification.

The investigation unit within the Ministry of Finance does not investigate cannabis. I previously mentioned Kamloops-area enforcement. We were involved because of the tobacco side. It was work with the police, and they were involved in regard to the cannabis and tobacco.

Also, it’s actually the CRA that collects the excise tax on cannabis, not the province, so they’re responsible for the enforcement from the tax perspective. In the province, the Solicitor General is responsible for looking at enforcement from a legal perspective.

Peter Milobar: Just looping back, in terms of municipalities, it’s been a position of UBCM and a discussion point with the government — 2018, 2019, 2020. The latest resolution is 2023. Last year was an election year, so it probably got lost in the weeds, but it is not something that, frankly, should be a surprise conversation. Perhaps to the minister, who I appreciate is new in her role: I find it hard to believe — or actually shocked, frankly — that the ministry itself was unaware of UBCM’s desire and discussions with the province over the course of, like, multiple years.

The pretty consistent ask and demand and discussion by the province that they were at least entertaining and discussing the revenue split of the excise tax, the federal tax…. I get it’s federal. But it’s meant to be a split of whatever comes to the province, so that is a concern.

[4:00 p.m.]

Some of these I’m just pointing out because, again, it’s the minister talking about trying to find efficiencies, trying to find the pennies under the couches and all of those great buzzwords, while we’re staring down the barrel of a $12.8 billion deficit, and counting. We know that a property tax of $4 billion may or may not have some changes to that, but the property transfer tax at $2.2 billion very much looks like it’s in trouble, based on how it gets calculated, differently than the property tax gets calculated.

Yet we have school districts held to a very high standard of balancing their budgets, regardless of what cuts they need to make with the revenues they’ve been provided, by the provincial government, in this budget. We have municipalities that are seeing a drop in their local gaming host community grants, as we established last night when questioning B.C. Lotteries, somewhat connected with the proliferation of illegal online gaming happening and the impacts that has on bricks-and-mortar in those host communities.

We have municipalities that have been walked away from with a conversation around cannabis excise revenue share. We have municipalities that don’t know what’s going to happen on the carbon tax side of the equation when it comes to things like active transportation, bike lanes and potential extra transit funding or not — all things that this government has repeatedly pointed to, as carbon tax paying for.

No certainty, no clarity, no clear path: “You guys just figure it out.” Yet when we try to ascertain where any efficiencies or cuts are happening, in real time with this government, we get met with: “It’s a work in progress.”

Every other jurisdiction that falls under the watch of this government is expected to do it immediately, do it right away, and the only definitive decision this government has made on anything has been to remove carbon tax in a 14-hour period, and then the only thing to remove from that revenue drop is the tax credit to low-income people in this province.

There’s a lack of concern around credit downgrades by the minister. What is the impact projected to be to our debt borrowing costs, in the long term and the short term, for B.C., with those credit downgrades and the trajectory of our debt that’s in this budget?

Hon. Brenda Bailey: Hon. Chair, I’d request a bio recess, if we may, please.

The Chair: Sure. We’ll be back in 15 minutes.

The committee recessed from 4:03 p.m. to 4:18 p.m.

[Mable Elmore in the chair.]

The Chair: I’ll call the committee back to order, continuing Committee of Supply estimates for the Ministry of Finance.

[4:20 p.m.]

Hon. Brenda Bailey: Bringing us back to the question at hand, the member has asked about the downgrades that we experienced: what they were and what the implications are and how it’s been impacting our borrowing costs.

S&P and Moody’s downgraded us on April 2. Two other rating agencies did not choose to downgrade but did change their trajectory to negative in terms of long-term view.

We’ve been working very hard on our relationships with investors, on our bond tour and, also, with the relationships with the agencies.

The way that it’s measured in terms of the borrowing cost is really against Ontario. Ontario is considered the benchmark province, and we actually haven’t seen a negative impact to our borrowing costs. In fact, our borrowing costs have gone favourably in our direction by 1½ basis points.

Peter Milobar: So it hasn’t impacted it yet. If it did impact it throughout the rest of this year, if it added, say, $100 million…. Again, I’m just using a round number — the minister can use whatever order of magnitude number — more for illustrative purposes than anything else.

If it impacted by $100 million, say, in borrowing costs in this fiscal year, to keep all things being equal, then on page 22, does that mean that the government would need to find $400 million worth of savings? Or would it just absorb it in the overall operational costs and see an extra $100 million added to the $12.8 billion deficit that we’re now at?

Hon. Brenda Bailey: No. Just no to the member in regard to how the member framed this question. This is not a “yet.” We are fully engaged in the issuance of bonds. We’ve already issued $6.6 billion in Canada, and we’ve had outstanding reception. We also have issued the equivalency of $2.7 billion Canadian in euro bonds, again to outstanding reception. So no, I’m not accepting the member’s premise for the question.

The reality is that, while we have experienced a downgrade, it is also true that the entire world is being impacted by what’s happening with the tariffs.

[4:25 p.m.]

The member makes a face about this, as if the tariffs aren’t happening. They are happening. They are having implications worldwide, obviously, including in the bond market. British Columbia is comparing very favourably, as indicated by these issuances.

Peter Milobar: The minister might not want to play poker with me, then, because I wasn’t making a face about the tariffs.

At any rate, tariffs would absolutely have an impact on the budget. We’re not disputing that, but they’re not showing up anywhere in the budget in this moment in time anyways. We can only work with the numbers and the information that we have in this moment of time with this minister.

We have a $12.8 billion deficit. We have projected corporate taxes dropping. Was there any modelling done around the CFIB requests around, I think, steps that could be taken to make small business and medium-sized business more competitive in B.C., particularly around things like removing PST on equipment and inputs?

I mean, it was good enough during COVID yet again. We had a carbon tax freeze during COVID to help with affordability issues. We had PST removal on equipment to try to spur on reinvestment and help stabilize industry. Now we’re in the middle of a tariff crisis that some in government have tried to liken, well, to World War II. Others have tried to liken it to the COVID crisis. We’re not seeing the same type of measures being taken.

Now, we did see carbon tax completely removed, but let’s face it. That was grudgingly done, and that’s what’s got us to the $12.8 billion deficit we’re staring at right now. The real question is around, you know, trying to reinvigorate and listen to our business community. We don’t seem to have very many tax measures in this budget.

One would assume there was some modelling done. Was it done on the CFIB recommendations, which have been pretty consistent for a few years now? If so, what was the outcome of that modelling, and why was it not part of this budget?

Hon. Brenda Bailey: I’ll answer this question in two parts. The first part is there was modelling done on the deficit, and that number is 10.9. I would appreciate it if the member would stop his misinformation campaign and use the actual number of the deficit in our budget, which is what we are discussing today, and that number is 10.9.

We’ll answer the second part of that in a moment.

[4:30 p.m.]

Hon. Brenda Bailey: In regard to the question about CFIB and meeting with small businesses, we take very seriously the thoughtful recommendations from the business community, and I enjoy a positive relationship with the CFIB.

We met quite recently. We’re just looking up the date. It was in March or April. I’ll share with the member opposite that I worked closely with the CFIB and with GVBOT on their recommendations — adopted not this budget, the prior one — in regard to changes for the EHT, which was the most important and pressing request coming from business at that time. They had made that very clear to me when I was at JEDI.

We didn’t do budget consultations this round, due to the election, but I’ve had the opportunity both to meet with CFIB and also just last week with BCBC to listen to their recommendations on taxation and other issues of importance to the community.

Peter Milobar: Well, the minister seemed to take great umbrage with me stating a $12.8 billion deficit, so I feel I’m compelled to correct the record, then, based on her strong words there. My comments were based on the fact that on page 1 we have a $10.912 billion deficit in this budget book. When you take the answers of today….

Again, the minister is fond of talking about a moment in time. Well, in this moment in time, with this budget, the minister very clearly stated that we have $1.991 billion of carbon tax revenue that there have not been cuts to spending for. There has been no attempt to make up the difference one way or the other. They can’t point to it.

I’m not even talking about the $300 million that’s notional, just the $1.991 billion in carbon tax revenue. So I would like to correct the record. It’s not actually a $12.8 billion deficit. It’s a $12.903 billion deficit, if we want to get accurate. The minister can point me to where the $1.991 billion in lost revenue of carbon tax appears. I’m not even putting in a number anticipating the caving of the property transfer tax or other things. These are strictly just adding the minister’s own answer around carbon tax revenues.

She can take great offence to it all she wants. I will correct the record. It’s not a $12.8 billion deficit; it’s $12.9 billion. Who knows how much it’ll grow by the end of the day?

[4:35 p.m.]

It’s interesting. The minister keeps trying to lecture us and tell us that it’s all about a moment in time and that we must stick to this book. Yet they have no problem, the government, talking about other programs or things that have happened after this book. It makes it a little bit difficult to try to deal with the budget estimate with a minister that’s not forthcoming.

Now, I want to quote a Finance Minister: “The moment I had reliable information to bring before this House, information that may not be politically advantageous, as the members opposite no doubt realize, I brought it before the public and before this House. I am committed to being forthright as a Minister of Finance, whether it favours me or does not favour me. I have done that here, and I am damn proud of it.” Andrew Petter, July 2, 1996. That was from a series of fudge-it budget quotes that I have.

The point being, to Mr. Petter’s credit at that time based on that quote, he was at least attempting to acknowledge that massive changes were happening. I could talk about other quotes that he has of the 1996 NDP budgeting process. But there was acknowledgement of shifting in projections and assumptions.

Now, I didn’t press the minister for a firmer number on property transfer tax last night or today. I accept that the market is going to keep moving around, so it’s not reasonable to think that the minister could give us a more updated number today on the property transfer tax of $2.247 billion. But there is a pretty safe assumption that that’s not going to meet its target, just like there was a safe assumption when the first target was set in the first place when this budget book was made.

I haven’t added that to the $12.9 billion deficit that this minister seems so offended by, but it’s her numbers. It’s her book. It’s her book she has changed as of April 1. It’s her book that she confirmed today on carbon tax, in particular, a revenue drop. The minister can suddenly now try to pretend there’s not a $1.991 billion hole in revenues, but there is.

Is the minister now saying that there is not a $1.991 billion drop in revenues of carbon tax, net drop, in total contradiction of her answer in this place an hour or two ago?

Hon. Brenda Bailey: Where I take objection to the member’s approach of making up a number that he is now referring to as the deficit is that it implies that that is in fact the deficit in this budget. The member is asking very specific questions that feed that argument. There are puts and takes that happen during a fiscal year. The member is highlighting some of the risk. Absolutely, there is risk in this budget — absolutely, and we’ve been discussing it.

But there are also areas where we’re going to see revenue increases. We’ve already identified the tobacco win, for example. That’s not part of the member’s calculation. There are other areas where we will see revenue lifts.

It’s not back-of-the-napkin work to determine what a deficit of a province is. This is serious stuff, Member, and we take it very, very seriously on this side of the House. The correct way of things is to rely on the intelligence before us, which tells us the deficit is $10.9 billion. Then, as we have the information from the next quarter and it’s modelled in, we revise those numbers based on facts, not based on things that are chosen politically to make an argument, which is what the member is doing. That’s why I take offence to it.

The actual deficit number for the province of British Columbia this year is $10.912 billion. That is the number we’re talking about.

The member knows that we are underway with deeply important work to reduce spending across government. The member knows that we are making reviews of programming because of the offset of the carbon tax. That’s not part of the member’s calculation.

That’s politics, Member, and that’s what I take offence to.

[4:40 p.m.]

Peter Milobar: Well, it’s not politics. We’ve had the better part of two days already, and we still have a couple hours to go today. I have asked repeatedly where the $300 million in savings that’s been booked is going to be found in this budget and have been stonewalled on that. That’s not politics. That’s the minister refusing to answer questions about expenditures.

The government actually has more control over expenditures than over the revenue side. The government refuses to even say where they’re going to come up with $300 million, yet we’re supposed to believe that they’re going to magically somehow offset $1.991 billion in carbon tax revenue.

The minister can talk about the tobacco claim. Great. B.C. won in court. It’s $3.7 billion over an 18-year payout. It’ll be about $200 million a year.

Can the minister then confirm that we’re getting all $3.7 billion? Every news report I have seen says it’s an 18-year settlement, and B.C.’s portion of the $32 billion will be $3.7 billion in the settlement. Or were all those media reports wrong? Because now that the minister is going down the tobacco settlement road as somehow going to magically fix our structural deficit…. Even if it was a $3.7 billion one-time payment, that still leaves this government — what? — $9 billion in the red.

So what exactly are the terms of this tobacco settlement that is supposed to be the saviour of this budget, when the minister is so opposed to me talking about the revenue loss of carbon tax added to the deficit, when she’s unwilling to show any substantial areas of revenue growth or expenditure decrease in this budget at the same time?

Hon. Brenda Bailey: The example that I gave of the incoming revenue from the tobacco settlement is an example of the fact that there are also revenues as well as increased expenses.

Now, the member has received answers from me on every question the member has asked, and I’ve explained how we are doing this work. You know, a one-time settlement isn’t going to solve the deficit problem that we’re in. The work that we are doing is going to solve the deficit problem that we’re in, and I’ve described it to the member. I’ve pointed it out on page 20. We are under an efficiency review. We already have booked $300 million. We’re doing deep work across the ministries in order to bring down the deficit.

The member might scoff, but this is important work. We’ve made a commitment to British Columbians that we are going to be on the path to balance. That is the work that we’re doing. So, yes, I find it difficult when the member makes up numbers that are not reflected in the actual numbers. Our deficit is $10.912 billion. There is significant work underway for us to reduce the deficit over time, and that is happening. There is work underway to address the loss in the carbon tax revenue. That work is happening.

Throughout the year, there are challenges with revenue. There are benefits to revenue. There are additional expenses. Things change within a fiscal year. That’s why we report out every quarter. To draw on those numbers and refer to them as an updated deficit number is completely appropriate, but to draw your own conclusions from small examples is not appropriate. That is not a deficit number. A deficit number is based on fact, and the facts are that the deficit currently projected for this year is $10.912 billion.

Peter Milobar: Well, it’s not. It just fundamentally is not. It’s a deficit projected on projections and assumptions that have already been blown out of the water. Property transfer tax is not a relevant number in this book, and I’m not even pressing on that one, because I recognize that it’s only a two-month sample size in this fiscal.

Interjection.

Peter Milobar: Carbon tax was a policy choice by this government to remove net $1.991 billion of revenue. It’s no longer an assumption. It’s done. It’s quantified. The minister gave the number. It’s not that it might be slightly slower fuel consumption, so instead of the $950 million of fuel consumption tax, we’re down to $910 million fuel consumption tax. But if it gets a little busier with trucking and everything else, maybe it bumps back up to $960 million in the second- or third-quarter update.

That’s not what we’re talking about with carbon tax. We’re not talking about property transfer tax that might have a rebound in the second half of the year and still get back to closer, which is why I haven’t added that in to the $12.9 billion deficit. We’re not talking about the projected personal income tax, corporate income tax, employer health tax that could still whipsaw a little bit.

[4:45 p.m.]

We’re talking about carbon tax. I’ve added that directly because the minister is unwilling to say if electric vehicle charging stations will no longer be funded with carbon tax revenue that’s gone, bike lanes, transit, EV vehicle rebates — whether or not that is a savings.

We couldn’t even get an accurate number out of the minister on what the cost back to industrial suppliers that were being paid for by carbon tax would be, so whether or not the $286 million in carbon tax they will still pay is a net positive or if we’re actually providing $300 million worth of grants back to industry. We couldn’t get that number today, in this moment in time.

In this moment in time, we know there’s $1.991 billion of revenue gone out of the $49.699 billion. In fact, that number would be different because it should be the…. Well, that’s less the $282.8 billion. We know that. These are the minister’s answers, not mine. I didn’t create the $1.991 billion number. The minister gave that to me today as a net negative revenue to government. There was no other option, based on the amount of times I’ve asked questions about where other cuts in spending would be, than to say it’s a $12.9 billion deficit in this moment in time.

The minister can correct me on the first-quarter update. That moment in time might show something different over the next month, but it’s only one month to go, and then those numbers are locked in. The first-quarter update might not happen until September 15. It might not be released. My bet is it gets released on the Friday of the long weekend — try to bury the story a little bit ahead of time. We’d love to be proven wrong on that.

In this moment in time, that’s all the information this government and this minister have provided us to operate on. For the minister to get offended that we would suggest a $12.9 billion deficit, when Moody’s is saying $14.3 billion in their projections…. I guess bond-rating agencies don’t know what they’re talking about when they look at budgets either, or understand budgeting, as the minister seemed to indicate. Yesterday she thought I didn’t understand how budgeting works.

Until the government can show, with credibility, revenue projections that are far exceeding any of their assumptions in this budget book, or spending that has been reined in, in this moment in time, there is no other option than that it’s a $12.9 billion deficit as we sit here today.

Can the minister point to any one of these tax revenue lines that has significantly been exceeding the assumptions and the revenue targets over the first two months of this fiscal?

[4:50 p.m. - 4:55 p.m.]

Hon. Brenda Bailey: The member and I are engaged in a challenge of timelines, largely. The reality is the work that’s underway is going to be reflected initially in Q1. When the member takes one side of the ledger and argues that doing the math that he’s done is the new deficit number, it doesn’t account for the work that we’re doing, and it doesn’t account for any puts and takes that come on the expenditure side or on revenue.

Now, I want to point out two things. I recognize that the member is frustrated hearing about Q1, and waiting is hard. I am seeing already the results of the work that we’re doing on expenditure management, and I will share with the member: just in the last week, I have had two meetings with private sector vendors who have come to me with concerns, concerns that I take very seriously. Concerns because they’re seeing such a decline in their revenue due to government making choices because of our expenditure review.

One is in the transportation sector, and the other is in the advertising sector. One decline was 30 percent, and the other was 50 percent. These are two of the areas that we’ve asked government to focus on to reduce spending. Now, it’s important to us that we work with the private sector to make sure that the changes that we’re making in government are not causing unintended consequences. When we talk about being careful in the work that we’re doing, that’s part of it, frankly.

But I know that we’re having impact. I know that we’re having impact within government, within the efforts to bring down these costs. They will be reflected in Q1 and the quarters after. It’s important work. We’re doing this carefully. We’re doing this very thoroughly. The fact that I see these results coming in, you know, counter what the member is doing with his back-of-the-napkin math.

I also want to point out — and this was an answer that was provided — that people can see we’re serious about this work. Despite the two downgrades that we received, one from S&P and the other from Moody’s, we are not experiencing negativity from those downgrades. In fact, as I’ve said, our offerings, compared to Ontario, which is considered the baseline, are favourable to the point of 1½ basis points.

That is because of a couple of different factors, one, of course, the reality of what’s happening in the world and how B.C. compares. And B.C. compares favourably. That’s good news for us. It’s also, I believe, because we’ve met with them. We’ve gone on these bond tours, and they can see how serious we are about deficit reduction. This is serious work that we are doing.

So I think it’s important that those factors are taken into consideration. But I look forward to the member’s next question.

Peter Milobar: Well, that’s astonishing. So a week ago, the minister met with advertisers who expressed concern about a cut in advertising spending. Twelve hours ago, 24 hours ago, the minister refused to say if GCPE had been directed to cut any advertising money.

Today, after hours of asking for examples of the $300 million in savings that are supposed to be getting found, magically, advertising has been cut to the point that suppliers are getting hold of the minister and having a minister to supplier, face-to-face meeting about said drop in revenues, because it’s that significant of a drop.

[5:00 p.m.]

So can the minister confirm today what she was unwilling to confirm yesterday, that GCPE has cut their advertising budget or been directed to cut their advertising budget? Or is the minister talking about some other form of government advertising out there?

Hon. Brenda Bailey: We’re talking about that $300 million and the expenditure controls. As the member understands, we have the efficiency review of two components: one being the expenditure controls; the second being the program reviews. The expenditure controls across government include — as we mentioned yesterday, when we went through the different STOBs that were included — advertising.

Peter Milobar: Why did the minister refuse to acknowledge that yesterday under direct questioning around advertising budgets and if any cut was going to happen to advertising budgets? I asked repeatedly. I highlighted that GCPE is directly under the minister’s control, that they have a $3.5 million advertising budget. It would show leadership to the rest of cabinet and the rest of government. The answer was: “No decisions have been made.”

Today we get a completely different answer. How are we supposed to be doing our jobs as opposition if fundamental questions like this continue to change day by day?

Hon. Brenda Bailey: We’re talking about two components: expenditure controls and program reviews. Expenditure controls…. I read out to the member yesterday the STOBs that were covered and included some advertising.

The member was asking specifically about GCPE. The GCPE, as part of our program reviews within the Ministry of Finance — that is work that is underway. So it’s a separate category that the member is asking about. That is work that is underway. It’s not being directed in terms of the exact number, but we are working with every single ministry, mine included, to review all of the opportunities and to make decisions on that. That work is happening right now.

Peter Milobar: Is the minister suggesting…? I mean, surely to god there’s a little bit of good faith here in the context of the questions. And I’m waiting for the Blues to get delivered up to me.

I’m asking about advertising; I’m asking about GCPE specifically. You have the head of GCPE here advising you. The answer I get back is that all STOBs are being looked at, but all ministries have those same STOBs. I then ask: “Are there any specific ministries under specific STOBs that are being asked to do more or less?” The answer is no.

[5:05 p.m.]

We asked specifically about advertising. The minister clings to the fact that I was only asking about GCPE advertising under that specific STOB for GCPE and the direction to overall government and then hangs her hat on saying: “Well, but under those STOBs, other ministries have advertising savings that they can find too.” That is what she is saying today. And: “GCPE is still under review.”

The opposition and the public are supposed to think that’s a reasonable, straightforward answer from a minister that very clearly ought to have known exactly what I was driving at when I was asking questions about advertising yesterday, a minister who’s taking great umbrage with the fact that I’m calling it a $12.9 billion deficit because she can’t show any actual direct savings after hours and hours of asking.

In fact, we’ve started down this rabbit hole yet again on advertising, chewing up even more time on estimates, covering old ground with the minister that completely avoided the first question I asked three questions ago, which was: can the minister point to any revenue source on page 23 that in the first two months of the fiscal has already dramatically shifted enough that gives the minister confidence to say that in the next month, when this first quarter ends, that $1.991 billion dollars of lost revenue will magically be made up in any significant way to avoid a $12.9 billion deficit? We already know they’re obviously not achieving it on the expenditure side.

Since the minister seems to want to be very, very accurate, I’ll start at the bottom and work my way up. Commercial Crown corporations net income — B.C. Hydro, Liquor Distribution Branch, B.C. Lottery Corp., ICBC and other combined — is $4.011 billion.

Does any one of those components of commercial Crown corporations net income over the first two months of this fiscal seem to be trending in a way that will dramatically exceed the revenue projections and assumptions that went into that $4 billion in the first place?

[5:10 p.m.]

Hon. Brenda Bailey: As the member knows and as I’ve said repeatedly, we don’t have the numbers for this year, Q1. However, I think the member brought up the example of Crown corporations revenue, and it’s an excellent example.

Let me point out to the member the type of volatility we see in revenue projections. This is ’24-25. In the Q1 update for Crown corporations total revenue change, it was up $247 million; in the fall 2024 update, down $322 million; in the Q3 update, up $1.420 billion. Total change was $1.345 billion to the positive.

So again, there is volatility in revenue as well. That really speaks to the point that I’ve been trying to make to the member: that by choosing specific things, and not waiting for Q1, which captures a broader picture, it’s not a fulsome representation.

Peter Milobar: It doesn’t sound like anything…. Again, housing in the first two months has trended. There are trend lines, and that was the question, around trend lines and assumptions. Is it exceeding or below trend lines that were in the budget?

Housing had trend lines — 13.2 percent and 2.4 percent. We know it’s now at 1.7 percent and negative 3.6 percent. That’s trending negative on the property transfer tax side of things. But we can’t put a number on that, and I accept that.

I didn’t ask for an exact revenue change of the assumption. What I asked was: within the commercial Crown corporations, has there been anything to indicate a substantive change over what was already made in the assumptions to create this budget book? It sounds like the answer is no.

So I’ll ask about contributions from the federal government. Health and social transfers and other federal government contributions total $15.277 billion. Has there been any substantive change or indications in the first two months of this fiscal that any of those transfers from the federal government are expected to significantly change, positively or negatively?

Hon. Brenda Bailey: The member misquoted me and said that the answer is no, that we don’t have the information on Crown revenue. That is incorrect. The information is not that there are no changes; the information is that we do not have this information yet. It will be in Q1, which is what I have been saying again and again.

For the member to say there has been no change, it’s not correct. This will be captured and expressed in Q1, when we have the data.

[5:15 p.m.]

Peter Milobar: The question is about trends and assumptions. Most of these areas would have monthly trends and assumptions associated with…. It’s not just the real estate industry that does that. We’re talking about billions of dollars being tracked by government.

Businesses submit PST returns regularly. Income taxes and corporate income taxes get filed, get updated. There’s back-and-forth with the federal government. Yes, there’s about a 20-month lag on the final reconciliations that move forward, and that creates some of the swings on corporate and personal income taxes. I fully understand that.

The question is about assumptions. The minister is completely offended that I keep saying it’s a $12.9 billion deficit, but she can’t point to anything to discount that. The reason I’m saying that is not to be antagonistic. It’s because the minister has made it very clear that there is a $1.991 billion hole in revenues created because of government policy, not government assumptions, not time lags of income tax, not outside market forces.

Government made a decision, apparently, that was in both parties’ campaign promises. It had no modelling done, no assumptions being done by government, despite the minister previously saying during Bill 5 debate that that work actually happens during an election with the ministry, behind the scenes, in a non-partisan kind of way.

Pretty large election promises being made by both parties. No modelling being done, no work being done ahead of time on how to offset. And the minister now, just as the Premier is, is fond of saying over the last week and a half: “Just trust us.” A month to go in this quarter: “Just trust us; we’ll give you all the information on September 15.”

Then, after repeated questions about the most basic thing, like a $3½ million advertising budget, the minister references, on day 2, that maybe there has been a little bit of a cut to advertising, but just not GCPE’s advertising, because that was a completely different STOB area, even though the minister didn’t want to talk about any specific STOB areas that were referenced by her in these budget estimates.

We have an evasion of answering whether or not there’s been…. By not answering, and me assuming that means there has been no…. I’m giving the minister the opportunity to say: “Yes, there has been a large shift in our projections on commercial Crown corporation income. We’re seeing that Lotteries is doing much better than we thought. ICBC is doing better than we thought. B.C. Hydro, you name it.” And the only reason it went up was that B.C. Hydro last year was projected to be at zero, break even, and then they found some money.

Government transfers last year were projected to be $14.446 billion. According to this budget book, this snapshot in time, it’s $14.189 billion. It has actually dropped.

Natural resource revenues last year were projected to be $3.015 billion. According to this budget book, they’re now $2.334 billion for the updated forecast of ’24-25. Again, I’m getting the first number from their budget book from last year. Assumptions, projections. I agree with the minister. They can move, but they’re not moving by much.

Where it did move was in personal income tax and corporate income tax, and those numbers do have to wait for the quarterly updates. With a 20-month lag and a slowing down on our economy, they could actually not be the windfall that they’ve been in past years.

[5:20 p.m.]

The $6 billion surplus the government had when the Premier came into office was largely due to close to $10 billion worth of corporate and personal income taxes that they weren’t expecting to find, because as most jurisdictions did through COVID, they underestimated what they were going to get. The impacts weren’t as severe to people. People stayed employed. People still paid income tax, and every jurisdiction underestimated. The lag finally caught up, but that lag is coming on.

Now we’re running deficit after deficit, and the minister is greatly offended somehow, that $10.9 billion is dramatically better than $12.9 billion. I’m giving her every opportunity to show me where any revenue sources in the first two months are trending in a significantly more positive way than they were when the snapshot in time of this budget book was created.

The minister likes to say, “Well, it’s not a backward-looking document,” but she wants us to talk about a document that was created in February and to not talk about what is going on in the world at the end of May. At the end of February, this book was created; we’re at the end of May. April 1 this government blew a 1.99 net negative hole in their budget. April, May — first two months of the quarter, and still no direction from this minister on what’s going to make it up.

The minister alludes to a tobacco settlement but can’t provide any certainty to us on how that works. I’ve asked; maybe I should ask again about that. I’ll come back to that, though. There are no substantive shifts, in the first two months of projections, for commercial Crown corporation net income of $4 billion and no substantive shifts in the modelling for contributions from the federal government, totalling $15.277 billion.

We’re working our way up. Let’s go to other revenue — post-secondary education fees, other fees and licences, investment earnings and miscellaneous. Investment earnings — that might be a questionable trend line over the last two months, given all things tariff war. And $12 billion — has anything in the area of other revenue, over the first two months of this fiscal, trended in a more positive way than what was originally projected in the budget? I’m not asking for the dollar figure. I’m asking if it’s trending in a significantly better way.

[5:25 p.m. - 5:30 p.m.]

Hon. Brenda Bailey: Before I respond to the question, I just want to correct two inaccuracies for the member. It is not correct to say that commercial Crown income is not improving. We do not have that data yet, and I have said that. I will say it again. They report to us quarterly. We don’t have the data. That does not mean there is not a positive change. It does not mean there is a negative change. It means that we don’t yet have the data.

[Lorne Doerkson in the chair.]

Second, it’s not true that I said GCPE was not included in our efficiency review. It is, in fact.

The member knows that we receive most of our data quarterly. I’ve already made that reference in regard to the Crown corporations. In terms of what we have from fiscal data, where we are in the fiscal year, we have one month of fiscal data. One month does not a trend make.

What we can say is that we do have, of course, financial data that comes in — and three or four months of that. Pardon me — economic data. There is an area that I’ll just highlight, one of the areas that we’re seeing some better-than-expected results, and that is in regards to retail sales.

Peter Milobar: Retail sales were not in the question. There was other revenue, post-secondary education fees, other fees and licences, investment earnings and miscellaneous. Again, the question was strictly a broad: “Is anything trending? Indicators?”

These assumptions weren’t made on April 1. The assumptions in this budget book, as the minister fondly likes to point out, are a snapshot in time, a moment in time, a place in time, any version of that you would like, back in January and February, in conjunction with advice from the Economic Forecast Council, other trade industries, what’s going on in global markets as it pertains to things like natural resource revenues. All of those are projected out — what the markets think might happen in bond markets, all of that.

So there are trend lines that do form. It didn’t just start. The trends wouldn’t have just started on April 1. They’d be showing themselves month over month leading up to April 1, through April, well into May, as to these revenue projections.

Again, the minister takes great umbrage with me saying a $12.9 billion deficit. I’m trying to get from her anything, any glimmer of anything that’s trending significantly positively to account for the extra $1.991 billion of lost net income that this government, by way of policy, decided to make on April 1.

She can’t show us an expenditure of any significance. She won’t talk about it. Grudgingly acknowledged the advertising but wouldn’t put a dollar figure to what the amount of advertising cut was. So 50 percent to one vendor? Was it a small vendor that’s desperate for advertising revenue, or is it Global B.C.? Was it because the Canucks didn’t make the playoffs? We don’t know. No detail.

Yet shame on us as opposition for daring to try to get answers out of this government, the same answers that we asked yesterday that suddenly became forthcoming around advertising, with very scant detail. Ignored the question around other revenue, contributions from the federal government or commercial Crown corporation net income. Grand total is $31 billion of $84 billion of revenue. Can’t show one trend line that’s projecting significantly better than what assumptions that went into this budget document that was created back in February are.

Let’s go up another area, natural resource revenue. There are always updates on those. It’s not like oil and gas and minerals and forestry is a static thing. Natural resource revenue, natural gas royalties, forests, other natural resources — grand total of just under $3 billion — $2.997 billion. Has anything in the natural resource revenue started to trend in a significantly better way than what was anticipated in the development of this budget book?

[5:35 p.m. - 5:40 p.m.]

Hon. Brenda Bailey: The member opposite has asked about natural resource revenue and if there are trends. I just want to be very clear about the distinction between economic trends, which we are very aware of, and commodity pricing and what is in the fiscal report-back. We’re one month into the fiscal year, but what I’m talking about here are economic trends from January to April.

Most commodity prices are up on a year-over-year basis, except for coal and oil. Of course, we monitor commodity prices, and pricing and volume are up. Natural gas price is up 10.2 percent in the first four months of the calendar year, and volumes are also up.

Again, I want to caution because we need to find out if this is a trend, and we will be able to report back on that on — anybody? — Q1.

Peter Milobar: Well, we’ve covered most of the other areas within the taxation revenue portion. Obviously, personal income tax and corporate income tax are not going to be available at this point. We do know carbon tax…. We do know property transfer tax is, in all likelihood, hemorrhaging but not a number to it. Sales tax sounds like it might be trending better than before. That’s, you know, arguable how much it will offset with property transfer tax. There’s going to be ins and outs on those.

You know, it’s fine that the minister wants to stick to her $10.9 billion. It’s very clear that we’re in and around that $12.9 billion as we stand here today.

[5:45 p.m.]

Going back to the expense side — because, once again, government has that ability to control expenditures, as the minister rightfully points out — last year in the budget, the budget estimate had about $89.5 billion of expenditures.

The minister wants to talk about fluctuations. Maybe I’ll jump back. Last year the government projected $77.5 billion, roughly, of revenue. It actually came in closer to $83 billion. So the minister is not wrong. Revenues can jump up. The problem with this government is they don’t know how to control their spending. At the same time, expenditures were supposed to be $89.4 billion, and the updated forecast in this year’s fiscal plan is $92 billion.

This is the problem. The revenues, the projections are kind of outside of, actually, the control of the government, as the minister has stated several times. They’re global markets. They’re forces of what’s going on in employment, taxation in terms of personal and corporate income taxes, the property transfer tax. It’s nothing to do with government. It has everything to do with what’s going on in the market, which we know is substantially lower than projections in this budget.

We know $1.991 billion in net carbon tax revenue is gone under the revenue projections. We have expenditures that are actually $2 billion — almost $3 billion —higher than last year, which is almost $3 billion more than it was projected to be in the first place.

You know, when you run record deficits under the guise of wanting to protect health care and education, first off, you don’t still have parents protesting cuts to education like we’re seeing. You don’t have ERs closing everywhere and people screaming for doctors and access to health care, if that’s what you’re protecting. When you have a record deficit, the natural assumption….

The amount of people I’ve pointed this out to and the surprise when they hear it is quite something. I say: “Yeah, it’s a record deficit.” It was $10.9 billion. After today, I’ll be letting them know it’s $12.9 billion.

Here’s the problem: no one takes issue with protecting health care and education. As bad as is being provided right now, at least it’s being provided in some form. But when governments run record deficits to protect those services, it’s because revenues have dried up because the economy really slowed. They explain it and justify it and get agreement with the public that that’s why it needs to happen.

In this case, the government has never collected or at least projected to collect so much money — $84 billion this year in total revenues. Last year they were estimated at $81.5 billion, came in at $82.8 billion. So their revenue projections were actually pretty close, no big, massive wild swings — a little bit higher but certainly not as high as spending went.

It’s not a taxation problem, and it’s not a revenue problem this government has running record deficits. It’s that they don’t know how to rein in their spending.

When we try to get detail about the spending, the one thing the government actually can control with some accuracy, we get: “Well, we can’t talk about it. We’re doing the hard work. We’re looking for efficiencies. We’re committed to it, though, but it’s hard work. It’s difficult work. We’re going to keep doing the hard work. Don’t worry. You’ll see the results of our hard work in Q1.” No decisions have been made even though Q1 ends in 33 days. We’re two-thirds of the way through Q1. Decisions still haven’t been made.

[5:50 p.m.]

There may be a savings in advertising. We’re not sure if it’s a blip or not. We’re not even sure who has reduced their advertising. It’s not GCPE. The minister didn’t mention if it’s ministries or if it’s a Crown that reduced their advertising. I don’t know why that’s a state secret, but apparently, it’s cabinet confidence or something. I don’t know. It’s certainly not something the government wants to talk about.

Let’s talk about the actions and potential cost savings that cabinet could be doing to demonstrate leadership to the rest of government at a time when the public service winds up with a Zoom meeting, public service–wide, where their takeaway from it is, “Get ready to take a heck of a lot less, and if not, you’re going to have job losses,” from the head of the public service. Characterized as an intimidation call, characterized as completely inappropriate in the midst of the starting of negotiations — not my words.

In fact, the Deputy Minister of Finance laid it out pretty clear and pretty open. I applaud him for being that forthright about the dire straits of the finances in B.C. We certainly don’t hear that reflected back in the answers from the minister, other than: “Well, we have hard work ahead of us, but we can’t tell you what we’re doing. We can’t tell you where we’re going to find the money. Just trust us.” The new slogan of the NDP and this Premier: “Just trust us.”

The minister referenced a transportation company. Has a directive gone out to cabinet to no longer fly Helijet and, if not, to restrict it to at least one flight a week? Have there been any restrictions put on cabinet, whatsoever, or expectation of how they travel back and forth from Victoria to Vancouver?

[5:55 p.m.]

Hon. Brenda Bailey: The guidance provided on travel is STOB 57, which is discretionary, non-essential travel, including conferences and meetings. People are encouraged to prioritize alternatives. The directives apply to all ministries, whether someone is a cabinet minister or not, but I will remind the member that the work of this House would be considered essential.

Peter Milobar: I’m not disputing whether ministers should travel for their job. I’m not disputing that we have a big province and that you need to get around. I’m from the Interior. It is not inexpensive to get around this province to do your job as an MLA or as a minister and it’s not for staff either. But there are expensive ways to do it, and there are less expensive ways to do it, plain and simple.

When you live in Vancouver, Helijet seems to be out of convenience. It is inexpensive; it’s a great service. I’ve flown it the odd time. The NDP staffers can go ahead and check my travel. I’m on there the odd time. Yes, I have the odd priority loading on my B.C. Ferries, as well, when I can’t get a reservation and I need to get over here.

I’m not disputing any of that. It’s about the frequency and/or the public perception around entitlement. There’s a difference in cost between Helijet and Harbour Air. Both fly out of the same harbour.

There’s a massive difference when several of us take the ferry every week, on both sides of this House. We see each other up in the dining area. I’m not saying it’s across everyone, and I’m not disputing there’s a cost to travel.

[6:00 p.m.]

At a time when we’re supposed to be finding the pennies, one would hope cabinet would be scaling back, that cabinet would be finding ways to be more efficient. Cabinet, who has wrapped themselves within their own ministries…. People work from home and Zoom and things of that nature — not just going to the default of popping back and forth. That’s the premise of the question.

I’m going to shock the minister here. I’m going to actually ask a vote 26 question, because we’re on vote 26. I do know, the minister knows, and we all know several votes the minister is responsible for. This is just the one vote that triggers this process.

In keeping with the theme around leadership and direction and the Minister of Finance supposed to be in charge of finding the pennies and showing efficiencies and working leaner and meaner, can the minister explain…. As I read it, the total 2024-2025 operating expenses, on page 40, for the minister’s office is $1.112 million. It appears that this year, the minister needs a $338,000 increase to that budget to $1.45 million, which…. You might think, if you’re listening at home very quickly, that that’s just wage increases, except it’s a 30 percent increase to the minister’s office budget.

Can the minister explain the logic between a $338,000 increase, a 30 percent increase to her office’s operating costs, in a year and in a backdrop of a budget that was already supposed to be getting created with the direction of a mandate letter that was in existence well before this budget was signed off on, to find efficiencies and cost savings…? And the minister felt it appropriate that her office needed a 30 percent increase to executive and support services?

[6:05 p.m.]

Hon. Brenda Bailey: That increase is driven primarily by three factors. The first is the Parliamentary Secretary for Rural Development moving over from Jobs, Economic Development and Innovation into the Finance Ministry, as well as an MA to support that work. Also, increased travel, which of course is related to the work of the Parliamentary Secretary for Rural Development, as well as an additional chief of staff in the Ministry of Finance.

Peter Milobar: Well, that’s interesting, except there hasn’t been a drop in the Jobs, Economic Development and Innovation Minister’s office. It went from $1.232 million to $1.253 million, so it actually went up.

[6:10 p.m.]

Again, this is supposed to be a government looking for the pennies, finding efficiencies. The answer to $338,000 is: “Oh well, that’s because the Parliamentary Secretary for Jobs, Economic Development and Innovation came over from that portfolio to my portfolio.” That might be understandable if there was a commensurate drop. Instead, their ministry’s office went up.

Can the minister explain corporate services then? Corporate services went up $550,000. It’s obviously not a 30 percent increase, but it’s still an increase from $45.494 million to $46.044 million — a $550,000 increase and $888,000 total to the minister’s office, in a year that the minister is responsible for finding efficiencies and cost savings. And government is saying: “Just trust us. We’re doing the hard work.” Can the minister explain that increase?

[The bells were rung.]

Hon. Brenda Bailey: The $550,000 increase in corporate services that the member asked about reflects the shared recovery mandate, the wage increases under the collective bargaining agreement.

Peter Milobar: That does not include the soon-to-be negotiated collective agreement? Or are these outside of that collective agreement?

Hon. Brenda Bailey: That is the previous collective agreement.

Peter Milobar: So in fact the $550,000 will increase once the collective agreement is solved, unless the head of the public service is correct and job losses might be necessary.

Hon. Brenda Bailey: I’m not able or willing to speculate on the results of what’s happening at the bargaining table now.

Peter Milobar: Well, let’s try this a different way then. If a collective agreement is achieved and there’s any type of wage increase, whatsoever, or adjustment to benefits, cost-wise, from government, will that $550,000 actually wind up increasing, as it would in other parts of government?

Hon. Brenda Bailey: Yes.

[6:15 p.m.]

Peter Milobar: The minister responsible for finding the pennies under the cushions needs $338,000 more for the minister’s office, with no commensurate cut to the other ministry that part of that was supposed to come out of. We have the Premier directing the Finance Minister — and, seemingly, all of cabinet — to find the pennies and charging the Finance Minister to find the pennies needed for a $600,000 increase to the Premier’s office.

Can the minister…? I haven’t had the time. I’m assuming her staff would know. I can keep flipping through and looking. I’m hard-pressed to find a single ministry where the minister’s office is…. Oh, I found one; look at that. The Minister of Education and Child Care — at least they saw a bit of a cut. They would have an expanded mandate, a bit, too. Okay. That’s a good start — $300,000 there. I applaud them. The Minister of Citizens’ Services? Nope, they’re up.

Other than Education, are there any other ministries that saw a minister’s office with any sort of cut at all to their operations — in a year that, while this budget was being developed, ministers were already instructed to find the pennies, be efficient and look to make sure that things are running as efficiently as possible, to find that $300 million that the minister is so confident we’re going to find?

[6:20 p.m.]

Hon. Brenda Bailey: The member asked the question: “How many minister offices saw a decline in the expected expenses in this fiscal?” The answer, including Education, is six.

Peter Milobar: It was good to see. I was doing some flipping too, so I thank the minister for that — a couple other follow-up questions, though.

[6:25 p.m.]

The minister’s answer to why going up $550,000 was the collective agreement in hers — granted, that’s on a $45 million spend — doesn’t seem to collate, or totally match up, anyways, because it’s obviously different staff in terms of the minister’s office. But there are lots of others that went up. Their corporate services didn’t really go up that much, but their ministerial offices still went up a bit. Social Development and Poverty Reduction — from $941,000 to a little over $1 million in the office. And the list goes on.

Anyway, this was developed under the lens of their already supposed to be finding efficiencies and cost savings. Yet only six ministers’ offices found some efficiencies and either re-shifting of resources or things of that nature, and the rest didn’t. That’s troubling in and of itself.

There was a lot made of the size of the cabinet, a lot made of all the parliamentary secretaries and ministers of state, and the reaction from the government was that this is a non-event. There’s a cost that comes with all that. There’s staffing that comes with that; there’s support that comes with that. Every minister of state winds up with some extra staff and some extra support. Every parliamentary secretary winds up needing some extra staffing and support.

Just to be abundantly clear, when we’re talking about finding efficiencies, now that these numbers are locked in, and locked into the budget expenditures on page 22 of the budget book, the only way to see any substantive cost savings in the ministers’ offices would be if there were job losses.

The ministers’ offices that have locked in within the expenditures on page 22 in the budget book — unless they start relieving themselves of some staff, their offices will not actually be finding any cost savings to help contribute towards the $300 million worth of savings that are supposed to be found this year. The burden of that will rest on the rest of the public service, to shoulder whatever may impact. The ministers are essential travel. Ministers’ staff are locked in.

Where, of all those STOBs that the minister listed yesterday…? Some are larger than others in terms of expenditure. Obviously staffing is one of the larger ones, STOB 50. Where is the minister’s expectation that the majority of the $300 million is going to be found?

[6:30 p.m.]

Hon. Brenda Bailey: The member has asked in the expenditure management controls which of the STOBs that I identified yesterday are we likely to see the biggest savings come from, and the team has identified three that they think we’ll see good savings from, the first one being the professional services. It’s a large expense historically.

For professional services, the guidance is: where possible, provision of services that will assist in the development of policy and programs or to improve or change the delivery of programs should be delivered by internal staff or transitioned to internal staff instead of through consulting services. We do expect that that will provide significant savings.

We also expect to see savings in STOB 50 through our hiring freeze and also through attrition and STOB 57, which is the category of travel. But of course we expect to see savings across all of these STOBs. I’m just identifying three that we think will see quite a large component of that.

Peter Milobar: You know, a lot of these questions I’m asking, because we always get accused of being too critical or negative and never offering solutions…. We’re simply trying to offer our insights into where government could save some of their much-needed money to avoid that $12.9 billion deficit.

In terms of toll revenues that the government is implementing with Bill 7…. I recognize Bill 7 hasn’t completely passed in the Legislature. I’m not here to debate Bill 7. It’s just waiting for third reading. Closure is coming tomorrow. It’s a fait accompli. I recognize that. I’m just assuring the Chair that I’m not trying to debate legislation.

[6:35 p.m.]

It’s been approved up to this point. It’s been approved to enable road tolling in this province. What revenue projections have been done by the government in terms of what they expect to potentially collect off of road tolling? One would assume that if it’s a tariff response, there would be dollars attached to it to try to help to counter tariff issues. What types of revenues has the ministry decided or modelled, based on what is moving forward, to government based on the provisions of the ability to toll roads in British Columbia?

Hon. Brenda Bailey: The first thing I want to make abundantly clear is that Bill 7 is the tariff response act, and enabling legislation under section 14, part 3, tolls and fees, is specific to tariff response, which would enable government to put in road tolls for American trucks, should that be necessary in our non-tariff response. It’s still a tariff response but not a specific tariff, a different type of response to the threat of tariffs.

It would not be normal for Finance to model out this type of response prior to it coming into place. This is the enabling legislation. It’s not actually bringing it into place. So, no, there has not been any economic modelling done by Finance.

Peter Milobar: Fair enough. As I say, I’m not here to try to debate Bill 7 at all. I’d just point out to the minister that, in fact, the way it’s worded, it doesn’t just limit it. If the government wanted, by regulation, they could toll anything, anyone moving anywhere in B.C., not just American trucks. But fair enough. There has not been modelling done.

[6:40 p.m.]

I’m just wondering. The minister references STOB 50 as a place to find savings in terms of salaries, with the hiring freeze. Now, I’m assuming that the expenditures on page 22 would be the existing complement of staff. So any hiring freeze would not see additions to that, but those numbers would have been accounted for in that. But the first hiring freeze was announced December 12. It was then made permanent February 13. Again, it was quite an auspicious day for my birthday. There were a few things announced on February 13.

At any rate, I’m just wondering, if the staff are already accounted for in the budget and there’s a hiring freeze, but the minister says they’re not wanting job losses, how many unfilled FTEs are currently on the org chart, then? Are those what will not be filled under the hiring freeze? Otherwise, the only way to slice through this to find the significant $300 million in savings would be layoffs and firings in STOB 50.

Remember this $300 million gets carried forward into next year and gets carried forward into the next year, which means any decision this year on staffing means the government is prepared to operate for the next three years under that staffing model.

I’m wondering if the minister could shed a little more light on how these savings in STOB 50 are going to be found without job losses, unless it’s connected in with empty unfilled FTEs that were previously planned.

I don’t understand why they would still be in a budget document when the government directed on December 12 that there would be a hiring freeze. Why would you still post, essentially, a budget that accounted for hiring people for empty positions when you’ve already introduced a hiring freeze that says you will not be filling those positions?

Hon. Brenda Bailey: Hon. Chair, we’re about to switch out some staff. I thought it might be a good time for us to take a bio break. I wonder if we might request 15 minutes.

The Chair: Absolutely, we can do that, Minister. This committee will stand at recess for 15 minutes.

The committee recessed from 6:43 p.m. to 6:59 p.m.

[Lorne Doerkson in the chair.]

The Chair: Members, we’ll call this committee back to order. I believe we are awaiting an answer from the Minister of Finance.

[7:00 p.m.]

Hon. Brenda Bailey: To the member, I’ll just draw his attention to language that we’ve used in the letter, the direction to all deputy ministers, referring to STOB 50, salaries: “Through attrition, hiring lag, holding middle and senior management and executive positions vacant, managing down leave liability, reviewing the use of overtime, and/or deployment of existing staff resources within and across teams.” That is the direction that will help make sure that we are seeing the savings that we expect to see in STOB 50.

Peter Milobar: However, the first hiring freeze was announced December 12. One would hope, with government staring down the barrel, at that moment in time, of a $10.9 billion deficit — it now seems to be $12.9 billion, but at that moment in time it was $10.9 billion — there would’ve been vacancies and empty FTEs when it was first announced on December 12.

Is the minister saying that the ministry still budgeted as if a full complement of staff were going to be in place, despite the hiring freeze announced on December 12, and that now it’s a case of regressing back and starting to find those positions and not filling them or waiting for attrition to happen?

Again, let’s just use round numbers for ease of an example. Instead of 100 people across the public service, 50 of them are open positions and with 50, the government’s waiting for attrition. I can understand that. When the hiring freeze is announced, they still budget for the full 100, as opposed to only the 50 waiting for attrition? I’m trying to get a better sense of the logic around, if a hiring freeze were already actually implemented and in place long before this budget would have been finalized, why would empty positions still have been budgeted for as if they’re going to be filled?

[7:05 p.m.]

Hon. Brenda Bailey: The answer is no. We budgeted the FTEs, and STOB 50, like all of the other STOBs we’ve identified as part of the review, will contribute to the $300 million.

Peter Milobar: I guess that’s where we’re trying to wrap my head around this whole budgeting process. The minister talks about it being a snapshot in time, a place in time. I’ve lost track of the terminology.

[7:10 p.m.]

The expenditure management line item will be $300 million this year, $600 million next year, and then that $600 million will be the same $600 million. Actually, only half of that $600 million will be new next year because the first $300 million is the first tranche; the second $300 million is the second tranche. That accounts for all of it, of expenditure management — 0.6 percent of the overall expenditure budget for this year, let alone over the course of it. So 0.6 percent.

Significant savings, one would assume, would be STOB 50, the employment income side of the equation, yet despite a hiring freeze that was supposed to be a firm hiring freeze, announced December 12, the budget doesn’t go to King’s Printer, likely, till mid-February for March 4. It doesn’t get finalized. A hiring freeze is announced with much fanfare. It gets re-announced before the budget, as well, mid-February.

The government’s response is to still fully fund within the budget, at least on paper, all the empty FTEs that the minister is now saying will not be filled. We can’t put a dollar figure on those to this day despite, from December 12 moving forward, a hiring freeze in place. A hiring freeze that we’re still trying to understand — what is or isn’t exempt from the freeze — because at different times, the minister and the Premier have indicated that political staff are not part of the freeze.

We’ve seen minister’s office budgets go up — all but six — despite a hiring freeze and a “check for the pennies under the cushions” mandate. Again, it seems like a lot of this could have been saved, to have just not funded the empty FTEs.

When I was at the city, if we were bringing staff on, by the time we got through our budget process, and we needed to add an FTE, we would only budget for half a year in the first year and feather it in, because you weren’t going to reasonably hire someone until the last six months of the fiscal. There’s no point budgeting a full year’s salary for that employee by the time you could on-board them, by the time a budget gets passed.

Same with the RCMP. If we had to bring RCMP in, we would make sure that we budgeted accordingly. RCMP…. If we had year-over-year surpluses because of unspent funds, because of people on long-term leave or paternity leave or long-term disability and they go off the payroll books for the city’s portion of the RCMP contract, we started budgeting at 90 percent of the cost of the RCMP so that we just weren’t pre-taxing people and made sure we still covered the expenditure of the RCMP.

It kept people’s taxes lower, kept the RCMP fully funded, but it accounted for historical trends of long-term absenteeism. When we got a bit better and a bit more staffing, we bumped that up to 95 percent. So it can be done.

I want to assure the minister I do understand budgeting, especially in a governmental context. I’ve done it a long time. I don’t understand in the backdrop of a hiring freeze — if it’s a true hiring freeze, where the government is truly trying to find $300 million, that is going to have to actually be the same $300 million of savings this year, next year and the following year — why there would be a false expectation of open FTEs.

How many FTEs were empty on December 12, and how many are currently empty? Because there’s supposed to be a hiring freeze, one would assume that number would be the same from when it was first announced by the government to today

[7:15 p.m. – 7:20 p.m.]

Hon. Brenda Bailey: This is a complicated one. The first thing I’ll say is…. I don’t say this to make light of the member’s significant experience. I share it just because I think it’s quite different, the municipal government, simply because of the size of the B.C. Public Service. It’s about 40,000 people. It’s the size of a small city, so it is a little bit different in the way it operates and the complexity of it, simply by the size.

The member has asked about vacancies. It’s a tricky thing to answer for this reason. Let me explain it in a way that…. I’ll try to explain it as best I can.

Let’s say we have an official bubble-blower, and the official bubble-blower decides to go and work elsewhere. We make the decision not to fill that role and eliminate the role of official bubble-blower. Therefore, there is not a vacancy, because that position no longer exists.

[7:25 p.m.]

It’s hard for us to then look at a moment in time of…. I won’t use that language, comparing the request — December 12, the time we brought in the hiring freeze — to now because vacancies have been eliminated. Therefore, we can’t do a comparison of that nature.

I’m not trying to be evasive. It’s just simply the tool that is used. If the position is not something we’ve deemed necessary, we will remove that position. The vacancy no longer exists. The position is gone. The request that the member made is not something I can answer.

What we can do is look at FTEs from December 12 until now, or some close association of that. I have the team working on that, but I thought, for a question of time, we should keep moving.

I will highlight that the reason that it’s challenging to answer that more quickly for the member opposite is that there’s a lot of hiring going on right now because of seasonal hires, particularly for wildfires. So the team will continue to look for the answer I think the member has requested, and I suggest we continue to move on.

Peter Milobar: Yes, I appreciate it’s a larger operation and more complex in terms of numbers of people, but ultimately, it’s numbers on a balance sheet. It’s numbers of FTEs. It’s a number of shifting priorities. It’s a number of political decisions.

[Mable Elmore in the chair.]

It’s all representative. I used to have this debate with Surrey when we were talking about policing because the mayor at the time, Dianne Watts, and I were on committees, and she’d say: “But that’s $10 million to Surrey.” And I’d say: “Yeah, and it’s $1 million to us. You’re ten times our size.” It’s the same. It’s all relative. So I appreciate what the minister is saying. I can understand how FTEs work and positions within collective agreements and everything else like that.

Shifting gears, because we are nearing our wonderful time together here. DigiBC tax credits — in terms of the budget, I’m just wondering. On page 59, they come up as a $5 million hit — not anything in this year’s. It will be into next year’s. However, the forecast went from — on page 146 — $126.1 million last year to $141.3 million this year, so almost a $15 million difference. Then it jumps $10 million, not the $5 million.

Now, I can appreciate some of that might be in anticipation of more activity happening and things like that, so I’m not really dwelling on that side of it. The bigger question I have is that increasing the tax break to 25 percent and making it permanent used to be thought to cost $22 million a year. The numbers don’t seem to match up, and I appreciate that might have also been some previous years’ calculations.

The question, I guess, really, I have for the minister…. We touched on this briefly in Bill 5, and I thought I would leave the rest till now because it does interplay with more of the other budgetary issues.

Again, at a time when money is scarce, we now seem to have a $12.9 billion, not $10.9 billion deficit. We have industries all over the place screaming for help. I don’t take issue with the advocacy of DigiBC for the digital space lobbying. That’s what they should be doing. That’s what all lobbyists and industry associations do for their industry.

But it’s about the only one that saw any change, and the change was to make it permanent, and the change was to go to 17½ to 25 percent, instead of the sunset clause of 17½ percent. Who exactly asked the minister for the permanency and to go to 25 percent?

[7:30 p.m. - 7:35 p.m.]

Hon. Brenda Bailey: We made a decision to advance the full creative tech sector. What I mean by that is film, animation, visual effects and digital media, as well as AR, VR and XR. This sector has tremendous opportunity for growth in British Columbia.

The member asked about consultations on increasing the IDMTC, both the amount and getting rid of the sunset clause. We consulted throughout the sector, and DigiBC has been advocating for both an increase in the IDMTC to get closer to those across Canada — frankly, many, many provinces are far ahead of us on this — as well as removal of the sunset clause.

Peter Milobar: Well, it’s interesting. When you go back to the budget presentations of Finance Committee…. In fact the minister presented for DigiBC when I was on Finance Committee in 2018 when she was working for them. I don’t take issue with that. People have jobs. People do lobbying. That was the request: to go to 25 percent.

DigiBC. For the next couple of years, it was 25 percent. Then it was training and 20 percent and make it permanent. That was 2022. In 2023, no request to actually increase it from 17½ percent. In 2024, no budget presentations because we were in an election year. So DigiBC, as a lobby group, specifically, had walked away from the 25 percent quite a few years ago in any official presentations to government.

I guess that’s what I’m hearing from other industry, as well, that have been left out of tax relief and help. The CFIB has made very specific requests for business in general. Forestry has been making requests. Forestry said: “Oh, $5 million? We have a program we could’ve run for $5 million that would’ve helped our industry immensely around training and things of that nature to help solidify us.” And the list goes on and on.

I get it. Ministers have that prerogative to make decisions, especially Finance Ministers. But it seems that the decision and the percentages landed upon are more in line with what the minister years ago was advocating for, for DigiBC than what DigiBC most recently was advocating for, at least in any public forums out there.

Again, this isn’t about being anti–creative industries. I’ve toured a lot of the people and the companies that would qualify under these, and they do great work. I’m not taking issue with that at all. I don’t take issue with the fact that they would lobby.

But so do other industries, and other industries were left out of this budget in a big way. Small business was left out of this budget in a big way.

The digital sector actually exceeded their most recent requests, which were two years old, by a far measure because it was, really, to keep training programs that were already in place and have continued.

Can the minister explain, and not just to me but, frankly, to all these other industries and small businesses that have been left out of this budget, why it is that what she used to lobby for with DigiBC was what found its way into the budget, despite the most recent requests by DigiBC not lining up with that, and other industry requests and small business requests in other sectors that are struggling and desperate for help have been left out in the cold in this budget?

[7:40 p.m.]

Hon. Brenda Bailey: First off, the member isn’t correct in his characterization of the timelines and lobbying efforts of the industry at all. Even in May of 2024, staff members from this ministry, from TACS and from JEDI were on a site tour at EA, and exactly this request was the request brought forward.

I also want to point out that there have been many different programs to support sectors throughout the economy. I’ll highlight one, which is the manufacturing jobs fund. The manufacturing jobs fund first came in at $90 million, and the then Minister of Forests — I think I can say his name, because he is no longer sitting in this House — Minister Ralston, advocated for a doubling of that fund so that additional $90 million could specifically be geared towards forestry. And that happened.

We know that the ratios of investment from government dollars into the businesses that have benefited from that fund, including those in the member’s own riding, to Mercer, which received funding to update a very important piece of equipment and make them more competitive…. We know that that unlocks $6 of additional investment; 1 to 6 is the ratio.

There have been a number of different tools that have come in place at different times for different sectors. This sector has been a sector that, frankly, has been neglected and was suffering.

I’ll also share with the member that it’s important to know when there is an opportunity to act on. In the interactive digital media sector, our largest competitor to British Columbia is Quebec. Quebec has made some changes to its IDMTC that haven’t been viewed favourably by the industry, and the industry is considering moving — some of the industry. We want to act on that. We want them to come here. We’re interested in that investment feeding our economy.

[7:45 p.m.]

We also know that some of the decisions that have been made in regard to French language have led to different investment decisions for that sector, also for film. It’s an opportunity and an opportunity we wanted to realize.

I’ll mention to the member that we’ve taken a number of steps to support B.C. businesses through the taxation system already. We expanded access to the small business corporate income tax rate so that businesses can invest and grow while still benefiting from the reduced rate. We reduced the EHT in last year’s budget. That was a very important request made by multiple business organizations; it was their number one priority, and we got that done for them. We eliminated the provincial sales tax on electricity for business — just some examples of some of the work we’ve done.

Peter Milobar: Well, again, I can only work off of the publicly accessible documents I have of lobbying efforts, which I’m sure, as the minister reviews the transcripts, you’ll see that’s what I was referencing. I’m not on tours when JEDI goes on tours. I’m not on any of those.

Just another question or two and then I’ll be turning it over to my colleagues from the Green Party.

In terms of the overall budget, though, we’re still trying to come to terms with where the overall cost savings are going to come, where the true, meaningful measures will be taken in terms of revenues, in terms of expenses. We’ve already heard that there’s been no tangible change to the assumptions, to the good, anyways, other than a slight uptick in retail sales, which cuts both ways.

The minister wants to say, and rightfully so, that if only a month or two sample size of what’s going on in the real estate industry is not representative of the whole year with the negative hit to revenues, the same holds true with retail sales — probably more so with retail sales, frankly, because it’s a lot more about disposable income and the ability for people to get out and spend money or not, which seems to be dropping.

I guess the real question is again: can we get past the language that’s been used around hard work, looking under the couch cushions, all of that type of stuff and get a definitive, clear line of sight on what this government’s plan is to truly get back to balance?

What has become abundantly clear over the 2½ days so far is that there’s no actual meaningful plan. There are concepts. There’s precious little detail. There are precious few dollar amounts attached to any of the actions the minister has talked about.

It took two different days of questioning just to get a basic answer around advertising, and there was not even a dollar figure attached to that. We still don’t know if there’s been a dollar figure or a percentage mandated to ministries to look at, to try to find. We know that cumulatively it’s 0.3 percent this year, but that’s it.

That’s just a simple calculation based on a $94 billion spend and trying to find $300 million in savings. The $300 million this year is the same $300 million that will be next year, which is the same $300 million that’ll be the year after that, which means an additional $300 million gets found next year, and the efficiencies end, at least in this fiscal plan. No clear direction.

That doesn’t even get us close to solving the $1.991 billion revenue drop of carbon tax, which is now permanent in those. We haven’t even got clear answers today on whether the government expends more than the $268 million it collects on industrial carbon tax with industrial tax breaks and incentives for emission controls. We couldn’t even get a clear answer out of that program.

[7:50 p.m.]

We couldn’t get a clear answer and line of sight on what’s going on with CleanBC programming that is funded by that $1.991 billion of net revenue loss. Municipalities don’t know if that means bike lanes are at risk, if that means transit is at risk. Homeowners don’t know if that means charging-station programs are gone for electric vehicles. The list goes on and on of things that CleanBC was supposedly funding. CleanBC was funded by carbon tax. We can’t get answers out of that.

In fact, when I asked the first question about if there were any major changes to revenue projections on page 23 from the time the budget was published, the minister refused to even acknowledge carbon tax in the first answer. I had to remind her that carbon tax was removed by government policy.

That is the backdrop that we’ve been scratching and clawing, trying to get answers of transparency on a government that professes to want to be on a track to a balanced budget, that is running what appears to be now a $12.9 billion structural deficit. Massive work would need to be done to try to tackle that — massive.

We can’t get a clear answer. We can’t get clear answers around hiring freezes. We can’t get clear answers around the cost implications of that. We were told STOB 50 will form a large part of the cost savings for the $300 million but no dollar figure associated with that.

How can the government reasonably say that they’re actually taking meaningful action to try to wrestle this massive deficit under control when they can’t even give the faintest crumb of a dollar figure attached to any cost savings they’re trying to find? Just going in a room with cabinet and telling a bunch of cabinet ministers they need to find money, when only six of them found money in their own office budget this year…. Everyone else needed more money to operate their budget.

This is a government that seems to think the way to rein in bureaucracy is to have a bigger bureaucracy. The minister’s own office budget — $338,000 more in staff, $550,000 more in administrative services. So $888,000, a 30 percent increase, in staff alone, by the minister responsible for finding savings in government. And the answer was: “Well, it’s because staff transferred over from JEDI.” The problem with that? JEDI’s budget didn’t go down.

It doesn’t exactly invoke a lot of confidence from the public when the minister and the Premier — who are supposed to be the two in charge and in head of driving this bus of cost savings — are two of the more egregious offenders in overall budget lifts within their own offices, in a backdrop of a hiring freeze, in a backdrop of having the public sector characterizing Zoom calls as intimidation meetings and totally inappropriate. Not my words; those are the union’s words.

The minister can take issue with the union all she likes. She can talk to the union about how they characterize things — the BCGEU. I haven’t seen a retraction. I haven’t seen a correction from how they characterized that meeting. Makes one believe it was accurate. So that’s the backdrop we’re at.

I’m going to ask one last time. What are the yearly targets, over and above the $300 million this year and the extra $300 million next year, that have been identified in the budget as being an aspirational goal to target? What other cost savings is this government targeting? What is the dollar figure that this minister is trying to achieve in savings over the next few years and the life of this fiscal plan?

[7:55 p.m.]

Otherwise, continuing to say we’re driving long term to balance the budget, when you’ve literally gone from a $10.9 billion deficit to a $12.9 billion deficit in the space of a month and a half, doesn’t really hold a lot of credibility. No acknowledgement. No costing to any of those programs I talked about.

What is the actual target, over and above the aspirational $300 million this year and $300 million next year, that’s supposed to be found that will actually get us towards a balanced budget?

Finding the $300 million this year gets you, even by the minister’s own budget book, to $10.9 billion. Finding another $300 million next year only gets you down a few hundred million dollars. That’s not getting to balance. That’s treading water.

The track record of this government is that each year’s deficit grows from what they projected the year before. This was supposed to be a $7.8 billion deficit. That’s now $12.9 billion. This time last year the budget book showed $7.8 billion deficit for this coming fiscal. It’s a $5 billion difference.

So what is the plan? Where is the actual target? Not the platitudes, not the language around working hard and tough work and important work and critical work, thoughtful work. What is the actual target to drive down a record-setting deficit at a time of record-setting revenues coming in?

It’s not sustainable. The deputy minister told the public service that very clearly. Again, not my characterization. The Deputy Minister of Finance made it very clear that it’s not a sustainable path this government is on.

We can’t get an answer out of the minister as to what that roadmap looks like. What is the target? These are just spreadsheets. These are numbers. They’re large numbers. It’s just a number on a sheet of paper. It’s got a few extra decimals. Can the minister please provide what is that target, what is that goal? Because as I say, her own deputy minister has confirmed to the public service that this government is not on a sustainable path.

I think the public deserves a clear answer of what that path actually is. Is it just that they’re going to keep running record deficits? Just own it. Say it. But trying to do this, “Oh, trust us; we’re doing the hard work. We’re going to find the money and balance the budget when we’re $13 billion in the glue” isn’t going to quite cut it.

What’s the path? What’s the target? What are the dollars that this government is actually looking for in substantive savings, because you are going to need savings as well as revenue growth. I’m just talking about the savings. What substantive savings is this government actually looking for?

We know, based on last year, they couldn’t keep their spending in check. They overshot the spending of their budget last year by a few billion dollars. If they do that again this year, we’re in real trouble.

Spending is what the government is supposed to actually have control over. That’s not supposed to be an assumption. That’s not supposed to be a projection. If you start to overshoot your budget, that’s when hard decisions get made. That’s what the business owners that are pleading for help right now are having to do on a daily basis and school boards are having to do on a daily basis. The only people that don’t seem to want to have to make those hard decisions are the cabinet.

So when can we expect that to actually have any meaningful targets and action and deliverable behind the flowery language? That sounds really good but is not delivering affordability for anyone in British Columbia at the rate we’re going. In the words of this minister’s deputy minister, it is not sustainable.

[8:00 p.m.]

Hon. Brenda Bailey: I first want to speak to the member’s comment. He has mentioned a couple of times that the deputy minister made a statement that the trajectory we’re on is not sustainable. Those words are also my words. The deputy minister and I are working in very close collaboration on this. Were we not to make the changes we’re making, we’d run the risk of a fiscal plan that would not be sustainable, but we are making these changes. That’s the important point: we are making these changes.

The member has asked for specific numbers of what percentage cuts we have told each ministry to do. Well, I’ll share with the member, and the member well knows this, that a previous government set arbitrary numbers and did deep cuts based on those arbitrary numbers. It was devastating.

If you don’t want to take my word for that, I suggest that the member pick up George Abbott’s book on this topic. He specifically reflects on this time in government and says how he would do it differently.

We have chosen a different path than that. We are careful, collaborative, putting people first, people that work here, the people of British Columbia. We’re making the changes that we need to make and the adjustments to best serve British Columbians.

[8:05 p.m.]

The member doesn’t like a lot of the words I’ve used. The member chose the words: “This is massive work.” Well, there’s a point where we absolutely agree. This is massive work, and we are doing it right now. I’ve told the member that we’ll start to see results in Q1. We’ll see them reflected in the budget, and we will get back to balance over multiple budgets. That is the work that we’re committed to, and that is the work that is undergoing.

Rob Botterell: There have been many days spent on Finance estimates. Probably, by necessity, some of the questions I’ll raise have been canvassed in different ways, but it would be helpful to use the hour that I have to get a picture. That’ll certainly help British Columbians, and everyone in the House, to sort of see a summary snapshot that I’ll endeavour to cover in the hour.

Today what I’d like to do is use this time to get to the heart of the government’s economic strategy and overall vision. It may end up being a bit of a summary of discussion over a number of days. I recognize that this fiscal year falls within very uncertain economic times, and this is precisely why we look to the minister to continue providing strong financial leadership. But we also would like to better understand the vision that is the basis for that financial leadership, and we appreciate the need to respond to economic threats.

We also would like to better understand the overall vision and strategy over several budget cycles — really, for the province’s economy in the next ten years. The fiscal plan certainly commits to standing strong for B.C. and protecting the essentials, not making flashy announcements. We totally support that.

But it has become increasingly clear that we’re going to need to do a lot more to support people in this province. Day in and day out in this session, we have discussed areas where there is a need to build the fiscal framework and the revenue base to actually do a lot more for people in this province.

In order to better understand how that would work, we’re also going to want to have a summary assessment, in the time we have, of how we’re going to tackle some of the financial issues that we face, whether it’s economic threats, affordability crisis, climate change or growing deficit. It’s a multifaceted challenge. And we’ve talked about this before to really have an understanding of where much-larger-scale innovation plays into building the economy of the future.

British Columbians deserve strong financial leadership, and this needs to be backstopped by a comprehensive and proactive vision for the economic future. So we are definitely curious about this government’s overall vision and the proactive plan that you have for the long term.

[8:10 p.m.]

We’ve broken our questions down into several areas, but in terms of general economic strategy, can the minister outline the long-term economic strategy for the B.C. economy over the next ten years and, specifically, how this year’s fiscal plan builds towards that long-term strategy and how you believe it will allow us to meet what you envision over the next ten years.

Hon. Brenda Bailey: Good evening to the member opposite, and thank you for the question. I’ll share with the member that I have to behave myself a bit here, because I could talk about this for the rest of our time. With respect to you, hon. Member, I’ll keep it very brief, but please ask any specifics that you would like.

I really appreciate the opportunity to talk about where we see the province going and the extraordinary opportunity that lies in front of us. This province has everything we need to succeed, absolutely everything. First and foremost are the amazing people in this province, people who have access to excellent education. We’ve got some of the best universities in the world right here in British Columbia. People who are learning trades at our amazing colleges and trade schools, people who are learning engineering and computer skills and medicine, and all of it helps drive our economy.

We see a vision that really sees British Columbia as the economic engine of Canada. You’ve heard the Premier speak about this, Member. This involves us really accessing our natural resources, accessing our clean energy, using the access to critical minerals that we have in the province to ensure that we’re driving forward on electrification, not only for our province but being a provider across the country.

We do this in a way that also harnesses technology. This is a point that I’m so excited about in what it means for the future of the province, because technology can make us more competitive. We’ve got the raw goods, and you combine that with the talented people that we have and the technology that’s being built in our province and elsewhere, and you have a winning combination.

There are so many examples. The technology that is coming forward now in mining, making mines so much safer than they used to be and so much cleaner than they ever were. The clean tech sector is booming in British Columbia.

In fact, as the member very likely knows, this week sees the largest tech conference in the world. It happens in Lisbon. It’s called Web Summit. It’s the Olympics of tech. We’ve been successful in attracting Web Summit right here into British Columbia. It’s here for three years. We stole it from Toronto. It had been called Collision. It has been rebranded in the Web Summit brand. There’s one in Rio, there’s one in Europe in Lisbon, and now there’s one here in British Columbia.

[8:15 p.m.]

This shines the world’s light on our tech and innovation right here in British Columbia. Every major media outlet in the tech world is right here in British Columbia this week; 15,000. I’m hearing, in fact, they’ve oversold — 17,000 people in British Columbia this week looking at our innovations, looking at our technology, engaging with our start-up ecosystem. When this conference was held in Toronto, there were 1,200 deals signed. We need to attract investment into this province, and that’s what this conference can help us do.

The vision is one where that coupling of innovation that drives forward safety and low-carbon solutions and ways to do things more efficiently and unlocking value…. Combined with our natural resource sector, we’re winners. That’s it. That is the strategy that is going to help us win. We have everything we need to make that happen.

There are many other things I could say, but thank you for allowing me to get the conversation started with that framing.

Rob Botterell: Thank you, Minister.

The success of achieving that vision very much depends on being nimble but also being able to manage for the curveballs that we can all expect. Some of them are going to be curveballs in a very positive way; others won’t.

In this session, we have seen the government stepping back commitments it made in the budget. The government committed to meeting environmental standards and growing a green economy, but the targets aren’t being met. Clean energy projects like the EV rebate have been cancelled. The government committed to diversifying the economy, yet we’ve seen taxes cancelled that brought in significant revenue streams, with no proposed alternative as yet.

This is not to say that economies like B.C.’s don’t have challenges to face. But as part of implementing this vision, how will this government hold itself accountable to its long-term economic strategy and vision and ensure transparency over its fiscal plan as it executes on the vision?

[8:20 p.m.]

Hon. Brenda Bailey: Thank you to the member opposite for the question.

The first thing I’ll mention is in regards to the question about accountability and transparency. Our budget is built in accordance with the Budget Transparency Act, and we are committed to accountability and transparency and to update, of course, every quarter. The member may have heard we’ve got a quarterly update coming up in September.

But I take the member’s comments in regards to being nimble, particularly at this moment in time, which is such a challenging one for people internationally, with global trade having been disrupted in ways that were just unimaginable a year ago. We’ve increased our contingency in this budget and each of the years in the fiscal plan by $1 billion. The contingency is now at $4 billion for each of the three years.

The member described the potential of curve balls, and that really is the tool that we have to handle curve balls, for example, like the initial response that may be necessary for the tariffs — to support people. But I do want to share with the member that we retain our will and passion in regards to the environment. Despite having to have made a very difficult decision — one I did not enjoy doing — to remove the carbon tax, we do look forward to working with the members opposite on the CleanBC review and for looking at opportunities to continue to advance the environmental agenda.

I’ll share with the member that really important to that work is aligning it with affordability. That is the work ahead of us. We mustn’t be in a scenario where a British Columbian is compelled to choose between affordability and climate action. We need to find solutions that marry those two things together. That’s the work ahead.

Rob Botterell: We just spoke moments ago in terms of the resources and skills and talents we have in the province. We have, obviously, very strong universities; strong trades, as the minister mentioned; the resources; the clean energy sector.

We really see major conferences and so on as a springboard, given the scale of challenges we face and the scale of opportunities still to be realized, whether it’s in delivery of health care, education, a whole variety of areas where there’s so much more we can do and innovation. I couldn’t agree with the minister more that innovation is going to be the cornerstone of building that long-term fiscal framework.

[8:25 p.m.]

I wondered if the minister could offer us a sense of how, in the minister’s vision, we’ll be able to scale up the innovation, whether it’s in mining or whether it’s in the clean tech, in any number of sectors, because, really, what we have is the beginning, in a very positive way, of a very significant, innovative economy. But in order…. The question I have really relates….

How do you see getting that scaled up over the next ten years? Really, where we all want to be is having $15 billion or $20 billion more in terms of spending capacity to do many of the things that we’ve all talked about, but not through debt, obviously. So that means really scaling up the innovative economy. I’d be interested in the minister’s vision in terms of scaling up what’s a promising start.

Hon. Brenda Bailey: It’s really about the whole ecosystem, isn’t it? How we grow it all — and multiple tools needed to continue to do that. So I’ll share some of those tools and how we see them helping with scale.

Of course, a major component to scaling companies is investment. It needs to happen in a number of ways. Investing in start-ups is important. We’ve got a wonderful start-up community. It was just Startup Week last week in British Columbia — amazing work being done.

Through Innovate B.C. and the many number of accelerator programs throughout the province, there’s quite a lot of support available to start-ups. We’d like more. There’s work to be done. Accelerate Okanagan, Hub up in Prince George, Innovate in Vancouver, VIATeC here — these are amazing organizations that identify very promising start-ups and help them grow.

Finding money to go from…. When you get to a medium-sized company and to become a larger-sized company is also challenging — a couple of different things there. We need to ensure that we create the tools to invite investment into British Columbia. But we also need to invest ourselves.

A couple of things happening there. We created and stood up InBC. InBC is a $500 million strategic investment fund that’s specifically designed to align with government priorities and help companies grow. And those government priorities include clean technologies, companies led by people from diverse backgrounds, who are often underfunded, and regional components to ensure that companies that are outside the Lower Mainland and Victoria are getting opportunities to grow as well.

We’ve seen some really, really encouraging investments — many I could point to, two I’ll mention. One is Clarius technologies, which is a portable ultrasound. It looks like…. It’s kind of the size, if I could use a prop very quickly, of an iPhone and is a really powerful tool.

Say, for example, I was a person living in a community remotely and having a difficult pregnancy. Travelling to a hospital could be really challenging, but this is a solution that can get real data very quickly to a physician or a nurse in town. So that’s a British Columbia company that received funding through InBC and is seeing an excellent growth trajectory.

Another one that I’ll mention is 4ag, which is a mushroom robotics company, I think in the Kootenays, that has a world-leading solution for mushroom harvesting. There are many other examples.

InBC is also investing in investment funds to help investment funds with their reach, including Indigenous investment funds — so a really important model and part of the solution to the question you’re asking about how we scale.

Web Summit is another way to draw the attention of investors into our innovation hub here in British Columbia, to ensure that they’re getting in front of investors. It’s sometimes hard for small and medium-sized businesses to make the trips they need to, to get the attention that they need. So for us to bring them there is an offering to those companies to help them with growth.

[8:30 p.m.]

We also have increased, in this budget, the small venture investment tax credit, which now goes to $500,000, were you an angel or super angel investor. Again, that is to help for exactly what the member has identified. These are all working in conjunction with each other.

At the same time, Innovate B.C…. We’ve rewired Innovate B.C. to really give it the tools it needs, and it needs more. We need to continue doing this work, but we’ve given them additional tools to help them. They’ve got an intellectual property strategy, which is so important.

One of the pieces of our history in British Columbia is that we build very good-quality tech, good companies built on tech, and they exit. They exit with the IP. The IP is where the value lies. We need to work to keep intellectual property here in British Columbia.

You know, for people who don’t really kind of get IP, what’s a way to understand it? It might be similar to saying that we’ve got a challenge in the forestry industry when you ship raw logs to Japan, for example. That’s what I grew up with, the challenge I remember my dad talking about. Well, this is kind of the same thing. We ship it off without unlocking the value. We’ve got to unlock the value here, keep it here, grow the IP here.

That IP strategy is very important, and that’s work that Innovate is doing — teaching people about the value of IP, how to protect it, how to use it as both the sword and a shield, how to keep it here.

Through our life sciences strategy, we’re making direct investments into companies that can be anchor companies, that are now anchor companies in British Columbia, to ensure that they grow here and that their IP stays here. We’ve made a number of investments in companies like AbCellera, $75 million matched by $225 million from the federal government and $400 million from the private sector — a $700 million life science campus, more than 500 jobs created. This is good work.

Same thing with Aspect Biosystems, a very promising life science company doing extraordinary things. Made an investment, landed them here, keeping them in British Columbia where their IP lives. They’re part of what we’re growing.

We have the fastest-growing life sciences sector in Canada, largely because of the work we’re doing. These are good examples This can be a pathway of how we do this work to continue this growth.

I have many other things that I would like to say, but I do want to honour the member with having time for him to ask his questions, so I’ll stop there.

Rob Botterell: Thank you, Minister.

Another key part of the vision is tax system review and reform. I’d be interested in the minister’s vision for the B.C. tax system and what the minister sees as the largest barriers in achieving this vision.

You know, over the past several years, our tax system has become even more complex than it used to be. It comes with concerns that our tax system is not functioning as efficiently as it could be. I’d be interested to know if the government would consider a comprehensive and systematic review of B.C.’s entire tax system so that we can ensure that it’s appropriately modernized and efficient and not overly complex for individuals or businesses. I’d welcome the minister’s view in terms of looking at bringing the tax system into the 21st century.

[8:35 p.m.]

Hon. Brenda Bailey: I’ll answer this in quite a broad way.

Of course, taxes really are such an important tool in our efforts to raise the money needed to provide the supports we need for British Columbians. There are two sometimes competing important philosophies going into this. One of them is that British Columbia is a small open market and we must remain competitive. That is an important factor as we consider the tax regime. So too is the question of equity and a tax regime that is progressive and supports the most vulnerable.

Rob Botterell: Thank you, Minister.

I certainly acknowledge the need for equity and the need for tax competitiveness and certainly the motivation for raising the previous question around conducting a comprehensive review to really ensure that our tax policy and our taxation framework are suited to the vision we’re discussing and also the challenges we face.

[8:40 p.m.]

A couple of examples. The first one is that there’s certainly a heavy reliance on personal income tax to generate a significant portion of the revenue. This fiscal year it’s projected that personal income tax will make up over 20 percent of government revenues, which is an increase of 3 percent since 2017-18.

I’ll probably raise two questions because I think they are interrelated. Certainly, the first question is: what is the government’s plan to avoid overreliance on personal income tax? Let me link that to another contextual piece in question. In Canada, the richest 1 percent control 25 percent of the wealth in the country, and the 87 wealthiest families hold more wealth than the bottom 12 million Canadians combined. We have a big wealth gap in Canada, and there’s nothing to suggest B.C. is different.

As part of not having overreliance on personal income tax — so a question around how we are going to tackle that. Then also, how do we ensure that the wealthiest in this province are paying their fair share? For example, should the government consider implementing an additional marginal tax rate for incomes over $350,000?

[8:45 p.m.]

Hon. Brenda Bailey: I can hear your point that perhaps there are areas that could use an update in our tax regime. I think that that is true.

Before every budget, we do look at tax recommendations from many stakeholders — many business groups, First Nations, other stakeholders — and review those recommendations quite thoroughly. I will share with the member that we have taken measures in the direction that the member is inquiring about. Specifically, I’ll share that British Columbians benefit from some of the lowest tax rates in Canada. People earning up to $150,000 actually pay the lowest personal income taxes among provinces.

On the other hand, since 2017, we’ve brought in a number of taxes that are specifically geared towards high-income earners — for example, a tax increase on big corporations in the top 2 percent of income earners, as well as a luxury car tax, which is 20 percent on million-dollar cars. I will also mention the speculation tax, which, of course, is a tax that is designed to bring homes into the market and that has shown quite good results in that way. Those are some examples.

Rob Botterell: Thank you, Minister.

Another area that we’ve touched on already, which certainly is part of the long-term vision, is in the area of building a long-term, clean, green economy. I’d be interested in how the minister sees that transition occurring over the next ten years.

[8:50 p.m.]

Hon. Brenda Bailey: I will speak about some of the work that we’re doing, moreover the three-year fiscal plan that we have been working on, in regards to how to continue the transition to a clean, green economy. Some of this work is being led by my colleagues, for example in ECS.

While we have made the difficult decision to remove the consumer carbon tax, I will point out to the member that we have retained the carbon pricing system for industrial polluters. Of course, this includes a design that is really more of a carrot than a stick in that, for these emitters, they can sell the credits for revenue, for the investments that they’ve made in cleaning their operations, for example. I know the member is going to be engaged in the CleanBC work that will help us move this agenda forward.

I do also want to just come back to the Innovation file, I think, a file that I have a strong passion for, and I believe the member shares that passion. There are many examples, but I’ll draw to one that we’ve increased funding in, in this particular budget. There were very few increases of funding in this budget, by design, of course, but one of them was for the IMI.

[8:55 p.m.]

This is a program that’s run through Innovate B.C. I’m such a believer of this program. I’ve seen the incredible results that this program can bring.

What does it do? It addresses the challenge when we have a promising up-and-coming company and they can get smaller customers, but they need to land a big customer to show that they can work at scale, show that their technology can be successful at scale. What the IMI does is that it looks for large players that have a particular challenge and partners them with a solution here in British Columbia, brings them together, and our investment de-risks this partnering.

It allows these businesses to really show their stuff, to be successful with a large partner, which then they can show to the world. This is really a way of doing strategic procurement, I would argue.

I think the member perhaps might be familiar with the company Moment Energy, which is a company out of Coquitlam that benefited from an IMI investment and has gone on to grow quite significantly. It was, very impressively, one of the companies listed on the clean 100 list internationally as a very promising technology.

We’ve invested an additional $40 million into that program this year. These are the kinds of tools that can really help accelerate the innovation and clean tech agenda.

Rob Botterell: One of the joys of having a number of critic portfolios in a caucus the size of two is that we get to participate in numerous estimates. So I do have some questions that the ministers that we were in estimates with deferred to the Minister of Finance, demurred to the Minister of Finance. This is sort of like the lightning round. I’ll just ask a few questions that came out of other estimates, and in the time we have left, maybe we can touch on some of them.

One of them is that the first-time-homebuyers program allows people to get property transfer tax exemptions if the property has a fair market value of $835,000 or less. Yet the average price of homes in B.C. is around $965,000, creating a barrier for entry into home ownership. My question to the minister is: would the minister consider raising the property value cap for the first-time-homebuyers program to reflect increasing housing costs?

Hon. Brenda Bailey: In respect to the lightning round, I’ll give you a quick answer. It will be that yes, we’d be happy to take a look at that, and we’ll take it under advisement.

Rob Botterell: Thank you, Minister.

The capital regional district has repeatedly reached out to your ministry since 2022, asking for the speculation and vacancy tax to apply to the Salt Spring Island electoral area. As of this morning, they advised they had not heard back from the ministry. Can the minister share where things stand with the request to apply the speculation and vacancy tax to Salt Spring and what the timeline might look like to have a decision?

[9:00 p.m.]

Hon. Brenda Bailey: In honour of it being a lightning round, I’ll give you a very quick response, which is that we’re not aware of that specific letter, with the group we have right here. If the member would allow me to take that request away and get back to him, I’ll do so.

Rob Botterell: Thank you very much, Minister.

When the flipping tax was launched last year, the Minister of Housing and the Premier said that they expected the tax to make over $40 million in revenue and that it would also help free up more homes.

Is the minister able to tell us how much revenue has been made from the tax so far and, perhaps, as well, the estimated tax revenues for this fiscal year?

Hon. Brenda Bailey: While the flipping tax was announced in the previous budget, it did not come into play until January, so it has only been four months. It’s too early for us to have that data. But we will have that data, the initial information, in Q1.

Rob Botterell: I’ve always wanted to say this. Noting the time, I would like to thank the minister and the minister’s senior staff for helpful answers to my questions. I realize that this will be the beginning of, perhaps, an annual event, asking questions in estimates of the Minister of Finance, so thank you.

The Chair: Did you have any brief closing remarks, Minister?

Hon. Brenda Bailey: In closing, at the end of our first experience going through estimates, I would like to begin by thanking the support of my incredible team at the Ministry of Finance, some of whom are here now, many of whom are in a room behind us. I’m very pleased to have been supported in such a strong way.

I do also very much want to thank my critic, the member for Kamloops Centre, who brought some challenging questions and also brought some very insightful questions. I appreciate the member’s commitment to this process, his diligence and the work that he puts in.

I too would like to thank the House Leader of the opposition for the time that we got to spend together. We have a couple of things to follow up on, but thank you very much for your time today as well.

Thank you very much, hon. Chair.

[9:05 p.m.]

The Chair: Hearing no further questions, I now call vote 26.

Vote 26: ministry operations, $426,950,000 — approved.

Hon. Brenda Bailey: I have a number of votes to move, so I’ll move through them relatively quickly.

Vote 27: government communications and public engagement, $32,453,000 — approved.

Vote 28: B.C. Public Service Agency, $71,872,000 — approved.

Vote 29: benefits and other employment costs, $1,000 — approved.

Estimates:
Management of Public Funds and Debt

Vote 47: management of public funds and debt, $2,762,120,000 — approved.

Estimates: Other Appropriations

Vote 48: contingencies, $4,000,000,000 — approved.

Vote 49: capital funding, $7,258,544,000 — approved.

Vote 50: commissions on collection of public funds, $1,000 — approved.

Vote 51: allowances for doubtful revenue accounts, $1,000 — approved.

Vote 52: tax transfers, $3,408,000,000 — approved.

Estimates:
Legislative Assembly

Vote 1: Legislative Assembly, $138,852,000 — approved.

Estimates:
Officers of the Legislature

Vote 2: Auditor General, $26,981,000 — approved.

Vote 3: Conflict of Interest Commissioner, $893,000 — approved.

Vote 4: Elections B.C., $14,802,000 — approved.

Vote 5: Human Rights Commissioner, $7,668,000 — approved.

Vote 6: Information and Privacy Commissioner, $10,933,000 — approved.

Vote 7: Merit Commissioner, $1,697,000 — approved.

Vote 8: Ombudsperson, $15,332,000 — approved.

Vote 9: Police Complaint Commissioner, $8,866,000 — approved.

Vote 10: Representative for Children and Youth, $12,603,000 — approved.

[9:10 p.m.]

Hon. Brenda Bailey: I move that the committee rise, report resolution and completion and ask leave to sit again.

Motion approved.

The committee rose at 9:10 p.m.

The House resumed at 9:10 p.m.

[The Speaker in the chair.]

Mable Elmore: Committee of Supply, Section B, reports resolution and completion of the estimates of the Ministry of Finance, of the Legislative Assembly and of officers of the Legislature and asks leave to sit again.

Leave granted.

George Anderson: Section A reports progress on Bill 15 and asks leave to sit again.

Leave granted.

Nina Krieger: Section C reports progress on Bill 14 and asks leave to sit again.

Leave granted.

Hon. Jennifer Whiteside moved adjournment of the House.

Motion approved.

The Speaker: This House stands adjourned until 1:30 p.m. tomorrow.

The House adjourned at 9:11 p.m.