First Session, 43rd Parliament

Official Report

of Debates

( Hansard )

Tuesday, May 27, 2025

Afternoon Sitting

Issue No. 71

The Honourable Raj Chouhan , Speaker

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

Contents

Orders of the Day

Reporting of Bills

Bill M202 — Eligibility to Hold Public Office Act (continued)

Darlene Rotchford

Trevor Halford

Amna Shah

Peter Milobar

Jeremy Valeriote

Third Reading of Bills

Bill M202 — Eligibility to Hold Public Office Act

Bruce Banman

Darlene Rotchford

Committee of Supply

Estimates: Ministry of Finance (continued)

Peter Milobar

Hon. Brenda Bailey

Rob Botterell

Estimates: Management of Public Funds and Debt

Estimates: Other Appropriations

Estimates: Legislative Assembly

Estimates: Officers of the Legislature

Proceedings in the Douglas Fir Room

Committee of the Whole

Bill 15 — Infrastructure Projects Act (continued)

Kiel Giddens

Hon. Bowinn Ma

Misty Van Popta

Rob Botterell

Brennan Day

Proceedings in the Birch Room

Committee of the Whole

Bill 14 — Renewable Energy Projects (Streamlined Permitting) Act (continued)

Larry Neufeld

Hon. Adrian Dix

Trevor Halford

Donegal Wilson

Jeremy Valeriote

Scott McInnis

Jordan Kealy

Ian Paton

Tuesday, May 27, 2025

The House met at 1:32 p.m.

[The Speaker in the chair.]

Orders of the Day

Reporting of Bills

Bill M202 — Eligibility to Hold

Public Office Act

(continued)

Darlene Rotchford : I move Bill M202 entitled Eligibility to Hold Public Office Act, as amended, be concurred

in at report stage.

First, I’d like to thank all members of the Select Standing Committee on Private Bills

and Private Members’ Bills again for the discussion and examination of Bill M202,

Eligibility to Hold Public Office Act. More importantly, I would like to thank them

for making themselves available, under short notice, to help strengthen the bill by

amending the bill and addressing unintended drafting errors.

As I said before in this House and during the committee process, I feel it is an important

piece of legislation that deserves to move forward in a timely manner because it closes

a loophole most British Columbians likely didn’t know existed. To do either job while

representing our community municipally or provincially, it’s a full-time job. That’s

the expectation of the people who elected us.

There will also be, obviously, conflicts of interest that will arise on any issue

where jurisdiction overlaps between municipal and provincial responsibilities. I am

surprised, as I am sure many British Columbians would be, to learn that there was

a loophole in this province that allowed, for some people, what would have been called

double-dipping or holding both positions at the same time.

Again, I’d like to thank the Select Standing Committee on Private Bills and Private

Members’ Bills for their work on strengthening and improving the bill so that it will

do what it is intended to do and close the loophole. Many other provinces have.

Trevor Halford : I want to respond respectfully to the member that tabled this bill. It was the first

in one of our processes, and I think that that’s an important fact here.

The MLA mentions the word “loophole.” What I find in this is that we have had a government

side of the House that has completely manipulated an all-party committee because they

put in inadequate legislation. What did they do? When one member couldn’t attend,

they subbed one member in for one meeting. I’ve never seen that happen before.

[1:35 p.m.]

What did they do? They had the Attorney General then weigh in with correspondence

after we had done the committee stage, after we had presented and voted on amendments.

Then there’s panic that ensues. Then what did they do? They forced the committee to

go back — the first bill we’ve ever done — to fix the mistakes that were pretty much

obvious through Google searches.

Now, if the government was so intent on getting this bill through the House, which

they are today, you would think that they would be intent on actually getting this

right the first time, knowing the difference between Community Charter in local government

and, maybe, understanding that Vancouver has its own community charter.

We have now rushed through and put through amendments, through the government’s majority.

Again, we’re struggling with consultation in this House — no proper consultation done.

I don’t even think they consulted the ministers responsible for this legislation,

because we’ve heard nothing from the Minister of Municipal Affairs, and the Attorney

General weighed in past the point of no return.

So we see the panic that ensues. Quite frankly, it’s an embarrassment to be able to

manipulate a committee for one single bill that was fundamentally flawed from the

beginning. The amendments that have come through completely change that bill.

I find it astonishing. I understand the piece of legislation that they were attempting

to do. We on this side got it right. The member for Langley-Willowbrook did the due

diligence. She put forward a bill. There were amendments that were brought forward

on the government side, which we supported because they made sense. There was no manipulation

with that. Today is outright manipulation.

Amna Shah : I’m perplexed, absolutely perplexed and disappointed, to hear the member’s words.

It’s incredible that the member, in this House, in the last third reading, can yell

out and say that we wouldn’t take the AG’s recommendations, when clearly we are, and

can continue to attempt to stall the process during committee stage — when we’re trying

to get through the amendments that put the bill into what the member knows is now

good form and full well reflects the principle and the intent of the sponsor of this

bill.

Quite frankly, none of the members on the committee could say with certainty that

they understood that this did not include some of the municipalities, through which

the amendments were brought into the bill.

Interjection.

Amna Shah : Were you not there in that meeting?

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

minute and 30 seconds.

This type of flip-flopping is really rich.

Interjections.

The Speaker : Members.

The member will continue.

Amna Shah : The member wants to hurl insults at a Chair who has attempted to uphold the integrity

of the committee as it does its work. The member knows full well that, as the Deputy

Chair, the member has a responsibility, as well, to uphold the integrity of that committee.

Interjections.

The Speaker : Shhh. Members.

Please continue.

Amna Shah : Quite frankly, the flip-flopping, from what I can see, is really that of political

convenience. You know what? On this side of the House, our responsibility is to ensure

that we uphold the integrity with which we serve our province. I appreciate the sponsor

for bringing the bill forward.

The Speaker : Thank you. Is the member finished?

[1:40 p.m.]

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

Thank you.

The Speaker : Members, before recognizing the next member, for the clarity of members, I confirm

that Bill M202 has been called under orders of the day this afternoon. Under the standing

orders, we have up to six minutes remaining for report stage debate on Bill M202.

Peter Milobar : Thank you, Mr. Speaker. I will respect the time to make sure that the Green Party

gets up and speaks as well.

I just want to clarify a couple of things, because the Chair of the committee, who

takes great offence to us pointing out how bungled this bill was, seems to not understand.

Maybe it’s indicative of the mindset of this government currently and what they feel

proper consultation is.

The point being, first off, it’s not the opposition’s job to make sure that a government

bill is actually in order. Every time we do point that out, the government tries to

thwart our efforts.

Secondly, the government’s view of consultation is to go out and consult on a bill

that did not talk about the Community Charter. It’s not some communities; it’s every

single community in British Columbia that’s a municipality, other than Vancouver or

the Islands Trust, that falls under the Community Charter.

They were not consulted with the wording of the bill as it’s now in the form, so there

was not proper consultation out to the broader UBCM community. No wonder UBCM is adamantly

opposed to other things this government is doing and feels like they’re getting railroaded

all the time.

That is what we are talking about when we are talking about a bungling of this process

and a manipulation of the process: not having adequate and proper consultation once

the amendments were known, going back out and consulting with UBCM to find out what

their member municipalities actually felt about the bill, because they weren’t talked

about in the previous bill.

They can use the words “mayor” and “council” all they want. If they don’t reference

the Community Charter, municipalities would not have felt compelled to need to comment,

because they fall under the Community Charter. But the government’s rush and haste

to manipulate the processes got us to where we are today, instead of taking the time

to properly consult, based on those consultations, and then bringing the bill back

to vote.

I have a newsflash for the Chair. They have the majority. They were going to win the

vote. What they needed to manipulate to win the vote today was rushing through the

process and not properly consulting with UBCM.

That is the fundamental flaw of the process and the manipulation that we are talking

about here today.

Jeremy Valeriote : I’ll be brief. In all fairness, I have to say, I’m not seeing the manipulation, the

catastrophic impacts to the private members’ bill process that the opposition is talking

about.

This was not a perfect process. However, from the beginning, the intent was clear.

Whether it read Community Charter or Local Government Act, there was no ambiguity

about who would be disqualified from holding public office.

I’ve listened to the discussion, taken input from the entities that submitted their

input to the committee. I did want to delay the implementation of this until the next

local government elections. That amendment was not supported by government.

However, I still think that the process that this has gone through doesn’t change

the overall intent. It has flaws, but I’m not seeing that the flaws are fatal in this.

I have intended to support this. I think it’s a positive step. It does put us in line

with other provinces, and I don’t see the doom.

Obviously, a lot of lessons learned, in terms of private members’ bills, and it was

going to be a learning experience no matter how we did it. And yes, some advice came

late, but in the end, this has been adapted to where it needs to be, and it is now

in the right place to go to third reading.

The Speaker : Noting that the time has now elapsed for report stage debate, I will now put the

question on Bill M202.

The question is that Bill M202, intituled Eligibility to Hold Public Office Act, be

concurred in at report stage.

[1:45 p.m.]

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

Interjections.

The Speaker : You already called?

Division has been called.

Just to clarify, the member for Esquimalt-Colwood did call division. I could not hear

it at that time because of some other noise in the chamber, so that’s why we have

called the division. Thank you.

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

Members, the question is that Bill M202, intituled Eligibility to Hold Public Office

Act, be concurred in at report stage.

Motion approved on the following division:

YEAS — 48

G. Anderson

Blatherwick

Elmore

Sunner

Toporowski

B. Anderson

Neill

Osborne

Brar

Davidson

Kahlon

Parmar

Gibson

Beare

Chandra Herbert

Wickens

Kang

Morissette

Sandhu

Krieger

Chant

Lajeunesse

Choi

Rotchford

Higginson

Routledge

Popham

Dix

Sharma

Farnworth

Eby

Bailey

Begg

Greene

Whiteside

Boyle

Yung

Malcolmson

Chow

Glumac

Arora

Shah

Phillip

Dhir

Lore

Valeriote

Botterell

NAYS — 41

Sturko

Kindy

Milobar

Warbus

Rustad

Banman

Wat

Kooner

Halford

Hartwell

L. Neufeld

Dew

Gasper

Day

Block

Bhangu

Paton

Boultbee

Chan

Toor

Hepner

Giddens

Rattée

Davis

McInnis

Bird

Luck

Stamer

Maahs

Tepper

Mok

Wilson

Clare

Williams

Loewen

Dhaliwal

Doerkson

Chapman

McCall

Kealy

Armstrong

The Speaker : Members, the House will now proceed to third reading of Bill M202, intituled Eligibility

to Hold Public Office Act.

Third Reading of Bills

Bill M202 — Eligibility to Hold

Public Office Act

Darlene Rotchford : I move third reading of Bill M202.

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

Member for Abbotsford South.

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

As a former mayor, as a former councillor there are some problems, in my opinion,

with regards to this bill. It is actually a problem. Not only, as was pointed out

a few minutes ago, were there errors in rushing this bill through, but this is an

attitude of this government that they know best, and they are going to take autonomy

away from local municipalities and cities by pushing this through.

I have a personal example where I had said to my mayor, when I was elected, that I

would do everything in my power not to trigger a very expensive by-election.

[2:00 p.m.]

On the whole of it, people look at this, and they say: “You know what? Politicians

shouldn’t be allowed to collect two paycheques.” However, when those people also understand

that, in Vancouver, it’s a $3 million by-election — or close to $400,000, as it was

in my city — they go: “Well, that doesn’t make any sense. We’re not really saving

any money. It’s costing money. That’s money that could go into our parks, for our

kids. That’s money that could go into infrastructure that we need to repair.”

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

the cities and the municipalities.

This takes away the autonomy. I was whipped when there was a change in leadership.

I was told to resign, and it created a very bad feeling with the mayor and council

that I had at the time, because they did want to spend that $400,000 on better things

than a by-election.

This is nothing more than cheap political points. Quite frankly, there are far more

important things for this House to be working on and discussing than this.

I cannot support this bill, because it takes away the power of local cities and municipalities

to be able to make a decision as to what is best on behalf of the taxpayers in their

neighbourhood, in their cities, that are going to have to pay the bill. This takes

away a tool that they could work out with each individual case, and I just cannot

support it.

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

Darlene Rotchford : I’m grateful to have the opportunity to close debate on this bill. As a private member

who is the first to follow the new process of private members’ time, it was an honour

to bring my bill forward.

I will be supporting my bill because I do believe closing this loophole is very important.

I think your average British Columbian doesn’t know this exists. I can tell you, talking

to my four municipal local governments, they were quite surprised.

I had that conversation before I ran, because if you’re running and you’re serious

about running, you’re serious about this being a full-time job and you’re serious

about supporting British Columbians, you should be having those conversations. I didn’t

do so lightly. You’ve heard me here at the mic talk about my council and how hard

it was to leave them behind, because I had those working relationships and I love

the work I do for my community.

That’s why I ran provincially. I ran provincially to make this a full-time job to

better support the people in my community. Closing the loophole in this bill ensures

that everybody, not just my riding of Esquimalt-Colwood but across this province,

gets what they deserve, and it is an MLA working full-time in the best interests of

them. So I will be supporting my bill.

I feel really sad for a group that stands there and talks about doing the right thing,

called us out on this bill, are not supporting the bill because we made the fixes.

My intentions were very clear all along that this represents each and every area of

this province.

With that, I will thank again everyone who is going to support my bill and for all

British Columbians to know that this side of the House wants to make sure that our

MLAs are here, giving you 110 percent.

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

Motion approved.

The Speaker : Members, Bill M202, intituled Eligibility to Hold Public Office Act, has been read

a third time and has passed.

Hon. Mike Farnworth : In this chamber, I call the estimates for the Ministry of Finance, to be followed

by the estimates for the Legislative Assembly and officers of the Legislature and,

if we get through that, the estimates for the Ministry of Attorney General.

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

In

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

[2:05 p.m.]

The House in Committee,

Section B.

The committee met at 2:07 p.m.

[Lorne Doerkson in the chair.]

Committee of Supply

Estimates: Ministry of Finance

(continued)

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

Minister of Finance to read the vote.

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

Peter Milobar : I asked a few questions yesterday about potential cuts, leadership that might be

shown by the Ministry of Finance and the Minister of Finance in terms of efficiency

reviews or expenditure management. It was in regard to GCPE and their $3.5 million

advertising budget. No commitment from the minister of any type of action or direction

taken on something as basic as that.

I mention that because we have agencies of government across this province that are

having to make hard decisions based on funding envelopes in this budget provided by

the government. You have universities reaching out to us and indicating they have

massive strains.

You have school districts…. DPACs were on the back steps of this place yesterday.

The minister and the government can try to say that there are not cuts to education.

They can say that it’s up to districts to decide. Well, the districts are a creature

of this government. The districts get their funding from this government. The districts

are told what a large portion of spending will be based on contracts of teachers that

are primarily negotiated by this government. Yet they’re held to a balanced budget

by this government.

In my riding, when that district has to make the hard choice of cutting 80 jobs, 80

unionized workers, off the workforce, they didn’t have the luxury or the time to say:

“Wait for a first-quarter update on September 15.” They didn’t have the luxury of

time and saying: “Well, we’ll get to it in six or seven months.” They didn’t have

the luxury of time and saying: “Well, we’re working on it. We’ve booked it, but we’ll

tell you how, ministry, we’re going to balance our budget moving forward. Just trust

us; we’ll do it.” They actually had to make the hard choice.

[2:10 p.m.]

In Kamloops’s case, it’s a reduction of band programs. One is a gold-medal-winning

national band program from last year that has now been cut, is my understanding. Another

school is cutting their band program. There’s talk that they will dip into and no

longer have the travel fund available for coaches to be covered to go to provincial

competitions with their sports teams that might qualify for a provincial playdown.

The list goes on and on, as well as 80 support staff that got pink slips.

To the government, that’s not a cut in education. To the government, it’s okay that

a locally elected school board has to weather those costs and make those hard decisions

at the local level, staring down local parents.

Yet in this chamber, we can’t even get a clear answer from this minister on where

$300 million on a $94 billion spend is going to come from. A refusal. A complete refusal.

We literally just watched the government applaud and pass a bill that will trigger

in Abbotsford a $300,000 extra cost on a school district, a cost they aren’t asking

for, at a time when districts across this province are having to make cuts because

they don’t have enough funds coming from this government.

But they’re making those hard choices. They’re being upfront about it. They’re weathering

the heat at those public school board meetings, with the parents that are coming in

and pleading for the band program not to be cut, pleading that the programs for special

needs children don’t get cut. The district is saying: “Our hands are tied. This is

the funding envelope we’ve gotten from the province.”

It doesn’t matter how the government wants to spin it. That’s the cold reality in

those school boardrooms. In fact, the DPAC isn’t blaming the school districts, if

you listen to what they’re saying. In unison, they’re saying across this province

that they don’t have enough money from this government.

I say all of that as the backdrop to the complete lack of want by this government

to even remotely talk about what they’ve already booked, which is a $300 million cut.

They can try to spin it any way they want. It’s a cut. But they won’t say where; they

won’t say how.

The interesting thing is the way they’ve booked it on page 22, because the minister

likes to use the term: “It’s been booked.” We go from a subtotal of government expenses

of $95.215 billion, they subtract off the $300 million of these phantom savings that

they may or may not have, and they say we will now have a total expenditure of $94.915

billion. When I asked the minister last night if that would change the deficit if

they didn’t meet the $300 million, she said: “No, it wouldn’t.”

So I’ll ask this question a different way. Based on the numbers of total expenses

of $94.915 billion on page 22 and total revenue on page 23 of $84.003 billion, if

the government only finds $200 million in savings, will that not change the overall

calculation between total expenses and total revenue and actually see us go to an

$11 billion deficit, based on these two pages?

[2:15 p.m.]

Hon. Brenda Bailey : The member can talk about refusal all he wants, but in truth, the only refusal happening

is the refusal of the member to accept the answer. It is not uncommon to use a tool

like this. We’ve been very clear that this is an expenditure management tool.

This is an expenditure management tool which was designed intentionally to enable

judgment to be used by ministries to get the best outcome. We’ve talked about how

the tool was put in place. We’ve talked specifically about where the tool will be

applied. We’ve talked about how, obviously, if we have a larger result using this

tool, it will impact, and if we had a lesser result, it would impact. That is clear.

We have no concern about that, frankly, because the estimate of $300 million, $600

million and $600 million is achievable with the tools that we are using, and we feel

very confident in these results.

Peter Milobar : The minister says this is a very common way of doing this practice. Can the minister

say when was the last time the government showed a budgetary line item like this in

a budget?

Hon. Brenda Bailey : There are a number of examples. In B.C., it was used in 2009. A current example is

Quebec, which has booked $616 million in the 2025 budget.

Peter Milobar : Well, that certainly is pretty frequent, if we are going national and using a 16-year

time period. I’ll give the minister that, given that there are two references being

cited. That would be — what? — ten times 16, 160 provincial budgets just provincially;

and it has been used twice.

Just to get better certainty, then, on the $300 million being sought this year, is

the $600 million for next year this $300 million plus $300 million, or is it a stand-alone

$600 million? Then likewise, in the following year, is that a new and additional $600

million, or is it just a carry-forward of the findings into the next fiscal?

Hon. Brenda Bailey : It would be the three, carrying through to the six, carrying through to the six,

so not additional but continued savings.

Peter Milobar : So the actual bulk of the savings will be this year and next year. In year 3, it’s

actually no new savings. It’s that whatever was found in year 1 and year 2 will just

continue forward. Again, it’s not net new dollars we’re finding.

I ask this because we’re supposed to be on a path to a balanced budget. We’re talking

about finding, actually, $600 million of operational savings. On a budget that has

a $10 billion-plus operational deficit, $600 million is the net actual find that is

being looked at. There’s $300 million in savings in this year, an extra $300 million

next year, and that’s it, operationally.

[2:20 p.m.]

You can add them all together and yes, $300 million each year and then the extra $300

million so that you still get to the $1.5 billion, but that’s cumulative. The actual

impact to individual line items of expenses on page 22 is really $600 million of actual,

real, year-in, year-out spending by government.

Just so we’re clear, that’s the level of seriousness this government is taking in

tackling a $10.9 billion operational deficit: to find $600 million in operational

savings over a three-year period. Shocking when you look at what school districts

are having to find right now, in the here and the now.

The minister can say it’s not true all she wants. She literally just confirmed it

in her previous answer. And if I’m wrong, the minister can reconfirm, then, if she

is insisting.

Is the $600 million in plan ’26-27 the same $600 million in plan ’27-28, or is the

government going to find an additional $600 million in ’27 and ’28 the way it’s laid

out in this book and intended in this book now?

Hon. Brenda Bailey : It’s $300 million in savings in the first year, $600 million the next, $600 million

the next. This is ongoing reduction. These are very prudent numbers. They’re part

of our efficiency work.

The first part, as we’ve described, is the expenditure management. That’s where these

numbers come from. We know they’re achievable. We used the design of the expenditure

management to project the $300 million, $600 million and $600 million.

[2:25 p.m.]

Obviously, that would not be enough for us to get back to balance. That’s part of

the work. There are additional parts of the work to get back to balance, including

the review that we are doing now with all of the ministries. Every single ministry

is participating in this significant review. In addition to that, work to grow the

economy. So there are multiple things happening.

The member is specifically looking at the expenditure management program, which is

$300 million, $600 million and $600 million. Of course, each year, you add them together

for the fiscal plan of $1.5 billion.

If we’re able to continue to bring, and we will be, spending down, that will have

impacts over time. That is the goal.

Part 1, expenditure management.

Part 2, the ministry

reviews. That’s ongoing right now.

Peter Milobar : The point being it’s not a new $600 million that’s being found in the third year.

To use a round number, if something was at a $700 million expenditure this year, it

would drop to $400 million. It would drop to $100 million next year, and it would

stay at $100 million. There would not be a second area that was suddenly looked at

to find another $600 million.

On page 23, switching to the revenue side, have there been any significant concerns

the minister has on any of the taxation revenue side of that ledger that gets us to

the $84.003 billion? If so, what would those revenue sources be?

Hon. Brenda Bailey : Of course, with every budget, there are risks. We are two months into the fiscal

year, and there are puts and takes, of course, that occur throughout the year.

This particular fiscal plan has additional risk, obviously, because of global trade

and the uncertainty that comes with the moment that we’re in. I will share with the

member that some of the prudence and risks are outlined on pages 56 and 57 of the

budget.

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

Has the minister made any legislative changes since this budget was introduced that

might have any fundamental impacts to the taxation revenue listed on page 23? She

doesn’t seem to want to talk about the over $3 billion of carbon tax. I’m assuming

she’s still expecting to collect that from industry then.

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

Hon. Brenda Bailey : The numbers on carbon tax are as follows. In 2025-26, revenue would have been $2.76

billion, less the CATC — which, as the member knows, we cancelled — of $769 million,

and the net revenue loss before other offsets is $1.991 billion. Those are the actual

numbers.

It’s important to recognize that that amount is notionally funding programs. There

is a review going on, looking at other trade-offs that we might have to make from

having this revenue no longer available to us, but I want to back up to the bigger

view for a moment. In any fiscal plan, there are changes that happen to revenue and

changes that happen to expenses. This, obviously, is a significant one.

There are also significant pieces that have come forward in regard to the revenue

side. For example, through the work of our Attorney General and our Premier, when

he was in that role, there has been a successful outcome for the tobacco legal case

that we were involved in. We’re expecting more than $3 billion to come in, and it’s

just being looked at for how that accounting treatment will be.

All of that to say, yes, there are significant pressures on this fiscal plan. There

are also positive intakes coming in on the fiscal plan. This is important, and it’s

why we do Q1, Q2, Q3 updates. It allows us to flesh out new information as it comes

in, and we’ll have those updates, as we always do.

Peter Milobar : Just under $2 billion of net revenue loss. To be clear, then, what is the remaining

industrial carbon tax that is still projected to be collected?

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

Peter Milobar : What is the overall cost, in what gets paid out to industry? That’s the revenue side

of the carbon tax, under the OBPS and other programs that industry can tap into. There’s

also money outlaid to industry for emissions improvements. What is the cost of those

programs to industry?

[2:40 p.m.]

Hon. Brenda Bailey : What was taking us a little bit of time there is that OBPS and the programs that

are in place for industry…. This is not a tax question, so it doesn’t actually fall

under my ministry, but we’re happy to take this on notice and reach out to ECS for

information if the member would prefer that.

Peter Milobar : Well, I would have hoped there would have been modelling done when decisions like

removing a net $2 billion of tax revenue…. And the implications of that program-wide,

not only what it’s funding, what CleanBC initiatives were being funded by that $2

billion, but also on the industrial side…. Lots was being funded there. Heck, we had

contingencies last year dedicated to CleanBC, $320 million.

The decision-making was pretty fast to cut out the low-income tax credit. That’s the

only fast decision this government made in relation to removing of carbon tax.

When did the government start modelling the potential implications of removing carbon

tax from this budget?

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

Leave granted.

Introductions by Members

Hon. Lisa Beare : In the House, we have Wood Elementary School joining us with their teacher, Jeven

Gill. We’ve got 25 grades 5 and 6 students and their parent volunteers.

On behalf of the Minister of Health, who’s in meetings right now, I get to welcome

you. Thank you so much for joining us today.

Would the House please make them all feel very welcome.

The Chair : Welcome, everybody.

Hon. Brenda Bailey : I’ll join the member in welcoming the students from Wood Elementary. We’re in the

budget estimates for the Ministry of Finance. I’m here with a respected colleague

on the opposition who’s asking the Minister of Finance questions about our budget.

Thank you for being here.

[2:45 p.m.]

Debate Continued

Hon. Brenda Bailey : The question, as I understood it to be, is: when did we start modelling this out

for the budget? The answer to that is that we didn’t model this out for the budget.

This decision was a post-budget decision.

Peter Milobar : Did the ministry themselves do any premodelling around what would happen if carbon

tax would be removed, ahead of the minister becoming the minister?

[2:50 p.m.]

Hon. Brenda Bailey : There’s a reporting mechanism that goes throughout the carbon tax regime and its

history, including annual reporting through the climate change accountability report.

The member is asking about modelling specifically on removal of the carbon tax. That

modelling did not occur until we had the direction that we’re, in fact, moving that

way.

Peter Milobar : Well, that’s remarkable.

On page 59 of the budget book, we have changes that happened to the Income Tax Act:

an increase to Film Incentive B.C., introduce major production tax credit, amend regional

and distant location tax credits for animation productions, increase the interactive

digital media tax credit to 25 percent and make permanent. Those all together total

$53 million. In fact, there’s no actual material impact to taxpayers in this fiscal.

It’s actually next year’s fiscal that that $53 million would be an impact, according

to the government’s chart on page 59.

I say that because, when I asked questions about some of those tax measures on Bill

5, this is what the minister had to say:

“There are a couple things I would like to say in regard to this question. One is

my civil service associates have advised me that during the interregnum period, it

is very common for bureaucrats to work on all of the platform commitments from various

parties as they make them, knowing that whoever is elected, there will be a rush to

accomplish some of those commitments.

“So yes, there’s some work that was occurring even during the interregnum period in

a non-partisan, broad kind of way, I would say.”

There was apparently work being done in that period — in a non-partisan, broad kind

of way — on four or five tax measures that resulted in a grand total of $53 million,

and not even until next tax year, on campaign commitments that were only referenced

by one of the parties running. I checked. Our campaign didn’t make any of those commitments.

Yet, on something that collects almost $3.1 billion of tax revenue…. That was a political

hot button federally and provincially that saw the Premier do a 180-degree turn in

the space of a couple of months, from saying he would never back down and that if

the rest of Canada got rid of carbon tax, the NDP was going to $170 a tonne, to a

few months later, in the heat of an election, saying: “Oh no, no, we’ll get rid of

it.” Pretty clear the B.C. Conservatives have always wanted it gone.

The minister is trying to now tell us that the civil service was doing no non-partisan,

broad-kind-of-way work on campaign commitments around carbon tax and the potential

implication of removing carbon tax because, you know, there’d be a rush to accomplish

some of these commitments. No work was done on $3.046 billion worth of tax revenue

that both parties had committed to removing, but there was work done and preplanning

done on the impact of $53 million of film and digital tax credits that only one party

campaigned on and that actually don’t even hit the financial plan until next year.

Is that what we’re honestly supposed to understand is the level of preplanning that

was going on within government moving forward?

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

Hon. Brenda Bailey : The work to understand the implications of cancelling the carbon tax doesn’t really

require in-depth modelling, in fact. The numbers are quite straightforward, and those

numbers, as I mentioned to the member, are available through the annual reporting

in the climate change aaccountability report. Those numbers are available to us.

The hard

part is now, in fact, the careful work that’s happening on the other side

of it, the implications of not having that revenue on those programs that were notionally

funded by it, and that’s work that is underway now.

Peter Milobar : So is the minister saying, then, that the cut of over $1 billion to low-income households

was of no concern to the government, didn’t require modelling, had no economic impact

assessment done on what it would mean to those individual homeowners on the low-income

side of the scale? That was just a throwaway, easy-to-make decision that didn’t require

any advanced modelling because it’s pretty straightforward?

Yet trying to figure out how to balance off the needs of industrial users or EV rebate

programs or electric charging station programs or municipalities and their transit

funding needs that come out of carbon tax or bike paths, those are much more complex.

Those actually require months and months of study and a long-term thought process

by the government as to whether or not those programs will still be funded.

But low-income people, you’re on your own. We can just make that cut, and we don’t

have to worry about checking in and making sure we understand the impact to that household

on that cut.

Hon. Brenda Bailey : To the member, I couldn’t disagree with his characterization more strongly. To mix

the question of complexity of a financial decision through economic modelling and

suggest that that means that a policy implication is easy or not important or not

impactful…. You’re mixing two entirely different things.

Something can be relatively simple in terms of its math and deeply important and meaningful

in terms of policy, which obviously this is, and we took this very, very seriously.

We also looked very carefully at what the numbers were for people who were receiving

CATC and what the implications were, and we continue our very important work to ensure

that we’re addressing affordability in many other ways.

I reject the premise that, in saying that something is not complex mathematically,

it somehow equals not being important in terms of policy. This was deeply important,

and it was deeply meaningful. We understand that it had implications for people, which

is why we continue the really important work on affordability.

[3:05 p.m.]

Peter Milobar : Well, it’s not complex to decide whether or not to continue to pay for EV charging

stations. It’s not complex to decide whether or not to continue to subsidize EV sales.

It’s not complex to decide whether or not you want to continue to fund transit from

carbon tax or bike lanes from carbon tax. None of that is complex. All of that is

a straightforward, simple mathematical calculation. In fact, it’s at least $1.991

billion.

The simple math on low income was that it was a little over $1 billion. The implication

and the modelling which I was referencing that the minister said did not happen….

The minister can’t have it both ways. It’s not like there are other affordability

measures, after carbon tax was removed, that have been added for those in the low-income

side of the equation. This was removed from the basket of services and tax credits

and supports that they receive.

Any of those other measures the government was planning on doing while actually promoting,

in language around carbon tax going up in this budget book, those same supports for

low-income households to go up at the same time…. This is why I’m focusing in on the

carbon tax aspect of support for low-income households. The rest of it was happening.

It’s happening whether carbon tax is there; it’s happening whether carbon tax was

removed.

I’m asking about the modelling and the impact on the everyday lives of those low-income

people. The only decision this government seemed to make about the removal of carbon

tax revenue is removing the support to those low-income households.

So the minister, just to confirm, is saying that the quick and easy mathematical decision,

although obviously gut-wrenching for the government to remove that support from low-income

households, was to remove it without doing any economic modelling in a time of extreme

affordability crisis, at a time when we see food bank usage going up and up and up,

one would hazard to guess by the same people that get that low-income carbon tax credit.

There was no modelling done about the overall impact to that household by losing their

carbon tax credit. It was just a mathematical decision, as gut-wrenching as it was

to make that one decision. And we’ll have to wait, at a minimum, until the first-quarter

update in September to find out if anything else is going to change that carbon tax

is funding. Am I understanding that?

[3:10 p.m.]

Hon. Brenda Bailey : I just want to take a moment to talk a little bit about the reality of what people

were paying in carbon tax and what they were receiving, those who were receiving the

CATC credit.

Now, the reason that we designed this repayment to people who are most impacted by

the carbon tax is to provide a levelling out to ensure that the most vulnerable aren’t

having to experience this tax, and we structured the tax credit in that way. I’ll

share with the member opposite that the average family paid about $410 in carbon tax,

and through CATC, the average family would receive $485.

I’m certainly not saying that $75 a year is nothing, but it’s also important to recognize

that that’s the amount that we’re talking about.

Peter Milobar : Just to be clear for the viewers at home, when the minister says “we structured,”

this tax credit was structured back when carbon tax first came in. It went up every

time the carbon tax went up. So it goes back to the days of the B.C. Liberals. I believe

2008 would have been the first tax year that it actually came into effect, and it

continued on.

[3:15 p.m.]

Then it plateaued out when it was at $30. Then when the NDP got power and they started

to put up carbon tax, long before the federal government mandated it to go to $50,

it increased as it went up.

It froze the one year during COVID, when the then minister, Carole James, acknowledged,

essentially, that carbon tax does impact affordability. Under COVID, she was worried

about cost and impact. So they froze carbon tax for a year. Then the next year, apparently

not as worried about it impacting affordability, and the march went on.

Then the feds changed the rules, and we started to see the $15-a-year increases after

it got to the $50. So that’s the Coles Notes version of the history of carbon tax

in B.C. But the Low Income Climate Action Tax Credit has been around since the inception

of it.

My point is this. Decisions were made. You know, the minister has made it very clear

that, on other tax measures, the public service had no problem modelling out and thinking

about the implication of a tax change happening. Something as significant as $3 billion

— $3 billion, I would point out, out of just under $50 billion of overall taxes collected;

so about 7 percent of the tax revenues of this province — was openly being talked

about by both parties in a campaign. Yet there was no pre-modelling done by the ministry

to figure out what the implications of that would be.

Here we are — what are we? — almost three months post-budget being introduced, seven

months post-election, changed since April 1. That was brought in and rushed through

pretty fast — 14 hours worth of debate. With all those various timelines and checkpoints,

still no clear direction from this government on what they’re going to do on the missing

$1.991 billion worth of revenue.

By my math, at a minimum, that makes our deficit now go from $10.9 billion to $12.8

billion. We’ll continue on throughout the rest of the day to figure it out, because

bond-rating agencies have already pegged it at $14.3 billion. That didn’t seem to

bother the minister, who shrugged it off as not a problem instead of trying to defend

and explain why, no, it’s not really $14.3 billion because here’s our plan to deal

with the revenue shortfall.

I’ll likely come back to carbon tax in a little bit, but there’s a whole lot of revenue

sources. We touched on property transfer tax a little bit yesterday. That’s $2.247

billion. We established last night that the budget accounts for 13.2 percent of projected

sales growth, with an average price going up by 2.4 percent. The minister says sales

volume is actually 1.7 percent, not 13.2, and that sales are actually negative 3.6

in value percent, not positive 2.4 percent.

It seems like that will be…. I agree with them. The minister said, when I asked the

first question about sales volume and number of transactions: “Well, it also depends

on what the purchase price is.” I totally agree with that statement, except the purchase

price is 6 percent lower than we were projecting, as well, in the budget. It’s not

exactly the way you want those two numbers to go when they’re both tanking.

So you jump forward to page 27. Property transfer tax revenue growth is expected to

average 7½ percent annually over the next three years, consistent with expected annual

changes in residential sales values and an assumed response to the expected lower

mortgage rates. Well, we know the sales values are dropping, and we know the actual

sales volume is dropping and way below anything projected. However, the line above

it is property tax as well. That’s $4 billion.

Now, I recognize that not all of that will be lumped in with this. But its description

is: “expected to grow by an average of 5.5 percent annually over the next three years,

consistent with gross assumptions on housing starts,” which we know are lower.

[3:20 p.m.]

Yes, it incorporates speculation and vacancy tax increases, but those, as we saw on

page 59, really only account for $12 million this year and $47 million next year.

When you’re talking $4 billion, that’s not really what’s going to stabilize things,

one way or the other.

With the $4 billion of property tax, and recognizing not all of it is directly tied

to the housing starts, how significant a part do housing starts actually play in that

$4 billion worth of projected property tax revenues?

[3:25 p.m.]

Hon. Brenda Bailey : I do just want to begin this part of the conversation by reminding the member of

something I’m sure he knows, which is that we’re seeing volatility in the market.

It’s important, when we’re talking about an annualized budget, that we recognize that

just taking data from two months at the start of the year doesn’t really tell us the

full story. I just want to ensure that we’re recognizing that.

For example, yesterday we talked a bit about how housing starts are down. We also

know that we’ve got the numbers in for April now, and while housing starts were quite

low in the beginning of the year at 30,000, April housing starts were 53,000. The

number we used in the budget is 46,000.

We are seeing volatility, and it’s premature to make assumptions about what the year

will look like. Of course, this is what we track very closely, and again, it’s why

we report out every quarter on what we’re seeing in terms of both revenues and expenses.

The member asked specifically about how this revenue impacts the budget, and I’ll

bring the member to table A5 on page 138, under property taxes. On the far right-hand

side, there’s a sensitivity analysis in regard to property taxes, which I believe

the member was asking about. I’ll just read it out: “Plus or minus 1 percentage point

change in 2025 new construction and inflation growth equals up to plus or minus $30

million in residential property taxation revenue.”

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

to point to the charts.

[Mable Elmore in the chair.]

In terms of the overall other taxation areas, what studies have been done on tobacco

taxation? It’s kind of a static $450 million across the board. However, we’ve heard

repeatedly from industry…. Again, I’m not trying to be an advocate for big tobacco

by any means, but there is a very real-world reality out there of black market cigarettes.

We can pretend they don’t exist. We all know smoking is not great for you, but the

reality is, just like with illegal gaming, it’s a revenue hit to government.

What does the government typically forecast as the revenue hit of illegal cigarettes,

and how does that impact our tobacco taxation number over this budget and in coming

years?

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

Hon. Brenda Bailey : We’re talking about the black market in regard to tobacco and how we do estimates

on revenue from tobacco. I’ll tackle this in two parts.

First, it’s very difficult to get data for the black market. Of course, they don’t

fall under the same disclosure rules and we don’t have access to information, but

it’s important to know that we take this very, very seriously. In fact, within our

ministry, we have an enforcement branch that works on this. I’ll share with the member

opposite that on May 15, we had what the police described as a very significant amount

of illegal tobacco and cannabis confiscated. There was quite a significant bust.

As to how we do forecasting for tobacco, without strong data, obviously, from the

side of the black market, what we use are prior revenues that come to us through taxation,

through the legal market. That number, for ’25-26, is $450 million.

Peter Milobar : I guess I’m asking because when government is looking for every penny under the couches,

one would think that there’d be a cost-benefit analysis — and not just on the public

safety side, for obvious reasons, in terms of organized crime. These are not people,

dealing with illegal cigarettes, that are not tied in with some form of organized

crime somewhere. It’s a pretty large operation that happens across Canada and across

North America.

There’d be the public safety cost-benefit analysis, but one would think, given the

dire financial straits of a government that is now apparently running a $12.8 billion

deficit, that they’d want to be making sure that illegal activities that are taking

away from tax revenues were being properly investigated and cracked down on.

I’m hearing from an increasing number of businesses out there that they’re feeling

like they’re being targeted with PST audits and other audits. I’m not going to pick

one side or the other, but there definitely seems to be a feeling, anyway, that there’s

an uptick in that or a more aggressive attitude from the ministry, hunting for those

pennies under the cushions.

Then you have other operators, like the small businesses that run the corner stores

and gas stations and that rely heavily on tobacco sales. You can argue the merits

— the health, or not, of it. But it is a legal product, and they are allowed to sell

it under certain conditions. They feel they’re not being supported while they’re still,

in unison, being audited for other issues within the tax branch. They don’t feel they’re

actually getting much support on the enforcement side.

Has there been any direction? Have there been any enhancements to the enforcement

side with the ministry, around things like the caving of revenues due to the black

market tobacco that’s out there?

[3:40 p.m.]

Hon. Brenda Bailey : I can certainly understand the sentiment from the businesses that the member has

spoken to who feel that they’re doing everything right and by the rules, and they’re

held to account and paying taxes and being good citizens, and down the road, somebody

is selling tobacco illegally, and that’s really frustrating.

I’m happy to share with the member that, in fact, my reference to the May 15 significant

enforcement that occurred, occurred in Kamloops. I hope that the member can share

with the businesses that the member has spoken to that we take enforcement very seriously

and that we understand the concerns that they’ve raised, and they’re very valid. Perhaps

the member would like us to get some information about that particular bust, as they

say.

I do want to share with the member an answer to the question: have we seen an increase

in enforcement? In fact, we have reallocated internal resources to this investigations

unit within Finance to increase their capacity.

Peter Milobar : Moving on to cannabis revenues, what is the overall cannabis taxation revenue, net,

to government for this coming year, or at least anticipated?

Hon. Brenda Bailey : To the member’s question in regard to the cannabis revenue, I’ll share with the member

that this is a federal excise tax that is collected by the federal government and

then shared out. It shows up on page 141 under “Other federal contributions,” the

second line. B.C.’s share of the federal cannabis excise tax is $110 million.

Peter Milobar : How much of that has been agreed upon to go back to UBCM and municipalities? There

was supposed to be a funding agreement agreed upon with the provincial government

when cannabis first came in. What is slated to go back to municipalities this year?

[3:45 p.m.]

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

Peter Milobar : Well, that’s concerning. When cannabis was first introduced, that was the deal, that

there was going to be revenue sharing.

Is the minister saying that that agreement has never happened with UBCM and that there

has, in fact, not only never been cannabis revenues shared with municipalities but

that there’s absolutely no intention of the province to make good on that commitment

to share cannabis revenues with local government?

[3:50 p.m.]

Hon. Brenda Bailey : The member has said that was the deal, and that is not my understanding. The federal-provincial-territorial

agreement on cannabis taxation was signed in 2017. It did not outline any specific

requirements for the province to share cannabis revenues with municipalities, nor

was there mention of any such expectation included in the federal releases or ministerial

statements in regard to the agreement.

Peter Milobar : Well, it’s going to be news to UBCM that the government has changed their tune, because

there was very clearly…. It’s not the federal side. There was a commitment made, and

there were negotiations made. In fact, the current Transportation Minister, who was

then the Solicitor General, was frequently quoted talking about it. I know the former

mayor of Kamloops was always wondering when the agreement was going to be made.

I had assumed, with as many years as have passed, that the government had fulfilled

that commitment. It has been quite a stellar couple of weeks for this government with

UBCM. That’s for sure. I’ll move on though. Obviously, that doesn’t seem to be something

that’s going to be moving forward. I’ll leave it to UBCM to decide if they want to

press that any further or not.

In terms of the illegal cannabis side of the equation though, there’s a lot of talk

about grey-area cannabis, but my understanding is that you have to go through the

same government warehouse that you would for B.C. liquor. It gets shipped through

that. It gets tracked that way. You get a licence, set up your store, and you operate.

Now, private liquor stores operate the same way. They get licensed by the government,

and they move forward, and the government gets their revenues off that. A liquor store,

whether it’s operating in a municipal boundary or on reserve lands, would still need

those provincial licences. In fact, if they didn’t have those provincial licences,

every drop of liquor would be deemed to be illegal in that store, and they wouldn’t

last very long. It wouldn’t be open very long at all. I can say that as a former liquor

store owner. That’s what would happen.

Yet cannabis, which is regulated and controlled by the exact same organization in

government and operates the exact same way, seems to be treated differently. The on-reserve

stores do not have access to those government warehouses. They do not have access

to the government-controlled supply of cannabis. So by virtue, it’s not grey. Everything

in that store would be considered illegal under the law. But very minimal enforcement

gets taken, usually only if the host First Nation asks for some intervention to happen.

What is the lost revenue? Surely that’s been investigated by the Minister of Finance,

given they have the investigative crew with tobacco and cannabis. She mentioned cannabis

when she answered about the illegal tobacco. These are stores that are up and running,

physically there.

[3:55 p.m.]

We know what we’re taking in on the legal stores. We know roughly what is happening

for volumes in those illegal stores. What is the revenue loss that the Minister of

Finance has calculated, on a yearly basis, by not enforcing the rules as they pertain

to cannabis, unlike trying to enforce the rules as they pertain to tobacco or liquor?

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

a point of clarification.

The investigation unit within the Ministry of Finance does not investigate cannabis.

I previously mentioned Kamloops-area enforcement. We were involved because of the

tobacco side. It was work with the police, and they were involved in regard to the

cannabis and tobacco.

Also, it’s actually the CRA that collects the excise tax on cannabis, not the province,

so they’re responsible for the enforcement from the tax perspective.

In the province, the Solicitor General is responsible for looking at enforcement from

a legal perspective.

Peter Milobar : Just looping back, in terms of municipalities, it’s been a position of UBCM and a

discussion point with the government — 2018, 2019, 2020. The latest resolution is

2023. Last year was an election year, so it probably got lost in the weeds, but it

is not something that, frankly, should be a surprise conversation. Perhaps to the

minister, who I appreciate is new in her role…. I find it hard to believe or actually

shocked, frankly, that the ministry itself was unaware of UBCM’s desire and discussions

with the province over the course of, like, multiple years.

The pretty consistent ask and demand and discussion by the province that they were

at least entertaining and discussing the revenue split of the excise tax, the federal

tax…. I get it’s federal. But it’s meant to be a split of whatever comes to the province,

so that is a concern.

[4:00 p.m.]

Some of these I’m just pointing out because, again, it’s the minister talking about

trying to find efficiencies, trying to find the pennies under the couches and all

of those great buzzwords, while we’re staring down the barrel of a $12.8 billion deficit

and counting. We know that a property tax of $4 billion may or may not have some changes

to that, but the property transfer tax at $2.2 billion very much looks like it’s in

trouble, based on how it gets calculated differently than the property tax gets calculated.

Yet we have school districts held to a very high standard of balancing their budgets,

regardless of what cuts they need to make with the revenues they’ve been provided,

by the provincial government, in this budget. We have municipalities that are seeing

a drop in their local gaming host community grants, as we established last night when

questioning B.C. Lotteries, somewhat connected with the proliferation of illegal online

gaming happening and the impacts that has on bricks-and-mortar in those host communities.

We have municipalities that have been walked away from with a conversation around

cannabis excise revenue share. We have municipalities that don’t know what’s going

to happen on the carbon tax side of the equation when it comes to things like active

transportation, bike lanes and potential extra transit funding or not — all things

that this government has repeatedly pointed to, as carbon tax paying for.

No certainty, no clarity, no clear path: “You guys just figure it out.” Yet when we

try to ascertain where any efficiencies or cuts are happening, in real time with this

government, we get met with: “It’s a work in progress.”

Every other jurisdiction that falls under the watch of this government is expected

to do it immediately, do it right away, and the only definitive decision this government

has made on anything has been to remove the carbon tax in a 14-hour period, and then

the only thing they removed, from that revenue drop, is the tax credit to low-income

people in this province.

There’s a lack of concern around credit downgrades by the minister. What is the impact

projected to be to our debt borrowing costs, in the long term and the short term,

for B.C., with those credit downgrades and the trajectory of our debt that’s in this

budget?

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

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

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

[Mable Elmore in the chair.]

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

the Ministry of Finance.

[4:20 p.m.]

Hon. Brenda Bailey : Bringing us back to the question at hand, the member has asked about the downgrades

that we experienced: what they were and what the implications are and how it’s been

impacting our borrowing costs.

S&P and Moody’s downgraded us on April 2. Two other rating agencies did not choose

to downgrade but did change their trajectory to negative in terms of long-term view.

We’ve been working very hard on our relationships with investors, on our bond tour

and, also, with the relationships with the agencies.

The way that it’s measured in terms of the borrowing cost is really against Ontario.

Ontario is considered the benchmark province, and we actually haven’t seen a negative

impact to our borrowing costs. In fact, our borrowing costs have gone favourably in

our direction by 1½ basis points.

Peter Milobar : So it hasn’t impacted it yet. If it did impact it throughout the rest of this year,

if it added, say, $100 million…. Again, I’m just using a round number — the minister

can use whatever order of magnitude number — more for illustrative purposes than anything

else.

If it impacted by $100 million, say, in borrowing costs in this fiscal year, to keep

all things being equal, then on page 22, does that mean that the government would

need to find $400 million worth of savings? Or would it just absorb it in the overall

operational costs and see an extra $100 million added to the $12.8 billion deficit

that we’re now at?

Hon. Brenda Bailey : No. Just no, in regard to how the member framed this question. This is not a yet.

We are fully engaged in the issuance of bonds. We’ve already issued $6.6 billion in

Canada, and we’ve had outstanding reception. We also have issued the equivalency of

$2.7 billion Canadian in euro bonds, again to outstanding reception. So no, I’m not

accepting the member’s premise for the question.

The reality is that, while we have experienced a downgrade, it is also true that the

entire world is being impacted by what’s happening with the tariffs.

[4:25 p.m.]

The member makes a face about this, as if the tariffs aren’t happening. They are happening.

They are having implications worldwide, obviously, including in the bond market. British

Columbia is comparing very favourably, as indicated by these issuances.

Peter Milobar : The minister might not want to play poker with me, then, because I wasn’t making

a face about the tariffs.

At any rate, tariffs would absolutely have an impact on the budget. We’re not disputing

that, but they’re not showing up anywhere in the budget in this moment in time anyways.

We can only work with the numbers and the information that we have in this moment

of time with this minister.

We have a $12.8 billion deficit. We have projected corporate taxes dropping. Was there

any modelling done around the CFIB requests around, I think, steps that could be taken

to make small business and medium-sized business more competitive in B.C., particularly

around things like removing PST on equipment and inputs?

I mean, it was good enough during COVID, yet again. We had a carbon tax freeze during

COVID to help with affordability issues. We had PST removal on equipment to try to

spur on reinvestment and help stabilize industry. Now we’re in the middle of a tariff

crisis that some in government have tried to liken, well, to World War II. Others

have tried to liken it to the COVID crisis. We’re not seeing the same type of measures

being taken.

Now, we did see carbon tax completely removed, but let’s face it, that was grudgingly

done and that’s what’s got us to the $12.8 billion deficit we’re staring at right

now. The real question is around, you know, trying to reinvigorate and listen to our

business community. We don’t seem to have very many tax measures in this budget.

One would assume there was some modelling done. Was it done on the CFIB recommendations,

which have been pretty consistent for a few years now? If so, what was the outcome

of that modelling, and why was it not part of this budget?

Hon. Brenda Bailey : I’ll answer this question in two parts. The first

part is there was modelling done

on the deficit, and that number is 10.9. I would appreciate it if the member would

stop his misinformation campaign and use the actual number of the deficit in our budget,

which is what we are discussing today, and that number is 10.9.

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

[4:30 p.m.]

In regard to the question about CFIB and meeting with small businesses, we take very

seriously the thoughtful recommendations from the business community, and I enjoy

a positive relationship with the CFIB.

We met quite recently. We’re just looking up the date. It was in March or April. I’ll

share with the member opposite that I worked closely with the CFIB and with GVBOT

on their recommendations — adopted not this budget, the prior one — in regard to changes

for the EHT, which was the most important and pressing request coming from business

at that time. They had made that very clear to me when I was at JEDI.

We didn’t do budget consultations this round, due to the election, but I’ve had the

opportunity both to meet with CFIB and also, just last week, with BCBC to listen to

their recommendations on taxation and other issues of importance to the community.

Peter Milobar : Well, the minister seemed to take great umbrage with me stating a $12.8 billion deficit,

so I feel I’m compelled to correct the record, then, based on her strong words there.

My comments were based on the fact that on page 1 we have a $10.912 billion deficit

in this budget book. When you take the answers of today….

Again, the minister is fond of talking about a moment in time. Well, in this moment

in time, with this budget, the minister very clearly stated that we have $1.991 billion

of carbon tax revenue that there have not been cuts to spending for. There has been

no attempt to make up the difference one way or the other. They can’t point to it.

I’m not even talking about the $300 million that’s notional, just the $1.991 billion

in carbon tax revenue, so I would like to correct the record. It’s not actually a

$12.8 billion deficit. It’s a $12.903 billion deficit, if we want to get accurate.

The minister can point me to where the $1.991 billion in lost revenue of carbon tax

appears. I’m not even putting in a number anticipating the caving of the property

transfer tax or other things. These are strictly just adding the minister’s own answer

around carbon tax revenues.

She can take great offence to it all she wants. I will correct the record. It’s not

a $12.8 billion deficit; it’s $12.9 billion. Who knows how much it’ll grow by the

end of the day?

[4:35 p.m.]

It’s interesting. The minister keeps trying to lecture us and tell us that it’s all

about a moment in time and that we must stick to this book. Yet they have no problem,

the government, talking about other programs or things that have happened after this

book. It makes it a little bit difficult to try to deal with the budget estimate with

a minister that’s not forthcoming.

Now, I want to quote a Finance Minister: “The moment I had reliable information to

bring before this House, information that may not be politically advantageous, as

the members opposite no doubt realize, I brought it before the public and before this

House. I am committed to being forthright as a Minister of Finance, whether it favours

me or does not favour me. I have done that here, and I am damn proud of it.” Andrew

Petter, July 2, 1996. That was from a series of fudge-it budget quotes that I have.

The point being, to Mr. Petter’s credit, at that time, based on that quote, he was

at least attempting to acknowledge that massive changes were happening. I could talk

about other quotes that he has on the 1996 NDP budgeting process. But there was acknowledgement

of shifting in projections and assumptions.

Now, I didn’t press the minister for a firmer number on property transfer tax last

night or today. I accept that the market is going to keep moving around, so it’s not

reasonable to think that the minister could give us a more updated number today on

the property transfer tax of $2.247 billion. But there is a pretty safe assumption

that that’s not going to meet its target, just like there was a safe assumption when

the first target was set in the first place when this budget book was made.

I haven’t added that to the $12.9 billion deficit that this minister seems so offended

by, but it’s her numbers. It’s her book. It’s her book she has changed as of April

1. It’s her book that she confirmed today on carbon tax, in particular, a revenue

drop. The minister can suddenly now try to pretend there’s not a $1.991 billion hole

in revenues, but there is.

Is the minister now saying that there is not a $1.991 billion drop in revenues of

carbon tax, net drop, in total contradiction of her answer in this place an hour or

two ago?

Hon. Brenda Bailey : Where I take objection to the member’s approach of making up a number that he is

now referring to as the deficit is that it implies that that is in fact the deficit

in this budget. The member is asking very specific questions that feed that argument.

There are puts and takes that happen during a fiscal year. The member is highlighting

some of the risk.

Absolutely, there is risk in this budget — absolutely; and we’ve been discussing it.

But there are also areas where we’re going to see revenue increases. We’ve already

identified the tobacco win, for example. That’s not part of the member’s calculation.

There are other areas where we will see revenue lifts.

It’s not back-of-the-napkin work to determine what a deficit of a province is. This

is serious stuff, Member, and we take it very, very seriously on this side of the

House. The correct way of things is to rely on the intelligence before us, which tells

us the deficit is $10.9 billion. Then, as we have the information from the next quarter

and it’s modelled in, we revise those numbers based on facts, not based on things

that are chosen politically to make an argument, which is what the member is doing.

That’s why I take offence to it.

The actual deficit number for the province of British Columbia this year is $10.912

billion. That is the number we’re talking about.

The member knows that we are underway with deeply important work to reduce spending

across government. The member knows that we are making reviews of programming because

of the offset of the carbon tax. That’s not part of the member’s calculation.

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

[4:40 p.m.]

Peter Milobar : Well, it’s not politics. We’ve had the better part of two days already, and we still

have a couple hours to go today. I have asked repeatedly where the $300 million in

savings that’s been booked is going to be found in this budget and have been stonewalled

on that. That’s not politics. That’s the minister refusing to answer questions about

expenditures.

The government actually has more control over expenditures than over the revenue side.

The government refuses to even say where they’re going to come up with $300 million,

yet we’re supposed to believe that they’re going to magically somehow offset $1.991

billion in carbon tax revenue.

The minister can talk about the tobacco claim. Great. B.C. won in court. It’s $3.7

billion over an 18-year payout. It’ll be about $200 million a year.

Can the minister then confirm that we’re getting all $3.7 billion? Every news report

I have seen says it’s an 18-year settlement, and B.C.’s portion of the $32 billion

will be $3.7 billion in the settlement. Or were all those media reports wrong? Because

now that the minister is going down the tobacco settlement road as somehow going to

magically fix our structural deficit…. Even if it was a $3.7 billion one-time payment,

that still leaves this government — what? — $9 billion in the red.

So what exactly are the terms of this tobacco settlement that is supposed to be the

saviour of this budget, when the minister is so opposed to me talking about the revenue

loss of carbon tax added to the deficit, when she’s unwilling to show any substantial

areas of revenue growth or expenditure decrease in this budget at the same time?

Hon. Brenda Bailey : The example that I gave of the incoming revenue from the tobacco settlement is an

example of the fact that there are also revenues as well as increased expenses.

Now, the member has received answers from me on every question the member has asked,

and I’ve explained how we are doing this work. You know, a one-time settlement isn’t

going to solve the deficit problem that we’re in. The work that we are doing is going

to solve the deficit problem that we’re in, and I’ve described it to the member. I’ve

pointed it out on page 20. We are under an efficiency review. We already have booked

$300 million. We’re doing deep work across the ministries in order to bring down the

deficit.

The member might scoff, but this is important work. We’ve made a commitment to British

Columbians that we are going to be on the path to balance. That is the work that we’re

doing. Yes, I find it difficult when the member makes up numbers that are not reflected

in the actual numbers. Our deficit is $10.912 billion. There is significant work underway

for us to reduce the deficit over time, and that is happening. There is work underway

to address the loss in the carbon tax revenue. That work is happening.

Throughout the year, there are challenges with revenue. There are benefits to revenue.

There are additional expenses. Things change within a fiscal year. That’s why we report

out every quarter. To draw on those numbers and refer to them as an updated deficit

number is completely appropriate, but to draw your own conclusions from small examples

is not appropriate. That is not a deficit number. A deficit number is based on fact,

and the facts are that the deficit currently projected for this year is $10.912 billion.

Peter Milobar : Well, it’s not. It just fundamentally is not. It’s a deficit projected on projections

and assumptions that have already been blown out of the water. Property transfer tax

is not a relevant number in this book, and I’m not even pressing on that one, because

I recognize that it’s only a two-month sample size in this fiscal.

Carbon tax was a policy choice by this government to remove net $1.991 billion of

revenue. It’s no longer an assumption. It’s done. It’s quantified. The minister gave

the number. It’s not that it might be slightly slower fuel consumption, so instead

of the $950 million of fuel consumption tax we’re down to $910 million fuel consumption

tax, but if it gets a little busier with trucking and everything else, maybe it bumps

back up to $960 million in the second- or third-quarter update. That’s not what we’re

talking about with carbon tax.

We’re not talking about property transfer tax that might have a rebound in the second

half of the year and still get back to closer, which is why I haven’t added that in

to the $12.9 billion deficit. We’re not talking about the projected personal income

tax, corporate income tax, employer health tax that could still whipsaw a little bit.

[4:45 p.m.]

We’re talking about carbon tax. I’ve added that directly because the minister is unwilling

to say if electric vehicle charging stations will no longer be funded with carbon

tax revenue that’s gone — bike lanes, transit, EV vehicle rebates, whether or not

that is a savings.

We couldn’t even get an accurate number out of the minister on what the cost back

to industrial suppliers that were being paid for by carbon tax would be, so whether

or not the $286 million in carbon tax they will still pay is a net positive or if

we’re actually providing $300 million worth of grants back to industry. We couldn’t

get that number today, in this moment in time.

In this moment in time, we know there’s $1.991 billion of revenue gone out of the

$49.699 billion. In fact, that number would be different because it should be the….

Well, that’s less the $2.8 billion. We know that. These are the minister’s answers,

not mine. I didn’t create the $1.991 billion number. The minister gave that to me

today as a net negative revenue to government. There was no other option, based on

the amount of times I’ve asked questions about where other cuts in spending would

be, than to say it’s a $12.9 billion deficit in this moment in time.

The minister can correct me on the first-quarter update. That moment in time might

show something different over the next month, but it’s only one month to go, and then

those numbers are locked in. The first-quarter update might not happen until September

15. It might not be released. My bet is it gets released on the Friday of the long

weekend, try to bury the story a little bit ahead of time. We’d love to be proven

wrong on that.

In this moment in time, that’s all the information this government and this minister

have provided us to operate on. For the minister to get offended that we would suggest

a $12.9 billion deficit, when Moody’s is saying $14.3 billion in their projections….

I guess bond-rating agencies don’t know what they’re talking about when they look

at budgets either, or understand budgeting, as the minister seemed to indicate. Yesterday

she thought I didn’t understand how budgeting works.

Until the government can show, with credibility, revenue projections that are far

exceeding any of their assumptions in this budget book, or spending that has been

reined in, in this moment in time there is no other option than that it’s a $12.9

billion deficit as we sit here today.

Can the minister point to any one of these tax revenue lines that has significantly

been exceeding the assumptions and the revenue targets over the first two months of

this fiscal?

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

Hon. Brenda Bailey : The member and I are engaged in a challenge of timelines, largely. The reality is

the work that’s underway is going to be reflected initially in Q1. When the member

takes one side of the ledger and argues that doing the math that he’s done is the

new deficit number, it doesn’t account for the work that we’re doing and it doesn’t

account for any puts and takes that come on the expenditure side or on revenue.

Now, I want to point out two things. I recognize that the member is frustrated hearing

about Q1, and waiting is hard. I am seeing already the results of the work that we’re

doing on expenditure management. I will share with the member, just in the last week

I have had two meetings with private sector vendors who have come to me with concerns,

concerns that I take very seriously, concerns because they’re seeing such a decline

in their revenue due to government making choices because of our expenditure review.

One is in the transportation sector, and the other is in the advertising sector. One

decline was 30 percent, and the other was 50 percent. These are two of the areas that

we’ve asked government to focus on to reduce spending. Now, it’s important to us that

we work with the private sector to make sure that the changes that we’re making in

government are not causing unintended consequences. When we talk about being careful

in the work that we’re doing, that’s part of it, frankly.

But I know that we’re having impact. I know that we’re having impact within government,

within the efforts to bring down these costs. They will be reflected in Q1 and the

quarters after. It’s important work. We’re doing this carefully. We’re doing this

very thoroughly. The fact that I see these results coming in, you know, counters what

the member is doing with his back-of-the-napkin math.

I also want to point out — and this was an answer that was provided — that people

can see we’re serious about this work. Despite the two downgrades that we received,

one from S&P and the other from Moody’s, we are not experiencing negativity from those

downgrades. In fact, as I’ve said, our offerings, compared to Ontario, which is considered

the baseline, are favourable to the point of 1½ basis points.

That is because of a couple of different factors: (1) of course, the reality of what’s

happening in the world and how B.C. compares. And B.C. compares favourably. That’s

good news for us. It’s also, I believe, because we’ve met with them. We’ve gone on

these bond tours, and they can see how serious we are about deficit reduction. This

is serious work that we are doing.

I think it’s important that those factors are taken into consideration, but I look

forward to the member’s next question.

Peter Milobar : Well, that’s astonishing. So a week ago the minister met with advertisers who expressed

concern about a cut in advertising spending. Twelve hours ago, 24 hours ago the minister

refused to say if GCPE had been directed to cut any advertising money.

Today, after hours of asking for examples of the $300 million in savings that are

supposed to be getting found, magically, advertising has been cut to the point that

suppliers are getting hold of the minister and having a minister-to-supplier, face-to-face

meeting about said drop in revenues, because it’s that significant of a drop.

[5:00 p.m.]

Can the minister confirm today what she was unwilling to confirm yesterday, that GCPE

has cut their advertising budget or been directed to cut their advertising budget,

or is the minister talking about some other form of government advertising out there?

Hon. Brenda Bailey : We’re talking about that $300 million and the expenditure controls. As the member

understands, we have the efficiency review of two components: one being the expenditure

controls, the second being the program reviews. The expenditure controls across government

include — as we mentioned yesterday, when we went through the different STOBs that

were included — advertising.

Peter Milobar : Why did the minister refuse to acknowledge that yesterday under direct questioning

around advertising budgets and if any cut was going to happen to advertising budgets?

I asked repeatedly. I highlighted that GCPE is directly under the minister’s control,

that they have a $3.5 million advertising budget. It would show leadership to the

rest of cabinet and the rest of government. The answer was: “No decisions have been

made.”

Today we get a completely different answer. How are we supposed to be doing our jobs

as opposition if fundamental questions like this continue to change day by day?

Hon. Brenda Bailey : We’re talking about two components: expenditure controls and program reviews. Expenditure

controls…. I read out to the member yesterday the STOBs that were covered and included

some advertising.

The member was asking specifically about GCPE. The GCPE, as part of our program reviews

within the Ministry of Finance — that is work that is underway. It’s a separate category

that the member is asking about. That is work that is underway. It’s not being directed,

in terms of the exact number, but we are working with every single ministry, mine

included, to review all of the opportunities and to make decisions on that. That work

is happening right now.

Peter Milobar : Is the minister suggesting…? I mean, surely to god there’s a little bit of good faith

here in the context of the questions. And I’m waiting for the Blues to get delivered up to me.

I’m asking about advertising; I’m asking about GCPE specifically. You have the head

of GCPE here advising you. The answer I get back is that all STOBs are being looked

at, but all ministries have those same STOBs. I then ask: “Are there any specific

ministries under specific STOBs that are being asked to do more or less?” The answer

is no.

[5:05 p.m.]

We asked specifically about advertising. The minister clings to the fact that I was

only asking about GCPE advertising under that specific STOB for GCPE and the direction

to overall government and then hangs her hat on saying, “Well, but under those STOBs,

other ministries have advertising savings that they can find too.” That is what she

is saying today. And: “GCPE is still under review.”

The opposition and the public are supposed to think that’s a reasonable, straightforward

answer from a minister that very clearly ought to have known exactly what I was driving

at when I was asking questions about advertising yesterday, a minister who’s taking

great umbrage with the fact that I’m calling it a $12.9 billion deficit because she

can’t show any actual direct savings after hours and hours of asking.

In fact, we’ve started down this rabbit hole yet again on advertising, chewing up

even more time on estimates, covering old ground with the minister that completely

avoided the first question I asked three questions ago, which was: can the minister

point to any revenue source on page 23 that in the first two months of the fiscal

has already dramatically shifted enough that gives the minister confidence to say

that in the next month, when this first quarter ends, that $1.991 billion of lost

revenue will magically be made up in any significant way to avoid a $12.9 billion

deficit? We already know they’re obviously not achieving it on the expenditure side.

Since the minister seems to want to be very, very accurate, I’ll start at the bottom

and work my way up. Commercial Crown corporations net income — B.C. Hydro, Liquor

Distribution Branch, B.C. Lottery Corp., ICBC and other combined — is $4.011 billion.

Does any one of those components of commercial Crown corporations net income over

the first two months of this fiscal seem to be trending in a way that will dramatically

exceed the revenue projections and assumptions that went into that $4 billion in the

first place?

[5:10 p.m.]

Hon. Brenda Bailey : As the member knows and as I’ve said repeatedly, we don’t have the numbers for this

year, Q1. However, I think the member brought up the example of Crown corporations

revenue, and it’s an excellent example.

Let me point out to the member the type of volatility we see in revenue projections.

This is ’24-25. In the Q1 update for Crown corporations total revenue change, it was

up $247 million; in the fall 2024 update, down $322 million; in the Q3 update, up

$1.420 billion. Total change was $1.345 billion to the positive.

Again, there is volatility in revenue as well. That really speaks to the point that

I’ve been trying to make to the member that by choosing specific things and not waiting

for Q1, which captures a broader picture, it’s not a fulsome representation.

Peter Milobar : It doesn’t sound like anything…. Again, housing in the first two months has trended.

There are trend lines, and that was the question, around trend lines and assumptions:

is it exceeding or below trend lines that were in the budget?

Housing had trend lines, 13.2 percent and 2.4 percent. We know it’s now at 1.7 percent

and negative 3.6 percent. That’s trending negative on the property transfer tax side

of things. But we can’t put a number on that, and I accept that.

I didn’t ask for an exact revenue change of the assumption. What I asked was: within

the commercial Crown corporations, has there been anything to indicate a substantive

change over what was already made in the assumptions to create this budget book? It

sounds like the answer is no.

I’ll ask about contributions from the federal government. Health and social transfers

and other federal government contributions total $15.277 billion. Has there been any

substantive change or indications in the first two months of this fiscal that any

of those transfers from the federal government are expected to significantly change,

positively or negatively?

Hon. Brenda Bailey : The member misquoted me and said that the answer is no, that we don’t have the information

on Crown revenue. That is incorrect. The information is not that there are no changes;

the information is that we do not have this information yet. It will be in Q1, which

is what I have been saying again and again.

For the member to say there has been no change, it’s not correct. This will be captured

and expressed in Q1, when we have the data.

[5:15 p.m.]

Peter Milobar : The question is about trends and assumptions. Most of these areas would have monthly

trends and assumptions associated with…. It’s not just the real estate industry that

does that. We’re talking about billions of dollars being tracked by government.

Businesses submit PST returns regularly. Income taxes and corporate income taxes get

filed, get updated. There’s back-and-forth with the federal government. Yes, there’s

about a 20-month lag on the final reconciliations that move forward, and that creates

some of the swings on corporate and personal income taxes. I fully understand that.

The question is about assumptions. The minister is completely offended that I keep

saying it’s a $12.9 billion deficit, but she can’t point to anything to discount that.

The reason I’m saying that is not to be antagonistic. It’s because the minister has

made it very clear that there is a $1.991 billion hole in revenues created because

of government policy, not government assumptions, not time lags of income tax, not

outside market forces.

Government made a decision, apparently, that was in both parties’ campaign promises.

It had no modelling done, no assumptions being done by government, despite the minister

previously saying, during Bill 5 debate, that that work actually happens during an

election with the ministry, behind the scenes, in a non-partisan kind of way.

Pretty large election promises being made by both parties. No modelling being done,

no work being done ahead of time on how to offset. And the minister now, just as the

Premier is, is fond of saying over the last week and a half: “Just trust us.” A month

to go in this quarter: “Just trust us. We’ll give you all the information on September

15.”

Then, after repeated questions about the most basic thing, like a $3½ million advertising

budget, the minister references, on day 2, that maybe there has been a little bit

of a cut to advertising, but just not GCPE’s advertising, because that was a completely

different STOB area, even though the minister didn’t want to talk about any specific

STOB areas that were referenced by her in these budget estimates.

We have an evasion of answering whether or not there’s been…. By not answering, and

me assuming that means there has been no…. I’m giving the minister the opportunity

to say: “Yes, there has been a large shift in our projections on commercial Crown

corporation income. We’re seeing that Lotteries is doing much better than we thought.

ICBC is doing better than we thought. B.C. Hydro, you name it.” And the only reason

it went up was that B.C. Hydro last year was projected to be at zero, break even,

and then they found some money.

Government transfers last year were projected to be $14.446 billion. According to

this budget book, this snapshot in time, it’s $14.189 billion. It has actually dropped.

Natural resource revenues last year were projected to be $3.015 billion. According

to this budget book, they’re now $2.334 billion for the updated forecast of ’24-25.

Again, I’m getting the first number from their budget book from last year.

Assumptions, projections. I agree with the minister, they can move, but they’re not

moving by much.

Where it did move was in personal income tax and corporate income tax, and those numbers

do have to wait for the quarterly updates. With a 20-month lag and a slowing down

on our economy, they could actually not be the windfall that they’ve been in past

years.

[5:20 p.m.]

The $6 billion surplus the government had when the Premier came into office was largely

due to close to $10 billion worth of corporate and personal income taxes that they

weren’t expecting to find, because as most jurisdictions did through COVID, they underestimated

what they were going to get. The impacts weren’t as severe to people. People stayed

employed. People still paid income tax, and every jurisdiction underestimated. The

lag finally caught up, but that lag is coming on.

Now we’re running deficit after deficit, and the minister is greatly offended somehow,

that $10.9 billion is dramatically better than $12.9 billion. I’m giving her every

opportunity to show me where any revenue sources in the first two months are trending

in a significantly more positive way than they were when the snapshot in time of this

budget book was created.

The minister likes to say, “Well, it’s not a backward-looking document,” but she wants

us to talk about a document that was created in February and to not talk about what

is going on in the world at the end of May. At the end of February, this book was

created; we’re at the end of May. April 1 this government blew a 1.99 net negative

hole in their budget. April, May, first two months of the quarter and still no direction

from this minister on what’s going to make it up.

The minister alludes to a tobacco settlement but can’t provide any certainty to us

on how that works. I’ve asked. Maybe I should ask again about that. I’ll come back

to that, though. There are no substantive shifts, in the first two months of projections,

for commercial Crown corporation net income of $4 billion and no substantive shifts

in the modelling for contributions from the federal government, totalling $15.277

billion.

We’re working our way up. Let’s go to other revenue: post-secondary education fees,

other fees and licences, investment earnings and miscellaneous. Investment earnings,

that might be a questionable trend line over the last two months, given all things

tariff war. And $12 billion….

Has anything in the area of other revenue, over the first two months of this fiscal,

trended in a more positive way than what was originally projected in the budget? I’m

not asking for the dollar figure. I’m asking if it’s trending in a significantly better

way.

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

Hon. Brenda Bailey : Before I respond to the question, I just want to correct two inaccuracies for the

member. It is not correct to say that commercial Crown income is not improving. We

do not have that data yet, and I have said that. I will say it again. They report

to us quarterly. We don’t have the data. That does not mean there is not a positive

change. It does not mean there is a negative change. It means that we don’t yet have

the data.

[Lorne Doerkson in the chair.]

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

It is, in fact.

The member knows that we receive most of our data quarterly. I’ve already made that

reference in regard to the Crown corporations. In terms of what we have from fiscal

data, where we are in the fiscal year, we have one month of fiscal data. One month

does not a trend make.

What we can say is that we do have, of course, financial data that comes in — and

three or four months of that. Pardon me — economic data. There is an area that I’ll

just highlight, one of the areas that we’re seeing some better-than-expected results,

and that is in regards to retail sales.

Peter Milobar : Retail sales were not in the question. There was other revenue, post-secondary education

fees, other fees and licences, investment earnings and miscellaneous. Again, the question

was strictly a broad: “Is anything trending — indicators?”

These assumptions weren’t made on April 1. The assumptions in this budget book, as

the minister fondly likes to point out, are a snapshot in time — a moment in time,

a place in time, any version of that you would like — back in January and February,

in conjunction with advice from the Economic Forecast Council, other trade industries,

what’s going on in global markets as it pertains to things like natural resource revenues.

All of those are projected out — what the markets think might happen in bond markets,

all of that.

So there are trend lines that do form. It didn’t just start. The trends wouldn’t have

just started on April 1. They’d be showing themselves month over month leading up

to April 1, through April, well into May, as to these revenue projections.

Again, the minister takes great umbrage with me saying a $12.9 billion deficit. I’m

trying to get from her anything, any glimmer of anything, that’s trending significantly

positively to account for the extra $1.991 billion of lost net income that this government,

by way of policy, decided to make on April 1.

She can’t show us an expenditure of any significance. She won’t talk about it. Grudgingly

acknowledged the advertising but wouldn’t put a dollar figure to what the amount of

advertising cut was. So 50 percent to one vendor? Was it a small vendor that’s desperate

for advertising revenue, or is it Global B.C.? Was it because the Canucks didn’t make

the playoffs? We don’t know. No detail.

Yet shame on us as opposition for daring to try to get answers out of this government,

the same answers that we asked yesterday that suddenly became forthcoming around advertising,

with very scant detail. Ignored the question around other revenue, contributions from

the federal government or commercial Crown corporation net income. Grand total is

$31 billion of $84 billion of revenue. Can’t show one trend line that’s projecting

significantly better than what assumptions that went into this budget document that

was created back in February are.

Let’s go up another area, natural resource revenue. There are always updates on those.

It’s not like oil and gas and minerals and forestry is a static thing. Natural resource

revenue, natural gas royalties, forests, other natural resources — grand total of

just under $3 billion, $2.997 billion. Has anything in the natural resource revenue

started to trend in a significantly better way than what was anticipated in the development

of this budget book?

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

Hon. Brenda Bailey : The member opposite has asked about natural resource revenue and if there are trends.

I just want to be very clear about the distinction between economic trends, which

we are very aware of, and commodity pricing and what is in the fiscal report-back.

We’re one month into the fiscal year, but what I’m talking about here are economic

trends from January to April.

Most commodity prices are up on a year-over-year basis, except for coal and oil. Of

course, we monitor commodity prices, and pricing and volume are up. Natural gas price

is up 10.2 percent in the first four months of the calendar year, and volumes are

also up.

Again, I want to caution, because we need to find out if this is a trend, and we will

be able to report back on that on — anybody? — Q1.

Peter Milobar : Well, we’ve covered most of the other areas within the taxation revenue portion.

Obviously, personal income tax and corporate income tax are not going to be available

at this point. We do know carbon tax…. We do know property transfer tax is, in all

likelihood, hemorrhaging but not a number to it. Sales tax sounds like it might be

trending better than before. That’s, you know, arguable how much it will offset with

property transfer tax. There’s going to be ins and outs on those.

You know, it’s fine that the minister wants to stick to her $10.9 billion. It’s very

clear that we’re in and around that $12.9 billion as we stand here today.

[5:45 p.m.]

Going back to the expense side — because once again, government has that ability to

control expenditures, as the minister rightfully points out — last year in the budget,

the budget estimate had about $89.5 billion of expenditures.

The minister wants to talk about fluctuations. Maybe I’ll jump back. Last year the

government projected $77.5 billion, roughly, of revenue. It actually came in closer

to $83 billion. So the minister is not wrong. Revenues can jump up. The problem with

this government is they don’t know how to control their spending. At the same time,

expenditures were supposed to be $89.4 billion, and the updated forecast in this year’s

fiscal plan is $92 billion.

This is the problem. The revenues, the projections are kind of outside of, actually,

the control of the government, as the minister has stated several times. They’re global

markets. They’re forces of what’s going on in employment, taxation in terms of personal

and corporate income taxes, the property transfer tax. It’s nothing to do with government.

It has everything to do with what’s going on in the market, which we know is substantially

lower than projections in this budget.

We know $1.991 billion in net carbon tax revenue is gone under the revenue projections.

We have expenditures that are actually $2 billion, almost $3 billion, higher than

last year, which is almost $3 billion more than it was projected to be in the first

place.

You know, when you run record deficits under the guise of wanting to protect health

care and education, first off, you don’t still have parents protesting cuts to education

like we’re seeing. You don’t have ERs closing everywhere and people screaming for

doctors and access to health care, if that’s what you’re protecting. When you have

a record deficit, the natural assumption….

The amount of people I’ve pointed this out to and the surprise when they hear it is

quite something. I say: “Yeah, it’s a record deficit.” It was $10.9 billion. After

today, I’ll be letting them know it’s $12.9 billion.

Here’s the problem. No one takes issue with protecting health care and education.

As bad as what is being provided right now, at least it’s being provided in some form.

But when governments run record deficits to protect those services, it’s because revenues

have dried up because the economy really slowed. They explain it and justify it and

get agreement with the public that that’s why it needs to happen.

In this case, the government has never collected, or at least projected to collect,

so much money — $84 billion this year in total revenues. Last year they were estimated

at $81.5 billion, came in at $82.8 billion. So their revenue projections were actually

pretty close. No big, massive wild swings. A little bit higher but certainly not as

high as spending went.

It’s not a taxation problem and it’s not a revenue problem this government has, running

record deficits. It’s that they don’t know how to rein in their spending.

When we try to get detail about the spending, the one thing the government actually

can control with some accuracy, we get: “Well, we can’t talk about it. We’re doing

the hard work. We’re looking for efficiencies. We’re committed to it, though, but

it’s hard work. It’s difficult work. We’re going to keep doing the hard work. Don’t

worry. You’ll see the results of our hard work in Q1.” No decisions have been made

even though Q1 ends in 33 days. We’re two-thirds of the way through Q1. Decisions

still haven’t been made.

[5:50 p.m.]

There may be a savings in advertising. We’re not sure if it’s a blip or not. We’re

not even sure who has reduced their advertising. It’s not GCPE. The minister didn’t

mention if it’s ministries or if it’s a Crown that reduced their advertising. I don’t

know why that’s a state secret, but apparently it’s cabinet confidence or something.

I don’t know. It’s certainly not something the government wants to talk about.

Let’s talk about the actions and potential cost savings that cabinet could be doing

to demonstrate leadership to the rest of government at a time when the public service

winds up with a Zoom meeting, public service–wide, where their takeaway from it is,

“Get ready to take a heck of a lot less, and if not, you’re going to have job losses,”

from the head of the public service. Characterized as an intimidation call, characterized

as completely inappropriate in the midst of the starting of negotiations — not my

words.

In fact, the Deputy Minister of Finance laid it out pretty clear and pretty open.

I applaud him for being that forthright about the dire straits of the finances in

B.C. We certainly don’t hear that reflected back in the answers from the minister,

other than: “Well, we have hard work ahead of us, but we can’t tell you what we’re

doing. We can’t tell you where we’re going to find the money. Just trust us.” The

new slogan of the NDP and this Premier: “Just trust us.”

The minister referenced a transportation company. Has a directive gone out to cabinet

to no longer fly Helijet and, if not, to restrict it to at least one flight a week?

Have there been any restrictions put on cabinet, whatsoever, or expectations of how

they travel back and forth from Victoria to Vancouver?

[5:55 p.m.]

Hon. Brenda Bailey : The guidance provided on travel is STOB 57, which is discretionary, non-essential,

travel, including conferences and meetings. People are encouraged to prioritize alternatives.

The directives apply to all ministries, whether someone is a cabinet minister or not,

but I will remind the member that the work of this House would be considered essential.

Peter Milobar : I’m not disputing whether ministers should travel for their job. I’m not disputing

that we have a big province and that you need to get around. I’m from the Interior.

It is not inexpensive to get around this province to do your job as an MLA or as a

minister and it’s not for staff either. But there are expensive ways to do it, and

there are less expensive ways to do it, plain and simple.

When you live in Vancouver, Helijet seems to be out of convenience. It is inexpensive;

it’s a great service. I’ve flown it the odd time. The NDP staffers can go ahead and

check my travel. I’m on there the odd time. Yes, I have the odd priority loading on

my B.C. Ferries, as well, when I can’t get a reservation and I need to get over here.

I’m not disputing any of that. It’s about the frequency and/or the public perception

around entitlement. There’s a difference in cost between Helijet and Harbour Air.

Both fly out of the same harbour.

There’s a massive difference when several of us take the ferry every week, on both

sides of this House. We see each other up in the dining area. I’m not saying it’s

across everyone, and I’m not disputing there’s a cost to travel.

[6:00 p.m.]

At a time when we’re supposed to be finding the pennies, one would hope cabinet would

be scaling back, that cabinet would be finding ways to be more efficient. Cabinet,

who has wrapped themselves within their own ministries…. People work from home and

Zoom and things of that nature, not just going to the default of popping back and

forth. That’s the premise of the question.

I’m going to shock the minister here. I’m going to actually ask a Vote 26 question,

because we’re on Vote 26. I do know, the minister knows and we all know several votes

the minister is responsible for. This is just the one vote that triggers this process.

In keeping with the theme around leadership and direction and the Minister of Finance

supposed to be in charge of finding the pennies and showing efficiencies and working

leaner and meaner, can the minister explain…. As I read it, the total 2024-2025 operating

expenses, on page 40, for the minister’s office is $1.112 million. It appears that

this year, the minister needs a $338,000 increase to that budget to $1.45 million,

which…. You might think, if you’re listening at home very quickly, that that’s just

wage increases, except it’s a 30 percent increase to the minister’s office budget.

Can the minister explain the logic behind a $338,000 increase, a 30 percent increase

to her office’s operating costs, in a year and on a backdrop of a budget that was

already supposed to be getting created, with the direction of a mandate letter that

was in existence well before this budget was signed off on, to find efficiencies and

cost savings? And the minister felt it appropriate that her office needed a 30 percent

increase to executive and support services?

[6:05 p.m.]

Hon. Brenda Bailey : That increase is driven primarily by three factors. The first is the Parliamentary

Secretary for Rural Development moving over from Jobs, Economic Development and Innovation

into the Finance Ministry, as well as an MA to support that work. Also, increased

travel, which of course is related to the work of the Parliamentary Secretary for

Rural Development, as well as an additional chief of staff in the Ministry of Finance.

Peter Milobar : Well, that’s interesting, except there hasn’t been a drop in the Jobs, Economic Development

and Innovation Minister’s office. It went from $1.232 million to $1.253 million, so

it actually went up.

[6:10 p.m.]

Again, this is supposed to be a government looking for the pennies, finding efficiencies.

The answer to $338,000 is: “Oh well, that’s because the Parliamentary Secretary for

Jobs, Economic Development and Innovation came over from that portfolio to my portfolio.”

That might be understandable if there was a commensurate drop. Instead, their ministry’s

office went up.

Can the minister explain corporate services then? Corporate services went up $550,000.

It’s obviously not a 30 percent increase, but it’s still an increase from $45.494

million to $46.044 million — a $550,000 increase and $888,000 total to the minister’s

office, in a year that the minister is responsible for finding efficiencies and cost

savings. And government is saying: “Just trust us. We’re doing the hard work.” Can

the minister explain that increase?

Hon. Brenda Bailey : The $550,000 increase in corporate services that the member asked about reflects

the shared recovery mandate, the wage increases under the collective bargaining agreement.

Peter Milobar : That does not include the soon-to-be negotiated collective agreement, or are these

outside of that collective agreement?

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

Peter Milobar : So in fact, the $550,000 will increase once the collective agreement is solved, unless

the head of the public service is correct and job losses might be necessary.

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

table now.

Peter Milobar : Well, let’s try this a different way then. If a collective agreement is achieved

and there’s any type of wage increase, whatsoever, or adjustment to benefits, cost-wise,

from government, will that $550,000 actually wind up increasing, as it would in other

parts of government?

Hon. Brenda Bailey : Yes.

[6:15 p.m.]

Peter Milobar : The minister responsible for finding the pennies under the cushions needs $338,000

more for the minister’s office, with no commensurate cut to the other ministry that

part of that was supposed to come out of. We have the Premier directing the Finance

Minister — and seemingly, all of cabinet — to find the pennies and charging the Finance

Minister to find the pennies needed for a $600,000 increase to the Premier’s office.

Can the minister…? I haven’t had the time. I’m assuming her staff would know. I can

keep flipping through and looking. I’m hard-pressed to find a single ministry where

the minister’s office is…. Oh, I found one; look at that.

The Minister of Education and Child Care — at least they saw a bit of a cut. They

would have an expanded mandate, a bit too. Okay. That’s a good start — $300,000 there.

I applaud them.

The Minister of Citizens’ Services? Nope, they’re up.

Other than Education, are there any other ministries that saw a minister’s office

with any sort of cut at all to their operations — in a year that, while this budget

was being developed, ministers were already instructed to find the pennies, be efficient

and look to make sure that things are running as efficiently as possible, to find

that $300 million that the minister is so confident we’re going to find?

[6:20 p.m.]

Hon. Brenda Bailey : The member asked the question: how many minister’s offices saw a decline in the expected

expenses in this fiscal? The answer, including Education, is six.

Peter Milobar : It was good to see. I was doing some flipping too, so I thank the minister for that.

A couple other follow-up questions, though.

[6:25 p.m.]

The minister’s answer to why going up $550,000 was the collective agreement in hers

— granted, that’s on a $45 million spend — doesn’t seem to collate, or totally match

up, anyways, because it’s obviously different staff, in terms of the minister’s office.

But there are lots of others that went up. Their corporate services didn’t really

go up that much, but their ministerial offices still went up a bit. Social Development

and Poverty Reduction, from $941,000 to a little over $1 million in the office. And

the list goes on.

Anyway, point being this was developed under the lens of “already supposed to be finding

efficiencies and cost savings,” yet only six ministers’ offices found some efficiencies

and reshifting of resources or things of that nature, and the rest didn’t. That’s

troubling in and of itself.

There was a lot made of the size of the cabinet, a lot made of all the parliamentary

secretaries and ministers of state, and the reaction from the government was that

this is a non-event. There’s a cost that comes with all that. There’s staffing that

comes with that. There’s support that comes with that. Every minister of state winds

up with some extra staff and some extra support. Every parliamentary secretary winds

up needing some extra staffing and support.

Just to be abundantly clear, when we’re talking about finding efficiencies, now that

these numbers are locked in, and locked into the budget expenditures on page 22 of

the budget book, the only way to see any substantive cost savings in the ministers’

offices would be if there were job losses.

The ministers’ offices that have locked in within the expenditures on page 22 in the

budget book — unless they start relieving themselves of some staff, their offices

will not actually be finding any cost savings to help contribute towards the $300

million worth of savings that are supposed to be found this year. The burden of that

will rest on the rest of the public service to shoulder whatever may impact. The ministers

are…. Essential travel. Ministers’ staff are locked in.

Of all those STOBs that the minister listed yesterday — some are larger than others,

in terms of expenditure; obviously, staffing is one of the larger ones, STOB 50 —

where is the minister’s expectation that the majority of the $300 million is going

to be found?

[6:30 p.m.]

Hon. Brenda Bailey : The member has asked in the expenditure management controls which of the STOBs that

I identified yesterday are we likely to see the biggest savings come from, and the

team has identified three that they think we’ll see good savings from, the first one

being the professional services. It’s a large expense historically.

For professional services, the guidance is: where possible, provision of services

that will assist in the development of policy and programs or to improve or change

the delivery of programs should be delivered by internal staff or transitioned to

internal staff instead of through consulting services. We do expect that that will

provide significant savings.

We also expect to see savings in STOB 50, through our hiring freeze and also through

attrition, and STOB 57, which is the category of travel.

Of course we expect to see savings across all of these STOBs. I’m just identifying

three that we think will see quite a large component of that.

Peter Milobar : You know, a lot of these questions I’m asking, because we always get accused of being

too critical or negative and never offering solutions…. We’re simply trying to offer

our insights into where government could save some of their much-needed money to avoid

that $12.9 billion deficit.

In terms of toll revenues that the government is implementing with Bill 7…. I recognize

Bill 7 hasn’t completely passed in the Legislature. I’m not here to debate Bill 7.

It’s just waiting for third reading. Closure is coming tomorrow. It’s a fait accompli.

I recognize that. I’m just assuring the Chair that I’m not trying to debate legislation.

[6:35 p.m.]

It’s been approved up to this point. It’s been approved to enable road tolling in

this province. What revenue projections have been done by the government in terms

of what they expect to potentially collect off of road tolling? One would assume that,

if it’s a tariff response, there would be dollars attached to it to try to help to

counter tariff issues.

What types of revenues has the ministry decided or modelled, based on what is moving

forward, to government based on the provisions of the ability to toll roads in British

Columbia?

Hon. Brenda Bailey : The first thing I want to make abundantly clear is that Bill 7 is the tariff response

act, and enabling legislation under

section 14,

part 3, tolls and fees, is specific

to tariff response, which would enable government to put in road tolls for American

trucks, should that be necessary in our non-tariff response. It’s still a tariff response

but not a specific tariff, a different type of response to the threat of tariffs.

It would not be normal