Fourth Session, 41st Parliament

(2019) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Monday, May 6, 2019

Afternoon Sitting

Issue No. 248

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Routine Business

Introductions by Members

Tributes

Sandy McPherson

S. Furstenau

Statements

B.C. Wildfire Service workers in airplane accident

Hon. D. Donaldson

J. Rustad

Statements (Standing Order 25B)

B.C. Police Association

G. Begg

B.C. Economic Development Association

C. Oakes

Emergency Preparedness Week

J. Rice

Bruce Johnson

D. Ashton

Kw’umut Lelum Child and Family Services

S. Malcolmson

Thrift stores

L. Throness

Oral Questions

Action on gas prices

A. Wilkinson

Hon. B. Ralston

T. Stone

Protection of old-growth forests

S. Furstenau

Hon. D. Donaldson

Government policies on forest industry

S. Bond

Hon. D. Donaldson

C. Oakes

J. Rustad

Point of Privilege

(continued)

Hon. D. Eby

M. Morris

Orders of the Day

Committee of Supply

Estimates: Ministry of Finance

Hon. C. James

S. Bond

P. Milobar

J. Thornthwaite

S. Thomson

T. Redies

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Education (continued)

J. Thornthwaite

Hon. R. Fleming

R. Sultan

N. Letnick

G. Kyllo

T. Shypitka

S. Sullivan

M. Lee

Proceedings in the Birch Room

Committee of Supply

Estimates: Ministry of Social Development and Poverty Reduction (continued)

M. Hunt

Hon. S. Simpson

J. Thornthwaite

Estimates: Ministry of Agriculture

Hon. L. Popham

I. Paton

L. Larson

B. Stewart

MONDAY, MAY 6, 2019

The House met at 1:35 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

J. Yap: I’m delighted to welcome to the House today a number of visitors from

Richmond. Paul Tam, chair, and Allen Chan, vice-chair, of the ICONNBC

Business Association are with us today. With the two of them are a group of

their business association youth group leaders, who I’d like to name very

quickly: Wilson Miao, Chun Sha, YingXue Leona Li, Elizabeth Shushkovsky,

Vivian Nguyen, Leina Harrop, Jillian Heathe. Would the House extend a warm

welcome to these visitors who are with us today for question

period.

Hon. A. Dix: You’ll know that the Fallen Paramedics Memorial was established on May

6, 2015, as a lasting recognition of the role of ambulance paramedics in our

society, their sacrifice and their service. Members will know that the B.C.

Ambulance Service provincial honour guard will be standing vigil from 5 p.m.

today until 5 p.m. tomorrow. I encourage all hon. members in that time, over

the next couple of days, to visit and to themselves honour both fallen

paramedics and the role that paramedics play every day in our

society.

I also would like to welcome Lance Stephenson, the director of patient

care delivery for B.C. emergency health services, who joins us in the House

today.

S. Gibson: I want to welcome, on behalf of this chamber, representatives of

Tourism Abbotsford and Tradex. They are touring the building, had lunch with

you, hon. Speaker, and I know they’re really looking forward to question

period, one of the reasons they’ve come here to this place today.

I want to welcome Craig Nichols, Tourism Abbotsford; Daniel Laverick,

who’s the board president; Kayla Tielmann, of Tradex; Andrea Collinson, also

of Tradex; Stephanie Vandervelde and Jenn Laverick, all of Tradex. Please

join me in welcoming them with legislative energy.

Hon. S. Simpson: All members know and have commented on, on both sides, many times over

the years, the important role of constituency assistants, our staff back in

our constituencies, and the work they do to support us and, more

importantly, to support the people in our constituencies.

Over this week, the government-side constituency assistants are going

to be in Victoria, getting some training and some work. We do have a group

with us today of those constituency assistants. I’m sure they’ll be through

over the next few days, a number of them. I would just ask the House to

thank them for the work they do for the people of British Columbia in their

role, greet them and welcome them to the House today.

Hon. S. Fraser: Visiting us in the Legislature today is one of the most dynamic and

effective local leaders I’ve every encountered. Anyone who’s seen her in

action will agree. Will the House please join me in making Her Worship Mayor

Josie Osborne, from the district of Tofino, feel very, very

welcome.

Hon. H. Bains: In the House is a very, very close friend — I would say my mentor —

and no stranger to this House: Penny Priddy, who was the Minister of Women’s

Equality, Labour, Small Business and Tourism, Children and Families,

Education — I don’t know what’s left — and the only person who has been

elected to all levels of government — as an MP, an MLA, a city councillor

and to school board. Please, all of you, join with me and give a warm, warm

welcome.

Hon. K. Chen: I’m really happy to see my good friend Amber Keane, who is also in the

chamber, joining us for question period today. I’ve worked with Amber for

many, many years in the community. She’s also a former early childhood

educator who is passionate about child care issues. I would like to ask the

House to please make her feel very welcome.

[1:40 p.m.]

Tributes

SANDY M c PHERSON

S. Furstenau: I want to highlight that in Cowichan we have a tireless volunteer who

has been recently recognized with the province’s highest honour for her

dedication to betterment of our community. Not many can boast the number of

organizations Sandy McPherson has volunteered with. Not even she could tell

you the number of hours she’s contributed. She’s volunteered her time and

energy with at least a dozen different non-profit organizations and

government committees and once served as a municipal director.

What I’d like to say is that we were so delighted in Cowichan when

Sandy McPherson joined 23 other recipients of the B.C. Community Achievement

Awards, hosted at Government House by the Lieutenant-Governor of B.C. She

was selected from 150 applicants.

I’m proud to live in a community where someone like Sandy devotes so

much of her time and energy to making the Cowichan Valley a better place for

all of us.

Statements

B.C. WILDFIRE SERVICE

WORKERS IN AIRPLANE

ACCIDENT

Hon. D. Donaldson: It’s difficult for words to describe the depth and complexity of

the emotions that a terrible event from this weekend has generated, yet

it is important, in this chamber, to make an attempt, on all our

behalf.

Many of you have already heard about the tragic crash of a small

airplane on Saturday that was carrying four contractors working for the

B.C. Wildfire Service. The four people on board were conducting infrared

scans of sites where wildfires occurred in the Northwest fire centre

last year. About 8:30 a.m. on May 4, the Cessna 182 aircraft crashed

about 95 kilometres northeast of Smithers. With the assistance of the

Joint Rescue Coordination Centre and the B.C. Wildfire Service, the

crash site was located shortly before 11 a.m.

Unfortunately, three of the four people on board did not survive.

One person was transported from the site by helicopter and now is being

treated in a Vancouver hospital. That person is expected to

recover.

Our thoughts are with the family and friends of everyone involved

in this incident. On behalf of all British Columbians, I would like to

extend our deepest sympathies to the families of the three people who

did not survive.

The Transportation Safety Board, the B.C. Coroners Service and the

RCMP are investigating the incident to determine the circumstances that

led to the crash. The B.C. Wildfire Service staff are providing all

possible assistance to the investigators and will continue to do so in

the days and weeks ahead.

J. Rustad: It is with a very heavy heart, to respond to such tragic news.

Small communities throughout the north — throughout the province, of

course — are very closely connected communities. When there are losses

like this, it affects all of us.

I want to thank the folks in the B.C. Wildfire Service for the

work they do. We’re very fortunate across this province with all the

work that has been done, particularly to the high standards of safety

that they adhere to.

I was out just across Francois Lake on Saturday when the incident

happened. We were talking about fire preparedness. It was a crew that

was there from the wildfire service that were talking about the work

that these individuals were doing, out doing the assessment over these

fires to make sure that all the hot spots were being addressed, if there

were any, to help keep us all safe.

A tragedy like this, certainly, is very hard. Our thoughts,

prayers and our hearts go out to the family — and to the individual

recovering, of course — for a tragedy like this. I hope that we don’t

have any more news like this as we go into a summer season.

Once again, to the people that do this work, as well as to the

families and to all the people really impacted by this, our hearts go

out to them. My hope is that families will be able to recover from this,

as I know one of the individuals is from Burns Lake. One of the

individuals, I know, is from Smithers, and others.

Statements

(Standing Order 25B)

B.C. POLICE ASSOCIATION

G. Begg: “To protect those who protect others” is the noble motto of a

group that is spending time here in Victoria this week, meeting with

each other and with legislators here in the provincial capital to

advance the good work that they do and strategize for their future and

the future of the work that they do every single day of the year, 24

hours each and every day. The work that they do goes on without ceasing,

in every kind of weather and in every circumstance and condition that

you can think of, and sometimes in circumstances and conditions that you

cannot even imagine.

[1:45 p.m.]

Launched in 2008, the British Columbia Police Association is the

combined voice for over 2,500 front-line police officers in B.C.,

offering guidance, research and communication support on both contract

and other important issues affecting police officers across the

province. The representatives gathered here this week are tasked with

continually promoting the interests of their sister and brother officers

as they serve citizens in our communities. By doing so, they’re

improving policing service, public safety and the quality of life for

all British Columbians.

Police officers are on the front line every day and are key

partners in ensuring that residents across B.C. feel safe in their

neighbourhoods. They are responsible for crime and the fear of crime

everywhere in this vast and diverse province — from saving lives on the

front lines of the opioid crisis to combating gun and gang violence, to

comforting a child, to mentoring a young adult, to delivering tragic

news with compassion and empathy. These remarkable women and men have

dedicated their lives to helping others. They go into places we would

fear to go and do things that many of us simply could not bear to

do.

To those members of the B.C. Police Association: know that we

appreciate and honour the work that you do, and thank you for the

protective services you consistently provide in all of our

communities.

We appreciate that the BCPA continues to strengthen the solid

relationships that officers across the province have with the public,

local municipalities, our provincial government and all members of this

Legislature. We look forward to continuing to work in partnership to

develop concrete actions and objectives to increase safety for

communities across British Columbia.

B.C. ECONOMIC DEVELOPMENT ASSOCIATION

C. Oakes: This week marks Economic Development Week in British Columbia.

British Columbia Economic Development Association supports British

Columbia communities in achieving economic goals and objectives through

workshops, training and other resources to attract and retain

investment, focusing on Indigenous and regional economies. The

organization is also a major leader in economic disaster recovery,

activating the first such program in Canada in 2012.

As markets ebb and flow, B.C.’s Indigenous and regional economies

have had to undergo sudden and significant changes, especially taking

into account the natural disasters many have endured in recent years.

This is a difficult change, especially for resource-based communities,

which is why we are fortunate to have the BCEDA focus on resiliency and

recovery of distressed economies. These efforts are not limited only to

members but to any community that requires assistance.

While it is certainly important that new investment is attracted,

it is equally as important that older businesses continue to thrive. The

BCEDA understands this. A healthy and growing economy advances the

economic, social and environmental well-being of all British

Columbians.

For all the incredible things they do, I ask the House to please

join me in applauding the BCEDA. Check out their website for a list of

the activities happening across British Columbia this week, and show our

gratitude for their hard work in helping British Columbians.

EMERGENCY PREPAREDNESS WEEK

J. Rice: It is Emergency Preparedness Week in British Columbia and across

this country, a yearly event which reminds us of the importance of

preparing our households and communities for the unexpected. Recently

Tofino held a tsunami preparedness exercise, and soon Prince Rupert

students will be hiking to high ground with their own event, with more

emergency preparedness activities happening in communities throughout

the province. This week also presents an opportunity for B.C. residents

to build personal resiliency in case of an emergency, from earthquakes

to floods and fires.

PreparedBC is getting back to the basics with a focus on helping

people identify local hazards, make a plan, build a kit and assemble

grab-and-go bags. We know that taking these steps can help alleviate

stress and improve response outcomes in the event of an emergency. I

encourage everyone to visit PreparedBC on the B.C. government website

for more information.

[1:50 p.m.]

As fair warning to all members, the province will be testing the

Alert Ready system on Wednesday at 1:50 p.m. That’s this coming

Wednesday, May 8. Mobile phone alerts will be tested at the same time as

radio and television networks. This will give us the opportunity to make

sure the system is working correctly, allow people to ensure their

devices are compatible and updated and raise awareness about the

importance of emergency preparedness. These alerts will also build on

other alert tools in B.C., such as the provincial emergency notification

subscription text alerts, sirens or other alerting

mechanisms.

The past two consecutive flood and fire seasons were

unprecedented, and it’s a significant reminder that British Columbians

are vulnerable to many kinds of risk. I encourage everyone to take some

time this week to plan ahead for a potential emergency and create some

peace of mind in your own household.

BRUCE JOHNSON

D. Ashton: His best friend described him as a wheel with his friends as the

spokes, and I’ll say a big wheel and a hub with lots of spokes, and

always continually adding to that incredible, diverse situation with

individuals.

I met Bruce Johnson in the mid-’70s and his lovely wife, Jan, and

their incredible kids — Blaine, Kevin and Kelley — through a mutual

family friend — instant friendship. We went to the same university in

Washington state in different years. He helped me make up my mind which

school: Bruce, the larger-than-life football scholarship jock; me, the

quiet, nerdy science guy.

He came home as a teacher, became a vice-principal, a principal, a

combined career of over 34 years and a staunch education advocate —

sticking up for French immersion, sticking up First Nations, sticking up

for LGBTQ. If you were in a kid in the education system or not, Bruce

had your back. On top of that, all those years of really caring for

children and their education and their lives, he continued to give back

through two terms as a school trustee.

When the vote came to address the closure of three schools — from

a hospital bed right after a major cancer operation, on a conference

call to the school board meeting, in a soft voice reflective of his

physical pain and the consequences of the vote — he stated, “I vote no,”

the only trustee to oppose. Bruce had huge admiration for his fellow

trustees, the wonderful staff at the school board and his fellow

teachers, but as it was always, it was always what is best for the

kids.

Sadly, Bruce was not strong enough physically to attend a third

term for the 2018 elections. After years of incredible community

involvement, always willing to lend a helping hand, always seeing the

best in everyone and in every situation, we lost this wonderful

gentleman in March to that terrible disease, the disease that also took

his son Blaine in 1991.

Rest in peace, my friend. Wherever you are, I know that things are

organized and that all the kids are looked after.

KW’UMUT LELUM

CHILD AND FAMILY

SERVICES

S. Malcolmson: Last week Kw’umut Lelum and the Snuneymuxw First Nation held a

ceremonial homecoming for children in care to recognize and honour their

place in the Snuneymuxw community and help ground them in their land and

culture.

We were in the longhouse together. It was smoky. There were many

witnesses from all over the province. The children were blanketed. The

women drummed. The masked dancers, in their beautiful, loud, solemn

ceremony, grounded these children and blessed them on their journey

ahead. Chief Michael Wyse said to the kids: “This is your land. This is

your place.” Grand Chief Doug Kelly turned to the foster parents and

said: “It’s not your fault the kids were taken from their parents, and

we thank you for taking care of them.” It was beautiful and so

moving.

Kw’umut Lelum supports families to keep kids out of foster care

and with their families and culture. It used to be just for families on

reserve, while off-reserve families were served by our Ministry of

Children and Family Development. But in November, the NDP transferred

that responsibility to Kw’umut Lelum so that it can now serve Indigenous

families off reserve in Nanaimo.

Since their urban office opened, they are changing more lives.

Their staff told me:

“A baby was about to go into permanent care, but we came up with a

plan that gave the mother, who’s battling cancer, another chance.

Through her hard work, Kw’umut Lelum believing in her and supporting

her, she’s now at home with her baby girl, together.

[1:55 p.m.]

“This good work was able to happen because of this government’s

willingness to build relationships with Kw’umut Lelum, to work with

their own people, guided by their Coast Salish teachings and values.

From this, a baby is reunited with her mother.”

A lot of damage was done, and there’s much work to do. But we’re

committed to clearing the path so that good people like those at Kw’umut

Lelum can do this vital work.

THRIFT STORES

L. Throness: I want to give a tribute to thrift stores today. Recently I had

the honour of helping to open the new Home Décor store in Chilliwack,

which is the second thrift store run by the Bridge to Better Living

Society.

The society, under the dedicated leadership of Bryan Crogie and

Shirley Cahoon, helps to fund juvenile diabetes, the Cyrus Centre for

youth, a prison ministry called Better Life and the Ann Davis Transition

Society. It also does workplace training in concert with the Stó:lō in

Chilliwack and works with the clientele of the Chilliwack Society for

Community Living.

There are other thrift stores in our city with other charitable

ends. Hidden Treasures supports a ministry to men and women offenders

called M2W2. We have two Mission stores. A dozen of them across Canada

have raised millions for their mission to purchase bibles around the

world.

The Community Services Thrift Store in Agassiz funds the food bank

and many of its other programs, and we all know the incredible things

the Salvation Army does around our province and in our city, in part

funded by its thrift store. The Chilliwack Hospice Society has a thrifty

boutique. Our hospital auxiliary has a thrift shop, and the Mennonite

Central Committee has its own store. Value Village is a Canada-wide

for-profit corporation begun by the same family that started the

Salvation Army thrift stores. It has a strong social conscience, giving

back a lot to communities, including hundreds of jobs.

I love the concept of the thrift store which uses the principles

of the market for a positive social purpose, providing inexpensive

high-quality goods for those of lower income, but they have also become

trendy places for everyone to shop. Given the growing number of storage

unit companies, our thrift stores are guaranteed an abundant supply of

goods for many years to come.

I want to thank the passionate leaders and volunteers in our

community who do something great for someone else every day by working

in our thrift stores.

Oral Questions

ACTION ON GAS PRICES

A. Wilkinson: Well, the saga of gas prices continues, and the total inaction by

this government also continues. We’re now hearing from people whose

lives are dramatically affected by gasoline prices — truck loggers, taxi

drivers and volunteers. They’re telling us, in very clear terms, that

it’s having a detrimental effect in their lives. They’re worried about

their ability to make a buck. In the case of volunteers, it’s putting

them into an impossible position. The Volunteer Cancer Drivers Society

drives patients to and from medical appointments to deal with their

cancer.

Over a year ago, the Premier said, “We’ve talked about a range of

options,” yet we have seen nothing. We now see the members of government

trying to pass the buck amongst themselves as to who will avoid

answering the question. So the pain at the pump continues.

This government controls 35 cents a litre of taxation room that

could be made available to people like the volunteer cancer drivers.

When will this government at least tell us what the range of options has

been and is in the past year? Can you tell us anything at all about what

you have in mind?

Hon. B. Ralston: Well, the Leader of the Opposition is at it again. He is advancing

his proposal to reduce taxes, which UBC Sauder Business School professor

Werner Antweiler described as “a completely ineffective proposition. It

makes no economic sense.” He just mentioned it again. That’s the Liberal

plan.

Last year they were prepared…. The Leader of the Opposition said

that he was very much dedicated to the idea that you respect the

marketplace when it comes to setting prices — apparently not so much

anymore.

[2:00 p.m.]

But Professor Antweiler was last week’s critical commentary on the

B.C. Liberal so-called plan. Let’s have a look at what has come up this

week from the B.C. Business Report Card .

Interjections.

Mr. Speaker: Members.

Hon. B. Ralston: This assesses how different people and things — of course,

businesses — fared this week. Before I give the letter grade, let me

give the comments. “It seems pretty clear this is a desperate party

doing desperate things, like putting up billboards, rallying against the

carbon tax that, um” — checks notes — “their party started.” What was

the letter grade? F-minus.

Mr. Speaker: The Leader of the Official Opposition on a

supplemental.

A. Wilkinson: Well, here we have a government that was offering up options a

year ago, has been completely silent on what they are…. Now we’re being

offered….

Interjections.

Mr. Speaker: Members, we shall hear the question.

A. Wilkinson: The marquee sign is supposed to say “F-minus,” when it really says

“$1.729.” We see a few members opposite grinning from ear to ear. They

like the idea of high gas prices, because it will drive people out of

business and make them vulnerable to the necessary environmental agenda

of the Green Party, which is, of course, controlling the members

opposite.

This is what George McAffer says, with the Volunteer Cancer

Drivers Society, his quote to the media. “Every time it goes up a cent,

we pay a lot more money.” The Premier controls 35 cents a litre of gas

taxation. What do we tell George when the Premier has said: “If we’re in

a position to provide relief, we’ll do that”?

To anyone on the government ranks, what is that relief? When are

we going to see it, and what were these options from the last year?

Because for three weeks now, there’s been nothing but obstruction from

the other side.

Hon. B. Ralston: Let me repeat: “A desperate party doing desperate things.” Letter

grade, F-minus.

What’s very clear is that, obviously, gas prices have gone up 40

cents in the Lower Mainland. Of the increase of 40 cents, one cent — an

increase in the carbon tax — is due to government taxation. The other 39

cents have gone to the oil companies for their own profit and their own

costs. So the solution that’s proposed by the opposition is a complete

non-starter.

Interjections.

Mr. Speaker: Members, we shall hear the response.

Hon. B. Ralston: He knows that, yet he continues to repeat it.

T. Stone: Well, that is a desperate, vacuous and ridiculous response

deserving of an F-minus, I would suggest.

Now, these are the exact words of the Premier of British Columbia

from one year ago: “We are monitoring gas prices, and we will take steps

if necessary. We have talked about a range of options.”

Now we learn that the Premier is telling his deputy minister to

come up with a range of options. That shouldn’t be too difficult,

considering the Premier was apparently considering options a year ago.

Now even the Premier’s Energy Minister had this to say: “The Premier has

been working on this issue, and he’s looking into a variety of options

to deal with gas pricing.”

It’s been well over a year. Why won’t the pain-at-the-pump Premier

share with British Columbians what those options are which he was

considering?

[2:05 p.m.]

Hon. B. Ralston: The opposition has suggested a variety of positions. The Leader of

the Opposition in particular, at one point, suggested that somehow our

relationship with Alberta was to blame for the increase in gas prices.

But he admitted in an interview on one of the radio stations that there

was no link, not at the moment. That’s a fair point.

So any of the explanations and the policy propositions that have

been put forward by the opposition are completely without any merit

whatsoever. In fact, the Leader of the Opposition, when the government

of Alberta proclaimed Bill 12, said, and his position was, that British

Columbia should do nothing. That was his position.

Our position on this side of the House, led by our Attorney

General, is that we will fight that bill in court to the end of the

legal process rather than simply accept it, sit back and do nothing on

behalf of the people of British Columbia.

Mr. Speaker: The member for Kamloops–South Thompson on a

supplemental.

T. Stone: It’s this government and the Premier, in particular, who have

floundered from one ridiculous, phoney message to another.

Initially, the federal government was going to sort this out. Then

it was: “Let’s build a refinery somewhere in British Columbia.” Then it

was, “Perhaps we can encourage our Alberta friends to build another

refinery in their province,” only then, a day or two later, for the

Premier to suggest that it would be nice if our neighbours to the east

of us were to just send us a bit more refined fuel product.

It’s the Premier that has been flipping and flopping on this

particular issue, and all British Columbians know is…. If you live in

Kamloops — I drove down yesterday — it’s a buck-50 a litre, the highest

we’ve ever seen for regular gasoline in Kamloops. And, of course, we

know that gas is at record highs — in fact, highest of anywhere in North

America. It’s British Columbians who are taking it on the

chin.

Now on the weekend, someone did leap to the Premier’s defence,

saying: “Sometimes the Premier says things without actually thinking

through the ramifications of what he said. I think what he was doing is

thinking out loud.”

Who said that? Well, none other than the leader of the Green

Party, the Premier’s junior coalition partner, who also apparently

thinks that the solution to soaring gasoline prices in British Columbia

is for hard-working British Columbia families to remortgage their homes

so that they can take out a loan in order to purchase an electric

vehicle. Or the same party that just suggests to British Columbians:

“Perhaps you should walk more, or perhaps you should carpool

more.”

Interjections.

Mr. Speaker: Members, we shall hear the question. Thank you.

T. Stone: So the question is this. Was the Premier, as the leader of the

Green Party suggested, just thinking out loud, or was the Premier

actually evaluating options to address soaring gas prices, and if so,

what are the options?

Hon. B. Ralston: Well, the member from Kamloops may want to shop around in

Kamloops. I’ve been advised that at Costco in Kamloops, gas is $1.349 a

litre rather than a $1.50 a litre. That’s accurate information as of

today. Some of, perhaps, the research done by the members

opposite….

Interjections.

Mr. Speaker: Members. Members, it’s almost impossible to hear the

response.

Minister.

Hon. B. Ralston: Well, members can laugh at it, but that’s the price. That’s the

price.

The member opposite said $1.50. Costco has got $1.34. That’s a

pretty big difference. One would question, then, what the accuracy is of

the rest of the statements that the member from Kamloops is putting

forward.

[2:10 p.m.]

In our budget, the budget put forward by the Minister of Finance,

we tackle the issue of affordability for British Columbians. We

undertook a number of measures to increase the affordability of life for

British Columbians. We took the tolls off the Port Mann and the Golden

Ears bridges. By the end of this year, we will have eliminated MSP

premiums — $900 for an individual, $1,800 for a family. We have

initiated a major social program of child care, which is making a real

difference in the lives of families and children across this

province.

PROTECTION OF OLD-GROWTH FORESTS

S. Furstenau: It was a little hard to hear what was going on down here, so there

was some confusion.

Interjections.

S. Furstenau: That was just an impartial, objective observation, hon.

Speaker.

Today the UN released a report on the devastation of nature. Over

one million species are currently at risk of extinction, and habitat

loss is the driving factor. According to this report, nature is at its

worst shape in human history. Habitat loss not only endangers animal

species but our own ability to grow food and safeguard drinking water.

The report states unequivocally that we are threatening humanity’s

capacity for survival.

Yet here in B.C., this government is continuing to facilitate the

logging of old-growth forests. B.C.’s coastal old growth has incredible

ecological value, and it is globally rare. We’ve already logged 90

percent of the high-productivity old growth on Vancouver Island, and

we’re actively continuing to log these ancient forests, with no end in

sight. Well, there is an end in sight. It’s when they’re all

gone.

Old-growth forests sustain wildlife and increase biodiversity.

Many species can only live in old-growth habitats — those species that

have been identified as at risk for extinction.

To the Minister of Forests, Lands and Natural Resources, we have a

moral responsibility to leave our children a healthy environment. Will

this government make protecting old growth on Vancouver Island a

priority?

Hon. D. Donaldson: Thank you for the question, an important topic. Our government is

committed to protecting the important biodiversity of old-growth

forests, as the member alluded to and pointed out in different studies.

Over half of B.C.’s old-growth forests on the coast are already

protected. We’re also committed to ensuring a continued, vibrant and

innovative forestry sector.

There’s a variety of perspectives on harvesting in old-growth

areas. The Minister of the Environment and myself met, just in January,

with representatives of the Ancient Forest Alliance, the Sierra Club and

other environmental non-government organizations. Our staff met again

last week with those groups and have another meeting scheduled for

June.

I was also able to visit many of the communities in north

Vancouver Island a couple of weeks ago, where I spoke with local

government leaders and those in charge of community forests, who see the

benefits of harvesting old growth come back to their communities in many

ways. So they see the importance of those harvesting

activities.

We are working on a new old-growth plan. We will be engaging with

First Nations communities, labour and environmental groups to complete

that plan. We’re also looking at ensuring there are fair solutions for

workers and communities as we move from old-growth to second-growth

harvesting.

Mr. Speaker: House Leader, Third Party, on a supplemental.

S. Furstenau: It’s interesting that many of those groups that the minister

speaks of have been reaching out to us, raising the alarm about the B.C.

Timber Sales proposal for harvesting of the old growth in the Juan de

Fuca area. It is easy to say that old growth is protected, but it’s not

completely factual, because of our remaining endangered old growth, the

highly productive areas — those that are in the valley bottoms and still

reasonably intact — are also actively being logged.

Last week hundreds of students were standing on the front of the

Legislature, demanding that we listen to them because the climate change

is an emergency. My office received 1,500 emails this last week asking

that Vancouver Island’s old growth be protected. My colleague from

Saanich North and the Islands has received 18,000 emails in the last

year.

[2:15 p.m.]

To the Minister of Forests, Lands, Natural Resources, we are in a

climate emergency, and in light of this emergency, how does this

government justify the continued logging of old growth?

Hon. D. Donaldson: Thank you to the member once again. The member referenced a B.C.

Timber Sales timber sale advertisement around the Port Renfrew area.

That timber sale was not advertised until there had been consultation

with the Pacheedaht First Nation, with B.C. Parks and with others about

the impacts of that logging.

Having said that, there was the potential for some legacy trees

identified by environmental non-governmental organizations, so B.C.

Timber Sales has delayed the awarding of that sale until the issue is

further examined.

We value the biodiversity that’s supported by old-growth forests.

We also value what old-growth harvesting does for communities on the

Island. When I visited those communities in north Vancouver Island —

Port McNeill, Port Hardy and Port Alice — a presentation from the

community forests that those three communities hold demonstrated that

the return from harvesting old growth in a manner that follows all

guidelines put money into the coffers of those communities so that a new

roof could be put on the curling rink. We visited that curling rink.

That roof would have never been able to be afforded if it hadn’t been

for the harvesting of old growth.

Old growth provides direct employment for 24,000 people in the

forest sector. We’re going to be embarking on a plan around old growth

with First Nations, with workers, with industry and communities. We know

the value of old-growth forests. We’ll be undertaking that process in

the near future.

GOVERNMENT POLICIES ON

FOREST

INDUSTRY

S. Bond: Every day more concerns are raised about NDP forest policy causing

significant uncertainty leading to job loss. First, the Premier sat and

watched his minister make an absolute mess of the caribou file. It

caused nothing but anger and resentment in communities across the

province. What did the Premier do? He had to call in a third party to

try to fix the mess.

Now with forest policy, the exact same thing is happening. No

consultation to key changes to the forest sector.

Will the government today stand up, press pause and ensure that

industry and communities are properly consulted?

Hon. D. Donaldson: If the member is referring to the Interior process to revitalize

the forest sector, we’re certainly engaging with communities in the next

round of process. The fact is that we’re addressing the issues that were

kicked down the road by the previous government.

They knew concentration in the forest sector wasn’t good for

communities, wasn’t good for First Nations, and they did nothing about

that. They knew the pine beetle impacts on the annual allowable cut were

coming, and they did little for communities to prepare for that. They

knew the caribou recovery was going to be an issue and didn’t take

federal legislation seriously, and those impacts are being felt by

communities now.

We created a coast forest sector revitalization initiative in

consultation with industry, with labour, with First Nations. We’re

creating an Interior forest process that is going to address the impacts

of the pine beetle that they failed to address. And we created draft

partnership legislation that’s going to help protect caribou and protect

jobs.

That’s the difference between this side and that side. We care

about communities, we care about First Nations, and we care about

workers.

Mr. Speaker: The member for Prince George–Valemount on a

supplemental.

S. Bond: Well, the difference between that side of the House and this side

is that we recognize that we need to support and work with the people

who actually create jobs and sign paycheques in communities where we

live.

[2:20 p.m.]

The minister can stand in the House and read off lists of things,

but let’s listen to what key leaders in the forest sector had to say.

Last week it was West Fraser and Teal-Jones. This time it’s Don Kayne of

Canfor who says: “The competitiveness challenges that we face in B.C.

are severe… with Bill 22 and the OIC and caribou and softwood lumber.

All those are things we are faced with.”

Let’s try this again. To the minister, will the government listen

to the significant concerns that are being expressed, and will they

press pause and take the time to consult with industry and

communities?

Hon. D. Donaldson: Well, of course we’ve been listening to communities and listening

to the forest sector and the forest industry. That’s why we’re

implementing the changes that we’re implementing. We care about forest

communities, about the future of forest communities, about First Nations

involvement in the forestry sector and about industry. That’s what the

changes are all about. We’ve been making them because the other side,

when they were in government, ignored it and kicked the can down the

road.

C. Oakes: Let’s be clear in this House what industry is saying. West Fraser

is the largest employer in my community. This is what they have to say:

clear here. They are making decisions without consulting with industry.

They need to understand the impacts that this will have on industry, on

communities and on employees. We are very concerned.”

To the minister, there has been zero consultation. Will the

government press pause and consult?

Hon. D. Donaldson: Well, the member might want to get her facts straight. There has

been consultation with major industry, including West Fraser, especially

when it came to the draft caribou partnership agreements. There were

over six meetings between industry and representatives from my ministry

before those draft documents were released on March 21.

We also have a process that the Premier has initiated around

revitalization within the Interior. We’ve challenged the industry to

lead that process, to provide some solutions, to call together

communities, First Nations, other tenure holders and workers at a TSA

level — never done before at a TSA level — to come up with solutions.

We’re also embarking on a policy initiative with Interior stakeholders.

We’ve got a lot of things going on.

As far as employment goes, well, the member ought to know that in

her own town, Quesnel, the Quesnel Cariboo Observer recently

reported that the unemployment rate was the lowest ever, under this

government, in 43 years.

Mr. Speaker: The member for Cariboo North on a supplemental.

C. Oakes: It wouldn’t be so embarrassing if the minister was a little bit

more on top of his file. What industry is clearly saying…. This

government is bringing in policies that are going to have absolutely

detrimental effects on communities, and I can say to this minister that

life is not more affordable when you lose your job.

We are talking about significant job losses as a direct result of

the Premier’s actions. You may want to look at the consequences of Bill

22. This is what Ted Seraphim, of West Fraser, said: “What gives us the

greatest concern are the myriad of policy changes that the B.C.

government is planning…. It puts the whole British Columbia industry on

pause.”

Instead of putting the industry on pause, why doesn’t this

government and this Premier stand up and press pause on its

policies?

Hon. D. Donaldson: Well, talking about putting things on pause, that side, when they

were in government, put on pause 30,000 jobs in the forest

sector.

[2:25 p.m.]

We are concerned about the future of rural communities in the

Interior. That’s why we’ve launched a process to bring together

industry, labour and First Nations in a TSA-level process. We have

launched that already. We’re about to embark on a policy engagement

session with other stakeholders to make sure that there’s viability in

towns.

But that’s not all. We have a wide variety of efforts in order to

make communities in rural areas viable and attractive for people to

come. The first urgent care centre in Quesnel has been announced by my

colleague the Minister of Health. We’ve got the redevelopment and

expansion of hospitals in Dawson Creek and Williams Lake. We have the

first-ever, 280-seat civil and environmental engineering program

announced at the University of Northern British Columbia. These are

substantial and practical efforts to make sure that northern and rural

communities are resilient and vibrant into the future.

J. Rustad: On May 2, Western Forest Products an­nounced: “We have resumed

export log sales. We expect our first shipments to occur in May, and

another in June.” We have Western now also looking at reducing its

milling capacity because it can’t access logs. We’re having, of course,

the restarting of the log exports. The monthly average number of coastal

cutting permits has been dropped by 40 percent.

Everywhere we look our forest industry is in trouble. Costs have

gone up. We’re now the highest-cost producer in North America. Jobs are

at risk. We’ve seen the job losses already under the NDP. Ultimately,

it’s the Premier’s responsibility.

Will the Premier step in and press pause before more damage can be

done to our vibrant forest industry?

Hon. D. Donaldson: Well, let’s look at that concentration in the coast forest sector

industry, brought about as a direct result of changes this former

government brought in, in 2004. Let’s have a look at that.

As a result of their actions between 2003 and 2017, jobs in the

coast forest sector decreased by 40 percent. Production decreased by 40

percent. Waste was up, and so were log exports. We’re determined to

address all of those trends with the changes we make, because we put

First Nations, communities and workers at the forefront.

[End of question period.]

Point of Privilege

(continued)

Hon. D. Eby: As you know, on April 30, I raised a matter of privilege. The House

Leader for the opposition raised a concern that she didn’t understand how it

applied to Standing Order 26. I have brief submissions for you about the

two-part test to consider in relation to those submissions.

The first branch that the Speaker needs to determine is whether the

procedural requirements have been met. The second branch is substantive:

whether the remarks themselves amount to a contempt, as I suggest they

do.

On branch 1, the question is whether the member raised these issues at

the earliest opportunity. The remarks were made on the 29th, and I reserved

my right the same morning. Then I delivered my remarks the next day: a brief

written statement of the matter, which is also a requirement, delivered in

the presence of the member, which it was. The member for Prince

George–Mackenzie was here when I delivered my speech.

Then there’s the larger question about whether misleading the House

can be a contempt. MacMinn does not talk about this — what specific

contempts are. He refers to two other textbooks: May’s 23rd edition, the

contempts chapter, and Maingot’s text, Parliamentary Privilege in

Canada . Both of those authors are very clear that the House may

treat the making of a deliberately misleading statement as a contempt.

That’s according to May. Maingot says that deliberately misleading

statements may be treated as a contempt.

[2:30 p.m.]

Now, I understand that not all criticisms of an Attorney General, or

even all false criticisms, would rise to this level. The Speaker should

protect an environment where people can be critical of the Attorney General.

However, I submit there is a limit to the cut and thrust, and that limit is

making things up out of whole cloth that attack the very root of the

Attorney General’s role of interacting with agencies, police, lawyers and

others — and, frankly, being the lawyer for the Lieutenant-Governor, and

ultimately Her Majesty, as the representative government here.

I urge you to find a prima facie case here. If you do, then I will

move a motion that this House determine whether the remarks rise to

contempt, by committee — which, as the members know, is the

process.

I’m happy to table my remarks. Again, hon. Speaker, these are the same

remarks that I have provided to your office.

Mr. Speaker: Member for Prince George–Mackenzie, do you have a response?

M. Morris: I’ll reserve my right to reply at a later time, Mr.

Speaker.

Mr. Speaker: Okay, thank you.

Orders of the Day

Hon. M. Farnworth: In this chamber, I call the estimates of the Ministry of Finance for

debate. In

Section A, the Douglas Fir Room, I call continued debate on the

estimates of the Ministry of Education. In

Section C, the Birch Room, I call the

estimates of the Ministry of Social Development and Poverty Reduction and, when

they are completed, to be followed by the estimates debate for the Ministry of

Agriculture.

Committee of Supply

ESTIMATES: MINISTRY OF FINANCE

The House in Committee of Supply (Section B); R. Chouhan in the

chair.

The committee met at 2:35 p.m.

On Vote 25: ministry operations, $265,327,000.

Hon. C. James: I will be having a variety of staff, as we look at the various

areas in the ministry, coming in to provide support. I want to express

my appreciation to the staff who always, during the year as well as

estimates, provide good support. I’m looking forward to the discussion

and the questions and the areas that we’ll canvass over these

estimates.

S. Bond: Good afternoon to the minister and her staff. We also appreciate

the work that the ministry staff do too, not just at this period of

time, although I know we’ll be spending a lot of quality time together

over the next few days. This is our opportunity, as the opposition, to

raise issues of concern about the budget and the fiscal future of

British Columbia. It’s also a chance for us to raise specific issues

that we have heard from constituents and British Columbians who want to

have some answers on some very specific issues.

In order to facilitate the flow of the estimates process, we’re

going to begin today with having several MLAs raise issues. I should

point out to the minister that, in some cases, some of the critics were

actually sent here to ask questions on behalf of some of the Finance

Minister’s colleagues. So we’re going to begin with a number of MLAs

asking those questions. We’ll have a few more throughout the course of

the next couple of days as the MLAs bring specific concerns, which we

always encourage them to do.

With that, we’re going to begin with one of my colleagues and some

very specific questions on clean energy.

P. Milobar: I’m glad to be here to ask a few follow-up questions of the

Minister of Finance in relation to CleanBC and a couple of calculations

in the budget from the minister’s numbers that don’t seem to quite match

up with what’s going on with CleanBC. So I’ll jump right in.

At $30 a tonne back in the 2017-2018 fiscal year, the province

took in $1.248 billion of carbon taxation, and in ’18-19, the last year,

under the former government’s climate strategy, the province took in, at

$35 a tonne, $1.488 billion. I raise that because those equate to 41.6

megatonnes of emissions that the tax was paid under $30 and 41.7

megatonnes under $35 a tonne.

Moving forward, as we progress with CleanBC and the march to $40,

$45 and $50 a tonne of carbon, we actually see the budget is based on an

ever-increasing tonnage, megatonnes, of emissions. So this year, at $40

a tonne, we go from 41.7 megatonnes of emissions to 42.8 megatonnes of

emissions. The next year we go to 43.75 megatonnes’ worth of emissions

that tax is being calculated on, and in the final year at $50 in the

budget book, it’s based on 44 megatonnes at $2.2 billion at $50 a

tonne.

[2:40 p.m.]

The question I would have for the minister is…. There seems to be

a disconnect between CleanBC’s stated goal to reduce emissions within

the province of British Columbia and the Minister of Finance actually

calculating and predicating financial figures based on an

ever-increasing — actually, a faster increasing — rate of emissions than

the two static years, the last two years, that we had under the old plan

around our climate action.

With CleanBC being implemented, what we’re actually seeing is an

increase of the megatonnes, a taxation level at a higher level of

megatonnes. In fact, if we were able to hold the emissions to about the

last year under the old plan’s emission targets, it would result in

about a $270 million loss of revenue to the provincial government based

on these next three years of budget. In fact, if CleanBC was actually

delivering what its stated goal is, to actually drive down emissions,

let’s say, by one megatonne a year, to be actually not even that

aggressive with the numbers, it results in a $550 million shortfall in

the provincial budget over the next three years.

Could the minister explain why, if CleanBC is supposed to be

driving down emissions, the Finance Minister has decided to have an

ever-increasing, and, actually, an accelerated rate of emissions for

taxation purposes to get to the $2.2 billion, but more specifically,

even an extra megatonne in this particular year as well?

Hon. C. James: There are a couple of pieces that I think are important to note

when it comes to the revenue coming in from carbon tax: the revenue

that’s booked into the budget. I think the biggest piece that hasn’t

been taken into account, if you simply look at the emissions and the

reduction of emissions, of course, is economic growth and adjustments

that happened there. Carbon tax revenues are forecasted to increase due

to, yes, the annual carbon tax increase, as the member has identified.

Also, diesel volumes are expected to rise by 2 percent — that gets

accounted within these dollars — and then other fuel volumes, again,

rising based on GDP projections, which is economic growth.

That would be everything…. Natural gas would be the largest piece.

I’d refer the member to the assumptions table that’s in the budget.

Table A5, page 119, actually identifies each of these areas and the

increase that we built into the budget that will account for the dollar

difference that I think the member is referring to.

[2:45 p.m.]

I think the other piece that’s important to note is that the

CleanBC initiatives, many of them, don’t take place…. The impacts of the

reduction in emissions, if you look at the CleanBC plan, don’t take

place within the first year or the second year of the fiscal plan.

Again, there are adjustments that will be made as that program is

implemented as well.

P. Milobar: Well, that’s a little confusing, given that there are several

CleanBC initiatives which are supposed to be bringing down emissions

that are funded in this year. Notably, the electric vehicle program is

100 percent funded in just year one, with no other funding in the next

years and no other dollars identified whatsoever. The low-income tax

credit is also another one that is responsible for about 10 percent of

the overall emission reduction within the current CleanBC plan. CEV is

about 7 percent, so there’s about 17 percent that should be driving

immediate results, one would think, for people and our

environment.

I guess again to the minister, then. To get clear, is the Finance

Minister saying that although CleanBC was supposed to be driving down

emissions, it doesn’t look like they’re budgeting to drive emissions

down with any of these measures within Clean BC? Or is the growth rate

of the GDP, and everything else that went into that calculation, going

to be higher than any of the tangible reductions that CleanBC is

shooting for? Are we still looking at a net increase of emissions based

on the CleanBC document, then, given the answer that the minister had

just provided, that you have to look at other factors to

see…?

I took from that answer the minister saying that the growth would

have been worse if it was not for CleanBC, but it’s still growing. The

overall objective of CleanBC is supposed to actually see a reduction —

not a slower increase but an actual reduction. This still shows a very

clear and, actually, much faster-growing increase.

When I look at the ’17-18 year versus the ’18-19, the economy was

still moving along very well. GDP was growing, and we only saw a 0.1

megatonne increase in emissions under the old climate strategy. Under

CleanBC, we see that jump by over a megatonne, by 1.1 megatonnes. Then

it jumps another megatonne; then it jumps again. It seems to be actually

increasing at a much faster rate than under the old plan.

Can we get some reconciliation in the answer here as to how it is

possible that a plan that is supposed to be driving down emissions is

actually being used as a calculation for revenue purposes to make sure

that the books balance and that there’s a surplus?

Hon. C. James: I’ll just come back, again, with a reminder for the member. Again,

I think it’s important to note that these assumptions are all listed in

the budget as assumptions. The amount of money coming in around the

carbon tax rate, around diesel volumes and around natural gas is all

listed in the budget.

Remember, we are talking about a three-year fiscal plan versus a

ten-year-plus climate action plan. So when you’re taking a look at the

strategies, as the member will know….

[2:50 p.m.]

I know he had a very thorough discussion with the Minister of

Environment around the CleanBC plan and around the time frame for the

CleanBC plan and the time frame it takes both to change behaviour as

well as to see the significant changes. I know the member has canvassed

all of those timelines, but that’s obviously different than the

three-year fiscal plan.

As I said, the carbon tax increase has been built into the budget

to 2021. Diesel volumes, again, rising. Other volumes, including natural

gas, because of GDP growth and because of growth, also rising, and those

are listed in the table.

P. Milobar: I’ll take from that answer, then, that the real plan for CleanBC

is to let emissions continue to grow over the next three years to then

try to get them driven down even that much further in the last seven

years of the plan. That’s what I’m hearing. We can add an extra few

megatonnes a year to the emission profile, and instead of then trying to

achieve 18.9 megatonnes of reductions, we will now have a new starting

point where we need to find 20.9 or 22.9 megatonnes instead of the 18.9,

plus the missing 6.1 megatonnes out of the CleanBC plan as it

stands.

Moving on to the low-income payment part of CleanBC, and that’s

$223 million over this next three-year fiscal plan, can the minister

confirm…? The Environment Minister, when I questioned him on this,

alluded to that this year it was a new program, which I was sure that it

was not. Last year in estimates, he alluded to that, actually, now with

this new way of doing the credit, 53 percent of the population would be

eligible for the low-income credit.

When I’ve been doing my research, what I have found is that at

$300, the climate action tax credit was available to people at a $30

carbon tonne. When it went to $35, it went from $300 to $350. Now it’s

at $40, and it’s moved to $400 for an eligible household. It seems to be

moving every time there’s a $5 increment. It moves as it did previously,

under the previous government.

When I went on line last week to the government website and pulled

off the information for the climate action tax credit, it actually shows

the payment schedule, starting back in 2014 all the way up to 2018. It

shows what the income thresholds are. There’s a methodical movement. It

does not seem to have changed anything there.

Can the minister confirm that, in fact, this is just a

continuation of what existing programs were in place for low-income

people, low-income families — that the income thresholds remain the

same, except for those inflationary adjustments that happen every year,

and that there’s not been a broadening of the eligibility for this

program and that, in fact, it is not a new program?

When we hear talk of a $400 program, last year it was actually

$350. That has moved to $400 this year. As the chart shows, next year,

when it goes to $45, it’ll go to $450. But it is not brand-new money,

not at $400. There has not been expanded eligibility, and in fact,

people would already need to be qualifying for that rebate cheque to be

able to qualify for the extra few dollars this year.

[2:55 p.m.]

Hon. C. James: The member is correct. There was an existing low-income credit

that was in place for the carbon tax. As the member has stated, we have

increased the credit — to increase each year, based on the increase in

the carbon tax as well.

With that maximum that increases each time the carbon tax is

increased, that means that the phase-out happens at a higher income

level. When the phase-out happens at a higher income level, that means

that more British Columbians receive the credit. So 57 percent is the

estimate of British Columbians who will receive the credit in ’19-20. It

will, as I said, increase each year as the carbon tax increases, until

we reach the $50 a tonne that we’ve committed to.

P. Milobar: But to be clear, then, it’s…. I recognize government is trying to

always make the best sales pitch possible. But I think the perception

that was given by a budget presentation — and subsequent answers by

various ministers and various speeches given in this House — was that

this was a new $400. In fact, the leader of the Green Party, in his

budget commentary, alluded to that, as well, and sounded surprised that

it wasn’t brand-new — $400 per household.

Why I’m asking this and why it’s important is…. Yes, there may be

the phase-out. The phase-out, to my understanding, is 2 percent of the

benefit as you clip over the minimum threshold. The minimum threshold is

$41,000, a qualification of $41,000 household income, approximately, for

a family of four. That’s the only way you hit the maximum of $400. If

you’re a family of three, depending what your makeup is, you start to

lose $5.50 a child, $19.50 an adult. You can have the one dependent

child be qualified as an adult to help that boost a bit.

[3:00 p.m.]

There are not going to be a lot of people that qualify 100 percent

as a family of four. If they do, that’s great. I think they do need the

supports. That’s why we put this program in place in the first place. So

we’re not quibbling with that.

I think it’s trying to get a better handle on the marketing. It’s

not 53 percent or 57 percent of the public that will be seeing a $400

increase to a subsidized tax credit or tax break. In fact, if you’re at

the higher income level, even at the $400, it’s a few dollars you might

now qualify for, not the $400.

Has there been a calculation as to what that actually means in

terms of the extra people that will now qualify? How much would they

actually qualify for out of that $400? Is it $10 a year? Is it $15 a

year? There must be something that went into the calculation of that

$223 million — just so that the public can get a better understanding

that they’re not actually going to be receiving a $400 tax credit now.

They may actually, previously, not have qualified, and they now go from

a $350 cutoff to a $400 cutoff, and they qualify for $16.95.

Hon. C. James: The member knows full well how income-tested programs work and

that there will be a variety of families, a variety of makeup of

families, a variety of individuals. So it will depend, for a family, on

the number of children they have, on their net income, and as I said, on

the makeup of their family. That’s going to vary from person to person.

And $400 is the amount, the new amount this year, for someone who

qualifies for the full amount. Then, again, it tapers, depending on the

makeup of the family and depending on the income level, and the income

levels are listed on page 126.

P. Milobar: I’ll move on…. Just to clarify, it’s not for a person to qualify

for $400. It’s for a family of four earning $41,000 or less as a

household income that would qualify for $400. An individual would

qualify for much less. It’s in the $154.50 range, I believe, for an

individual, and they would have to make $35,000 or less to qualify for

that.

Moving on, then, to the clean vehicle program, the ZEV program — a

couple quick questions. I just want to make sure that when we get to the

Energy and Mines Ministry at the end of the week and heading into next

week that the answer back isn’t that I should have asked here, so I want

to make sure we cover this off on a progression.

Last year…. Well, starting in the September 2017 budget update and

moving through to the end of fiscal ’18-19, there was $57 million added

to the rebate program.

[3:05 p.m.]

Again, we started the rebate program. We’re not opposed to this

happening. But that was a very substantial chunk of money needed to go

into the program to make sure that it ran through to the end of

fiscal.

Today as I was sitting here…. You can go on line. They have a

real-time tracker. They’re at under $3.9 million left in the fund before

it’s fully exhausted. I’m sure they’re waiting for the next tranche of

this $42 million that’s in this year’s budget, under CleanBC

programming, to come forward to top up that $3.8 million. I would

imagine that with the matching federal program kicking in May 1, that

$3.8 million probably dropped very quickly in the last couple days and

will continue to over the next few weeks.

When I asked in the Ministry of Environment estimates around this,

the answer back seemed to be why there was only money for CleanBC for

year 1 at $42 million, which based on the $57 million would seem that

there’s not enough money to even hit the end of this year’s fiscal

without the program running dry. The answer back was: waiting to see

what the feds were going to do or not do and making sure that programs

could sync together or not and what types of resources may come to bear

there.

The concern is we have a piece of legislation in front of the

House that would essentially say: “It’s no longer the government’s worry

about how you get into a clean energy vehicle. We have a piece of law

with million-dollar fines telling you that you better figure out how to

sell somebody a car they might not want right now or you’re going to pay

us a fine.”

There’s not enough money to even fund the first year of this

three-year budget book, let alone the subsequent two years. I was able

to establish that based on the expected dollar values needed to help

offset industry’s costs within CleanBC, the initial $168 million will

probably be topped up significantly from the $299 million in CleanBC

that’s sitting in contingencies. And as best as we could work around,

that left about $100 million in contingencies within the CleanBC

document.

So there’s $300 million in contingencies now dropped to a $100

million with an unfunded program of this magnitude.

Doing the math of what it actually takes for a subsidy of roughly

$4,000 a car — because not every car gets the full $5,000, at least to

this point — what we’ve been seeing is that to get to 2030 goals within

CleanBC, you would need close to $1.6 billion at the end of this $42

million to get you there.

Talking to the auto industry, they say the tipping point of

pricing…. They’re not sure where government is getting that from because

they do not feel that it’s anytime soon on the horizon. In fact, when

Ontario stopped their subsidization program, the sales ceased

immediately.

I guess the question is: why is there only $42 million in the

first year in CleanBC for the clean energy vehicle program when even

in…? As this year’s budget was being created, it would have become very

apparent, as $30 million needed to go into supplemental budgets with the

Ministry of Energy and Mines to fund the car program to get to the end

of the fiscal…. Why was there a shortfall of funding to even get through

this year’s fiscal within CleanBC within this year’s budget? Let alone,

where is the subsequent year’s money for this program?

[3:10 p.m.]

Hon. C. James: I think the member rightly talked about the work being done in

EMPR with the federal program. So we’re waiting for the federal program

to come into place to see whether any adjustments would need to be made

over this next year with our provincial program as well. I think it’s

important to note that for CleanBC, just for this fiscal year, there’s

$37.3 million in contingencies in this area. A large portion of that, we

expect, will be allocated towards the electric vehicle

program.

Then as for the second year and third year, I think, as the member

knows well, each year you take a look at the program. You take a look at

the structure of the program. You take a look at the success and the

challenges of the program, whether you need to make any changes. Those

decisions will be made in the upcoming budget for the following

year.

P. Milobar: Well, that’s a little concerning. The language around the

contingencies funding within CleanBC in the budget book very much makes

it seem like this is for new types of programs and initiatives that

would come on stream and as of yet have been defined. Based on that

answer, a large portion of this year’s contingencies is now going to go

to a program that exists and that just didn’t get proper funding in the

first place, even though the budget book was being created at the same

time as supplemental requests were being made, and press releases were

being issued to fund that same program.

We also know that out of the $299 million, the better part of $280

million is going to go to help heavy industry offset their tax burden.

That means that we’re down to, even just with this year, about $60

million left out of a $300 million contingency fund over three years,

which is worded in such a way that there was much excitement that this

would help spur on innovation and new programming within the province.

Instead, that doesn’t seem to be the case. Again, is the minister then

saying that the ZEV program continuation hinges solely on a federal

government program running or not running?

There are no dollars indicated in years 2 or 3. There was no

federal program indicated when this budget book was brought out in the

first place. Again, why was there no ZEV money for years 2 and 3 in this

budget, if in fact the intention is to continue it on? There is a great

worry out in the manufacturers and the sales world, with the legislation

coming and the way the budget book reads, that the hammer for the

government to make the shift for people and sales will be legislative,

not with the existing rebates that are available.

As I say, we see what happened in Ontario — that resulted because

of a change in government — the rebate program disappeared, and so did

the sales. We have a federal election coming up in October. If there’s a

change in government or a change in direction, you could have the same

thing. Is the province saying that we’re only going to go as the federal

government goes? Or is CleanBC a document that is properly funded? If

so, where is the funding for CleanBC, for this program, in years 2 and 3

in this budget?

Hon. C. James: I expect the member to continue to hold us to account each budget

year. That’s the purpose of going through estimates. It’s so the member

has the opportunity to be able to raise those questions — and other

members, as well. As I said, it’s important to make sure that the

program is put in place in coordination with other programs that are out

there.

[3:15 p.m.]

That’s why, as the member heard clearly from EMPR, they were

taking a look at the federal program, to take a look at how to

coordinate. That’s why dollars were put in contingencies, to be able to

provide for that support. Then, as we go into the budget process, this,

obviously, is a clear commitment both in CleanBC as well as for our

government. We’ll take a look at the amount that will be needed to be

able to fund the program.

P. Milobar: Well, again, there’s not enough money in contingencies to actually

fund the program, based on last year as it is and based on other

commitments for those contingencies that were conveyed in estimates with

Environment.

One last area I would like to just touch on again to make sure….

I’m wondering if the minister could enlighten me on any modelling within

the ministry on the extra per-litre cost to the consumers’ gasoline at

the pump and diesel that has been done on the new fuel standard that is

mandated by CleanBC. So they’re going to a higher mix. It doesn’t

currently exist. It doesn’t exist in Alberta. It will be somewhat of, I

guess, an artisanal blend for British Columbia that will get

made.

One would have to assume that if the oil companies could produce

that cheaper right now, they would be. Most companies tend to put to

market whatever they can produce and that would have acceptance at the

lowest cost possible. So there must be an increased cost per litre of

gas and per litre of diesel with this new fuel blend. This new fuel

blend will result, under CleanBC, about…. It accounts for almost 22

percent of CleanBC’s emission reduction targets. So it’s a very

significant piece of the whole CleanBC plan, or that falls apart. Let

alone the missing 25 percent; you’d be almost missing 50 percent of

CleanBC, if this fuel does not hit the market.

What modelling has been done, and what is the expected increase of

the per-litre cost that this fuel mixture will cost British Columbians —

the travelling public, industry, everybody — to be able to use this new

fuel blend that needs to be made specifically for the B.C.

market?

Hon. C. James: EMPR is working with industry right now to develop a plan around

the new fuel standard, and certainly, Finance will be there at the table

as they have those discussions and work through that process. EMPR may

have a little more to say in their estimates as well, but that’s the

process that they’re going through, and we’ll be part of that

process.

J. Thornthwaite: I have a couple of questions to do with — actually, closer to

three, I think — the speculation tax.

I have a couple of constituents that have written me. They live in

Indian Arm. We’ve heard lots in this House about Belcarra. In fact, one

of the responses that my constituency got, the staff from the ministry

actually incorrectly referred to her as living in Belcarra. They don’t.

They live on the other side of Indian Arm, and they are only accessible

by water.

[3:20 p.m.]

She notes in her letter to me: “Islands that are accessible only

by air or water are not part of the taxable regions.”

She goes on to say: “Our secondary property is a recreational home

located in Indian Arm, Orlomah Beach, which has no road to the home. It

is not an island, however. It is boat access only. I would like to

request exemption from the speculation and vacancy tax based on the same

criteria as the islands that are accessible only by air or water. My

recreational home is only accessible by water, and I respectfully

request fair and equitable application of the exemption based on access

to the property.”

That’s my first constituent. The other one, I think, lives in the

same area. He didn’t give me his exact address, but he is up there.

Certainly, he’s up in Indian Arm, and he says the same thing: “We do not

have hydroelectricity, city water or phone service. Even the cell

service is intermittent. The parking and access in the Deep Cove area

does not lend itself to long-term or even short-term rentals — i.e.,

request to rentals. Emergency services are not readily available up

Indian Arm should a tenant become injured, and access, again, is by

water only.” His question is: “How is it that Johnson Bay residents,

which are directly across the inlet from me, are exempt and we are

not?”

I think that my question is all about equity and why my

constituents, even though they are only accessible in the upper Indian

Arm, on the district of North Vancouver side of Indian Arm…? You can’t

get to it, except by water, like an island. Why aren’t they exempt as

well?

Hon. C. James: Thank you to the member for bringing forward the constituency

concerns. As I think the member knows, we’ve often canvassed the

speculation tax in question period. I won’t be, as Finance Minister,

giving individual, specific tax information or advice to individuals. As

we have learned, many of these are very complex situations. It’s

important that accurate information be given and that we receive that

accurate information. So I’m happy to take information from all members,

if their constituents feel they haven’t had their questions answered.

I’m happy to pass those along to the people in our help area to be able

to look at those issues and get back to them.

The broader question around the specifics that the member raised….

As the member knows, I’ll be having a meeting with the mayors of the

impacted areas. They’ll certainly be bringing their issues. By the time

we have that meeting, we hope, as well, to have more specific

information around the speculation tax. So we’ll be able to put all of

the data on the table and have those conversations based on the facts

that we have been able to gather.

I do think it’s important, when we begin to have the discussion

around the speculation and vacancy tax, to note that we are talking

about people’s second homes or third homes or fourth homes. This not

people’s principal residence. Those are exempt. The fact is that 99

percent of British Columbians are exempt from paying this tax. I just

think it’s important to set the context of the fact that we are bringing

forward this tax to deal with speculation and the vacancy challenges

that we’re facing in communities, the affordability crisis for people,

and to address it on behalf of individuals and workers.

J. Thornthwaite: The point is that these are not speculators. Yes, they do have a

second home, but it’s equivalent to an island. They just happen to be up

Indian Arm. Why are they essentially discriminated against because they

live on the mainland, even though, if they were on an island, they would

be exempt? You still have to get to them in the same way.

I will take the minister up on her offer. I will make sure that my

constituents pass on their information to the minister. I hope, for

sure, that she will consider the district of North Van. It’s not

Belcarra. One of the responses that one of them did get from the

ministry said that they were from Belcarra. They’re not. They’re on the

other side of Indian Arm.

My next question, as well…. I had another constituent who

purchased a condominium in the year 2010 in the north Nanaimo area. He

had planned that this was going to be his future retirement home. He was

going to move there on a full-time basis once his wife retires. He’s

retired, but she’s not quite yet. She’s just finishing her career in

North Vancouver. They purchased this property in Nanaimo under the

intent that they would be moving there to retire.

[3:25 p.m.]

I’ll quote what he says: “The sole objective for purchasing this

unit in Nanaimo was for our own use and not for speculative reasons. The

Nanaimo unit is not currently rented as we are personally using it once

or twice per month, as our son and his wife also live in Nanaimo and we

travel there to visit our three grandchildren.”

I’m going to quote what he said: “Truthfully, this additional tax

will be a huge burden to us. We strongly believe that as Canadian

citizens, we should not be penalized for our hard work and success. I

hope that the current government will further review the speculation tax

once again and only penalize those who are benefiting from these types

of speculation, instead of senior citizens who are not speculating, who

had no inkling of the added tax burden that government has implemented

at such short notice.”

Plus, the fact is, as I said, that they bought their property in

2010. They’re very worried, and they think that they might have to sell,

and they bought it for their retirement.

Again, I ask the minister: could you please take into

consideration the senior citizens that are obviously not speculators? I

have no problem sending this letter directly to the minister if the

ministry would consider an exemption in this case. I know the letter

that I did get from my constituents…. They were essentially pleading

with me to plead to the minister.

Again, my question is to the minister. Is there going to be any

opportunity for my constituent here, in this case, to get an

exemption?

Hon. C. James: I’d be happy to take the information. I’m not going to give

individual tax advice to individuals. That’s something that, as I said,

is important to be done with people who can look at all of the

information that’s there and make sure all the information is

accurate.

I do think it’s important to note, though, that that increase in

housing prices over 2010 to today is a large increase that people who

own second or third or fourth homes have benefited from. While I

appreciate the member’s comments, and I appreciate the challenges for

seniors, let’s remember as well that there are a large majority of

people, of many seniors in this province, who are struggling to find

housing, who aren’t able to find a primary residence, never mind looking

at a second home or a third home.

Those are the individuals, the kind of crisis we’re facing…. It’s

why we are here in the first place. People can’t afford to be able to

find a single home. They can’t afford to be able to rent a place because

the vacancy rate is almost zero in communities.

You’ve continued to see that in the areas that have been chosen

for the speculator and vacancy tax. They’re the least unaffordable. They

have the lowest vacancy rates, and they have the most challenges —

challenges for businesses in finding workers, challenges for recruitment

and retention. In fact, the businesses came forward, as I’ve talked

about often in the development of this tax, to say we had to do

something about the affordability crisis.

We have taken into account, as the member knows, many exemptions,

in fact, for special circumstances for individuals — if a person is ill

or someone goes into long-term care or they’re working somewhere else.

In fact, there are individual exemptions within this tax bill to be able

to take into account a number of considerations.

I’m happy to take the member’s information, but I think it is

important to note that the increase in housing prices has provided a

benefit to people over the years. Looking at affordability is something

that will benefit all British Columbians, which is critical if you’re

looking at housing being used as a place to live. That’s the goal, and

that’s part of what we’re working on with the speculation and vacancy

tax.

J. Thornthwaite: We do know that these particular cases, and the thousands of

others that are similar, have nothing to do with providing housing stock

or rental stock for individuals. It’s not putting a dent in that issue.

These poor individuals that are essentially getting punished because

they have a second home are not helping the housing crisis in this

issue.

I want to have one more scenario, just to bring it to the

attention of the minister. I know this isn’t specifically…. I mean, it

does obviously affect the spec tax. I just wanted to give a scenario to

the minister about how it just seems so counterproductive in this

particular case.

[3:30 p.m.]

There’s a student who is in the same school as my daughter. Her

parents are foreign, but they purchased a condominium for their daughter

to live in while she goes to school — so the four years and maybe

beyond. They actually purchased this property.

Well, obviously they’re getting charged the speculation tax. But

the issue is what they’ve been forced to do. This is how preposterous

this thing is for them.

[J. Isaacs in the chair.]

Now they have to rent that property to a foreigner — or to another

person, foreign to them, not necessarily a foreigner — and then get

another rental property for their own child because they’re not allowed

to rent the property for their own child.

I just don’t get that. I just think that it’s maybe an unintended

consequence — that you can’t even rent out to your own child. You have

to rent out to a foreigner or a different person, and then you have to

get that housing for your own child somewhere else to rent off of

someone else. I’m just wondering if the minister had thought about those

scenarios with regards to the spec tax.

Hon. C. James: Again, as I’ll state to the member, I’m not going to speak about

individual tax information, because it’s obvious, with the information

that the member is providing, that there can be a misunderstanding.

There can be a lack of information provided.

If you are a B.C. resident and you have bought, for example, a

condo for your child who is going to university — you live in one of the

areas where the speculation tax applies, and they’re living in a condo

going to university — you do not pay the speculation tax. They are

considered a non-arm’s-length individual. They do not pay the

speculation tax. They don’t. If you’re a B.C. resident, you get a

$400,000 credit on your second home. That’s also available.

Again, it’s part of the reason…. I think the member has raised a

perfect example of why it’s important not to be making decisions based

on information that’s passed along, because sometimes not all of the

information is passed along or the individual may not have shared it

all.

I’m happy to take a look at the specific information to pass it on

to staff to be able to review. But again, I think it’s important to note

there is an exemption, a non-arm’s-length exemption. If the individual

has bought a condo for their daughter or son who is going to university

or is living in it as their primary residence, they will not pay the

tax.

J. Thornthwaite: Again, I will take the minister up on her offer and provide her

with the details in an email, so thank you very much.

S. Thomson: I appreciate the opportunity to ask a couple of questions. Welcome

to the minister and her staff.

I expect I’ll get the same…. They’re some speculation tax

questions. I’ve got one other issue, as well, that I want to canvass,

but the first couple of questions will be around the speculation tax. I

expect I’m going to get the same answer that the minister just provided

to my colleague from North Vancouver–Seymour.

It does bother me, in terms of putting the questions forward,

around the response from the minister, that even though it’s clear in

these examples that people are not speculating and the properties aren’t

vacant — so it’s not speculation and it’s not vacancy, both the apparent

tenets of the legislation — it’s okay if the rules happen to be such

that they have to pay the speculation tax because they don’t quite fit

one of those exemptions and it’s okay that you’re paying the speculation

tax simply because you’ve had an increase in value in your property over

time.

[3:35 p.m.]

You should, then, apparently just suck it up and be happy to pay

the tax because you’ve had this increase in value, when clearly you’re

not speculating — you’re not in that category — and the properties

aren’t vacant. I’ll use the example here, which is one of the ones I

wanted to raise. It has gone, specifically, to the minister’s office,

and they have received a response.

The situation here is the person…. It’s a couple. They have a

residence in Kelowna. The husband lives in Kelowna. It’s his principal

residence, and qualifies for principal residency. He’s paying taxes in

Kelowna. The title is in both his and his wife’s name.

His wife lives, and continues to live, in Alberta and has to stay

there because of medical reasons. They have a home in Alberta, which

they intend on selling as soon as the medical requirements for her to

stay in Alberta are complete. So they’ve purchased this home. He lives

here. She lives there. Now they’re being assessed the 50 percent of the

speculation tax impact because she is on title, even though the property

here is a principal residence, even though it is not vacant, not

available for rental or anything like that.

She has had to stay in Alberta because of critical medical

rationale, and they’ve been told, “No, sorry, you don’t qualify for the

medical exemption,” because of the criteria of the medical exemption.

It’s just an example.

It points, to me, to one of the reasons why — and we’ve raised

this before during debate on the legislation — there needs to be an

independent appeal process in some way where those legitimate cases like

that can be appealed and some consideration given, because when it goes

into the property tax branch, they’re going by the very strict rules

that are in the legislation and are not qualifying for those

exemptions.

This is a specific example and one that the minister’s office has

dealt with. I just wanted to bring it forward here again, because it is

one that points out the impacts of this legislation when it is clearly

having these unintended consequences on a couple who are now having to

pay speculation tax when, clearly, this isn’t about speculation, and the

house is fully occupied and not vacant and not eligible for rental or

any other way to avoid the impact of the speculation tax.

I wonder if the minister could comment on whether she feels that

that situation is something that the speculation tax should apply

to.

Hon. C. James: I would expect the member, as the previous member did, to bring

forward the issues on behalf of their constituency. That’s their job. I

expect those to come forward. As the member has said, we received some

of those in the office as well.

Again, the member is quite right. I’m going to give the same

response, which is not to speak about a specific tax case. I think it’s

important, again, whether people pay taxes in British Columbia or pay

taxes in Alberta. There are a number of different factors that come into

account when it comes to the tax. I think, again, full information is

critical in making those determinations, and that’s

important.

I appreciate the member raising the issue. As the member knows

well, we will have an opportunity to hear from the mayors, as well, of

the communities that are impacted by the speculation tax. We’ll be

holding an opportunity for them to present their issues. Their community

will have the data from the speculation tax as well, which will give us

a good opportunity to be able to do a full review. That will occur each

year. As well, there is another review built in, so there are

opportunities along the way to address any unintended issues that may

arise.

S. Thomson: I’ll just, then, make a point around two other files. I know I

will get the same response, so I’ll just mention the files here. They

are in the minister’s office. Maybe if she could undertake to have a

look at them…. People are waiting for specific responses on

them.

[3:40 p.m.]

One is a file under the name of Fedak. The situation there is

that…. It’s a couple living in Kelowna, previously married, divorced.

She and her new husband have purchased a home, and it’s their principal

residence. Both filled out the speculation tax on it. She remains on

title on her former husband’s home, and she has a situation where there

has not been cooperation in getting her name removed from that title and

mortgage on her other home. She’s fighting that battle. She has limited

legal resources in order to be able to do that and now is finding

herself impacted by the speculation tax.

To the credit of the staff, I understand that they have been

provided some accommodation for the first year of the application but

have been told, unless she can get this straightened out, she’s going to

be impacted in the next year on it. Again, it’s a clear situation where

there is no speculation involved. Both homes are fully occupied, so

neither of them are vacant. Both are principal residences and, again,

being impacted by the tax.

Again, I go back to my point previously around there needing to be

a better appeal mechanism, maybe something sort of separate and

independent, that would look at these cases where, clearly, the impact

of the legislation is not what was intended. You’re having these

unintended consequences of the implementation of a rushed piece of

legislation. I’ll just raise that one.

Another one is very complicated, had quite a bit of back-and-forth

on it. It’s called the Truswell file. It involves an old piece of

property that the current owner inherited from his family through the

passing of his wife.

He has a life estate on it. Property title is in the ownership of

the children. The children don’t live here. One lives in White Rock. Two

live in the States. They spend significant amounts of time in the house,

but it’s not their principal residence. He, as the life estate holder,

also doesn’t spend all his time…. He also lives in the States for

periods of time.

It’s very, very, very complicated, and it gets caught up in the

legal side of what the definition of an owner is around life estate and

life tenancy and all those sorts of things. So we’ve been working back

and forth on this one with your staff. But I’ll just flag it as one that

needs some continued attention, because at this point, they are being

advised that they will still have to pay the speculation tax. All four

of them will have to pay their share of it.

This is a piece of property that has an official community plan

process over it with the city of Kelowna, which has designated it as

future park property. They don’t have the ability to sell it. It’s right

on the edge of Mission Creek in my riding. It’s just another one that

I’ll flag to the minister that needs some continued attention. I’m not

expecting a response to that.

My final question. I’ll just switch gears a little bit. I want to

just ask a question about the employers health tax and the application

of the employers health tax. This comes from a submission. A letter has

been written by the B.C. Cherry Growers Association to the minister’s

office. The letter was sent in, in January. They still haven’t had a

response to that letter.

It involves the application of the employers health tax around the

seasonal agriculture worker program.

As the minister may know, under that program, the contractual

arrangement between the parties, between Canada and Mexico and B.C. in

terms of that program, the farmer who is utilizing the seasonal

agriculture worker program is required to pay private medical insurance

for all of the employees that are brought in under the program. That’s

part of the contractual requirement.

[3:45 p.m.]

They’re not eligible for medical services premium coverage, yet

they are being assessed an employers health tax as the replacement tax

for MSP. It’s getting built into their…. Their payroll for all of that

is being assessed the employers health tax.

It seems to me that, first of all, it’s creating a very

significant impact on the agricultural industry, particularly, in this

case, the cherry growers, who are major users of the program. Given the

nature of the industry, the growth of the industry, the tremendous

opportunities in the export market…. And we’re seeing real growth in the

sector. I’m wondering if the minister could clarify or comment on her

views of the application of this tax on agricultural operations, farmers

and ranchers in British Columbia who are utilizing that program and, as

part of that program, having to pay a prescribed private health premium

for health coverage for those employees and now getting hit with this

tax.

I see two potential things that should be considered. They should

just be exempt from it, given the nature of it, or consideration should

be given that those temporary workers under the seasonal agriculture

worker program should be eligible for MSP coverage. Then you’d have some

fairness and some equity in terms of how things are being treated. In

this case, they’re having to pay the private insurance, and they’re

being assessed the employers health tax at the same time, and it’s

having a very significant impact on agricultural operations.

I know the members opposite and the government want to support the

agricultural industry and want to see that growth, yet you’ve got a

situation now here where you’re negatively impacting those

operations.

Hon. C. James: I want to start off by apologizing. I’m not sure where the

correspondence has gone, if it came in, in January. But I’m happy to

make sure we follow up so that a clear response goes back to the Cherry

Growers Association as well.

I think the first piece to note on the employers health tax and

the move to the employers health tax is that, as the member will know,

it was to get rid of a regressive tax around MSP premiums. It’s not a

tax — nor were the MSP premiums only there — that was directly linked to

spending that people may make on health care or the use of the health

care system, which would happen if you were linking it to a seasonal

workers program. There’s a link there to the use of the health care

system. In fact, that’s not the direct link. It’s a general application

tax, just as it is in other provinces. It’s tied for the lowest rate, as

the member knows, but not directly linked to the use of the health care

system by individuals.

[3:50 p.m.]

I think it’s also important to note that the support for moving

away from medical services premiums and moving to an employer health tax

is of benefit to everyone. A strong health care system is a plus for

everyone. The member quite rightly points out the challenges for

agriculture in finding workers and being able to have workers to be able

to address the work that they need doing. Again, addressing some of the

challenges in this province, whether it’s affordability or otherwise or

it’s medical service premiums or otherwise…. Making ourselves more

competitive as a province is going to be a help to everyone.

I recognize it doesn’t give the member or the cherry growers

association the specific answer they want, which is to look at an

exemption. This is a general application tax. It applies to all

employers across B.C. Payrolls of below $500,000 don’t pay. So again,

the vast majority of businesses are, in fact, not paying the employer

health tax. Then it’s graduated for $500,000 to $1 million, and $1.5

million and above, which will be paying the full tax.

Again, I think it’s just important to note that it’s not directly

linked — one of the examples the member raised. It’s not directly linked

to, in fact, the use of the health care system.

T. Redies: We weren’t sure how many questions the member from Kelowna was

going to be asking.

Minister, again, thank you for the opportunity for us to ask

questions with respect to the budget and the forecasts going out three

years. I’d like to thank the staff, again, for giving us that

opportunity and, in advance, for responding to our questions.

We’re going start first with the fiscal 2018-19 actuals and then

proceed from there into sort of the three-year forecast, if that gives

you, again, some help in terms of anticipating where we’re

going.

Hon. C. James: I just wanted to point out that ’18-19 actuals come in public

accounts, so that’s still to come. I just don’t want the member to feel

that she’s asking questions that we won’t have responses for because

they, in fact, come in public accounts.

T. Redies: Thank you for that. I appreciate that. I think this is mostly

public information that’s already in the budget, but if there is

anything that has to be deferred, then we’ll go from there.

The original fiscal 2018-19 plan forecasts spending at $53.6

billion, but actual spending came in at $55.7 billion. Can the minister

explain why the government spent $2 billion more of the taxpayers’ money

than it originally planned?

[3:55 p.m.]

Hon. C. James: Thank you for the question. A few pieces just to point out in

those changes that occurred. I think the biggest one will be no surprise

to anyone, which would be the fire, the challenges we faced when it came

to fire management costs — a $551 million difference, which is a very

large number that we had to deal with — as well as flood. Again, the

irony — the fire management and the flood costs, which were $308

million.

Student loan interest elimination, $217 million. Refundable tax

credits, $372 million — a large portion of that was related to film tax

credits. That’s, again, past years coming back. That made a big

difference in that piece. Health authorities, $312 million.

Those are the big…. I can walk through all the minor areas, but

those are the large areas that made the difference. And then

supplementary estimates, of course, which was $375 million. I know the

members have had their opportunity to ask those questions as

well.

T. Redies: Thank you, Minister, for the answer. That was helpful, actually,

because I did have the numbers for FLNRO and the $308 million for public

safety, but I wasn’t 100 percent sure what that was. So it was the

floods.

I think what you’re clarifying is that of the $269 million

additional spending in the Finance budget versus what actually happened,

$217 million was in the student loan administration. Am I correct in

that? If so, what is the balance that was spent additionally in Finance

in fiscal 2018-19?

[4:00 p.m.]

Hon. C. James: My apologies to the member. It’s, again, looking at the ’18-19

numbers and bringing them into this year’s budget and the challenges

there. The member is right. Student loans is the largest portion of

that, 217. Then the other portion is affordable housing.

[4:05 p.m.]

We have the housing initiative fund in the Ministry of Finance, as

the member may know, and there were grants to increase affordability in

the existing housing units that were accounted for. Those are the two

big pieces that made the difference in the budget.

T. Redies: Thank you to the minister for that answer. Would the minister

categorize this, dare I say, excess spending all on forecastable

events?

Hon. C. James: Both of these issues, I think as the member knows well, are key

parts of our government’s platform around affordability. If we’re

talking about the student loans — the member asked whether these were

planned ap­proaches — student loans was a piece that certainly we have

been taking a look at. The second piece, of course, was the housing

initiative fund and again looking at how we can create more affordable

housing.

Both these programs were in fact programs that were reviewed, that

were analyzed, that went through the usual process that they would to

determine the costs that were there and then allocated within the

budget.

T. Redies: The minister is focusing on, I guess, what should have been

forecastable events given that they were platform promises that were

made. I have another question, but since she has raised this particular

issue, I would like to ask her: why, then, was it an unbudgeted

item?

Hon. C. James: I think it’s important just to take a few minutes to talk about

the setting of priorities and the determination of what goes into the

budget and what doesn’t go into the budget. It isn’t a plan to determine

these are the pieces that are going into the budget without looking at

all of the…. I know we’ll have lots of conversation around assumptions

and around economic forecasts. It is important that all of those pieces

be taken into account.

As I often say, as Minister of Finance, it is rare that something

crosses my desk that isn’t worth, from somebody’s perspective, looking

at for funding. It isn’t possible to be able to fund everything. It

isn’t possible to be able to include it all.

Therefore, part of the decision-making process that occurs through

the fall and in setting priorities is to determine what priorities

government is going to go ahead with, what gets built into the budget,

what the economic circumstances are of the province, what the second-

and third-quarter reports come forward with.

All of those pieces are critical in making decisions around where

the priorities are, when you determine something goes ahead, when you

determine that you can balance the fiscal needs of the province and

responsibility to build in prudence and to make sure that we have a

strong economic base and the investments in people that are going to

help you continue to grow the economy. That’s exactly the process that

we’ve used in every budget that we’ve developed.

T. Redies: I think the minister has established that these were not planned

expenditures, but as soon as they saw room for it, they decided to go

ahead with the expenditures.

I guess my question is also with respect to the other items that

were essentially overspending vis-à-vis the original 2018 budget. Again,

does the minister see those as actually events that could have been

forecast or events that were not forecastable?

[4:10 p.m.]

Hon. C. James: I think there are a couple of areas the member is talking about.

One would be statutory expenditures, and perhaps the other one is

supplementary estimates and the process for supplementary

estimates.

Just so I’m clear, I want to speak about statutory. If we speak

about the statutory expenditures, there are a few key areas, as the

member knows well. There are opportunities for statutory expenditures

where you spend what you have to — fires and floods obviously being one

of those. As the member knows, we have increased the fire budget for

this coming year, for ’19-20, but we also recognize, again, that that

goes up and down. The fire seasons go up and down. Rather than leave

money stranded in an area, you provide for the statutory expenditure,

which is: you spend what you need to, to be able to fight the

fire.

I don’t agree with the member’s characterization around

overspending at all. In fact, there are, as I said, key areas built in

for exactly these kinds of purposes, and that’s what we utilize them

for.

T. Redies: Thank you, Minister, for the answer.

Actually, where we’re going with this is that, again, we have made

numerous…. Well, there’s lots of evidence that this government is

spending at a breakneck pace and is potentially spending beyond the

capacity of the economy and, with unforecastable events like forestry

fires and flooding, is not actually being prudent in its spending. My

colleague is going to canvass a couple of questions which are going to

address this even further.

Obviously, the government has to spend for fires and floods, but

the point is that if the government has its pedal to the metal on

spending and is not being prudent with respect to the management of its

budget or its finances, then that could put the province into a deficit

situation.

[4:15 p.m.]

I’m going to talk now about the refundable tax credit transfers,

which the minister really hasn’t addressed. These were $372 million over

the original February budget of fiscal ’18-19. Why is that,

Minister?

Hon. C. James: As I mentioned earlier when I talked about refundable tax credits,

the vast majority of the $372 million is film tax credits. These are

years that come in from past work that’s been done, so filming that’s

already occurred.

I think it’s important to note that there was an industry

reassessment that occurred in 2017. That industry reassessment changed,

obviously, the numbers that were coming in around the refundable tax

credit. That, again, two- and three-year lag that occurs creates the

kinds of numbers that you’re seeing here.

We’ve been working, as the member may know — I think we talked a

little bit about this in last year’s estimates — with the film industry

to look at how we could provide more stability and predictability in the

numbers. We’ve had some very good conversations with the industry to

talk about things like pre-certification, so we could have a

pre-certification done on the project so that we would have a better

sense of what was coming when it came to tax credits.

That’s one of the areas that we’re exploring with the industry.

They’re very supportive as well. That’s something that we’re looking at

to be able to address some of the change that you see, year to

year.

T. Redies: Thank you, Minister, for the answer. I mean, it’s great that we

have a film industry that is very buoyant.

[4:20 p.m.]

I guess my question is: given that the actual tax credits came in

30 percent above what was forecast for fiscal ’18-19 and given that the

changes occurred in 2017 — notwithstanding the conversations that the

minister has been speaking about, with the film credit industry — is the

minister comfortable that her forecasting process around these film

credits is sufficiently robust, that British Columbians can rely on the

forecasted numbers going forward? Again, a $372 million difference that

represents a 30 percent increase is a significant variance. I guess what

I’m looking for is assurance from the minister that we won’t see that

type of issue again.

Hon. C. James: I think what the member describes is exactly the part of the

discussion that we’ve had with the industry. It’s to talk together, to

work together to look at how we can continue the kind of growth that

we’re seeing and continue the strong economic activity in our province

but also to be able to forecast the kinds of numbers.

I think it’s important to note, though, that when you’re

forecasting refundable tax credits, for example, or tax information

coming back from CRA, it’s often a 12-to-24 month lag before those

numbers come in. The member will remember that from one of our first

budgets, when the numbers shifted on the corporate income tax and then

shifted the other way. You had a down, and then you had an up the

following quarter.

There’s always some volatility that is there, but I certainly feel

very comfortable about the work that we did with the industry. We’ve

increased the amount that we expect to come in, in outer years. I think

that will take into account the pieces that are here. As I said, the

precertification piece, I believe, will make a big difference when it

comes to being able to forecast what’s coming and being able to make

those kinds of calls when it comes to building into the

budget.

I think the other interesting piece, of course, with the film

industry…. I think, certainly, that this province has tried, as other

provinces have, to get rid of the “let’s play off each other” as we look

at how we attract the industry and how we, instead, build a base for

stable, long-term growth in our province. Other outside factors take

into account the kinds of numbers that we’re looking at as well. The

dollar makes a big difference. Has some jurisdiction offered a huge tax

break that then attracts industry that would have been here in that time

period? That’s the kind of volatility that I expect could continue, but

I certainly feel comfortable with the work that we’ve done and the look

at the precertification for these numbers.

T. Redies: Thank you, Minister, for the answer. Again, a 30 percent swing in

unforecasted numbers is a significant variance. That’s what concerns us

going forward, because if we continue to see swings like that, then

obviously that will eat into the ability of the ministry to balance

budgets.

[4:25 p.m.]

The minister…. I may have heard her incorrectly, so I apologize if

I did. I think she said that they were increasing the tax credits. In

fact, my numbers here…. Again, I could be wrong. It’s been a week or so

since I looked at them. What I have is that in fiscal 2019-20, these

credits are actually forecast to come down to $1.489 billion. Am I

correct? Why are they coming down? Again, is the minister sufficiently

comfortable that we are not going to see a significant swing upwards in

these tax credits going forward?

Hon. C. James: I can understand…. The piece that’s important to note in the

’18-19 year is that it included a prior-year adjustment, which was a

one-time adjustment. That’s about $174 million, so that has to be taken

into account. I think the other piece to note is that the rates were

adjusted in 2016, so the rates were lowered in 2016. That was a

negotiated agreement with the previous government and the industry to

lower the rates. Existing films, work that was going on, were

grandparented in. That, again, caused the blip that you saw in 2017 and

the increase that came up in 2018, when you’re talking about, again, the

lag that came in.

We expect when you take off the one-time accounting and when you

take a look at the rate adjustment flowing through now from 2016 —

because now you’ve had those 24 months, and that’s when we often get the

information — you’ll see that there’s a drop in 2019-20, taking into

account those two pieces and then an increase in the outer

years.

[4:30 p.m.]

T. Redies: Thank you, Minister. I guess I’m still not following, if there was

a known one-time adjustment, why that was not built into the original

budget.

Hon. C. James: In fact, I think what the member is asking is, basically, the crux

of the challenge that we’ve been working on with the industry. It was

expected — I’m speaking for previous governments — after the rates were

adjusted in 2016 that there would be lower activity. With the rate

adjustment that happened in 2016, that was built into the 2017 budget,

but instead, you saw an increase. That’s what’s occurred.

[R. Chouhan in the chair.]

That’s why you see the changes, and that’s why it was so important

to us to sit down and look at prior assessments, because, in fact, there

isn’t a good analysis, and there hasn’t been a good analysis in this

province around what productions are out there, what’s coming up and

what might be anticipated.

As part of our looking at how we do a better job of taking a look

at these numbers, that’s why we’ve had the discussion with industry. In

fact, it is exactly the crux of the challenge that we faced as

government coming in and looking at these numbers.

T. Redies: Thank you, Minister, for that answer. Just looking at the SUCH

sector now, in 2018-19 it was $549 million higher than the original

budget. Why is that? What caused those overages? Can the minister take

us through what controls she has in place to prevent runaway spending in

these areas?

[4:35 p.m.]

Hon. C. James: Just to speak about the SUCH sector — the health authority’s

post-secondary school districts, hospitals, etc. — a portion of the dollars in that budget come from grants

from the ministry. So that’s obviously something we control — whether we

give those grants or don’t give those grants. That’s about $200 of the

amount that the member was looking at.

Then the rest of the spending in this is own-source revenue.

Again, that would be spending controlled by the individual sectors, so

they would control that spending and how they determine to spend that.

They obviously have to follow rules around balanced budgets, etc., but

they have the authority to spend their own revenue, and a large portion

of that would probably be…. They don’t list specifics, but international

student fees for universities would probably be a large portion of the

own-source revenue.

T. Redies: Thank you for the answer. That’s a lot of international student

fees, if that’s actually what is happening. I mean, the reason why we’re

asking these questions, I think the minister can appreciate, is that

spending under this government is going up by $10 billion from the time

they took office to the end of this fiscal year.

[4:40 p.m.]

It’s really important that British Columbian hardworking taxpayers

know that this money is being spent wisely and is also being spent

prudently. I think we, on this side of the House, have some real

concerns that the pace of spending is unsustainable.

Minister, just with respect to the forest fires that we’ve been

speaking about, the minister mentioned that the government has increased

the budget to, I believe, about $117 million this year. But we know in

the last two years, the government has spent almost $1 billion fighting

forest fires. Is $117 million budgeted for forest fires really

realistic, given that we are actually expecting one of the hottest

summers coming up and given past experience?

Hon. C. James: I think, as the member knows, the forest fire budget that we had

the last two years, being the worst we’ve seen…. Before that, again, the

budget really fluctuated. That’s been a common process over the last

number of years.

Yes. I do feel comfortable with the number we have built in, at

$101 million. But I also think the other pieces to put in context to

support that are the prevention and resiliency dollars we added again.

We had money in the ’18-19 budget, but we also added on top of that

another $60 million for the prevention work. That’s a critical piece of

work that has been occurring, to be able look at everything from

clearing to the prevention work that is there.

[4:45 p.m.]

Then I think the other piece to note…. The member has mentioned

prudence in a number of different places. I would agree that prudence is

critical in a budget. In fact, it’s something that I have spoken very

strongly about as I’ve delivered the budgets that I’ve delivered as

Finance Minister.

If you take into account the three-year fiscal plan, we have $2.65

billion over three years built in the forecast allowance and

contingencies. In fact, in this year, forecast allowance and

contingencies at $1.25 billion is the highest level ever built in — ever

— in a budget, for contingencies and forecast allowance. I think that’s

critical, and I think that’s being recognized. If you take a look at the

rating agencies and their ratings for British Columbia, if you take a

look at the comments that are made, the recognition of prudence being

built into the budget is there and is, I believe, an important factor to

build in. I think we’ve shown that in our numbers.

S. Bond: I know that the minister is comfortable with that number when it

comes to fires in British Columbia, but I’m sure she’s also aware that

we’ve got fires in British Columbia today, and they are starting earlier

than anticipated. They’re going to continue to be an issue. So we will

continue to monitor the fact that, at some point, we actually have to

embrace assumptions in the budget that mirror, sadly, more of what is

realistically happening on the ground. I certainly can…. We have

certainly lived that fear in my constituency and across northern British

Columbia and other parts of the province. We’ll continue to look at that

particular line item.

I think my colleague has always done an excellent job of sort of

looking at the math behind the budget. We have significant concerns

about the sustainability of spending that this government is doing. In

fact, when you look at debt…. Yes, the minister is correct that bond

rating agencies have, at this point, been fairly positive. But let’s be

clear. This government inherited a triple-A credit rating and very sound

financial practice. There were also some warnings contained in the

latest triple-A credit rating which talked about policy decisions. Those

are the kinds of things that we’re going to be monitoring very

carefully.

In fact, for British Columbians, I think it’s always helpful to

look at…. When we talk about numbers — billions — British Columbians

often glaze over, but from a pragmatic perspective, when you look at the

three-year plan that this minister and the NDP have tabled, their plan

is to increase the total provincial debt in British Columbia at a rate

of…. When you do the math, it actually works out to about $403 million a

month that will be increasing in British Columbia. So we have some

significant concerns.

Maybe we can start with the minister. Can the minister confirm for

us that the federal government provided a $1.6 billion federal transfer?

Could she outline for us the reason that British Columbia got that

transfer and perhaps indicate whether or not she anticipates that that

would be something that would be repeated by the federal

government?

[4:50 p.m.]

Hon. C. James: I just want to make sure I respond to the member’s actual

question. Could the member let us know where she’s referred to the $1.6

billion federal transfer, where that number is in the budget that she’s

referring to?

S. Bond: Well, I think that’s precisely the point. I’m sure the minister

can confirm that