Third Session, 41st Parliament

(2018) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Thursday, March 8, 2018

Afternoon Sitting

Issue No. 99

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Routine Business

Introductions by Members

Orders of the Day

Committee of the Whole House

Bill 4 — British Columbia Innovation Council Amendment Act, 2018 (continued)

A. Weaver

Hon. B. Ralston

T. Stone

Report and Third Reading of Bills

Bill 4 — British Columbia Innovation Council Amendment Act, 2018

Second Reading of Bills

Bill 8 — Supply Act (No. 1), 2018

Hon. C. James

S. Bond

A. Weaver

Hon. C. James

Committee of the Whole House

Bill 2 — Budget Measures Implementation Act, 2018

Hon. C. James

T. Redies

S. Bond

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Education (continued)

D. Davies

Hon. R. Fleming

P. Milobar

S. Bond

D. Ashton

S. Cadieux

N. Letnick

J. Yap

S. Sullivan

J. Thornthwaite

L. Throness

A. Olsen

THURSDAY, MARCH 8, 2018

The House met at 1:32 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

Hon. B. Ralston: Joining us in the precinct today is the Ambassador of Austria to

Canada, His Excellency Dr. Stefan Pehringer, who is here on his first

official visit to Victoria to meet with you, Mr. Speaker, as well as with me

this afternoon. The ambassador is accompanied by his wife, Mrs. Debra Jean

Pehringer, and the honorary consul general to Austria, Mr. David Haber.

Would the House please welcome them.

Orders of the Day

Hon. M. Farnworth: In this chamber, I call committee stage of Bill 4. In the little House,

Committee A, I call continued debate on the estimates of the Ministry of

Education.

Committee of the Whole House

BILL 4 — BRITISH COLUMBIA

(continued)

INNOVATION COUNCIL

AMENDMENT ACT,

(continued)

The House in Committee of the Whole (Section

B) on Bill 4; R. Chouhan

in the chair.

The committee met at 1:34 p.m.

section 5 (continued) .

A. Weaver: Continuing with

section 3, I have one somewhat technical question

and a number of broader questions.

The Chair: Members, we are on

section 5.

[1:35 p.m.]

A. Weaver: Sorry,

section 5 of Bill 4,

section 3 that is being amended in the

BCIC Amendment Act. Thank you for that clarification, hon.

Chair.

The first question. With respect to

section 3(

e) of the act that

is to be amended — by

section 5 of the bill that’s the amendment act —

it says specifically there that one of the purposes is to “gather and

organize information on scientific research.” I’m questioning why the

word “technological” was not added, as well as “scientific research.” Is

this being left out explicitly, or is science to include technology

here?

The reason why I do that is that a number of times in this

section

— that is,

section 3 of the act that’s amended,

section 5 of the act

that’s doing the amending — “science” has been replaced by “science and

technology,” and it’s really this one place where it hasn’t. My question

to the minister is: does this mean to include scientific and

technological research, as it says, actually, earlier in the same

section?

Hon. B. Ralston: I just wanted to clarify the member’s question. In the previous

act, he seems to be referring to

section 3(e), which reads: “…gather and

organize information on scientific research.” Is that

correct?

A. Weaver: Yes, that is correct. I’m wondering whether it should be

“scientific and technological research,” because we’re changing it in

(

d) and (

f) there. Also, earlier in that actual

section 3 there, it

talks about the importance of the “development and dissemination of

scientific, technological and scholarly knowledge.”

[1:40 p.m.]

I’m wondering whether the research is actually also technological

here. It may sound like semantics, but I don’t know whether it’s just

inadvertent or whether it’s deliberate.

Hon. B. Ralston: I better understand the member’s question now.

Section (

e) in the

previous act focuses on scientific research. The amendments are to (

d) and (f), substituting, for “science policy,” “science, technology and

innovation policy.” The focus there is not on research but on

policy.

I don’t think there was an intention to change (e). It was rather

to expand the scope of the policy that would flow from it, whether it’s

scientific research or technology in general. I think that’s the reason

for the distinction.

A. Weaver: I appreciate the clarification. To further that, though, if the

minister is able to look at

section (c), it actually talks about the

“development and dissemination of scientific, technological and

scholarly” information.

I’m wondering whether there’s an inconsistency there. On the one

hand, you’re disseminating and developing scientific, technological and

scholarly research, but on the other, you’re just looking at the science

aspect.

Hon. B. Ralston: I don’t think there’s an intention to emphasize or create a

difficulty there. The focus is on the development of a broader policy

beyond science policy, technology policy and innovation

policy.

That’s clearly not the intention. I think the member has made a

perceptive point, but I don’t think it really detracts from the purposes

of the amendments.

A. Weaver: Thank you for the clarification.

I have a number of general questions about the role of Innovate

B.C. In particular, I’m wondering if the minister could identify the

relationship between the innovation commissioner and Innovate B.C., as

reconstituted in this amended act here.

Hon. B. Ralston: Innovate B.C. and the innovation commissioner will be separate

entities, but they will work closely together, obviously.

The commissioner is mandated to be an advocate for the tech

industry, both here in British Columbia, to our federal counterparts,

and, indeed, abroad. The commissioner will interact with board members

and will be an ex officio member — will be invited to participate with

Innovate B.C.’s board members as an ex officio member. There will be a

close relationship, but the office of the innovation commissioner will

be independent of the agency.

A. Weaver: Thank you for the answer. It actually answered my next question.

Would the innovation commissioner be a member of the board or an ex

officio member? That has been clarified as well.

My next question is with respect to…. With this new vision, as

outlined in

section 5 of the amendment act, pertaining to an amendment

section 3 of the original act, what is the…? If the minister could

articulate in a few words what he would define as the new mission

statement for Innovate B.C. Has the minister got an idea in mind? If he

were to succinctly express, in two sentences…. What is the mission

statement of Innovate B.C., as reconstituted here?

[1:45 p.m.]

Hon. B. Ralston: I’ve attended — and I’m sure, probably, the member has — board

meetings or retreats of organizations where a mission statement will

sometimes be worked on for days, if not weeks, and a lot of internal

debate will take place about the exact wording of a mission statement.

So to ask me to give a precise mission statement here is something that

I approach with some caution.

The goal of the organization is to focus and use innovation and

support for innovation to catalyze companies to be more successful in

what they do, or even research institutions to be more successful. It’s

a broad look at the power and the transformational force of innovation

as applied to a wide range of human and societal problems.

A. Weaver: That’s very helpful, and I would never ask the minister to develop

a mission statement in committee stage. It would simply be something

that he could not be held accountable to — understandably so. I have,

too, been in those board meetings that have taken days to decide whether

it should be a “the” or an “an” or “they.”

My next question, then, is following on that previous question,

actually. As articulated here in

section 5(b), where it uses the words

“innovation policy,” I’m wondering if the minister would be able to

define specifically what he means by “innovation.”

Hon. B. Ralston: I did have a discussion with the member before lunch, and I got an

opportunity to think about the question, which he very kindly told me he

was going to ask me in advance.

I don’t think I’d want to be confined to a single definition of

“innovation.” One looks at different institutions, and innovation has

different effects and consequences. For example, research institutions —

whether it’s catalyzing or driving the creative and intellectual

abilities of researchers and students or whether it’s the kind of

innovation that drives companies of all sizes to develop either new

products or new services that allow them to grow and fuel the

economy.

Clearly, innovations can be big, can be huge, whether we’re

thinking of a company like General Fusion, which I’ve met with and I’m

sure the member is familiar with, where the innovation that they’re

recommending would literally transform the world — I don’t think that’s

an understatement — or whether there are small process innovations in

the way in which a manufacturing process goes forward. Sometimes

practitioners on the shop floor will think of a way that things might be

improved. That, too, would be an innovation.

I think what we’re hoping to do is to take a wide view of

innovation in all its aspects and look to it, in a competitive and

rapidly changing world, to draw on the creativity and talent of the

people of British Columbia and use innovation and creative change to

solve human problems, make things better, make companies grow and

prosper and generally enhance the quality of life of everyone in the

province.

A. Weaver: Thank you for the very helpful response.

My last question is on the issue of technology. We’ve heard a lot

of discourse. I thank the member for Shuswap, who asked a number of

probing questions, and the minister for his responses.

We’ve heard a lot about innovation in technology. I’m wondering if

the minister could expand upon what he means by “technology,” more for

clarifying the public record. Many people often think that technology

means apps and stuff that has chips on it. Here, the minister has a

broader definition of what “technology” is — innovation in technology

and innovation in general.

In what areas other than just chips, computers or apps is he

thinking when he’s talking about innovation, perhaps, in technology and

elsewhere?

[1:50 p.m.]

Hon. B. Ralston: I would adopt the answer that the member suggested, which is a

broad scope of innovation. I agree with him. Sometimes there’s a view

that innovation is confined to software developers in downtown

Vancouver. That is most assuredly not the case.

Whether it’s in Kamloops, at the Kamloops Innovation Centre; in

Prince George, at the clean-tech innovation hub that’s being developed

by the economic director there at the city hall; or in Victoria here

with Tectoria, it’s certainly geographically broad. The scope of the

problems that are tackled, and what is meant by technology, is very

broad indeed.

Technology is capable of revolutionizing and changing very

traditional industries, such as the mining industry. I think I’ve

repeatedly given a couple of examples.

MineSense, which is a company using the Internet of things and

sensors, devised a process to examine ore that’s been extracted and sort

it more quickly, more thoroughly and more efficiently, thereby

increasing the efficiency and, ultimately, the profit of the company.

LlamaZOO has a visualization technology that looks at a mine before it’s

developed, inputs all the data and then represents that in a visual

display of the minesite itself in a way that helps people to understand

what the mine might look like, what the ore body might look like it or

how it may be extracted more efficiently.

I don’t think I would want to be confined by that narrow

definition of technology, certainly, whether it’s technology, or it’s

innovation solutions applied to climate change, or life sciences or ICT

— across the board. There’s an institution at Simon Fraser University

that speaks of social innovation — in other words, applying some of the

same techniques, some of the same inspiration and some of the same

talent to major social problems, whether that might be addiction or the

problems of aging.

I think there’s always room, and the hope is that there are lots

of solutions coming that can be implemented to solve problems and make

life better for everyone.

T. Stone: I just have a few questions as well. Obviously, this piece of

legislation is of great interest to me as a former tech CEO. I certainly

applaud the government for taking some steps here to modernize the

government’s approach, doing more to enable expansion within the tech

sector.

My first question relates to the board itself, the board of

Innovate B.C., which will be appointed, presumably, in the weeks and

months ahead. I’m just wondering if the minister could provide a little

bit more detail as to the kind of timing that he has in mind for the

board, and if he can give some assurance to this House that there will

absolutely be representation on that board from rural British

Columbia.

I think we all acknowledge that innovation is taking place in

communities large and small, in every corner of this province, so it

will be very important to make sure that there is representation that

reflects the breadth of that innovation that’s taking place across B.C.,

including representatives from rural British Columbia.

Hon. B. Ralston: I thank the member for his question. I know he raised this issue

in his speech at second reading. I thank him for that. As the member

will know by my reference to Kamloops Innovation Centre, I’m aware of

the dynamism and creativity in the Kamloops tech sector. Indeed, they

won a national award for the start-up of the year. The expectation is

that once the agency is reconstituted legally and is in place, then

appointments will be made. I don’t want to confine myself to a time

frame, because sometimes people that you ask and think would be good

don’t always accept.

[1:55 p.m.]

Certainly, the goal is to have the kind of representation that the

member refers to on the board. I think it’s important, one, because

that’s the reality. Secondly, I don’t think it would be right, or a

proper reflection of the kind of change we want to bring about, to

confine it only to people from, say, the Lower Mainland, for

example.

I certainly appreciate the member’s comments. In fact, probably we

could talk about this off line. If he has people that he thinks would be

good for the board, then I would be prepared to consider

them.

T. Stone: I certainly appreciate the minister’s comments, and I will take

him up on his offer there to sit down and have a chat. There are some

exceptional people that come to mind in different parts of the province

that would be, I think, outstanding participants on the Innovate B.C.

board.

I was pleased to read the communication that was wrapped around

this bill when it was introduced that indicated there would continue to

be support for the important work that’s done with the First Nations

Technology Council. I think every member of this House fully supports

doing everything we can to encourage and foster more success with

respect to Indigenous entrepreneurship, whether that involves technology

and innovation or not.

I’m just wondering if the minister could share a few of his

thoughts as to how he sees that relationship between the First Nations

Technology Council and Innovate B.C. really evolving over the months

ahead.

Hon. B. Ralston: I want to thank the member for that question. I think that’s

certainly an important question.

BCIC, the predecessor organization, has a number of programs that

will be continued that support Indigenous technology entrepreneurs,

including the venture acceleration program and the tech works program. I

can give more details if the member wishes.

In addition, the tech summit, which was begun under the previous

government, is being continued enthusiastically by this one. There are a

number of Indigenous stakeholders who are being asked to provide

meaningful participation.

I can briefly list them here: First Nations schools; First Nations

Schools Association of B.C.; First Nations Education Steering Committee;

Indigenous Adult and Higher Learning Association; the First Nations

Technology Council, which is the organization the member referenced; the

First Peoples cultural council; the Indigenous Business and Investment

Council; and the Aboriginal labour market committee.

They are all being asked to provide their input into the content

of the tech conference. Some of that, I think, will translate into

participation, although I haven’t formally considered it. I think it’s

important to note the future structure and composition of the board of

Innovate B.C.

T. Stone: I appreciate the minister’s answer there.

In this section, there is reference to building capacity to access

new markets. I know this has been canvassed a bit with a few other

members. I expressed this in my comments in second reading, as well. As

a former tech CEO, I remember back in the day, when we were really in

the early stages of our business, trying to build it in British

Columbia. It was far more difficult to do business with British Columbia

government entities than it was to do business in other

jurisdictions.

[2:00 p.m.]

I think some progress has been made on this front, without

question, in terms of where we are today. But in talking with friends in

the tech sector and other folks I know that are still actively engaged

in bootstrapping their companies and looking for those initial pilot

customers and so forth, I still hear far too often that it’s not as easy

as it should be to actually get your foot in the door with local

governments, with Crown corporations, with provincial government

entities here in our own province.

I’m curious if the minister could offer some thoughts as to what

kinds of strategies he thinks may flow from the work that Innovate B.C.

will do and the innovation commissioner — obviously, with direction and

input and support from the minister himself — to really give B.C.

companies, B.C tech start-ups and those in the early stages of growth

that better opportunity to actually get their foot in the door within

the public sector here in our own province.

Hon. B. Ralston: I thank the member for his question. The member raises a recurring

question, and I think he’s right in his characterization of it. It’s

still too difficult.

Quite often what one encounters is companies who say they’re out

globally trying to sell their product or service, and people say: “If

you’re so good, how come your local jurisdiction, your local provincial

government, from your very sophisticated tech sector, hasn’t hired or

bought your service or bought your product?” It is a way of establishing

credibility in the market for future sales and building the strength and

the sales of the company.

Some work has been done. The member might be familiar with it.

There’s a program called start-up in residence which draws local

companies and invites them in to look at what sometimes in the business

jargon they call pain points — problems of operation or service or

delivery in government. It brings in companies and matches a start-up

company with the ministry or agency, and they devise a

solution.

This is borrowed directly from the private sector. One of the

legendary start-ups in Silicon Valley has a very similar program where

they invite start-ups in and pair them off with industry leaders,

whether it’s in transportation or finance or tourism or shipping, and

then have a start-up bring fresh eyes and fresh enthusiasm and an

innovative approach to solve problems that are vexing the

company.

There is a program called start-up in residence. I attended an

awards ceremony for the first class, I guess you could call it, of that.

It seems to be successful. But I would agree with the member that it’s

still far too difficult and that there is more to do. Government

is….

There’s another program, which is called the continuous service

improvement lab, here in Victoria that, again, brings talented people

from the government, in a hothouse atmosphere, and asks them to examine

problems in service delivery and operation in the technology within

government. They’ve had some considerable success as well. That’s been

running for about a year or so, I believe.

[2:05 p.m.]

Those techniques and that trajectory are being followed, but I

certainly agree that more can be done and more should be done. It would

provide an important shot in the arm, an important incentive, to those

companies and help them get up and running. I think if that’s the case,

we all benefit.

T. Stone: I would concur. The start-up in residence

program, which was an initiative of the former government, is, I think,

working. There seems to be an appetite in the sector to actually expand

it. Hopefully, it would be the intent of the government to take a look

at potentially doing that.

Another initiative that, again, I’m not certain as to where it is

today — and perhaps the minister could fill me in a bit — is this

concept of a procurement concierge, some type service that would best

match government’s needs with companies in British Columbia that are

innovating and that potentially could meet those needs. We called it the

procurement concierge service. It was received with a fair bit of

excitement within the tech sector when it was announced, but I don’t

believe it was actually…. I think this was just before the last election

campaign.

I’m not certain that it was really lifted off the ground.

Nevertheless, I think it’s an idea worthy of exploring. I would ask if

the minister could offer some thoughts on whether or not that’s

something that he and government would be prepared to look

at.

The second piece would be…. I think some progress was made on

simplifying the RFP process, as well, inside of government. I was always

one to be pushing, pushing, pushing to simplify it — more, faster.

Again, with B.C. tech companies in mind, it wasn’t that long ago that to

bid on a project with B.C. Hydro or with a different arm of government,

it would involve an RFP of hundreds of pages. I think that was whittled

down quite dramatically.

Perhaps the minister could provide some thoughts on whether or not

he would be willing to entertain any further gains that could be made at

really simplifying that RFP process.

Hon. B. Ralston: Let me deal with those two in the order that they were raised. The

procurement concierge, I’m not…. Staff is not aware of where that was

at. I think it may be for the reasons that the member set out. It was an

idea that had not come close to beginning implementation. The way in

which the member has described it, it sounds like something that might

well be worth investigating. I’ll follow up with my staff, and we’ll see

what we can find out. We can advise the member of our

efforts.

Certainly, we would want to make access to government, in that

way, easier. Again, it’ll lower the transaction cost, and we’d get a

wider range of bids if we make it easier and more accessible. That would

be an advantage to government that I would welcome.

On the RFP process. Some of the logistics of procurement, of

course, now fall in the Ministry of Citizens’ Services

and don’t fall within the new structure. I’m advised that

for contracts under $250,000, there is a two-page RFP, which was

implemented and is being continued. Again, I think it’s important to

make access to government…. The methods by which we can encourage and

contract with small business in British Columbia are important. I also

have the mandate for small business, so I’m keenly interested in that as

well.

[2:10 p.m.]

I think that’s being continued, and any enhancements that could be

made to that process, I’m certainly open to hearing about.

T. Stone: I appreciate that.

My final question relates to what is a critical component of any

successful tech strategy. That is ensuring that we’re focused on the

talent side of the equation and, first and foremost, growing talent here

in British Columbia. I think that starts by ensuring that we are adding

more seats in our post-secondary institutions, which was initiated under

our former government. The current government has followed

suit.

I know that up in Kamloops, folks are very appreciative of soon

having a full-fledged software engineering program. It is another option

for Kamloops kids to stay in Kamloops for their education. It’s good for

industry there, for the hundreds of tech companies that now exist and

that are yearning for good talent. I would hope that the government

would intend on continuing to look at further opportunities to expand

the number of science, technology, engineering and math positions at

post-secondary institutions around the province. Perhaps the minister

could speak to that.

Secondly, co-op placements are critically important as part of the

equation. We need more co-op placements, opportunities for co-ops around

the province. Perhaps the minister could speak to that.

Last but not least, I was very proud when our former government

introduced coding in the schools in grade 6. I speak to this in a bit of

a personal…. As a dad, first and foremost, I was a bit taken aback, in a

good way but very proud, when my 11-year-old daughter came home and

couldn’t wait to tell me that she had just done her first line of code

at school. She was in a grade 5-6 split class.

I realized, in that moment, the power of what that initiative

really meant: sparking the imagination of kids, a little girl like my

daughter. So I’m a very strong advocate of expanding coding beyond grade

6 into later grades as well. I would like to see it expanded, ideally,

to grade 9 as a next step. I’d ask the minister if he has any thoughts

about the impact of coding in our schools and our kids being exposed to

that and if he feels that there’s any appetite to expand coding to

grades beyond grade 6.

Hon. B. Ralston: I thank the member for acknowledging the announcement that was

made throughout the province, but particularly as it affected Thompson

Rivers University. I know I’ve spoken with the president, Dr. Shaver,

and he was delighted that a full software engineering program was going

to be funded at Thompson Rivers University.

As he pointed out, and as the member has pointed out as well,

there’s demand for that program. It will be filled very rapidly.

Although it’s a big expansion, I think we’ll be monitoring it. I can’t

speak for the minister, nor for the Finance Minister, who would have to

pay for a further expansion, but I think we’re quite proud of the fact

that, for that sector, particularly in Kamloops, we’ve implemented that

program.

[2:15 p.m.]

In terms of co-op placements, there is a $10.5 million line item

for Innovate B.C. — or BCIC, the predecessor organization — for tech

co-ops. I totally accept what the member says about the value of co-ops.

They’re valuable for the employer, in the sense that they get a good

chance to look at enthusiastic students and decide whether they are the

ideal candidates for permanent employment — plus the students themselves

get real-life work experience and also can decide whether they want to

be at that company or in that particular field. A lot of companies

really value the co-op experience. Certainly, that’s why we’ve committed

to funding it further.

On coding in schools, I recall the member’s story about his

daughter from his second reading speech, and I was touched by that. I

would say, though, that the decision to expand coding or not would be a

decision for the Minister of Education. I think I would be straying

jurisdictionally into his area. So I probably shouldn’t venture an

answer. Certainly, I will speak with him and find out what his views are

on that, and I would encourage the member to perhaps pursue that in

estimates with the minister.

Sections 5 to 11 inclusive approved.

Title approved.

Hon. B. Ralston: I move that the committee rise and report the bill complete

without amendment.

Motion approved.

The committee rose at 2:16 p.m.

The House resumed; Mr. Speaker in the chair.

[2:20 p.m.]

Report and

Third Reading of Bills

BILL 4 — BRITISH COLUMBIA

INNOVATION COUNCIL

AMENDMENT ACT,

Bill 4, British Columbia Innovation Council Amendment Act, 2018,

reported complete without amendment, read a third time and

passed.

Hon. S. Simpson: I call second reading of Bill 8, the Supply Act.

[R. Chouhan in the chair.]

Second Reading of Bills

BILL 8 — SUPPLY ACT (N o . 1),

Hon. C. James: I move that Bill 8, Supply Act (No. 1), 2018, be read a second

time now.

Existing voted appropriations will expire on March 31, 2018.

Consistent with past practice, Bill 8 provides interim supply for

ministry operations and other appropriations for approximately the first

two months of the 2018-2019 fiscal year while the House completes debate

of the appropriations presented in the ’18-19 estimates. Interim supply

for ministry operations and other appropriations is required to ensure

continuity of government services until the final supply bill comes into

force.

Bill 8 also provides one-third of the combined vote amounts in

schedules C and D of the ’18-19 estimates for disbursements related to

capital expenditures, loans, investments and other financing

requirements. The one-third authorization provided for in relation to

these disbursements is higher than that authorized in relation to

ministry operations, as the disbursements described in schedules C and D

aren’t evenly distributed throughout the year. Therefore, you require a

higher level of interim supply to accommodate the payments that will be

made under these schedules.

Bill 8 also authorizes the full amount of the disbursements

related to in

schedule E of the 2018-2019 estimates.

Schedule E of the

2018-19 estimates outlines the revenue collected on behalf of, and

transferred to, specific programs or entities. There’s no impact on the

operating results, the borrowing or the debt resulting from the

collection and transfer of this revenue.

These interim supply appropriations are based on accountabilities

and allocations outlined in the 2018-2019 estimates. The final supply

bill for the 2018-19 fiscal year will incorporate these amounts to

ensure it reflects the sum of all voted appropriations to be given to

government in that fiscal year.

S. Bond: Thank you to the minister. This is second reading, so I certainly

don’t intend for the opposition’s comments to take a very long time. My

co-critic and I, as we move through Committee of Supply, will have

perhaps one or two questions. Obviously, we’ll shortly be moving on to

another bill which will be much more lengthy in terms of our

discussion.

The minister certainly characterizes this bill in the appropriate

way. It is a consistent practice that as we watch the budget process

unfold, we see the Finance Minister table her budget. And when she

tables that budget, she also tables the estimates for the various

ministries. In essence, the fiscal plan of the government is laid

out.

The estimates process is incredibly important. It has been really

interesting to see the evolution of that process over time, as a person

who has been in this place for a fairly lengthy period of time. It’s

fantastic now to see MLAs having direct access to ministers. Yes,

sometimes that takes longer, but it’s really important because it’s the

chance for locally elected representatives to bring their issues, their

concerns, from a local perspective, to ministers. While I understand

that may often require additional staff support and briefings, the

estimates process is absolutely critical to ensuring that there is a

transparent budget process.

Certainly, over the course of the next number of weeks, both

opposition members and, of course, members from the Green Party will

engage in a very lengthy process. Basically, it’s an extended question

period time, where every day we will walk through various ministries and

ask some very important questions.

[2:25 p.m.]

The point of the supply bill is pretty straightforward. It

basically allows government to continue to operate. It makes sure that

public servants continue to get paid while this estimates process goes

on over the next period of, as the minister has pointed out, two

months.

The bill itself notes that the allocation, particularly on the

expense side, related to the public service will be about 2/12 of the

total amount of the votes of the government. I think it’ll be

interesting, also, to have the minister walk through, perhaps more

specifically, a little bit of information about the uneven distribution

of payments, which is requiring a greater allocation of supply for some

of the other aspects of the bill. That matters a great deal.

Technically, this bill will allow the government to take and

withdraw those funds from consolidated revenue. As I said earlier, it’s

obviously a very important piece of legislation, as we want government

to continue to function during the period of time while we are going

through the estimates process.

I think that inherent in the discussion around the budget process

will continue to be some of the significant concerns that the members of

the Green Party, the opposition and, in fact, British Columbians have

been raising over the last number of days since the budget has been

tabled.

Certainly, the opposition remains very concerned about the ability

of this government to deliver on the promises that it made without

relying on revenue from what essentially is a surprise tax increase to

British Columbians, and in significant ways. We’re talking about over $5

billion this year alone.

When we talk about the more significant issues that we want to

spend our time on, it is not unlike what I said. It was interesting. I

went back to look at what we focused on in the supply bill when we were

at the budget update period when the government was first put in place.

I’m just going to quote what I said at that time. I said: “So we have

aggressive spending, very little additional fiscal room left for any

other spending, and increased taxes to pay for those initiatives. Add to

that the other side of the equation: promises made to British Columbians

about key programs and service enhancements. No sight of them in the

budget.”

Well, I probably could say ditto, because we’re seeing exactly the

same kind of approach to the budget that we saw with the budget update

that took place in the fall. I have regard for the minister. We have

been in this place together for a long period of time. These questions

are not personal in nature. They are about a different approach between

a government and an opposition. So those questions are

important.

From my perspective, there is added weight when it’s not just the

opposition bench sitting up and trying to figure out what kinds of

questions we’re going to ask every day. Members on this side of the

House, and I am positive members on that side of the House, have been

flooded with emails expressing concern about the employers health tax

and the so-called speculation tax. Those are important

issues.

I have to admit to a degree of frustration when in question period

every single day. I’ve been on that side of the House too, and I know

what it’s like. You know, here are the answers. How do we get through

question period?

British Columbians are concerned, not just members of the

opposition sitting on this side of the House. Whether you are a

university, a municipality, a small business owner, there is deep

concern about the impacts of the tax. So that relates to supply. I’ll

tell you, what I’m concerned about is that we’re actually going to have

supply that’s going to deliver the budget that the Minister of Finance

laid out.

I think British Columbians deserve some thoughtful, careful

answers and respectful ones. When a small business owner tells me that

he or she is concerned about the viability of her or his business, that

should be a concern to the members opposite — every single one of them

in their individual ridings. Yet that’s not the attitude that we’ve seen

in this House. It’s: “We’re eliminating the MSP.”

[2:30 p.m.]

Yes, we admit the government is eliminating the MSP premiums. But

at the same time, they are replacing that tax with another tax. It is a

replacement tax. It is an NDP replacement tax that, in essence, is being

passed on to businesses in British Columbia.

[L. Reid in the chair.]

If the Minister of Finance does not think that that somehow does

not impact average British Columbians, she would be wrong. All of the

people contacting members on this side of the House and on that side of

the House are making it clear that they have several options. One of

them includes transferring the additional burden that they will bear on

to the average consumer, whether it’s a product or it’s a

service.

We remain incredibly concerned, and the thing that is particularly

enlightening is when the comments made in September can be repeated

almost verbatim about the Supply Act in March, I think that we have a

concern about the thinking, the planning, the execution of this budget.

I know that the minister knows that there will be much more discussion

about this.

We’ve seen, since — and I said it in a way that was pretty graphic

— the keys to the Legislature have been handed over to this new

government, $8 billion in tax measures either in place or

announced.

Interjection.

S. Bond: Well, we used to say seven months, but I actually heard a member

the other day talk about eight months, so I think we’re up to eight

months now.

Today what I want to make very clear to the minister is that what

we support, in terms of the Supply Act, is keeping government operating.

Our comments today and our support will obviously allow for that to take

place. But we question the long-term sustainability of this budget, and

we certainly are very concerned about the issues that British Columbians

have been expressing for the long-term supply issues, the long-term

viability of this budget.

My co-critic and I will have more to say as we work through other

bills in the Legislature. But I will end my comments about the Supply

Act there. I know that the Leader of the Third Party intends to speak as

well. With those comments, I appreciate the opportunity to make those

remarks about the Supply Act.

A. Weaver: I rise to speak to the Supply Act. I thank the member for Prince

George–Valemount for her comments and the minister for her introduction

of the bill.

This bill, as the member for Prince George–Valemount pointed out,

is, essentially, following tradition, where, after the budget is

announced and estimates are brought forward, a portion of the budget

getting us through this legislative period is requested up front to

ensure that people get paid, in essence — that government can operate,

that capital projects can go forward.

In this Supply Act, we’re approving 2/12, or 1/6 — quite

remarkably, not to do fractional division, 2/12 is 1/6 — of the total

amount of the main estimates, as well as one-third — you could have said

4/12, if you wanted, as opposed to one-third — of the capital budget. I

won’t be proposing an amendment on that, although I think it is sloppy

mathematics.

On a slightly different note, I do have a number of concerns,

serious concerns, with respect to the Supply Act because the Supply Act

is making assumptions with respect to the implications of the budget.

And, of course, the budget, which we’ve discussed, has got some

assumptions in it.

I and my colleagues are frustrated here in the B.C. Green caucus.

We’re frustrated because on July 18 of 2017, this government was sworn

in. We are now nearly eight months since government was sworn in, and

we’re still questioning what legislation is going to be brought forward.

In the 19 days of debate — we’re in our fourth week now, of debate here

— here we are, and what’s being brought forward?

We’re getting the Supply Act to debate — fine. Fully four of the

eight bills that the government has introduced, including this Supply

Act, are really housekeeping bills or bills that every government has to

bring in. We have the bill, of course, to ensure the supremacy of the

parliament. I won’t talk to that, obviously, because that’s a different

debate. We have the Budget Measures Implementation Act. Of course, I’m

not going to speak to that bill either. It’s another debate.

[2:35 p.m.]

We have the now famous Miscellaneous Statutes Amendment Act, which

we’re all waiting with bated breath to debate as we define things like

Pacific daylight-saving time. These are what the government’s agenda is.

This is troubling. These are what the government’s agenda is. This is

troubling.

Let’s go back to July 24, 1972, when an election was called. On

August 30, 1972, a new NDP government was formed. In the first session

of that 30th parliament in the fall, they sat for nine days, and they

passed 13 bills. In the second session, they passed 93 bills in 61 days

— 93 bills.

This government has had 16 years in opposition to come up with an

agenda, and now we’re being asked to approve a supply act when we don’t

actually know what that agenda is. We’re 19 days in, and we’ve seen

precisely four non-traditional bills to debate, one of which is the

Supply Act.

We’re troubled about a number of the assumptions in this bill that

are leading to the Supply Act. We have seen government talk about an

employers health tax. We’ve seen government talk about a speculative

tax. We’re not sure what they mean when they’re talking about

it.

I had thought, after conversations and reading the media, that a

speculation tax wasn’t going to apply to British Columbians. Silly me

for actually listening to the Premier and the Finance Minister say that

in media scrums. But then I see an interpretive bulletin that actually

says that what’s going to happen, leading to estimates that we have to

approve here, is that in fact, if you’re a B.C. resident, you’re getting

a tax credit. That’s what the interpretive bulletin says: you’re going

to get a tax credit.

You tell that to the constituents of mine or other colleagues

across this who aren’t earning any income but happen to own a family

cottage on a lake that happens to be in the boundary of Nanaimo regional

district or on one of the Gulf Islands — that now that person is going

to be charged $12,000 a year as a speculation tax. They’ll get a tax

credit, sure, but they’ve got no income on which to apply that tax

credit. How’s that a speculative tax?

This government clearly believes that this real estate market is a

market from which they can sap revenue. We’ve asked: what is the

outcome? What are the outcomes you’re looking for your measures? That

has yet to be defined.

We see projected budget increases, and then stabilization of

revenue, coming from things like this so-called speculation tax. If it

was a speculation tax, you would hope it’d go to zero. It’s being

applied, in our sense, as a paper wealth tax. We feel that what’s

happening here is that policy and finance and tax measures are being

made up in press scrums.

The market needs certainty. What are your outcomes? We have got a

supply bill that’s made budget estimates assuming income from a

speculation tax whose implementation has literally changed three times

since the budget was announced.

Is it going to apply to the Gulf Islands? Is it going to apply to

the city of Kelowna, where the rental accommodation right now is

critically dependent on owners renting their houses to students for

eight months of the year and using those houses in the summer for either

vacation rentals or to live in themselves? This is critical for the

Kelowna economy, yet we call that a speculation. No. They’re playing a

critical role to rental properties there.

We understand that Vancouver is out of control. We understand that

the Vancouver market’s completely out of control, and we understand that

it was far too long to deal with it. But the revenues here, we’re

uncertain of. We’re frustrated, because we don’t know what the agenda of

the government is, we don’t know the direction that they’re going in the

housing market, and all they’ve done is signal to the market that it’s

going to be chaotic times ahead because we haven’t articulated what this

critical new measure is to broader society. That’s not how tax measures

are going to be brought in.

We proposed, of course, dealing with the problem, which was the

foreign capital that’s flowing into this province. This would have given

certainty here, because we would have assumed that when you start to tax

that foreign capital or you actually eliminate the source, you know

those revenues are going to go to zero.

[2:40 p.m.]

This government, in the supply bill, is actually counting on those

revenues and basically taxing the grandmother in Oak Bay who happens to

have a house from 150 years of family on Saltspring Island that they

want to leave to their children.

How many MLAs here have properties on the Gulf Islands? How many

government MLAs have properties on the Gulf Islands? Well, one just has

to look through the disclosure. I can tell you it’s a number of them.

Are they getting a surprise, knowing that they’re going to pay $12,000 a

year, if it’s worth 600 bucks? So $12,000 a year, but they’ll get a tax

credit. They get a healthy salary here. Okay, that’s fine. But most of

them don’t.

We’re very worried down here. We’re worried that the government is

actually falling into the trap that they have branded on themselves over

many years, which is one of not being able to be fiscally responsible

with the money, the hard-earned, taxpayers’ money, in our economy. That

is troubling. It’s very troubling.

Obviously, we support the supply bill. Obviously, we must have a

continuation of the government operating and all the schools and

hospitals around this province. Obviously we must support this bill. But

we want government to stand back and reflect upon what it’s been

doing.

It has had 16 years — or the dreaded 17 years, depending on where

you count, 16 or 17 years — to develop a legislative agenda. We are now

19 days into this session, and we’ve had nothing.

We stuck our necks out. We recognized that British Columbians

wanted a change. We recognized that they wanted to have people put

first. We recognized that they wanted a child care plan, which we see in

the Supply Act. We recognized they wanted real measures done in the

housing market. We recognized that they wanted bold action in the

housing market. What have we got? A tepid response that, frankly, is

botched up from its first introductions through the present day we are

here.

I’m worried, because let me say that the measures that are being

brought forward are not dealing with the problem there. If you want to

tax speculation, tax speculation. But we’re not actually taxing

speculation here. You could still, here: buy a townhouse; take

possession; flip that townhouse four times; pay zero property transfer

tax because you bought it in a bare trust.

Government has known about this for months and years and railed on

the B.C. Liberals to close that bare trust loophole. Have they done it?

No. Why? Because they have to collect more data. How much more do we

need to study these issues? How much more studying do we need? Clearly,

too much, in that case, but what about the employer health benefit?

Well, we don’t need to study that, even though we have a MSP tax panel

to actually do just that.

We decide, as reflected in this Supply Act, that we know what the

answer is. We struck a panel of distinguished academics who put their

careers and credibility on the line to write a report on which

government is going to base decisions, and government determines the way

it’s going to deal it with before their interim report is there. And it

had to, because you don’t make budgetary decisions two days after an

interim report is done.

What does that say that government is actually doing? Is it

listening to the experts? Only on what it wants to listen to. Only on

what it wants to delay, what it wants to kick down the road.

It’s not listening on the employer health premium — again, a piece

of tax policy that, as far as we can tell, was introduced, realized it

was done inappropriately. Now we’ve got the MSP panel coming in with

their final report clearly articulating that they don’t approve or

recommend the direction government has taken. How’s government going to

respond? They’ve boxed themselves into a corner. They’re going to

respond in a way that’s going to hurt schools and hospitals all across

this province.

Now they’ll say: “Okay, we’re going to cut it for the average

person.” Yes, they will. They’ll cut it for the average person. And I

get that there are unions out there — I was one of those negotiators —

who’ve negotiated MSPs as part of a collective agreement, and it was

costed against the settlement. I understand that. But what you do then….

I mean, there are also unions right now going back to their employer,

saying: “You’re not going to have to pay that. Give us the money back.”

Now the employer is getting doubly hit, because they’re going to get a

health care tax. Not only are they going to get a tax; they’re going to

get an increased tax.

I don’t understand the logic of this government not thinking this

through and not recognizing that there are models out there and that you

don’t hit the economy with a baseball bat. You recognize that there are

problems. You send a signal to market, and you do so slowly, and you

don’t make policy up in each individual press scrum.

[2:45 p.m.]

I will quote one of the legislative reporters here who accurately

assessed some emails that my constit office was sending out suggesting

that in fact the speculation tax wasn’t going to apply to British

Columbians, because we heard, in press conferences, government say just

that.

They said just that — that it’s not going to apply to British

Columbians. But in fact, it does. It’s applying, through a tax credit,

not only in the problem area of Vancouver but in downtown Kelowna, which

will absolutely devastate their economy.

In Parksville. The member for Parksville-Qualicum talked about a

development that likely won’t go ahead. Parksville is a community that

caters to — guess what — snowbirds, people from the prairies who are

trying to escape the cold winters and come to Parksville for four or six

months a year to live. Sometimes they rent out their home in the summer,

for summer vacations. It’s a community whose entire economy is based on

tourism — snowbirds and others.

What about if we go to Cultus Lake? I had a passionate plea from a

citizen from Langley who said they just bought a house. They’ve been

saving their life for a place in Cultus Lake. They’ve entered into a

contract, and now they have to move from the contract and get out of it,

out of fear that the speculation tax will apply to them. They’re afraid

that they’re going to be sued because government hasn’t given the market

certainty as to the direction it wants to go. This is

unacceptable.

We’re debating a supply act where the government is asking: “So

give us two-twelfths.” It should be one-sixth. That’s actually a

beautiful demonstration of what I’m saying. Get the numbers right.

British Columbians deserve that. They deserve a signal. They deserve a

real estate sector that actually deals with the problem — not

Whac-a-Mole, where you put a foreign buyer tax in Victoria and one in

Nanaimo regional district. Guess what. You go to Cowichan Valley

regional district.

There’s no difference between Cowichan Valley, CVRD, GVRD and

Nanaimo. There are just a few arbitrary roads in between. So we

Whac-a-Mole down here. We Whac-a-Mole up there. When you Whac-a-Mole in

Nanaimo regional district, you’re going into the rural communities of

Coombs and Errington. They’re not actually communities that have any

housing problem. You’re going into these rural communities and

Whac-a-Moling there. Meanwhile, you’re leaving Cowichan Valley open —

pristine farmland that is being bought up and turned into mansions. But

you’re not dealing with that.

The CEO of the Royal Bank has identified what the problem is. We

know what that problem is. CIBC has identified the problem, by clamping

down on foreign mortgages. This government is actually not viewing what

the problem is. Instead, they’re viewing this tax, to generate revenue

in the Supply Act that we’re debating, solely as a form of income to

fund its other expenditures. That is reckless, and we deserve

better.

We deserve government to declare its agenda. We’ve given them a

full eight months now, and we are waiting. We continue to wait to know:

what direction? What are they going to introduce? You promised a bunch

of things. I sat here for years and watched private member’s bill after

private member’s bill being introduced.

I come back to Dave Barrett. Ironically, and sadly, we celebrated

his life last week. Dave Barrett, who in his first session, in the

spring…. His government passed 93 bills, many of which are around today

— one bill every three days over the short term.

Here we are, government saying: “Trust us. We have an agenda. Give

us some money now. We’ll kick it down the can, and we’ll vote again

later. But we’re not really going to tell you what that agenda is, even

though we’ve had so much time to do so. What we’re going to do is make

up tax policy, on the fly in press scrums, creating chaos in the

market.”

We deserve better. So while I stand in support of this Supply Act,

because we must pay the government, I could say we have very serious

issues with the budget implementations.

Interjections.

A. Weaver: People are joking: “Well, you have to support the Supply Act.” We

have to. If we don’t support the Supply Act, basically, nobody gets

paid, whether it be in schools or hospitals. The government shuts

down.

[2:50 p.m.]

I mean, they do that in the U.S. all the time, and it seems to be

okay. But we don’t want to do that here. We don’t want to do that here

in Canada.

With that said, I say that now we have very serious issues with

the way government is implementing the speculators tax and very serious

issues with how the government is implementing the employers health tax.

We have nothing now before us in legislation. We’re told it’s coming in

the fall. Government has months to fix it. I expect them to fix it,

because frankly, right now it’s unacceptable. Frankly, right now we need

to have certainty.

I plead on government to stop making up tax policy on the fly, in

press conferences. Give us certainty, so we know what’s going on, and

stop scaring people across the province. They’re contacting me. They’re

contacting our colleagues across…. They’re contacting members here. We

deserve better.

Deputy Speaker: Seeing no further speakers, the minister closes debate.

Hon. C. James: So much to respond to. This is the Supply Act, so I am going to

actually stick to the Supply Act — tempting as it is to get into budget

debate with members from both sides of the House.

There are just a couple of things that I think are important to

note. First, I want to say that the member, my critic on the other side,

from Prince George, made a very important point, which is that the

opportunity for questions, the opportunity for making sure that the

opposition has a chance to be able to question ministers, is exactly why

we bring forward the Supply Act. It’s an opportunity for the estimates

to occur, for accountability to be there. That is a strong part of our

democracy, whether you’re on that side of the House or this side of the

House. A critical piece of democracy is to provide for that debate and

discussion.

The member also spoke about differences of opinion. That is in

fact why we’re here. That is why we’re having this discussion around the

Supply Act and around estimates. It’s so that we can talk about our

approaches. It’s so that we can talk about our beliefs, our directions,

our principles and the values we’re bringing forward in the work that

we’re doing as ministers and in the work we’re doing as

government.

I look forward to that debate. I look forward to that debate about

differences when it comes to the budget, because we do believe in this

budget that we have brought forward — a budget that focuses on the

people of this province, who help build the strong economy that we all

benefit from. We do believe, as I’ve said over this last couple of

weeks, that the people of British Columbia should benefit from the

prosperity of British Columbia. That has not been happening in this

province.

Did we bring forward a budget with some bold measures? Yes, we

did. Are we taking action on areas that the public has expected and

asked for, for years in this province? Yes, we are. It’s because the

people of this province deserve to share in the benefits of this

province. They help build those benefits. That hasn’t

occurred.

I know we’ll have an opportunity to talk in other bills and in

other debate about the budget. As the Leader of the Third Party

mentioned, there are not measures in this bill, in the Supply Act, that

speak specifically to the speculation tax or to the employers health

tax. We have had discussions over that, and I expect those discussions

will continue.

When you are bringing forward a new tax measure like the tax

measure around speculation, it is the responsible thing to ensure that

we listen and take the opportunity — as we’ve been doing since we

announced the principles of that tax in the budget in February — to

analyze all of the issues that have come forward. That’s exactly what

we’ve been doing since February, and we will continue to do that. The

details will come out, and we will ensure that people have all the

information they need, well before we are moving into the fall and well

before the legislation comes forward.

With that, I will move second reading of Bill 8, Supply Act (No.

1), 2018.

Motion approved.

Hon. C. James: I move that Bill 8 be referred to a Committee of the Whole House

for consideration at the next sitting after today.

Bill 8, Supply Act (No. 1), 2018, read a second time and referred to

a Committee of the Whole House for consideration at the next sitting of the

House after today.

Hon. S. Simpson: I would call committee stage of Bill 2, Budget Measures

Implementation Act, 2018.

Deputy Speaker: This House will stand recessed for three minutes.

The House recessed from 2:55 p.m. to 2:58 p.m.

Committee of the Whole House

BILL 2 — BUDGET MEASURES

IMPLEMENTATION ACT,

The House in Committee of the Whole (Section

B) on Bill 2; L. Reid in

the chair.

The committee met at 2:58 p.m.

section 1.

The Chair: Minister, did you wish to introduce your staff?

Hon. C. James: I have with me Richard Purnell, who is acting director of tax

policy, and David Karp, director of income tax policy. I’m going to

introduce the staff who may be coming and going. For the members

opposite, we may have some staff coming in for particular areas. Jord

Goss is executive director of the consumer taxation programs branch,

revenue division. Jeffrey Krasnick is executive director of the income

taxation branch, revenue division.

These are people who’ll be coming in and out again: Duncan

Jillings, director of property tax, and Brad Snell, who is the senior

policy analyst in the mineral, oil and gas revenue branch. They’ll be

coming and going as we’re going. I look forward to the

discussion.

T. Redies: Thank you very much to the minister, and thank you to the staff

for coming. This is a very technically heavy bill, so I’m sure the

minister feels very happy to have some experts around her. I know I

would. This is, again, quite a technical bill. We are going to be asking

for clarity, because we really just couldn’t, in some cases, make heads

or tails of some of the changes.

[3:00 p.m.]

With respect to

section 1, can you explain what’s happening here

and how these changes are being reflected through other sections of the

bill? It does make reference to other acts. Maybe you can just sort of

set the framework for the rest of the discussion. Where else do these

changes occur, and what does that mean?

Hon. C. James: Maybe I can talk about the principle of bringing forward the

change. As the member has pointed out quite rightly, there are a number

of sections. That applies across a number of these pieces of the bill

where, by making a change on a taxation piece, you have to make sure

that it’s reflected in a number of different acts. So that’s what you’ll

see. You’ll see, often, what appears to be repetition in a number of the

pieces, and it’s because those changes also have to occur in other acts.

The member quite rightly points out that references to the School Act

and the exemptions will come up in other parts of the bill, and we can

reference those as we go along.

Just to talk about the general principles of this, this is related

to providing enabling support to municipalities. Right now,

municipalities can exempt property tax for municipal revitalization

areas or zones. They can zone a particular area. They can exempt

property tax to encourage development. What we’ve said is that the

province could also be a partner in that by exempting school tax in that

area, in that zone, if the municipality chooses. So this isn’t

directive. This is permissive and gives an opportunity for

municipalities to make a determination, to set this revitalization area

and then have the opportunity to have the province match that with the

school tax.

I think it’s important. I know the members on the other side know

this, but for people who are listening: a school tax doesn’t relate to

schools. I think that’s important to acknowledge. I think many people….

I know the member across the way, my critic, was also on a school board.

I can’t tell you how many times I had to explain to people that the tax

on their property bill that said school tax wasn’t related to the school

board and the spending of resources at the school board. It’s a

provincial tax. It may have had a relationship way back when, but there

isn’t a connection now. Basically, what this amendment does is add the

provincial rental revitalization exemption from property tax imposed by

B.C. Assessment.

S. Bond: Thank you to my co-critic. We’re going to work our way through

these sections, and I very much appreciate her beginning.

That’s a very interesting description, and I appreciate it. Did

municipalities make a request that there be the opportunity for the

province to provide an exemption? Could the minister give us an example

of when a municipality might want to use that tool?

Hon. C. James: We’re going to make sure that the staff who deal with the

municipal tax come in, in case there are specifics.

We did hear, during the housing consultation that the Minister of

Housing was doing, that municipalities were looking for the opportunity

to provide further incentives. For example, if they had developers who

wanted to come in and look at building purpose-built rental housing,

they had the opportunity, as a municipality, to be able to say: “Well,

we can give you a break. We’ve got this tool already.”

Any other tools that are possible and were available were the

kinds of ideas that were coming up during the consultation. The Minister

of Housing did a number of round tables and forums with members from

not-for-profits, from housing, from municipal governments and heard a

number of ideas. This was one of the approaches that came up.

[3:05 p.m.]

We’ll get staff. We can get some specifics where it’s been

utilized — not this tool, because this is obviously a new tax, but where

the municipalities have utilized this revitalization. We can get some

specifics for the member if she wishes.

S. Bond: Thank you to the minister for that response. It’s basically, then,

a tie-in to the housing strategy that the government has tabled, most

specifically, but there may well be other things.

Does the minister or the ministry have any idea of the quantum in

terms of forgone revenue?

Hon. C. James: To go back to the purpose of the revitalization, it’s utilized by

municipalities in a broader sense than simply looking at rental housing.

It’s often used, for example, for a downtown revitalization. It’s a

fairly broad approach.

Our approach from a province’s perspective and from the school tax

perspective is simply rental housing. That is the only portion that

we’ll be looking at. We’re expecting very little revenue loss based on

that because we’ve narrowed it. We’re not looking at the broad

revitalization for municipalities. We’re looking at the revitalization

focused on purpose-built rental housing. This really is, as the member

said, part of the housing strategy.

S. Bond: Since we’re discussing the sorts of overarching principles in

this, and it will help us later when it’s reflected in another act…. At

this point, it’s rental housing and an incentive as part of the housing

plan, but there are other opportunities. You look at how municipalities

incent economic growth. Prince George has just been given a new

designation. One of the ministers of international trade was in Prince

George talking about a new development zone.

Is there the likelihood or possibility that…? Is this basically a

pilot, where we’re looking at a specific government initiative? Are

there other ways that the municipalities could approach government to

say: “You know what? We really need some thinking about whether this

could make the difference in attracting some investment or some other

economic projects”?

Hon. C. James: The member brings up a very interesting point — whether this is a

tool that will be successful in spurring on further work and partnership

between municipalities and the province. I certainly wouldn’t rule that

out. It’s not the intent of the changes that you see in these bills and

the number of changes that you’ll see coming up.

It’s just focused right now on purpose-built rental housing, but I

think the member raises an interesting point. As the member knows,

government tracks all of the tax changes that happen. We will certainly

be tracking this one to see whether it’s utilized and to see whether

it’s helpful to municipalities to do a review, as we do with all of our

tax changes each year, and take a look at whether there are

opportunities or requests.

I think it would be an interesting discussion at UBCM to see where

there were requests, to say that this would be helpful to

municipalities. We certainly wouldn’t close the door, but that’s not the

intent of these changes.

Sections 1 and 2 approved.

section 3.

[3:10 p.m.]

T. Redies: With

section 3, can the minister explain the changes that are

occurring here and give a real-life example of what this applies

to?

Hon. C. James: Again, I’ll just give the bigger picture around the reason for

this amendment. Then, if there are any specific questions around the

amendment itself….

When the carbon tax was implemented in 2008, it was implemented

with a security system which would enable refiner-collectors — and I’ll

get into explaining this a little bit more — to acquire fuel from one

another without paying security on the fuel, instead paying security to

government only on the first sale of the fuel to the person that was not

a refiner-collector. So basically avoiding double paying. That really is

the purpose here.

What this amendment does is it clarifies the legislation by making

sure that all fuel swaps are exempt. The amendment brings the

legislation in line with the current practice that is already there. And

just to define a refiner-collector — that’s something I certainly asked

— it’s persons who own and operate a crude oil refinery in Canada. There

are eight of them in British Columbia.

This, as I said, is basically clarifying the legislation, bringing

it in line and ensuring that when they acquire fuel from one another

without paying security on the fuel, they pay the security to government

only.

Section 3 approved.

section 4.

T. Redies: With

section 4, can the minister provide some insight as to how

this particular change is going to impact the industry, if at

all?

Hon. C. James: Basically, this doesn’t change practice. It clarifies practice.

There will be no change. They’ve been taking these credits now. This is

the way it’s working now. This change will just clarify that in

legislation so it’s certain that it works the way it was intended to

work, which isn’t a double tax, when it’s changed, but that we receive

the security once.

T. Redies: Just to be clear, could the minister confirm that there’s no new

fee and no new tax here being put on the industry?

Hon. C. James: The member is correct. It’s a refunding provision. So there’s

nothing new — no new taxes, no new additional costs in this

section.

Sections 4 and 5 approved.

section 6.

T. Redies: This

section refers to, I guess, the reimbursement of costs for

auditors travelling outside the province. Can you talk about what types

of costs are incurred by auditors now to travel outside of B.C.? What

has been happening in the past? Has something changed here?

Hon. C. James: It happens more frequently than you might imagine — that people

have their books outside the province. It requires, then…. The kinds of

costs you’re looking at, really, for an auditor are airfare, hotel

costs, travel costs to be able to access the books. That’s paid for by

the Ministry of Finance.

[3:15 p.m.]

What we’re saying is we want to look at recovering our costs. We

want to make sure that if there are out-of-province audits that are

required to be done, we eliminate the need for the province to cover

these costs and that we ask the individual or the business to cover

those costs.

Again, remember that the individual could, in fact, bring the

books to British Columbia and there would be no cost, so this,

basically, is a fee…. If someone isn’t able or doesn’t want to bring

their books to British Columbia, then we would recover the costs for the

ministry.

T. Redies: Thank you for that, Minister. I want to, again, be clear here. The

intent is for cost recovery, not to add on any additional fees. It’s

just cost recovery of the auditor’s travel expenses to that

location.

Hon. C. James: Yes, it is cost recovery. We’re not going to look at billing as

you would for someone who travels. It won’t be saying to the company:

“Here’s the cost of….” We will create a fee structure. It won’t be a

cost of: “Here are the air travel costs and the hotel costs, and you’ll

pay that exact amount.” It will be a fee

schedule that will be worked

out. Again, remember that the individual or the business can eliminate

that completely by bringing their books to British Columbia.

T. Redies: Will you be charging for the auditor’s time?

Hon. C. James: The fee

schedule is still being worked out. But the idea is that

it would be a per-diem cost that would include the travel costs and the

time of the auditor.

T. Redies: How long is it going to take for this fee

schedule to be worked

out? It seemed to be quite open-ended language. If I was in industry,

I’d be wondering what the potential impact is here. How long is it going

to take to get the fee schedule, and how much do you

anticipate?

Hon. C. James: The specific fees still have to go through Treasury Board. That’s

an important step. That hasn’t occurred yet. We expect, in the next few

months, that that will be worked out. It’ll go to Treasury Board, and

those determinations will be made. But I think it’s important to stress,

again, that there is a very clear option for people to avoid the fee and

not have to pay the fee at all.

T. Redies: This fee is to be set by regulation. Why not through

legislation?

Hon. C. James: In fact, it’s the administrator or the director that sets the

fees. It goes through Treasury Board. The director has the opportunity

there, sets the fees. The regulation will look at the maximum that can

be charged. It will determine the maximum.

The reason it’s in regulation is just to give the flexibility

around hotel costs or travel costs or those kinds of things changing.

There will be an assessment, obviously, as this is a new piece coming

in. There will be an assessment around what the actual costs are, what

the money is coming in. It gives the flexibility to be able to make

those changes, if needed.

[3:20 p.m.]

T. Redies: Minister, in the briefing, we were given the understanding that

this fee was going to be used to recover costs of operating an audit

office in Mississauga. Is that the case? What’s the cost of operating

that office in Mississauga?

Hon. C. James: There is an office in Mississauga, as the member knows. Just to

mention, because people will wonder why the Ministry of Finance in

British Columbia has an office with staff in Mississauga, it’s precisely

because of these kinds of reasons. Where there are many books that are

outside of British Columbia, it provides an opportunity for us to be

able to do those kinds of audits for people based there. That actually

saves the costs of the individual who is looking at auditors if you have

auditors in the province.

That is one of the considerations that will be looked at — the

fee. No decisions have been made. No costs have been determined at this

point. We’re obviously bringing forward the changes to look at the fee.

But that is one of the considerations that may be on the table when we

take a look at the fees.

T. Redies: Just to ask again: could the minister tell us what the costs are

of operating that office annually? Is there any planned expansion with

these new regulations coming through?

Hon. C. James: I can get back to the member. I know we’ll be taking a while on

this bill over the next week, I’m sure. We can make sure we can get the

specifics. I don’t have them with me, but I can get the

specifics.

There is no intent to expand. The office is working well. It’s

functioning well. It’s serving its job, which is to provide audits, so

we don’t foresee any kind of expansion.

Section 6 approved.

section 7.

T. Redies: I’m sorry, Minister. I’ll be asking these questions quite a bit.

Can you clarify the purpose of this

section and under which authorities

a penalty would be imposed and on whom?

Hon. C. James: Just to clarify, this

section actually is focused on the notice of

assessment of a fee. The penalty piece was already an existing piece in

the act, so this isn’t changing it related to the penalty. This is

talking about making sure that a notice of assessment comes out if we

impose a fee.

Section 7 approved.

section 8.

T. Redies: With respect to

section 8, what deficiencies are there in the

process that the minister believes may occur and why they’re putting

this particular piece in place?

[3:25 p.m.]

Hon. C. James: This is a common clause in tax acts, That’s why it’s included in

here. I don’t have any specific irregularities that the court may find,

but I can go back and talk to the lawyers and see if they have specific

irregularities that might be included in this. This is a standard clause

that is included in the act.

T. Redies: Not being an expert in how this stuff is done, it seems to me a

bit odd. Why would a court be barred from disallowing or varying a fee

related to a deficiency in the process? That doesn’t seem to put a lot

of onus on government to make sure that the processes are correct. I’m

just kind of curious that, if you say that’s a standard clause, it seems

it banks towards government.

Hon. C. James: I’ll look at the two sections. There is a process for a judicial

review of the imposition of a fee. That’s a process that is still there.

Someone can take this issue to judicial review, where they look at the

process and determine if the process was fair or not — which gives a

better balance, as the member was talking about, between government and

the individual. If the judicial review finds that the process was not

followed, they have a right to overturn the fee. That is there within

the act.

In this clause, what the “changed” talks about when it looks at

irregularities is that they can’t overturn because of an irregularity

that happens as it’s coming forward. They can’t overturn the fee based

on that, but you still have the opportunity, through a judicial review,

to have the fee overturned based on administrative process or based on

the process not being fair — which, again, makes sure that the

individual, the business or whoever it may be has a fair opportunity

against government, as the member has raised.

Sections 8 and 9 approved.

section 10.

T. Redies: To the Minister of Finance: can you again give a little bit of

context of why this clause is in here? Why is it being done through

regulation? Why is the limitation value not actually being set in the

legislation?

Hon. C. James: Similar to the previous discussion we had, again, the

administrator determines and sets out the fee. The regulations set out

the maximum that can be there.

Again, this is simply related to the ability to be able to

increase or decrease. It’s not always an increase. I know most people

expect that most times, when fees are put in place, they’re an increase,

but there may be a fee that needs to be decreased. This provides the

flexibility, through regulations, to look at an increase or to look at a

decrease, but the maximum will be set out in regulations.

[3:30 p.m.]

T. Redies: I can only hope that in my lifetime I actually see a decrease in

government fees. But thank you for that, Minister.

Section 10 approved.

section 11.

S. Bond: There are several sections of the bill that talk about

information-sharing. We certainly have seen, with experiences in other

jurisdictions and even here in Canada, that there is significant concern

when personal information is either collected or shared. An important

part of that concept is also protection of privacy. It’s not just about

the freedom of information.

[R. Chouhan in the chair.]

As I understand it,

section 11 takes away, removes, some of the

exclusions of some uses and disclosure of taxpayer information. First of

all, can the minister describe exactly what data will be treated

differently?

Hon. C. James: This piece is about sharing information that’s already gathered,

but sharing it between acts. The Home Owner Grant Act right now sets out

the opportunity to share information with the Income Tax Act, for

example. They can also get and share information with the Land Tax

Deferment Act. If they get information on the Income Tax Act, they can’t

share that with the Land Tax Deferment Act. So there is a pass through.

You can’t share the information between those three acts.

What this provides is an opportunity for that information to be

shared. It’s using existing information, opening that up, so we can

gather information on the homeowner’s grant, income tax and the land tax

deferment, and share that information.

The purpose of this — and I think the member has heard us talk

about this — is to make sure that we have the information we need for

audit purposes. Information is the first step. Once we get audit

information, and if an audit is warranted, that gives us the ability to

then move to enforcement if people are avoiding paying the taxes that

they need to pay.

That’s really the purpose of this change, to allow information to

be shared with those three acts. Information that’s already gathered now

by the Home Owner Grant Act will now be able to be further shared with

the Land Tax Deferment Act and the Income Tax Act.

S. Bond: Thank you, Minister. All of the information that is being

collected is currently collected. British Columbians will be asked for

no new information?

Hon. C. James: That’s correct.

S. Bond: So what we’re doing is, in fact, broadening the distribution of

that information. We’re connecting various parts of the tax system, and

we’re allowing them to share that information.

Will there be monitoring? I know that certainly we have had lots

of discussion about how information is shared, who looks after it, what

happens with it. The good news is, it’s no new information. The question

is: how will we monitor what is a new information-sharing system, in

essence?

[3:35 p.m.]

Hon. C. James: There are strict provisions that exist already. Those will

continue to exist. I can just give the member a couple of examples.

Using the Income Tax Act, for example, taxpayer information can only be

used by authorized persons for very specific uses, such as administering

taxes or formulating fiscal policy. It would be an offence to knowingly

share the income tax payer information for an unauthorized purpose.

There are fines. There’s imprisonment. So very, very clear

restrictions.

On the operational protections, those are kind of the legal

protections on the operational protections. Right now, data file

exchanges with CRA, the Canada Revenue Agency, are all secured via

Entrust encryption. There’s encryption built in there. It provides for

maximum security of the data by making the files accessible only to

individuals who have the cryptographic key, which is the term that’s

utilized, to be able to access the encrypted files. The exchange can

only occur through a file transfer protocol. Again, there are protocols

built in.

Then a number of safeguards around communicating the information

in a secure way and destroying it in a secure fashion. Keeping and

maintaining the records is also covered by this. So very clear

restrictions that do not change with this amendment that we’re

making.

S. Bond: I appreciate that answer. I think also that across government…. I

know that at Public Accounts we recently looked at some work done by the

Auditor General about how the evolution of making sure that we’re

protecting information is improved. I actually think it’s a work in

progress. We had a good discussion about that at Public

Accounts.

The minister referenced the CRA and made it clear that they would

be using some of this information. I’m assuming that is not a new

practice.

Hon. C. James: It’s an existing practice, Member. You are correct.

S. Bond: Are there any other agencies through which the information would

be shared? So CRA, internally through a tax branch. Is there anywhere

else where the information will be shared?

Hon. C. James: This does not make any other changes. There are no other

agreements. This does not expand in any way, shape or form any other

sharing of information other than what is named in the

change.

If the member was looking for an example of where information

might be shared — in a broad sense, not related to this amendment — it

could be, in a very limited way and with all the protections that I

talked about earlier, another ministry that administers tax credits, for

example. There may be very limited purposes, where they’re allowed to

utilize information to be able to determine the eligibility of someone

for a program or a credit. So that may be an example. But this amendment

makes no changes to any of the existing processes.

S. Bond: I just want to confirm for the record that it doesn’t involve

other jurisdictions. We’re not sending this information anywhere outside

of Canada, I would assume.

[3:40 p.m.]

Hon. C. James: Correct, Member.

S. Bond: I want to just explore…. The minister did speak about it in a way

that I think was helpful, but I think if you’re trying to work through….

Information-sharing, as I said, is going to come up a few times, and

we’re probably going to ask fairly repetitive questions. British

Columbians, as you know, are quite reluctant at times to share

information, and they want to be sure that it’s properly

protected.

What is the ultimate purpose of increasing the connection between

a variety of acts, as the minister described it? What does she hope to

accomplish with the broadened network?

Hon. C. James: I think the best word to describe it would be “consistency” of

information. The example I might use would be B.C. homeowners who are

deferring their property taxes. You have to be a resident of British

Columbia to be able to defer your taxes. These measures and the sharing

of this information will allow tax administrators to be able to identify

taxpayers who have different information, for example, on their income

tax return than on their property tax form.

That raises red flags on why there is different information. This

provides that opportunity to, then, identify those red flags and make

sure that people are actually paying what they should and providing the

information they should and that that information is accurate between

acts.

Section 11 approved.

section 12.

S. Bond: Here’s one of the repetitive sections in terms of reference to the

School Act. I think the minister did a great job of clarifying what that

meant in terms of the first section. Could the minister just lay out for

us how it relates to the Hospital District Act?

Hon. C. James: Indeed, as the member described earlier and as I described

earlier, this basically mirrors the school tax change that’s going to

happen with the rental revitalization exemption. It provides an

opportunity, then…. When you see your property tax bill, they have a

number of organizations listed that take a tax off.

We are requiring, through this change, hospital districts to

mirror that same exemption for rental properties, in the rental

exemption that the municipalities may put in place. It mirrors that to

make sure that, again, there are exemptions for rental properties. It

does not look at the broad revitalization piece that we talked about

earlier with the member. This simply applies to the rental

properties.

[3:45 p.m.]

S. Bond: It’s becoming clearer to me now. There will be a package, then, of

potential tax exemptions that a municipality can request of the province

— so school tax, hospital tax — if it’s related to a rental housing

initiative. Is that correct?

Hon. C. James: The onus is on the province. The municipality determines the

rental revitalization or the revitalization exemptions — the area. They

make their changes that need to occur in the municipality. The province,

if it’s rental property, would then say to all of these other provincial

organizations: “You must exempt it if it’s rental housing.”

Section 12 approved.

section 13.

T. Redies: Could the minister explain what the current practice is that’s

requiring clarification in this legislation? Specifically, are there

properties that B.C. Hydro owns that are currently not assessed school

tax that they’re trying to capture with this change?

Hon. C. James: This basically was a piece that was already in place via

regulation. It was put in place by the previous government. That

regulation expires. It had a two-year term. So it’s taking that

regulation, putting it into the legislation and making that change

permanent. It isn’t changing anything. It’s taking the existing

regulation and basically putting it into the legislation around how

their land is assessed as a Crown entity.

T. Redies: Could the minister give us some sense of how much school tax B.C.

Hydro pays today, and will that change with this regulation? It sounds

like it won’t, but I just would like the confirmation.

Hon. C. James: I’d be happy to get the member the number. We don’t have the

number of exactly how much school tax they pay. There are some areas

that are exempt from paying school tax. We can take a look at that, but

there is no change with this. This basically takes the regulation that

was put in place two years ago and puts it into legislation.

Section 13 approved.

section 14.

S. Bond: I know that often tax measures have to be changed to align with

federal changes. Obviously, this

section talks about the infirm

dependent credit and the caregiver credit. Can the minister explain how

this aligns with the federal bill and whether there will be additional

benefits available to British Columbians?

[3:50 p.m.]

Hon. C. James: The member is quite right. There will be a whole series of these

that parallel the federal changes. There were changes federally in 2017.

We aren’t required, as a province, but often, as the member knows and as

she mentioned, if we parallel, there’s an opportunity to be able to

further support individuals in our province.

That, indeed, does happen with this benefit. The changes are

expected to provide taxpayers with an additional benefit of $5 million

in ’18-19 and $4 million in ’19-20 by paralleling with the federal

credit.

S. Bond: Thank you to the minister. I look forward to the details about the

B.C. caregiver credit — I think that’s what it’s called — and how those

additional benefits might accrue to a family, in particular. We know

that’s a huge issue for many families in the province.

Could the minister just confirm for me, then, that there is no

impact to the 2017 taxation year?

Hon. C. James: That is correct. It begins in the ’18-19 year.

S. Bond: Does the minister expect, anticipate, that there will be

additional people who will claim the credit or the ability to claim the

credit? Does the minister expect to see additional people benefit from

the credit?

Hon. C. James: There are some benefits. There are people who do benefit with the

changes that have been made. Those would be individuals who care for an

infirm spouse or single individuals who care for an adult relative.

They’re going to actually benefit, who weren’t previously

benefiting.

These individuals could previously only claim the spousal tax

credit or the eligible dependent tax credit. Even if the caregiver tax

credit or the infirm tax credit would have given them a larger credit,

they weren’t able to claim those. They will be able to now, under these

changes. They’ll get a top-up to make sure that the higher of the

spousal tax credit or the eligible dependent tax credit and the B.C.

caregiver credit is received. So it gives them that

flexibility.

The other piece that is a change is that individuals who are

caring for an infirm relative but don’t live with that relative will

also have the ability to be able to get a larger tax credit, depending

on the relative’s income. It obviously looks at the relative’s income.

But that’s another area where there may be an expansion in the services

or in the supports that individuals are able to collect.

S. Bond: I appreciate hearing…. So in essence, expanded scope. Where there

was more limited ability to apply for other types of credit, a family or

an individual, for example, will be able to claim both. There will be a

cap, I’m assuming, based on income?

Hon. C. James: They don’t apply for both, but they’re able to get the larger of

the two. So it ensures that they get the larger amount, when they didn’t

previously.

S. Bond: We have lots of debates in the House about where we differ, but I

think that’s an important expansion for some families who will certainly

need that.

One question I do have, though, is…. The minister noted…. I think

she said there would be a $5 million investment in 2018-2019 and then a

$4 million investment the following year. Is there a reason that there

was a differential of $1 million? Is it based on just availability? What

was the reasoning in terms of not just continuing a $5 million

enhancement in the second year?

[3:55 p.m.]

Hon. C. James: I think, as we talked about, people who can access more support….

There are also people who are no longer eligible to receive the tax

credit. I think that’s important to recognize. The federal tax credit

said that individuals who live with a healthy senior parent will no

longer be eligible to receive the caregiver tax credit.

It’s the federal government, through their process — and we’ve

mirrored it through our process — targeting the need to infirmed, and

that’s where the support is. We believe that because of that targeting,

there will be a drop in the second year. It’s a small drop. Again,

that’s what the modelling shows. Whether the tax credit needs to be

larger, it’s a small enough amount that that difference will be

there.

We believe that with the changes…. With the extra individuals

coming in and then the limiting of the support for healthy individuals,

we think those are the numbers that are there.

S. Bond: When you look at sort of the puts and takes of the programs, is

there an anticipated number of people who would no longer receive a

benefit that they are currently receiving?

Hon. C. James: I’ll go through each of them, because I think it’s helpful. This a

good piece, for an issue, as the member says, that we all care about.

When I was talking about the individuals who care for an infirm spouse

or single individuals, that will impact about 40,000 taxpayers, who’ll

be better off. That’s the number that we’ve used around the

modelling.

People who care for an infirm relative but don’t live with the

relative…. That’s approximately 2,500 additional people that will

benefit. It’s estimated at approximately 30,000 individuals who live

with a healthy senior parent who will no longer receive the caregiver

tax credit. That gives the member the kinds of numbers that were used

for the analysis.

S. Bond: Can the minister quantify for me what the monetary loss to the

30,000 people is? Is there an average benefit that those families would

lose?

Hon. C. James: We have it back at the office. We’d be happy to get it for the

member. It will really vary because of the family income and the

individual’s income. But we’re happy to do a follow-up and get the

information for the member.

S. Bond: I apologize for being repetitive about this, but could the

minister perhaps more broadly explain to me the difference for the

30,000 people? The minister noted that it was a federal government sort

of realignment of a program. Perhaps the minister could just explain

exactly who and what their circumstances are.

I think it has to do with a healthy parent, but obviously there

was a benefit being provided to these families for a reason before, and

now there isn’t. So could the minister just articulate for me who those

families are?

[4:00 p.m.]

Hon. C. James: Previously, there were two tax credits that were available. So an

infirm dependent credit is for taxpayers — I think that’s pretty

straightforward — who provide care but generally do not live with an

infirmed adult family member. I’ve got the definition of

“infirmed.”

The second credit was called a caregiver credit, which was for

taxpayers who live with and provide care to a senior parent or

grandparent and/or adult family member. The senior parent or grandparent

was not required to be infirmed.

What the change has been is to focus on the care, the amount of

care and people who are providing more care. Basically, what they’re

looking at are people who have an impairment, a physical impairment or a

mental impairment. That’s really the definition that they’re using

around infirmed, and that’s where they’re focusing the credit: to make

sure that people who are most in need are getting the supports that are

there.

S. Bond: That’s a rather large group of people. I think that…. Anyway, I do

appreciate the minister’s answers.

Was there any consideration of closing that gap? I can understand

the need to focus on those most vulnerable and those who are infirmed,

but caring for elderly parents is also incredibly challenging for many

families today.

We’re seeing $1 million less in costs. That’s a fairly substantive

program that families were taking advantage of. Was there any thought

given to the loss of that benefit for families who are in those

circumstances?

Hon. C. James: As the member knows, the complexity of the tax system in making

changes based on the federal tax system is very difficult and causes,

again, more administrative costs.

We believe that it made sense to mirror the federal agreement

that’s in place. Remember, these are tax credits. These aren’t programs,

so this doesn’t take into account the work that we’re doing in the area

of the Ministry of Health, for example, on seniors care, on support or

on home care. This doesn’t take away from any of the work that’s going

on in programs and services. This is simply looking at the tax

credit.

From a tax credit point of view, mirroring the federal tax credit

makes good sense. Then looking at making sure that we’re supporting

those individuals in other ways through government programs and services

can still occur and will still go on.

S. Bond: Certainly, I know we need to move on, but I do want to reflect on

the fact that when you look at seniors care, we require a continuum of

care. No matter how many programs, government incentives and all of

those things are in place, we still have a gap in how we can care for

our seniors.

I would think that as you look at the options in terms of

supporting families as they care for their seniors, one of the things….

Tax credit or not, if that’s an incentive that allows a family to care

for their elderly parents in a particular way….

I certainly understand that the minister is juggling a lot of

priorities. I just think it’s worth noting on the record. The minister

looked for innovative ways to support municipalities, for example, in

building rental units. I think this is an important place where people

will feel that gap. I know that choices are made, but I think it is

important to reflect on the fact that 30,000 people, or 30,000 families,

will be impacted by the loss of this credit.

[4:05 p.m.]

I do appreciate the minister’s comments. I just want to…. For the

record, I think that a series of incentives are required to support

families who take on that important care of seniors.

Hon. C. James: I couldn’t agree more with the member that a range of services and

supports are important. A tax credit is simply one piece that provides

support, and it provides support to certain individuals who are able to

claim that as a tax credit and utilize it. I think we’ve got to remember

that, again, it doesn’t catch all the people who are providing support

to seniors.

I think we can’t look at one particular tax credit as an

opportunity to provide support for seniors, and I couldn’t agree more. I

think we have to look at a range of supports. That includes the Ministry

of Health, with the work they’re doing around seniors, the issue of

PharmaCare and drugs. There are a whole range of pieces that have been

put in place that will make a huge difference for seniors and for the

people who are caring for them, which I think are critical.

Sections 14 to 16 inclusive approved.

section 17.

S. Bond: Again, I think we’re looking at what is alignment with some

changes at the federal level. We’re talking about the education tax

credit for 2017 and 2018. Perhaps the minister can once again walk

through the alignment that’s being made here, from British Columbia’s

perspective.

Hon. C. James: When the federal government changed, there were a whole range of

tax credits that were in place and that the federal government

eliminated. Just to give context around this credit, this was a

non-refundable tax credit that was based on the number of months that a

taxpayer was a full-time or a part-time post-secondary student.

Full-time students qualified for a benefit worth $10.12 per month, and

part-time students qualified for a benefit of $3.04. I think there were

certainly good reasons to take a look at this credit and make

changes.

The previous government was making the changes in 2018. We’re

going to be making the changes a year later, in 2019. January 1, 2019

will be the end. We think there are better ways, more ways, more

opportunities to be able to support post-secondary students. This was

very limited. It was a very limited credit. We wanted to make sure that

we provided the transition while we looked at priorities around

post-secondary, had discussions with institutions and looked at the best

ways to provide support to students.

Section 17 approved.

section 18.

S. Bond: Maybe just to follow up on what the minister said, I want to

confirm, then, that it extends it a year. I do recall that our

government was going to make the same adjustment, but I did want to

follow up on her comments about future thinking around advanced

education. This will not, at this point, be replaced with any equivalent

credit, but there is a contemplation of how post-secondary students

might be supported with another type of credit, perhaps.

Hon. C. James: Correct. We are not looking at a replacement for this credit. We

are in discussions. The member will know, from the commitments that we

have around post-secondary, that there are a number of areas that we’ve

looked at for post-secondary students — everything from grant programs

to interest on tuition. All of those discussions are going to

continue.

Section 18 approved.

section 19.

[4:10 p.m.]

S. Bond: I want to ask one thing to reflect that basically in

section 19,

simply, there is no change to the tuition tax credit. I think the

language was that they were attached, together. I’m assuming that what

this does is simply adjust the Income Tax Act to reflect the elimination

of one part, which is the education tax credit, but the tuition tax

credit stays in place.

Hon. C. James: That is correct, Member.

Sections 19 to 22 inclusive approved.

section 23.

T. Redies: To the minister, this relates to the mining flow-through tax

credit. I see it’s being renewed annually. Has there been any thought

given to extending it for a few years to give the mining industry some

certainty?

Hon. C. James: This is a credit that for the last number of years has been one

year, each year. We always evaluate. You’ll see that, as we get into

further discussion around other tax credits, there are different amounts

of time that tax credits are reviewed. I think that that often relates

to the importance of taking a look at the tax credit, seeing whether

it’s still effective, whether it’s meeting the goals that you want,

whether we see it supporting the industry — for example, if we’re

looking at the mining flow-through share tax credit — and having

discussions with the industry itself, as well, around the tax

credit.

I think there have been a number of tax credits where you’ve seen

changes that have occurred over the years and where you’d want to go in

and make some changes to the tax credit. So we won’t rule it out. It’s

certainly a big support to the industry. We support it. That’s why we’ve

extended it. We wouldn’t rule out looking at a longer period of time.

But those will be discussions we’ll have with the industry as

well.

T. Redies: Thank you, Minister, for that answer. You’re right. There are

different periods of time for different tax credits. There doesn’t seem

to be a rhyme or reason to why. I was just thinking. Given some of the

challenges with the industry and the fact that this has been a

long-standing program, why not extend it for a few years?

Hon. C. James: I agree with the member. It’s something that we’ll consider and

take a look at. This was our first full budget. In many cases, it’s

continuing on the practice that was there. That certainly will be

considered as part of the review.

Sections 23 to 25 inclusive approved.

section 26.

S. Bond: This

section relates to the farmers food donation tax credit

program. I’m wondering if the minister could explain to us the purpose

of the credit and, perhaps, how many people claimed it last

year.

Hon. C. James: I think the member knows well that this is a non-refundable

personal and corporate income tax credit, which is to encourage farmers

and farming corporations to donate food, fresh produce, to registered

charities that provide free food — food banks, school meal programs and

those kinds of things.

[4:15 p.m.]

The credit is worth 25 percent of the market value of the donated

food, and individuals have to claim the charitable donation tax credit

first. That’s a piece that they have to claim. Corporations have to

claim the charitable donations deduction, which means they get the

provincial and the federal tax incentives on this piece.

It’s not — and this is why it’s extended, back to the conversation

we had earlier — about whether you extend it for one year or further

years. Right now, in 2016, for example — we haven’t got 2017; we’ll be

gathering that data — 30 individuals claimed the program, $9,000 in

personal tax credits. So it’s not been a huge boom. Certainly for those

communities, it probably has made a big difference, for those individual

communities that are able to access food that they weren’t able to offer

before. This is why, in a review of the program, we want to take a look

at that. Corporate claims can’t be disclosed because there are so few of

them. If we did, it would reveal taxpayer information.

I think we certainly have some work to do. If this is a program we

want to expand or extend, I think there is some work to do. As the

member knows, the Minister of Agriculture is looking at a large program

around Buy B.C., Feed B.C., Grow B.C. This will certainly be part of

that review — to look at whether this is the most effective way to be

able to get produce to food banks and school meal programs, etc., or

whether there’s another program we should be looking at. That’ll be part

of the Minister of Agriculture’s review over the next while.

S. Bond: That was, obviously, going to be my next question: is there going

to be an annual review? In many ways, it’s disappointing that there are

only 30 individuals. I know that it makes a difference, because I have

farmers in my constituency who are very generous and who make a

significant contribution to organizations in our community.

I want to just confirm, though, that there has been no change to

the criteria and that basically, the program today is the program that

it was. Is the minister suggesting that the Minister of Agriculture is

looking at the overall program related to the benefit?

Hon. C. James: Correct. There have been no changes. This is the same program that

is being extended for another year. The work by the Minister of

Agriculture is looking at the broad issues of supporting farmers,

supporting food banks, supporting fresh produce, whether we’re talking

about food banks or talking about hospitals and schools.

It’s a much broader view, but the review will occur there to look

at whether we need to expand this program, whether we need to do better

advertising, whether we need to get the information out or whether

there’s another program that would be a better fit or a better

opportunity. All of that will be under review.

S. Bond: I’m going to take the opportunity to just get a plug in with the

Finance Minister. I used to have a much more direct route. Now I have to

use this platform.

I just want to also note that — I’m sure the Minister of

Agriculture will be looking at it — the farmers market nutrition and

coupon program is absolutely fantastic. I see the Minister of FLNRO

nodding as well, so I’m happy to see that. I’ve certainly had

communication from a number of people in my community, encouraging the

government to maintain that program. It does make an enormous

difference. I think it’s in over 50 locations across the province. I

thought I’d take my opportunity to get in a plug.

That’s it on this

section for me.

Hon. C. James: I couldn’t agree more with the member across the way. I think the

farmers markets have done a very good job of making sure they reminded

all of us of the value of that program.

I’ve had those visits as well, at my own farmers market, to talk

to families who’ve benefited from the program. It makes a huge

difference. The fact that it’s coupons that people get — they can just

go like everyone else and make their choices around the market — makes a

huge difference around respect for individuals who are also there as

well. I couldn’t agree more that it’s a strong program.

Sections 26 and 27 approved.

section 28.

T. Redies: This is, again, another one of these information-sharing changes,

I think, between different acts. So perhaps some of this has already

been discussed. Can the minister explain exactly what is being done here

and what new authority is being created here with respect to

information-sharing?

[4:20 p.m.]

Hon. C. James: I think you’ll see a number of these pieces. We’ve dealt with one

already. I think there are a number of other ones coming forward that

deal with the specific acts talking to each other.

This will allow information to be shared from the Income Tax Act

to the Land Tax Deferment Act — not the other way, as we talked about in

the other one. You’ll see different specifics coming forward. This is

the Income Tax Act sharing information to the land tax

deferment.

Again, for the purposes of consistency of information, this gives

us the opportunity. Again, if people are putting different information

in different places, it gives a chance for auditors to have the red

flags raised and to know whether we can go in and take a look at whether

there are issues around information or whether there are issues around

paying taxes or qualifying for programs.

T. Redies: Thank you, Minister, for your answer. I guess just maybe asking

for a little bit more clarity. Specifically, what taxpayer information

is going to be disclosed to what branches of government?

Hon. C. James: The example I would use…. It was an example when we talked about

property tax deferment as well. If a requirement — for example, in the

Land Tax Deferment Act — for someone to be able to defer is to be a

resident, we would have the ability in the Income Tax Act to confirm

that information and make sure the information was consistent. If it

wasn’t consistent, that again would raise red flags and would give the

opportunity for us to do some kind of audit or make sure the information

was provided and is correct.

T. Redies: Thank you to the minister for the answer. Can you give us a little

bit of clarity, too, in terms of how this information is going to be

shared and the process whereby it would be shared?

[4:25 p.m.]

Hon. C. James: A fairly straightforward process but with all the safeguards in

place that I talked about earlier in the previous section. The CRA

downloads the income tax information to our income tax branch here in

the province. Then, if there was a request or a requirement to check on

residency, for someone to be able to look at the program, the income tax

people would be able to look at that information, only that information,

and only that information could then be provided for the purpose that

was needed to be able to determine whether residency was

there.

It’s very limited on the scope of the information. Again, with all

the checks and balances that we talked about earlier — the legal

safeguards in place, the privacy safeguards in place — and on the

individuals who can access that information, safeguards are in place as

well.

T. Redies: Can you maybe give us an example of what would constitute a

potential red flag — i.e., what would cause an auditor to question the

residency of a particular individual? How would that be solved with this

particular piece?

Hon. C. James: In most cases, it would be the example of somebody applying for a

program. So somebody applies through the Land Tax Deferment Act to defer

their taxes. The land tax deferment people would come to the income tax

people and say: “Could you check on someone’s residency? They’re

applying for our program. They’re required to be a resident as part of

this program.”

The income tax people then would have the ability to go in to be

able to check that very specific piece. Then a red flag could come up if

somebody was not a resident yet they’d applied, or if they went back and

discovered no income tax forms had been filed for ten years and they’re

looking to defer their taxes.

It’s the issue of someone applying, of looking at a program and

then being able to do the checks and balances to make sure the

government program’s integrity remains, that people are applying and

providing their correct information and that they fall under the

program. That’s really the kinds of examples that this will

provide.

T. Redies: Just to confirm, the trigger is somebody applying for a program.

That’s when this might come up where you would be looking for more

information with respect to residency.

Hon. C. James: That’s correct. In the ordinary case, that’s how the process

works. Somebody applies, the check is done, and if there’s a problem

there, that raises the red flag.

T. Redies: In terms of the problem that you’re trying to solve with this

particular change, can you give us some sense of what you think the

scope of the problem is out there and what this might lead to in terms

of, I guess, additional taxation recovery or whatever? Could you just

provide some clarity around that?

[4:30 p.m.]

Hon. C. James: I think this is…. It fits with most of the information pieces that

are coming forward as sections in this bill. The lack of information

really means we don’t know. We don’t know at this stage what increase we

may see, whether there are a lot of people taking advantage or whether

there aren’t.

[L. Reid in the chair.]

That’s really the purpose of these changes. It’s to give us that

ability, in a very limited way and in a scope that serves the purpose,

which is making sure people are paying their fair share of taxes, as

they need to within the law. This will hopefully provide us with this

information.

We haven’t built any revenue into the budget, for example, around

this piece, because it really is an unknown. I think we’ll have a better

sense next year and the year after on some of these measures of the

changes we’ll make. At this point, it really is an unknown.

There’s lots of discussion out there, as the member knows, lots of

conversation about this being a very big issue. I think gathering the

information, and doing it based on the facts, is the first step in

making sure we get to the bottom of this issue.

T. Redies: Thank you, Minister, for that answer. I do agree with you. It’s

hard to know exactly what the scope is when you don’t actually have the

information. We also have to be very careful that information like this

is handled with due care. I think you’ve indicated that the only time

people would be accessing the income tax information is if somebody was

applying for a program.

I guess just maybe a little bit more clarity around the controls

in place so that not just anybody, for any reason, can go and look up

someone’s income tax information. I think we’d like to know that there

are some proper controls around that.

Hon. C. James: First of all, the amendment speaks to that specifically. It says:

“…official solely for the purposes of the administration or enforcement

of the Land Tax Deferment Act….” I think that speaks very clearly to

that piece.

Government, as the member would know, in a number of areas, has

information-sharing protocols and security in place that are already

covered by freedom of information and the purpose there. The Income Tax

Act is very clear that information can only be shared for a very

specific purpose. And there are penalties. There are penalties that are

in place for when that’s not followed or if that’s not

followed.

So very clear guidelines. This does not alter any of those. It

does not alter any of those provisions. It’s important to us, as well,

to make sure that the taxpayer’s information is only being shared for a

very specific purpose and that those safeguards are in place.

Section 28 approved.

section 29.

S. Bond:

Section 29 talks about removing a requirement for the

Lieutenant-Governor-in-Council. That’s a code word for cabinet. Can the

minister explain why the requirement is being removed?

Hon. C. James: This is, again, a harmonization of an approval process, right now,

for information-sharing agreements around other tax statutes. Just to

give the member…. This is not an exhaustive list but just to give some

examples. The provincial sales tax, the property transfer tax, the

carbon tax, the tobacco tax, the insurance premium tax, among others,

are all entered into without Lieutenant-Governor-in-Council approval

right now. This is just harmonizing the approval process under other tax

statutes.

[4:35 p.m.]

S. Bond: Does the minister anticipate any other information-sharing

agreements may be required under the income tax and land deferment

acts?

Hon. C. James: We have an agreement in place between CRA and our income tax

branch. We’re looking at that now, whether that will need to be amended.

That hasn’t been determined yet, but that may need an amendment to

include this act.

Section 29 approved.

section 30.

T. Redies: This is a relatively large

section dealing with, I think

primarily, tax avoidance. Given that it is such a large section, could

the minister explain what you’re trying to achieve here, what problem

you’re trying to fix and, I guess, the scope of what it is that you’re

doing?

Hon. C. James: We talk about paralleling the federal act. This change in this

section amends the Income Tax Act to better parallel the federal

government’s anti-avoidance rules, which would ensure, then, that a

taxpayer can’t benefit under B.C.’s Income Tax Act by misusing or

abusing a provision in the federal act.

This, in fact, tightens it up. It closes some opportunities that

people may utilize and makes it consistent with other anti-avoidance

rules in other provinces and federally. As I said, it’s really to make

sure that we harmonize with the federal approach that they’re using and

cut down on the ability for people to be able to abuse or misuse

an act

and gain a benefit in another place.

T. Redies: Could the minister explain, maybe an example, how our current regs

basically enable somebody to avoid tax? Now you’re making these changes.

So I’m just curious as to how it would happen.

[4:40 p.m.]

Hon. C. James: There was a very specific court case that, in fact, pointed out

exactly this issue, where someone took advant