Fourth Session, 41st Parliament

(2019) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Thursday, April 11, 2019

Afternoon Sitting

Issue No. 239

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

Second Reading of Bills

Bill 25 — Coastal Ferry Amendment Act, 2019 (continued)

N. Simons

B. Stewart

S. Malcolmson

J. Rice

R. Sultan

S. Gibson

Hon. C. Trevena

Bill 19 — Energy Statutes Amendment Act, 2019

Hon. M. Mungall

G. Kyllo

T. Shypitka

B. Stewart

Hon. M. Mungall

Bill 27 — Ticket Sales Act

Hon. M. Farnworth

M. Morris

B. D’Eith

J. Martin

S. Chandra Herbert

M. Stilwell

Hon. M. Farnworth

Royal Assent to Bills

Bill 5 — Budget Measures Implementation Act, 2019

Bill 10 — Income Tax Amendment Act, 2019

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Environment and Climate Change Strategy (continued)

M. Stilwell

Hon. G. Heyman

P. Milobar

A. Olsen

S. Thomson

G. Kyllo

THURSDAY, APRIL 11, 2019

The House met at 1:33 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

G. Kyllo: It gives me great pride today to stand and introduce some very close

friends, Shannon Martinson and Trevor Harrison, visiting us from Salmon Arm.

Trevor is a homebuilder — very successful, does an amazing job. Shannon is a

very close friend of our family. Shannon has two kids, Kade and Keela, who

were born about the same time as two of my girls. I’d like the House to

please give Shannon and Trevor a very warm welcome.

B. Stewart: It gives me great pleasure to welcome to the House some of my family:

my mother, Rosemary Stewart; my sister Andrea McFadden and her husband,

David. Obviously, they are here looking for the excitement around Bill 15,

but unfortunately, we’re not discussing that today. We’ll look forward to

the other debates going on in this House.

Coming from a long line of agriculturalists, they are very interested

in changes to the agricultural land reserve. More importantly, Andrea and

her husband have one of British Columbia’s most successful lavender

enterprises called Okanagan Lavender.

[1:35 p.m.]

Orders of the Day

Hon. M. Farnworth: I call continued debate in this chamber on second reading, Bill 25,

Coastal Ferry Amendment Act. In

Section A, the Douglas Fir Room, I call

continued debate on the estimates for the Ministry of Environment and Climate

Change.

[J. Isaacs in the chair.]

Second Reading of Bills

BILL 25 — COASTAL FERRY

AMENDMENT ACT,

(continued)

N. Simons: I’m happy to have this opportunity to speak in favour of Bill 25,

the Coastal Ferry Amendment Act, 2019.

I’m very pleased that our government has made a very concerted

effort to ensure that this important infrastructure of our province,

which serves thousands of residents of island and coastal communities,

is not only strong but has a strong foundation for going forward. It’s

been a long time, I think, that I’ve spent in this House listening to

questions about ferries from my colleagues, asking some of my own, and

hearing, from government, answers that never satisfied me or residents

of ferry-reliant communities.

I represent Powell River–Sunshine Coast. For those who don’t know,

it’s the only constituency in the province that’s entirely only

accessible by boat or by plane. Or if you’re a good swimmer or if you

happen to hike the very long trails up and around Howe Sound, up and

around Jervis Inlet or Bute Inlet…. That was tried once, to no happy

conclusion.

This is, in fact, a piece of legislation that strives to ensure

that the public interest is a central part of the act, the legislation,

that governs how our ferries operate in this province. Now, back in 2003

or ’04, I believe it was, the previous government made a decision to

take the authority of running the ferries from the government. They

decided to divest it to a private company.

They gave that company its operating orders, and those orders were

in the form of the Coastal Ferry Act. At the time, Judith Reid, the

Minister of Transportation, said that the new act would increase the

number of jobs, promote stable fares and…. There was another thing that

I don’t quite…. Oh, ensure our level of service was

maintained.

Now, since then, of course, we saw that fares increased, in some

cases, up to 105 percent — on the Texada Island ferry. Services were

cut. The number of about 2,700 sailings per year were cut. We saw the

elimination of the discount that was provided to seniors to travel on

certain days of the week. We saw communities that were, in effect, left

completely out of the discussion around how their infrastructure was

going to serve them.

Studies were done by independent examiners to see what the impact

of the B.C. Liberals’ plan for B.C. Ferries was, and it was that our

communities suffered economically, socially. And unfortunately, it

resulted in a lot of people having to struggle more in order to make

ends meet. This is simply because they lived in communities that were

served by ferries and relied on ferries.

I call our communities ferry-reliant. We’re not dependent; we’re

reliant. Our businesses use the ferries on a daily basis to bring goods

to market or from the market. Family members go and visit friends or

family across the Salish Sea or across Jervis Inlet or from Horseshoe

Bay over to Langdale.

[1:40 p.m.]

These are ferries that connect people, that connect communities,

that connect businesses. They ensure that young people can participate

in sports activities that might not be present in the community they

live in. We had kids participating in orchestras who had to travel on

the ferries.

When the government made decisions about ferries, they did so with

very little input from the public, not because the public wasn’t

interested. The public was specifically kept out of the decision-making

process — specifically and intentionally kept out.

We went from a system that the previous government felt was

problematic…. They decided to off-load the responsibility for ferries

onto a company. So when people had complaints, they would phone me, and

I’d say, “You have to phone the Ferry Commissioner,” and the Ferry

Commissioner would say, “You have to phone B.C. Ferries,” and B.C.

Ferries would say: “This is not our problem. Talk to the

minister.”

We talked to the minister. The minister from the previous Liberal

government was known to say things like “boo hoo.” It wasn’t his

concern. He wrote a piece of legislation that cut the public out of the

decision-making process, and his response to our concerns, when we

raised them appropriately in this House, was boo hoo. In other words:

“You’re on your own. We wrote the legislation. Forget about it. We’re

done. This is the way it’s going to happen.”

We saw fares increased. We saw services reduced. We saw

communities suffering economically. We saw people having more difficulty

accessing health care, entertainment, employ­ment. People take the ferry

every single day between West Vancouver and the Sunshine Coast for work.

People take the ferry every day from Texada Island to Powell River to

work.

These are nurses. These are people who teach in our school system.

In fact, on Texada Island, when the government allowed services to be

cut so much, kids could no longer attend school. People moved off the

islands in order to be able to do the most basic community activities,

such as going to school or keeping a job.

Now, I think the concerns that this is somehow going to make

government specifically in charge of every decision that B.C. Ferries

makes is just wrong. I don’t think that the opposition should be so

scared. I don’t think they should be so concerned that, in fact, when we

talk about public interest and we enshrine it back into the legislation,

that’s something to worry about. It’s not.

We’re here to serve the people of the province. When you hear the

opposition say, “We don’t like that you put public interest back into

the mandate of the authority,” I really question who the opposition is

supporting. I’ve asked that question many times on many different pieces

of legislation. Who are they standing up for here? It doesn’t seem to be

the people of the province.

I’m more than happy that the Minister of Transportation has worked

hard, with the support of her caucus and her colleagues in cabinet and

the Premier, to say public interest is important. On a service — on

ships that ply our waters, that serve our communities, that make sure

our communities are strong — there should be public input into how those

programs are offered.

I really question the idea that just because it’s our government

restoring public interest into the act…. It doesn’t mean that there’s a

secret plot to take over the running of the ferries again. Yes, there

are many people in our communities who would like government to bring

back ferries under the direct authority of government. There are many

people with many cogent arguments to say that’s a good idea. Our

government has made the decision, based on some financial

considerations, that that wouldn’t be a good idea.

But we’re making efforts to overcome the barriers that that

creates by saying, “Okay, the legislation governs ferries. It’s still a

separate company. The single shareholder is British Columbia people.” We

should have a system that says: “Consider the interest of the public.”

Now, the interest of the public isn’t simply to ensure that we have

reliable service back and forth but that we have a service that reflects

the concerns and values of British Columbians.

Our concerns and our values include ensuring that we have a clean

environment. Yes, we are making good, strong efforts towards addressing

our climate change goals. I think the CleanBC is a singularly important

part of that process.

Individuals and companies in our communities have their own

responsibilities as well. We’re not telling B.C. Ferries they have to

reduce their carbon emissions, but we’re saying that the oversight of

B.C. Ferries has to include the consideration of their impact on the

environment.

[1:45 p.m.]

Now, a member from the opposition, the member for West

Vancouver–Sea to SkyWest, spoke earlier, and he made some good points.

Well, he made one good point that the public interest was…. No, I can’t

really think if he made a good point. Anyway, he raised concerns that,

in fact, the government was taking everything over, that we were going

to be micromanaging B.C. Ferries. That is singularly not the

intention.

We are ensuring that the board, the authority, represents the

public. The government appointments are still a minority on that board.

It is not going to be able to control the day. The input of people that

the government thinks will reflect the interests of the public…. They’ll

be the ones chosen for the board, and I’m, quite frankly, very pleased

about that.

I think that coastal mayors and councillors and district directors

are all saying that we finally have a government that recognizes that

ferries are not just like a funucational adventure, as the one previous

minister used to call them. We don’t go on the ferries for fun and

education. Sometimes we get fun, and it’s educational. We see whales. We

see the beautiful coastline. We enjoy the ferry rides often.

Unfortunately, they did cancel the shrimp salad sandwich, and the

government’s not going to say you have to restore that sandwich.

Everything that the ferries does is up to them, but they operate within

the legislation that we’ve written. We’re amending that legislation, as

is the responsibility of government. The responsibility of government is

to ensure that the public interest is embedded in the legislation that

we pass here.

Unfortunately, in 2004, I believe it was, the public interest was

actually excluded from that legislation. We’re correcting a wrong. We’re

fixing a problem. We’re actually overcoming what I think might have been

an ideological bias. Our perspective from this side of the House is to

ensure that the legislation we pass here is a reflection of the

interests of the public, the people of British Columbia.

People who don’t even live in ferry-reliant communities benefit

from an affordable service that serves the coastline — goods and

services from the Sunshine Coast, people from the Sunshine Coast. We

welcome so many visitors to our beautiful area, and they come over on

the ferry. When ferry services prevent them from travelling, even with a

little bit of inconvenience, that’s usually surmountable. When the

inconvenience means you have an eight-hour wait at a ferry because

they’ve decided to cut the midday sailing, that is a serious problem. I

understand, because I used to not live in a ferry-reliant community. I

understand that it’s hard to conceive of what it is like. But when you

count on your highway being closed for two hours and then open and then

closed for two hours….

Every single time you travel anywhere, you need to take a ferry.

My riding — you need to take a ferry from West Vancouver. You get to

Gibsons. Everybody wants to go to the Sunshine Coast. It’s beautiful. If

you want to continue up the Sunshine Coast, you have to take another

ferry. That ferry goes to the Powell River region. If you want to go to

Texada Island, you’ll take another ferry over there. These are

communities that need to have their concerns reflected in

legislation.

When the government allowed B.C. Ferries to consider cancelling

the first sailing on a Sunday morning, it suddenly meant that if you

were travelling and you needed to go to the Vancouver airport in order

to catch your flight, you’d have to go the night before. You’d have to

buy an expensive night in a hotel. That’s the kind of thing that I think

a well-considered system would take into account before a decision is

made on that kind of thing.

Kids wouldn’t be able to go up to Whistler, in the member from Sea

to Sky’s own constituency. They wouldn’t be able to go first thing in

the morning, like kids and skiers and outdoor enthusiasts like to do.

They’d have to wait. And the inconvenience is more than an

inconvenience. It impacts a lifestyle. It impacts the quality of

life.

Restoring public interest, I think, is the most fundamentally

important part of our responsibility in this House. For that reason, I’m

strongly supportive. I encourage those who may not understand the

complexity of our coastline or the difficulty in transportation along

our coastline to recognize that in ferry-reliant communities, we have a

perspective that might be slightly different. Just as I might not

completely understand all the issues in Peace River or I might not

understand all the concerns about the Kootenays. But I rely on my

colleagues in this chamber to inform me of the concerns of their

constituents.

[1:50 p.m.]

Even as a member of the government caucus, I welcome any insight

that could add to my understanding of the diverse geography and

demography of our communities. I’m pleased to offer my encouragement to

members in the opposition. I understand the way our system works. We

don’t require their support, but it would certainly be a nice indication

for residents of the coast to see that the opposition understands that

when we took out the public interest from the management of our ferry

system, we did a disservice to British Columbians, including my

constituents.

I hope that after careful consideration, and perhaps proposed

amendments, the opposition will support this important piece of

legislation. I thank you, Madam Speaker, for the opportunity.

T. Shypitka: I seek leave to make an introduction.

Leave granted.

Introductions by Members

T. Shypitka: It gives me great pleasure to introduce two very, very, very important

people in my life that are here in the gallery today, the first one being my

son, Adam Shypitka. He just turned 11 yesterday. They just made the big trek

from the Kootenays down here. We’re going to watch the Vancouver Giants

sweep the Victoria Royals tonight. The second one — my wife, Carrie. She’s

the rock. She’s the love of my life. I really appreciate them coming down

here. I hope the House will join me in welcoming them here.

Debate Continued

B. Stewart: It gives me pleasure to rise on a very important topic for British

Columbians. As many of the previous speakers have noted, this is an

integral part of the history of British Columbia and the development of

Vancouver Island and the Gulf Islands and all the coastal communities up

and down the coast. This is very important and, of course, one of the

things that would be considered to be particularly topical, especially

when you adjust service and what it is.

I want to talk a little bit about the history and kind of how

we’ve got to the B.C. ferries corporation today. We’re talking about

amending the way that the appointments are made and why the B.C. ferries

corporation was set up as an independent Crown corporation. This was a

privately run enterprise in the early ’60s. Of course, the government of

the day decided that that wasn’t servicing the needs of the

communities.

I can remember travelling from Vancouver to Victoria on one of the

old CP ferries, which doesn’t look anything…. It was more like a cruise

ship. You loaded in through the side, but it was one of the early kinds

of ships.

Another famous trip that we took back in the mid-’60s was a trip….

We flew out of the Kelowna Airport — in those days, there weren’t many

flights — probably on a DC-3 to Vancouver. We loaded up into a wagon and

went across to Saltspring, where we spent an absolutely unbelievable….

Probably one of those best memories in our lifetimes as a family —

getting to the Gulf Islands. Coming from the Okanagan, it seemed

idyllic, walking along the beaches and all the changing tides — things

that we didn’t have on Lake Okanagan, where we spent our time and grew

up.

The Okanagan is not that much different. Even today, Kootenay Lake

still has automobile ferries. Lake Okanagan was not that much different

in the sense that we had a ferry there until 1958 when the bridge opened

up.

Interjection.

B. Stewart: It wasn’t a free ferry, as the member is suggesting about the

Kootenay Bay ferry. That’s a decision that’s….

As far as what we’re talking about, the fact is that a toll bridge

was built across Lake Okanagan. It was a toll bridge, meaning that the

residents or the people that used the system had to pay. So it wasn’t

free.

The reality is that the ferry service that we have today is not

free. I think the member admits that. There is a cost to it. We need to

manage that, and that’s what B.C. Ferries…. I think that one of the

things that is really important is that we talk a little bit

about…

Interjection.

[1:55 p.m.]

Deputy Speaker: Member.

B. Stewart: …what the changes are.

I’m sure that the member is quite passionate, being that he’s from

Powell River–Sunshine Coast. I know that it’s a ferry-dependent

community. I do want to speak to some of his comments that he made. I’m

sure that he’ll give me that opportunity to speak directly to some of

his suggestions — that it would be great if we could come together on

this. I would like nothing better than that, Member, in the sense that I

think that if we could arrive at the same principled kind of approach on

this, I would be happy to support Bill 25. However, there are some

dangers being proposed in Bill 25 that I think need to be

raised.

I know that the minister is listening intently in the sense that….

I mean, she’s also from coastal-dependent communities. It is important

that we have this dialogue. But I want to just go back in time a little

bit. I want to talk about the B.C. Ferry Authority and what the changes

were that the member for Powell River–Sunshine Coast

references.

One of the things that we have to look back on is: what led to the

creation of an independent Crown corporation? Part of that was not…. If

the service was in good financial stead, I doubt very much that the

government, back in 2001, would have had to look at what was

happening.

Maybe I should just take you down memory lane and summarize a

little bit about what happened the last time that your government was

running ferries for ten years in the province. You had several terms to

be able to make the changes and adjustments. And no doubt, the service

has improved. It was very much, I’d say, focused in on the communities,

etc., but there are some concerns that I do want to raise.

Just so you know that you can talk about ferry fares, between 1991

and 1999, the ferry fares in British Columbia increased 72 percent,

which, I mean…. Okay, 72 percent is almost doubling in less than ten

years. So you have to think about what that meant.

Despite the 70 percent fare hikes, B.C. Ferries’ debt increased

1,800 percent. So what did we get for the 1,800 percent in increased

debt? From $60 million in 1991, when they took over from the former

government, to $1.1 billion in 2000. That’s a staggering increase, and

what do we have to show for it? Do we have a fleet of new ferries? Did

we get improvements in terminals?

Where did it all go? No new terminals. The ferries that were

built, which I’ll come to in a second, were sold off because they didn’t

work. The bottom line is that we were left with a system that not only

had increased the debt, but it was dragging down the province’s credit

rating because of this debt.

One of the reasons that Crown corporations are set up off-books

and set up with an independent board of directors is to ensure that,

essentially, when looking at the province’s overall debt load as the

Minister of Finance, you would look at how much debt and what we can

afford to do with it.

B.C. Hydro. It’s expected that B.C. Hydro will take care and

service its own debt. B.C. Ferries — it’s the same thing. It’s set up as

an entity to make certain that they can afford to make certain the

repayments.

I have to say that, you know, on top of the fact that there were

losses in the ’90s…. One of the worst years ever posted was in 1996-97,

when they had a total loss of $77 million. All right. So even last year,

if I’m not mistaken, the province of British Columbia not only covered

almost a quarter of a billion dollars of subsidy that went into B.C.

Ferries….

Interjection.

B. Stewart: Well, it goes into B.C. Ferries to help prop them up. This is part

of our….

Interjection.

B. Stewart: Okay. It’s part of the expectation that we will make certain that

there is adequate service to those communities. So a quarter-billion

dollars is coming out of all the other taxpayers in the

province.

I see the member wants to…. He must have other things to go to,

but I do want to address one of his comments that he made.

[2:00 p.m.]

I think the fact is that we don’t see that there’s a secret plot.

What we do see is that if we end up getting to a situation where the

highways are considered to be an equivalency, like a two-hour wait for a

ferry…. Well, I know the member for Kootenay East was travelling to

Kelowna recently to get to some meetings that he was attending there,

and there was a truck that was in one of the creeks. What ended up

happening is that Highway 3 was closed for more than a day. Of course,

it was a tragic accident. But this is a reality we face in the interior

of British Columbia. Snow, avalanches and all the other things that can

delay transportation.

Many of us…. I know that I travelled with…. Five of us, my

colleagues, were unable to get here for the throne speech because of the

fact that the flights in and out of Victoria were cancelled on February

11 and then the morning of the 12th. So we drove. Of course, it was a

horrific day of driving — vehicles on Highway 1 through Vancouver. But

we did eventually get here, albeit late. But it was an exciting and

bonding experience, I have to say.

The point about it is that I think that many of the members that

don’t have ferries in their communities appreciate the fact that we have

DriveBC, and we rely on the fact that the skilled and top-flight

government workers and bureaucrats, etc., try their best.

I’ve heard all sorts of complaints, as a former chair of the

regional transportation advisory committee. Lots of Interior people felt

that we should have no avalanche closures on the Coquihalla. Well, when

you look at it, and you actually start to understand how snow is

controlled in those corridors, it is impossible to guarantee that. It

doesn’t matter….

I think that really, one of the things that we have to appreciate

is that there are disruptions. In ferries, it’s wind and other matters —

mechanical breakdowns and things like that.

I want to go back to, you know, this idea and notion that we’re

taking B.C. Ferries and we want to turn this from maybe a Crown

corporation that has oversight from an authority that gives direction.

And typically, the management are charged with the responsibility of

doing the strategic planning, making the decisions, making the

recommendations to the authority and making certain that the mandate is

achieved as to what the commissioner and the authority give direction

on.

In this particular bill, one of the things that we’re talking

about is that we are changing the makeup of that board. We’re actually

taking the number of OIC board appointments to the B.C. Ferry Authority

from two to four candidates. This is going to eliminate two community at

large candidates. I’m not quite certain that’s making certain, as it

says here…. We want a service model that puts people first. We’re taking

community at large candidates that are no longer going to be there and

sitting on the B.C. Ferry Authority.

That is part of what I don’t understand — why the government feels

that it needs to have its own appointments or what the agenda is.

Because besides the four representatives on a nine-member board, there

is also a representative from the workers, which in this particular

case, would be the union members that are part of the B.C. Ferries

staff.

So between them and government, what if they decide: “Well, you

know, we don’t really like the business model that the other four

business-minded or whoever is sitting on the B.C. Ferry Authority, and

we want to make changes”? As the member for Powell River–Sunshine Coast

said: “We want the shrimp sandwich back.” Or we don’t think that having,

you know…. I’d say utilization on some of the ferry routes running at

less than 20 percent, which sometimes happens. I’ve seen the

statistics.

Certainly, the bigger routes — Tsawwassen, Swartz Bay, Nanaimo,

Horseshoe Bay…. Those ones have high utilization, and I think, for the

most part, we don’t have complaints. It is the communities that are more

difficult to get to that do struggle with the service that they have

come to expect or believe that they should have.

Yet I go back to that trip in the mid-1960s, and we all loved the

idea of: wouldn’t it be nice to be on island time, where we didn’t have

to worry about the fact that…. Things happen, right? You don’t get the

ferry. I have cousins that spent their entire lives growing up in

Ucluelet. They used to take the ferry over. It was quite a journey in

the early ’60s travelling from Ucluelet — the Pacific Rim National Park

didn’t even exist — and making their way across to Port Alberni, down to

Nanaimo and over to Vancouver.

[2:05 p.m.]

I think that their idea of coming was that they came as close as

they could, but the reality is that things happen when you’re taking

those long journeys.

I think that one of the concerns about having the B.C. Ferry

Authority under too much government control is: does it pass the smell

test from the people that look at our credit ratings? And will that mean

that we may end up having to take the B.C. Ferries debt back into

government because we want to have this control? We want to make certain

we’re making decisions based on the priority of, as the minister said,

putting people first.

I want to talk a little bit about our record in terms of what

actually happened after this fiasco with building ferries on our own,

when it was government directly awarding contracts to, maybe, their

friends and families or whoever you want to call it. The reality is that

we built three ferries in the 1990s here that cost British Columbia

taxpayers $462 million to build.

Those ferries — I remember seeing them plying the waters, going

back to Nanaimo. They looked very…. Fast cats, I think, is the brand

that they were sold under. But the reality is that they were not really

designed for the waters here. The wake, etc., swamped the boats and

ruined docks, etc., and they had to be taken out of service. It was a

case where there wasn’t enough due diligence done.

It’s a case where people that are not in the business of running

an enterprise like B.C. Ferries are making decisions based on something

that sounds good. It’s going to create jobs, and we’re going to put all

these workers to work on these ferries. We had those ferries in

operation for a very short time, and we’ll talk about the outcome of

that.

I want to just flip the page ahead, to back when the federal

shipbuilding procurement was taking place, back seven or eight years

ago, here in Canada. Of course, the federal government put the

procurement out across Canada. It was a highly competitive bidding

process, and of course, British Columbia wanted its fair

share.

The reality is that we worked with the shipbuilding yards both in

Esquimalt…. As the member for Esquimalt-Metchosin said earlier: “Why

don’t we build ferries here?” or “Why don’t we do that?” We do want to

do it. We do retrofits right in her riding. She has one of the biggest

dry docks on the west coast of North America, and we do want to take

advantage of that. But we needed to have the skilled workers. We didn’t

have them at the time. We didn’t have the people that understood how to

do that.

Here on Vancouver Island, at Camosun College, we put in programs

around shipbuilding — the wiring, the painting and the engineering of

these things — to help build the capacity that we needed to have to make

certain that we could undertake shipbuilding in a constructive

manner.

Those people that have been trained through that program have been

out working with Seaspan, out of North Vancouver, which is where the

contract, eventually, for some of the ships in Canada…. Not the largest

one, but it was a start, and it helped get our foot in the door. It

helped build the capacity so that British Columbians, with a coastal

province, have every right to be able to make certain they have the

ability to participate in a competitive bidding process.

Now, we know that there’s lots of competition, and we’ve got lots

of challenges in British Columbia, as we’ve seen with the recent LNG

plants. Bringing steel in from offshore or from other countries —

there’s a tariff on it. So we have that disadvantage. We have an

incentive to using Canadian-produced steel — not that it’s from the

west. But the reality is that we incentivize the idea that we’re going

to create employment opportunities here in Canada for

Canadians.

Not all of that makes sense, so some of those LNG facilities are

being built offshore, in modules. Some are coming from Korea. I imagine

parts are coming from China. The reality is that we want to do that, but

we have to have the capacity to be able do that.

I’m going to go back to the fact that we were successful in the

government procurement bid, working with Seaspan to make certain that

they had the tradespeople. We had the education system to backstop them,

and we were prepared to help them get to capacity so that we could build

those supply ships here in Esquimalt, as well as in North

Vancouver.

In the 1990s, that fast ferry project, the $462 million debacle….

I mean, it was something that I’m sure Glen Clark, or I should say the

former Premier….

[2:10 p.m.]

I apologize. I retract that, Madam Speaker.

I’m sure that the Premier probably would have liked to have seen a

better outcome. I’m sure we all would have, as taxpayers.

At the end of the day, those two ferries were sold off. They went

to…. I think it was Abu Dhabi. But anyways, they’ve been recently

spotted in Egypt.

Anyways, the situation is that those ferries sold for $19.4

million, and they cost $462 million to build. That’s $6½

million….

Interjection.

B. Stewart: Hey, listen. They’re your ferries. It’s your legacy. If you wanted

to buy it for $6½ million, you could easily have…. I’ll bet you the

scrap metal would have been well worth the investment. But you know,

that’s not my business expertise.

I do know one thing: the business expertise that is needed to make

certain that we don’t get B.C. Ferries back to where we were, where

government was running B.C. Ferries and making all the decisions…. It’s

not a place we want to go. Bill 25 is taking us back to a place where,

both from a credit-rating point of view and a danger point of

view….

We do want to make certain that we consult with the public. We

want to make certain that we take their input, which we did in 2013 and

2014 before we looked at the utilization, the subsidy that was going

into B.C. Ferries and what the taxpayers of the province of British

Columbia are willing to fund on an annual basis to have the services

that the member for Powell River–Sunshine Coast mentioned.

You know, people on Texada Island, he says, can’t get to school.

I’ve got people in my riding, kids, who travel two hours, one way, in a

bus, along British Columbia’s worst….

Interjection.

Deputy Speaker: Members. We’ll come to order.

Interjection.

Deputy Speaker: Members, please come to order.

B. Stewart: Well, Member, I…. Okay, so….

Interjection.

Deputy Speaker: Member, come to order.

B. Stewart: Well, you’re the one that suggested that they couldn’t necessarily

get to school. My point is, I’ve been on Texada Island. I know that one

of the members earlier, from Esquimalt-Metchosin, talked about sailing

around. That’s idyllic. That’s the island way of life.

I think that when you make a decision…. When you go to islands,

etc., I think that there is a responsibility that you take on to make

certain that there are adequate resources. Some of the communities…. I

know many of the members from rural British Columbia have small

communities that have small schoolhouses that are closing or being

threatened to be closed because of the fact that there’s a lack of

students in those ones. So it is not a perfect solution.

Anyways, I know the member has vast experience in making business

decisions, but these numbers speak for themselves. So $1.1 billion in

debt.

Interjection.

Deputy Speaker: Member.

B. Stewart: Thank you, Madam Speaker.

I think that one of the things that we…. In the recent

consultations, when we were in government, we knew that there was going

to be hardship in those communities — ferry-dependent communities up and

down the coast. We never took anything lightly, but we made certain that

the Ferry Commissioner, who I think did an exceptional job to make

certain that the authority was alive to the fact that they had to make

certain that they did consultation….

What were they going to do for communities that were affected, as

the member suggests, that the ferry was shut down? The ferries, at

certain times of day, were shut down, but not all of the ferry service

was shut down, as far as I know, to any one of the communities that were

ferry-dependent.

I worry, also, about the long-term strategy. B.C. Ferry Authority

is about the strategy, the fact that…. I’m sure that anybody who’s in

this House who has travelled on B.C. Ferries in the last decade has to

say that there’s an improvement not only in the services but the fact

that the food services have been…. You know, they’re dynamic. They’re

diverse. They meet the requirements. The Internet. The comfort. The fact

that they have an exceptional on-time service record. The fact is that….

You know what? I think that for most people….

[2:15 p.m.]

I realize it’s an inconvenience. But you know, when I go to fly

here in Victoria, I have to plan to be at the airport an hour ahead. I

have to leave my house 30 minutes or 45 minutes, depending on the time

of day. It’s part of planning. It’s part of life. It’s not…. The ferry

service has an on-time record.

The fact is that what we want is certainty, to make certain we can

do that. If we start fiddling around with that — because we think, “Oh,

it’d be nice to have an extra sailing here, there and everywhere else” —

that’s how the clock keeps running up and we keep spending more money.

You don’t have to take my word for it, okay?

Interjection.

B. Stewart: Well, back when your government was last running the ferries,

Member, I can tell you that there was a review of what had happened,

okay? So let’s not just look at the fact that it was a bad deal, and how

it all happened.

The independent Wright report, 2001 — and the Auditor General, in

’99, report on the structure of B.C. Ferries — found that political

interference was rampant across B.C. Ferries operations, not just in the

fast ferries. Wright said in 2001 that B.C. Ferry Corp. would be unable

to meet its financial goal of solvency due to the governance structure.

That’s the whole reason that we’re here. This is about the reality that

governance matters. That’s why we’re all here. If you can’t learn from

past lessons, Member, you haven’t really learned anything. What you need

to do is to understand.

Re-read the Wright report; re-read the Auditor General’s report.

Both of those reports we acted on when we became government. The 1999

Auditor General report and the 2001 Wright report recommended that

control of B.C. Ferries be placed in a truly independent board. We tried

to make certain that we did exactly that. We tried to make certain that

we didn’t interfere.

We increased the subsidy when we realized that there were

challenges. We made certain that B.C. Ferries, through the

representation, did community consultation. Nobody likes to have a

reduction in services or increased costs. I think that as far as some of

the things that I know we were doing recently with LNG, we were very

much focused in on putting LNG, clean ferries, into service. That’s a

new opportunity in British Columbia because of the large supply of

natural gas here in the province and having facilities that can supply

B.C. Ferries right here with cleaner-burning natural gas, LNG, versus

bunker fuel, would be a benefit.

I like the idea of the e-drives — I do know that there’s a company

that I visited in Vancouver that’s a world-leading manufacturer of

batteries — that actually convert to battery power when vessels are

entering ports. Some of the best ports around the world are demanding

and expecting that ships coming into port use this type of alternative

energy, rather than being dependent on bunker fuel in areas where it’s

spewing out CO 2 and whatever other emissions that are in the

air.

I think the reality is that we don’t have to look very far.

British Columbia has been leading in that already. The company is

selling their product to fleets of ferries all over Scandinavia and in

Europe, and B.C. Ferries should be embracing that type of technology to

make certain that we’re using homegrown clean technology to make the

ferry fleet better.

In closing, I just want to make certain that I’ve answered some of

the questions, some of the concerns I’ve heard from the members

opposite. They talk about that this is really about serving the public

interest, and I get that. I think that that’s always what we’re here to

do: to make certain that we’re serving in the public interest. These

B.C. Ferries are like a marine highway, and highways, as I mentioned,

are subject to closures.

Recently, and the member for Penticton…. There was a landslide,

and the highway between Penticton and Kelowna was closed for weeks

because of the fact that the slide was unpredicted, a geological event.

There was a fix that they put in on highways. The staff there, as

always, put in temporary measures, but sometimes they’re not very

popular: a three-, four- or five-hour trip for some of the people that

were in my riding. They were commuting back and forth to work. It

happens. The fact is that you have to work around that and try and find

friends or other people, maybe, to stay with while you’re in the

situation where the highway is closed.

[2:20 p.m.]

I’m looking forward to further debate on this. I know that some of

my colleagues that had to take over this fiasco back in 2001 — of having

too much government interference in the B.C. ferry system — will, I’m

sure, have a word or two or want to say the real facts about what it was

like and how difficult it was to get back to a balanced budget that this

government, I know, is talking about, with all of the tax increases that

they’ve brought in.

Well, the fact that increased taxes…. It seems like a small

amount, but $6 billion in carbon tax, an increase in provincial spending

over the next three years, will bring it up 25 percent. That’s not a

small amount of tax increases.

I think the reality is that it’s all hinging on the status quo,

the economy growing as the best in Canada. The reality is that history

has shown, as we know from the ’90s, that the economies do ebb and flow

and they change. I hope that they’ll give further consideration to some

of the comments that I’ve made today.

J. Brar: I seek leave to make an introduction.

Leave granted.

Introductions by Members

J. Brar: I see a number of students there. I don’t know what school they’re

from, but they’re there to witness the debate in this House and also to

learn about this institution.

It’s Ladysmith Intermediate School. They’re here to learn about this

democratic institution and watch the debate. I will ask the members to make

them please feel welcome.

Debate Continued

S. Malcolmson: Ladysmith is close to home and another ferry-dependent community,

so I’m glad that the students are here to listen. I hope they don’t take

too much to heart the comments from the Liberal member opposite, knowing

full well that the NDP has only increased taxes on the wealthiest and

most-connected Liberal friends that were looked after for so long, when

they did not look after regular people, including ferry

users.

The history of B.C. Ferries over the last 15 years has been a

terrible one for our community. As someone who lives on an island

serviced by a ferry, I have been deeply embroiled in the debates and the

community concern and comments about how best to manage

ferries.

So this really is a good day. We are standing together as New

Democrats with our Minister of Transportation, who herself lives on a

Gulf Island — Quadra Island. This is one of the ferries that goes back

and forth. It’s a real commuter ferry. For people that live on Quadra

Island — the same as where I live, living on Gabriola Island — the ferry

is absolutely a lifeline. For any members or anybody watching who

doesn’t have that experience and know how deeply intertwined the ferries

are with B.C.’s community, with our economy and with our settlement

pattern….

In fact, when B.C. Ferries was created in the early ’60s, it was

taken on not by a New Democrat government but by an arguably more

right-wing government. It said this is in the public interest — to make

this part of the province’s infrastructure. Indeed, settlement patterns

were laid down on that basis — on commitments that the ferry service

would be provided by the province and that the fares would be

affordable.

We do pay, unlike the Interior ferries — they were the focus of

most of the previous speaker’s debate — where they don’t pay anything

for their ferries. On the coast, we do, and it matters. It has

impact.

Then because of the push in development that happened because of

the ferries, Islands Trust was created in 1974 by the NDP government.

But it was a recommendation of all parties, recognizing that the

development pressures on the southern Gulf Islands were intense. Partly,

that was because of the access now from the public ferry system. So

those two institutions have grown up very much together.

[2:25 p.m.]

As I was elected as a trustee in 2002 until 2014 and, for six of

those years, was chair of Islands Trust Council, a lot of my advocacy

and what I’ve learned about ferries came directly from ferry users and

from islanders.

Let me also just give a picture of how a ferry changes a

community. When the ferry is not running, we truly are inter-reliant and

interdependent as a community. It creates very tight

communities.

Also, the conversations that happen in the ferry lineup or on the

ferry itself knit communities together in a way that they wouldn’t in

any other way. It’s not the same as being stuck in a traffic jam

together. It’s not the same as being in the waiting room at an airport.

We get to talk with people in our community that we would never know

otherwise.

Very often we unload on the ferry. After a 20-minute conversation,

I feel, as an elected official, like I’ve just had my second mini–town

hall of the day. But people always say that that’s a conversation we

would not have had if we had a bridge or any other way to get to the

community. So I’m grateful for that. They are community

builders.

This is why this legislation that we are bringing in today is so

important, to bring and affirm public interest back into the centre of

the Coastal Ferry Act. Again, the previous speaker talked a lot about

inland ferries, but they’re not governed by this legislation.

The previous government made reckless cuts to service on our

routes and reckless, ideologically motivated fare increases. They drove

fares up repeatedly, putting islanders at a disadvantage that was costly

and unfair. Some of the results of that are still felt today.

Fares doubled under the B.C. Liberals, during the time they were

in power. This led to a big decline in ridership, and it caused billions

in lost economic activity.

I’m very grateful for the work of local governments in this

regard. That includes the Union of B.C. Municipalities, which put a

major effort into trying to get the government to see the damage that it

was doing and to hire the consultants to do the business modelling to

prove that the link between the user-pay philosophy of ferry fares….

It’s a philosophy that is applied to no other government service. Roads

are not user-pay. Hospitals are not user-pay. Schools are not user-pay.

But under this government, ferries became user-pay, and that was

wrong.

Ferry fares doubled. A family of four on a round trip between

Vancouver and Victoria now pays $216. That’s $96 or 80 percent more than

they paid in 2001. And ferry fares rose at a rate of four times the rate

of inflation between 2001 and 2015. Then making it even worse, in 2014,

the Liberals pressed ahead with $19 million in service cuts, cutting

sailings on 13 routes, without consulting communities or doing any

socioeconomic impact on what that would cost.

Now, the Liberals on the other side will say: “We did consult.”

Let me tell you, I was there, and this was the form that the

consultation took: “We are cutting half a million dollars out of

operating costs, out of your ferry. Which runs and which B.C. Ferry and

Marine Workers staff do you want to sacrifice?” It was an impossible

situation.

We ended up having people saying: “If you cut that early morning

sailing, I will lose my job at the hospital. I will not be able to get

to my shift in time.” And the hospitals have got 1,000 people there.

They are not fiddling with each person’s salary to accommodate those who

happen to live on an island just 20 minutes away.

These were life-changing decisions for families. We lost, on

Gabriola, a lot of our young working families. With the demographic on

the coast, we could not afford to lose them. They were heartrending

conversations. That was no consultation, and the government did not show

up.

At that time, it was the member for Kamloops–South Thompson, who

still sits in this House. It was his cut. It was his process. He would

not show his face to any of those communities and say to them directly:

“I am going to force you to either lose your community, your friends,

your whole kids’ network and teachers you’ve come to know or lose your

job.” It was mean-spirited, and it was wrong.

They also eliminated the Monday-to-Thursday 100 percent discount

for seniors. Who messes with seniors? The Canadian Association of

Retired Persons were protesting on the front lawn of the Legislature.

Have they ever had to do that before? For what savings? This was the

midweek sailings only that they got a 100 percent discount, if they were

there as a passenger. It saved not a lot of money, but it sure riled up

a lot of very activist seniors. It was ridiculous.

[2:30 p.m.]

These cuts hurt communities. They hurt the economies. Tens of

thousands of people put their names on signatures to this Legislature

demanding a fare freeze and rolling back the fares on B.C. Ferries,

ferry cuts. They asked for a full resumption of service.

These are all things that this government has done in the first

year and a half in power. We have restored the seniors discount. We have

frozen fares on the major routes. We have rolled back fares 15 percent

on the minor routes. It is having an immediate impact, both on ridership

and on people’s pockets, and it’s the right thing to do for a government

that is oriented for the people and that runs B.C. Ferries as an

organization, as a corporation, for the people.

[R. Chouhan in the chair.]

Still more B.C. Liberals that still sit in this House…. We met

with the member for West Vancouver–Sea to Sky repeatedly. As chair of

the Islands Trust Council, I was part of a group of regional district

chairs from the entire coastline, from the CRD here right up to Reg

Moody, who is the Bella Bella regional district chair. All walks of life

— Mount Waddington, Alberni-Clayoquot. We all were there.

Joe Stanhope, from the regional district of Nanaimo — I didn’t

think we had the same ideological inclination, me and Joe Stanhope. But

we became firm friends, and we united so strongly. It was his old party

who did this, and he was spitting mad at them.

Blair Lekstrom was a transport minister who heard us and said:

“You’re right. We’re doing damage.” He did nothing to repair it,

although he was the most sympathetic one.

The member for Langley, who still sits in this House — she refused

to hear what coastal communities wanted. We met with the Premier,

Christy Clark. She beamed at us and told us our analysis was brilliant —

again, did nothing. So, yeah, they are still here, still doing

damage.

Now, even worse, then they brought in their own Coastal Ferry Act,

and this is what they said it was going to do. People that represent the

coast, listen carefully to some of this language. See if any of this

worked out. They said that “the primary intent of this bill is to ensure

that our coastal ferry service can flourish and support our economy.”

This was in 2003 that this was brought in.

“We all want the service to succeed; we all need it. It is

fundamental to local economies, and it is one of the most prominent

symbols of our lifestyle here on the west coast…. Most of all, B.C.

wants B.C. Ferries to meet its potential, to sail on time, to have clean

facilities, a good selection of food choices and friendly services and,

of course, to remain affordable.

“This piece of legislation…give assurances to people as we move

forward that their ferry service will be there for them. They will know

what rates they’re going to pay for it, so they can make their plans.

The industries that use the ferries will be better served.”

Finally:

“I believe this will lead us into a time where we can look forward

to more people travelling on the ferries instead of feeling like the

ferries were a bottleneck to our economic growth and

prosperity.”

That’s what the Minister of Transportation, Judith Reid, said was

going to be the outcome of their Coastal Ferry Act. Instead, high fares

eroded B.C. Ferries’ customer base and high fares affected business

viability in ferry-dependent communities like the Gulf

Islands.

When I was representing Islands Trust Council, we wrote this

letter to Blair Lekstrom in 2011: “Trust Council wants economic and

social considerations taken into account when establishing fares and

service levels for routes serving rural coastal communities. Small

business is struggling under the weight of the cumulative effect of

excessive fare increases. Tourist traffic is down, adding stress to

communities counting on tourism to ease the transition from reliance on

traditional resource extraction.” It doesn’t sound like that 2003

promise was kept.

From Bowen Island, here are some specific impacts, then, of the

service cuts. They said: “Morning cuts have resulted in social impacts

that include children no longer participating in off-island

activities…and shift workers now needing to spend that night off-island.

It has also resulted in inconvenience for people who want reasonable

travel connections to the airport or to weekend morning events such as

church service.”

Denman Island and Hornby Island, which were very hard hit, then

were forced to take a gap in service in the middle of the day. They say

missing a mid-day ferry now means a significant cost. Delivery

businesses can no longer make two deliveries in a day. Denman Island

elementary schools had to stop competing in interschool sports, and

Vancouver Island schools have to wait in the lineup for hours and hours.

So it affected that fabric of the community also.

[2:35 p.m.]

We ended up with a conclusion of “failure to deliver” for the

Coastal Ferry Act. We wrote again — this is now 2011 — from me, Islands

Trusts Council, to the Ferry Commissioner. Since 2013, with funding

frozen to the ferry service and increasingly referred to as a subsidy —

implying it’s not a legitimate government contribution to provincial

infrastructure — we illustrated precipitous increases in ferry fares, an

average of 60 percent at that time and as much as 125 percent fare

increases on some routes.

We identified the corresponding drops in ridership levels that

were having grave impacts on island communities. We said that this is

setting up a negative cycle of impacts. As fares increase, ridership

drops. Then businesses close, and families leave, threatening the social

and economic stability of island communities. When ridership levels drop

once again, B.C. Ferries’ only option is to further increase fares,

continuing the downward cycle. Instead of the promised improvement,

we’ve seen skyrocketing fares, seriously slumping ridership and a ferry

service that doesn’t appear to sustain itself.

The costs of goods and services on the island have gone up

substantially, as well as the cost of essential trips to see doctors,

dentists, family and friends. Contrary to some suggestions, our

communities are not wealthy, with average family income below or close

to B.C. average levels.

So here we are today — total failure and economic failure, as well

as a failure to honour the public good. We are instead introducing….

Well, actually, even before this bill, we already had a lot of good news

for ferries. The legislative amendments here on the Coastal Ferry Act

will ensure that the model is putting the needs of people in B.C. at the

heart of the decision-making. They’ll also enshrine the view that B.C.

ferries are an integral part of B.C.’s transportation

network.

Having, with this legislation, community interest at the forefront

of decision-making, there are a few ways that this is being done. The

viability of the corporation, of course, is still considered, but cost

and service to communities is paramount, as it should be as a Crown

corporation.

Second, the public interest group participation in ferries is now

facilitated and funded, which I think is great. We’ve had a huge amount

of expertise — retired economists and modellers and number crunchers

that have been doing the yeoman’s work for 15 years. The ferry advisory

committees do this work. The FAC, ferry advisory chair’s committee, have

been doing this work. My friend Brian Hollingshead, on Saturna Island,

just made it his entire retirement project to crunch the numbers to

forecast on what the impacts would be on people of increased ferry

fares.

I’m just so glad that, as in other legislation…. Ontario used to

have this, the Intervenor Funding Project Act. If you are truly in the

public interest and you need an analyst or a lawyer to help represent

you in a public interest regulatory hearing, you should have that. That

will increase and level the playing field so that public interest is

represented. And then more representatives on the B.C. Ferries board

only makes all the sense in the world.

I appreciate other small pieces too. In a previous amendment to

the Coastal Ferry Act, the requirement that there be no

cross-subsidization between routes was removed. That was deeply damaging

to us. That’s already gone. In this bill, though, is gone the

requirement or the invitation to contract out routes or to say that you

could meet your obligation to get people from A to B by building a

bridge or by privatizing the route. That was never taken up on. I’m very

glad that the Transportation Minister has taken it out. This is public

infrastructure and so should remain.

More good news, just to end, in our community. We are restoring

the service cuts that were removed under the previous government. I

represent three routes: Nanaimo–Horseshoe Bay, Nanaimo–Duke

Point–Tsawwassen and also Nanaimo-Gabriola. Gabriola is going to have

service — that’s route 19 — restored, I believe, starting on April

[2:40 p.m.]

The Ferry Corp., with help from the Ministry of Transportation,

said to the ferry advisory committee: “You decide. You talk with your

community about which of the sailings you want to restore and how that’s

going to work.” They were able…. Just yesterday they announced that

they’ve recommended that it be the early morning sailing. They’ve also

done some tweaks to assure that people can connect to the first ferry

departing Nanaimo for Horseshoe Bay. Again, the connectivity piece

that’s extremely important.

Then last year we provided support to freeze fares on the major

routes, roll back fares 15 percent on the minor routes and restore

seniors’ travel midweek — all very humane, sensible,

good-for-the-economy, good-for-affordability investments. I’m really

proud of the Transport Minister for taking those on.

If I may, Mr. Speaker, I’ll finish by talking not about a B.C.

Ferries project but a really important ferry project in my own

community. For years we’ve talked about a private harbour-to-harbour

foot passenger ferry between Nanaimo and Vancouver. It would boost

affordability in the region. It would really boost the local economy.

The tech sector especially says that this would be great for jobs for

us, that they can attract more people, more talent.

We’ve been helping it move forward. I have, as a Member of

Parliament and as a local government rep before then. I have been

fighting myself, personally, for five years for this project, along with

Mayor Krog and many other community members.

In December, the Transport Minister agreed that the infrastructure

money allocated for passenger ferries and federal infrastructure money

would be prioritized by the B.C. government. That’s something that the

B.C. Liberals refused to do. So that’s a major leap forward for this

project and a really good news piece for Nanaimo, which has been arguing

this for so long.

We’ve also — this is the minister — lifted the non-compete clause

with B.C. Ferries and removed one more barrier to this private foot

passenger ferry going ahead; also accelerated the federal funding

process, gaining six months at least; and then also working with

TransLink to gain approval for the passenger ferry to land on the

Vancouver side. So four big ways that we have helped to remove barriers

to this project. We were very helpful — that that work has been

successful.

I’m really proud that, in addition to this work on the coastal

ferry system, the minister and her staff have been able to help Nanaimo

with this smaller private project. We need ferries. We are reliant on

ocean travel. It’s good for the community and the economy. I’m very

proud to support Bill 25.

J. Rice: I’m really excited today to stand up and talk to Bill 25, the

Coastal Ferry Amendment Act, 2019. Thank you to the member opposite who

has made space for me today to talk at this timeline.

The legislation we’re discussing today will strengthen the Coastal

Ferry Act to better serve the needs of people in coastal communities. I

found it really interesting to hear from the previous member opposite,

from Kelowna, talk about the hardships faced by Kelowna residents with

the occasional road closure and comparing that to the impacts that have

been felt by coastal communities. That was quite intriguing.

I also note that the ferries that are in his area, in the interior

of the province, are 100 percent free, unlike the ferries that service

coastal British Columbia and island communities.

British Columbians deserve a ferry service model that puts people

first. People living in coastal communities depend on this vital service

provided by B.C. Ferries. But for many years they experienced service

cuts and skyrocketing rates. These amendments to the Coastal Ferry Act

will put people at the heart of decision-making. These are the Minister

of Transportation’s words. I agree 100 percent. I have to say that I’m

so pleased she’s here today, because I am so honoured to be speaking to

her bill today.

[2:45 p.m.]

It is going to dramatically transform the lives of my constituents

on the north coast and Haida Gwaii and in the Central Coast — for many

rural and remote communities, most of which are Indigenous, most of

which don’t enjoy the wealth from the interior of the province like the

member from Kelowna was speaking about.

This is transformational, not just for economics. It improves

health. It improves mental health and wellness. And it improves the

social ties that people are privileged to have in other parts of the

province and that have been cut off by decisions made by the previous

government in years past.

The legislation captures several amendments that will signal an

emphasis on public interest — the key words here being “public interest”

within the Coastal Ferry Act — but it’s also intended to capture the

government’s broader goals, which are about people.

The amendments are based on the recommendations in Blair Redlin’s

coastal ferry review. I want my constituents at home, who haven’t had a

chance to read through the thick report, to know that some of the

highlights of these amendments include requiring the B.C. ferries

commissioner to prioritize the public interest when regulating ferry

services, including the consideration of the province’s greenhouse gas

emission targets. It’s pretty progressive.

Other highlights include facilitating the participation of

consumer advocates in the B.C. ferries commissioner’s regulatory

processes to consider the needs of people in the review of ferry

services. Simply put, that allows public participation, which many

people were unable to do before because they simply couldn’t afford to

gather up their resources and make a submission. Now we’re going to

actually make resources available so that the public can participate and

guide the services that they rely on.

The amendments to this act increase the number of B.C. Ferry

Authority directors appointed by government, from two to four, to bring

a greater public interest perspective in the role of B.C. Ferries

shareholders. It ensures that the B.C. Ferry Authority oversees the

strategic direction of B.C. Ferries in support of the public interest,

including safe, reliable and affordable coastal ferry service in British

Columbia, and it requires the B.C. Ferry Authority to set term limits

when appointing directors to the B.C. Ferry Services board to improve

the oversight of B.C. Ferries.

Now, it’s no secret that having boards change over, having a

diverse perspective put on boards and having fresh new eyes every few

years make for a healthy and robust board. In this case, we’ve had board

members that have been installed by the previous government and that

have served for a very, very long time. So this is about refreshing the

perspective of board members.

Interestingly enough — and I think a lot of my constituents would

be excited about this — over the years, talking a lot about the concerns

that fares were skyrocketing and so were the salaries of the top brass

at B.C. Ferries…. Now, I’m not here to criticize them at all. They are

deserving of a wage, a salary, a good salary, and they have a big

responsibility guiding the institution of B.C. Ferries.

However, anyone that knows B.C. Ferries like us here in the

coastal communities will know that there are VPs of pretty much

everything. Yet these executive roles — we are not privy to what kind of

salary or compensation they are receiving. I think that by having a true

sense of what the executive is being compensated for at B.C. Ferries

allows for better transparency and accountability.

Once enforced, these amendments are intended to reframe the model

to better reflect the public interest. I keep saying that, but that’s

exactly what this is about. And the view that ferry services are an

integral part of the transportation network…. They are part of our

marine highway — no bones about it. I can’t believe we’ve actually even

had that debate in the past.

However, we should talk about some of our recent successes, which,

again, I profusely and profoundly thank the Minister of Transportation

for. I speak on behalf of my constituents. The most amount of mail I’ve

ever received in six years as an MLA had to do with how the service cuts

and skyrocketing fares have impacted my constituents.

[2:50 p.m.]

And the most amount of positive emails I’ve ever received in my

six years as MLA were letters of thanks and congratulations and dramatic

appreciation for what our government has done to improve the lives of

coastal communities.

We’re restoring the sailings on the majority of ferry routes that

were cut in 2014. That will see over 2,700 additional round trips added

to schedules on ten minor and northern routes. We’re providing funding

to B.C. Ferries to reduce fares on the smaller and northern routes — we

have already done that — by 15 percent and freezing the fares on the

major routes. Fares will continue to be frozen this year.

Like I said, I have received so many positive emails, and I would

love to share just one here today, from a constituent. I have to say

that Joni Fraser has been a tireless, tireless advocate for improving

the Coastal Ferry Act and improving the services. I’ll read you two of

hers. One was:

“I am so thrilled with the B.C. NDP’s decision. I was actually

thinking I would have to move. I thought about going by medevac in the

Coast Guard boat at night, in winter, in a southeast storm, and I was so

horrified by the idea that I thought about either moving away or signing

a waiver that there is no way I would ever allow myself to go across

water in a small boat, strapped to a spine board. Anything goes wrong,

and you are helplessly going to the bottom with the spine

board.”

This is a reality that was faced by my constituents on Haida Gwaii

when the B.C. Liberals cut the two eight-hour shifts between Sandspit

and Skidegate and installed one 12-hour shift, essentially cutting off

services at 6 p.m.

Whereas patients who had to be transferred or medevacked had been

put in an ambulance and taken over to the Queen Charlotte hospital by

ferry, they were now going by Coast Guard boat, which is essentially a

Zodiac — an inflatable vessel in a community that experiences up to

24-foot tides, wheeling patients up steep gangways to shore, essentially

— with logging injuries, with broken bones — bumping along in the

massive waves in a totally inappropriate vessel so that they could get

medical care. That is what the previous government’s impacts were to my

constituents. It impacted their health to the point where a resident of

Sandspit wanted to sign a waiver that she wouldn’t even go on a spine

board, and risk her health.

I was interested in listening to the previous member talk about

our previous record in the 1990s, when I was a teenager, around B.C.

Ferries. I couldn’t help it. It triggered a memory of mine where the

Queen of Chilliwack in 2014 was taken out of service right

after $15 million in retrofits and then sold, ironically, to someone who

used to work for B.C. Ferries — who knew better, who knew this was a

steal — for $1.8 million. So $15 million of taxpayers’ dollars to fix

this ship up, and it sold for less than $2 million. It is now sailing

happily in Fiji today.

I wanted to talk about where we’ve come from and where we’re

going. The cuts that we’re talking about, which were such a dramatic

blow to my constituents in 2014, were all in the name of seeking

efficiencies. It was $19 million worth of seeking efficiencies. The

previous government made reckless service cuts and hiked our fares for

years. For example, in 2003, it was $223 to go from Port Hardy to Prince

Rupert in a car. By 2016, that more than doubled to $469.

We’re looking at ferry increases of over 100 percent, just in the

short four years that the B.C. Liberals had and were governing in my

last term as MLA. They drove up the fares repeatedly. They were going up

so much that I couldn’t keep track of them and putting coastal

communities at a disadvantage. It was costly, and it was unfair. Fares

doubled. It led to a huge decline in ridership, and it cost billions of

dollars in economic activity.

[2:55 p.m.]

In 2014, they pressed ahead with this $19 million in service

reductions, cutting sailings on 13 routes, including all four that

service my communities in the north coast, without even consulting with

them. They essentially came and said, “We’re doing a consultation in

your communities,” but all the decisions had been made. They just said:

“How do you want to make it different? Here’s the decision, but here we

are consulting. Check off a box.”

It was hugely insulting. People were crying. It was so painful to

attend these meetings. And they did this without a socioeconomic impact

analysis. It took UBCM to do their own socioeconomic impact analysis,

and they demonstrated that these cuts were costing the British Columbia

economy billions of dollars — not an “m,” a “b.”

They did no analysis to look at how these impacts to coastal

communities were actually impacting the Interior, where people take

circle routes — for example, from Port Hardy to Bella Coola and Bella

Bella. They do a circle through the Interior, up Highway 20, through

Williams Lake and back down. They do the same thing through Prince

Rupert, across over to Prince George and back down. They did no economic

impact analysis of what the Interior communities were

experiencing.

They didn’t look at the impacts to health. I had physicians

phoning me in Prince Rupert, saying: “Jennifer, you have constituents

and I have patients in Haida Gwaii who are neglecting their health. They

are not coming to see me in Prince Rupert — and they desperately need to

see me — because they can’t afford to stay in a hotel for four days in

Prince Rupert, or they’re fearful of the cuts or that they won’t be able

to get back home.” They desperately needed medical care, and they were

neglecting it.

They didn’t look at the tourism sector as a whole. They didn’t

look at it, definitely, for coastal communities. Tens of thousands of

people signed petitions demanding a freeze and a rollback of fares. They

wanted their services reinstated, the service levels put back to what

they were.

I definitely remember that my colleague here from Nanaimo, who

spoke about the rallies on the Legislature lawn…. I clearly remember

those moments. People carpooled and rented buses to come here and let us

know, as legislators, that these cuts were wrong. Yet they still went

ahead with them.

It was a trying time for my constituents in Bella Coola — taking a

125-car ferry, selling it for nothing and installing the oldest ferry in

the B.C. Ferries fleet, the Nimpkish , which can take a maximum

of 16 cars, not including people travelling with their RVs, etc. They

were told that was fine and that it was all in the name of

efficiencies.

The Bella Coola Valley has communities that were heavily reliant

on the forestry sector. Then, when we brought in the Great Bear

Rainforest agreement and adopted ecosystem-based management, these

communities were told: “Logging like you have known it is done, and you

need to reinvent yourself.” For two years, a bit of money was given from

the Ministry of Tourism. They said: “Here. Go and reinvent yourself in

the ecotourism sector in the Bella Coola Valley. You’ve got lots of

bears; market your bears.”

So here these people invested in lodges, rafting companies, tour

guides and hiking companies, spending their own money, taking a risk and

starting businesses. Then two years later, the only way in, for them to

actually have tourism, was cut off — all in the name of so-called

efficiencies. These people have suffered. Businesses have shut down.

People have gone bankrupt in the valley. These cuts were

heartless.

Now, let’s not forget that Christy Clark did promise them a new

ferry just before the election. She promised it would be in operation by

summer of 2018. It never happened because B.C. Ferries was put under the

gun to get a ferry servicing them, to fulfil this whimsical election

promise, on a tight timeline that was essentially impossible. They had

no choice but to buy a secondhand vessel overseas and get it retrofitted

to meet that timeline.

[3:00 p.m.]

Well, it turns out that because they were so rushed, they bought a

lemon, and now the cost of refitting that vessel has gone from $53

million to $64 million. It didn’t meet the timeline, and it’s further

delayed. Hopefully, and thankfully, we’ll see that vessel in service

this summer. But again, that was about poor decision-making. B.C.

Ferries would have liked to build a new vessel that met the needs of the

community on the Central Coast, a vessel that made sense. Instead, they

were forced to take whatever they could find, and in no time, it

actually will be proven that it’ll be oversubscribed and we’ll need a

bigger vessel. Not good use of money. Not good policy-making.

Deputy Speaker: Member, just a second.

Members, could you please lower your voices while the member for

North Coast has the floor. Thank you.

Please continue.

J. Rice: I’m almost finished, hon. Speaker.

I just wanted to go back and talk about how this all happened,

where the government wanted to make these cuts and these fare increases

all in the name of seeking efficiencies.

I remember a constituent from the Central Coast, who was an

advocate, phoned me up one day and said: “You know, I want you to hear

what a cabinet minister said to me.” This was a cabinet minister from

the opposition currently, now. They said: “If you guys don’t want to see

ferry cuts in coastal British Columbia, you guys have to stop voting

NDP.”

That was such a heartless thing to say. It may be true. I mean, it

demonstrates the ideology on the other side of the House. But what a

horrific thing to say to someone who is in not a ferry-reliant but

actually a ferry-dependent community, like my constituents. We’re here

to legislate and serve people. We’re not here for our own

self-interest.

Government efficiencies were sought by the previous government by

tearing up care workers’ contracts, which led to a decade of neglect for

seniors in care, and seeking efficiencies in classrooms by tearing up

teachers’ contracts. The human cost was a decade of overworked and

overloaded teachers and a generation of students in overcrowded

classrooms.

By putting public interest at the forefront of the services B.C.

Ferries provides, we’re putting the human cost in a benefit above

everything else, and that is why I am so proud to stand here and support

Bill 25.

R. Sultan: During those absolutely dreadful 16 years which transfixed our

political opponents, providing a handy excuse whenever their inevitable

foul-ups come along, B.C. Ferries actually became a model admired around

the world. Equipment was modern. Safety was enhanced. The ferries mostly

ran on time, through some of the stormiest seas separating two large

urban areas. B.C. Ferries was well managed and efficient.

Of course, it came at a price. Fares continued to rise, which was

a hardship on some. But B.C. Ferries was not free to charge whatever

they wanted; there was a price-cap system. B.C. Ferries was treated like

a regulated utility, operating with monopoly powers, which indeed it

virtually does.

Under the existing price-cap model, fares have risen in line with

increases in operating costs and capital expenditures and according to a

regulated rate of return on equity. Fares on the minor routes have risen

faster than on the major routes as a result of a prohibition of

cross-subsidization between route groups, whereby costs have been spread

across lower volumes of traffic compared to the major routes. Some think

that’s very unfair. But I haven’t heard people on the major routes

saying they’d like to pay more so that people on the lesser routes could

pay less.

[3:05 p.m.]

In January 2012, Gordon Macatee, commissioner, and Sheldon

Stoilen, deputy commissioner, issued a report including recommendations

for changes to the act which would “better enable the commissioner to

balance the interests of ferry users with the financial sustainability

of ferry operators.” That’s a very key phrase.

Macatee also, by the way, said a new market for B.C.’s depressed

natural gas industry, in those days, could open up. He recommended,

among other things, that the semi-independent organization, which was it

was, start using LNG to fuel its vessels. But that’s an

aside.

Now, when it comes to ferries, it’s not hard for an economist to

predict the views of people who live on islands or even people who live

up on peninsulas. More-often sailings are better than less often, and

less expensive is better than more expensive. It’s really pretty simple.

But perhaps things are now going to get a bit more

complicated.

I would observe that the NDP, with Bill 25, may be releasing the

trailer of a movie whose basic plot line we observed before. “NDP Gets

Into the Ferry Business: The Sequel.” Wait for it. The original movie

was gripping drama. The well-intentioned party, long on social

sensitivity, rather short on commercial memory, stumbled into their

original movie plot by — get this — skirting B.C. Ferries governance.

They stumbled into their movie plot by skirting B.C. Ferries

governance.

Here’s a brief movie synopsis. The early 1990s were a depressing

time for shipbuilding on the coast. Socreds were lobbied by union

leaders, who saw west coast yards frozen out of the east coast

shipbuilding contracts. By the time the New Democrats took power in late

1991, union members’ bitterness about job loss — and it was very severe,

particularly on the North Shore — turned into militancy.

A new Finance Minister delivered good news: a super ferry for B.C.

would be designed — several, in fact. They’d be contracted locally. It

would inject millions into the provincial economy, creating 700

person-years of employment and benefiting 260 businesses. The PacifiCat

program had been launched. The vision was bold: 250-vehicle,

1,000-passenger catamarans capable of speeds of up to 37 knots between

Horseshoe Bay and Nanaimo.

Now here comes the important part. Through a series of

jaw-dropping breaches of what would today be considered good governance,

the Premier forced his plans onto the Crown corporation responsible for

ferries. Directors were pressured to rush things through. “An awkward

situation,” my old friend George Morfitt, the provincial Auditor General

of the day, described it.

The Premier attended a ferry corporation board meeting, presumably

to better instruct directors on their duties and responsibilities. The

Premier instructed the Crown corporations secretariat to take charge,

resulting in a project proposal substantially different from what B.C.

Ferries’ own staff had come up with. The rest is history. In the 2001

election, my first, only Joy MacPhail and Jenny Kwan survived. The

PacifiCat aluminum hulls are today somewhere, I believe, in the Arabian

Gulf.

Now, given that lurid history, which we all know, one would think,

when it comes to ferries, NDP stalwarts would be very wary and cautious

and move very slowly. But no. I would say the next movie might be

subtitled “Fatal Attraction: Cannot Resist the Temptation.” History

notwithstanding, governance lessons from the past long forgotten — and

it wasn’t so long ago — the existing governance structure of B.C.

Ferries is, I believe, once more going to be turned

topsy-turvy.

[3:10 p.m.]

What is B.C. Ferries’ current governance and regulatory structure?

Well, it has three components. Just to review, the British Columbia

Ferry Authority is a non-share capital corporation whose purpose is

merely to hold and administer a voting share in B.C. Ferries but also

elect the directors to the board and approve the compensation

arrangements for the directors and executive of B.C. Ferries.

Two, the B.C. Ferry Services Inc. This is the operator. It’s the

operating subsidiary of the authority providing coastal service, with 35

vessels travelling between 47 terminals on 25 routes. B.C. Ferries, as

has already been mentioned in this debate, is one of the largest ferry

operators in the world, both in terms of fleet size and also in terms of

passengers carried.

The third leg of the stool: the British Columbia Ferry Commission,

the provincial regulatory body, with statutory responsibilities under

the act for making regulatory decisions affecting the ferry operators.

The commissioner’s role includes regulating core ferry services that are

defined in a coastal ferry services contract between the ferry operator

and the province, establishing price caps for each performance term and

monitoring compliance with the price caps.

Now, I predict that all of this governance structure will soon

come tumbling down or be rendered meaningless through judicious staffing

replacements, board appointments, etc. Ultimately, I think it’s

inevitable that the cabinet will be in charge, not the marine

professionals and certainly not those annoying bean-counters or persons

with treasonous thoughts about the marketplace. Heaven

forbid.

Key features of the new law, Bill 25, are: redefining the

objectives of the corporation. Tossed aside will be the January 2012

Macatee commissioner report that included recommendations for changes to

the act which, I repeat, “will better enable the commissioner to balance

the interests of ferry users with the financial sustainability of ferry

operators.” The perpetual trade-off — one trades off against the other,

back and forth.

Under Bill 25, the new world,

section 21.01 of the act will be

revised, stating that now decisions will be made “in the public

interest.” Well, who can argue with that? In other words, forget about

balancing the interests of ferry users with the financial sustainability

of ferry operators. The public interest will prevail. What does that

mean? Well, de facto, I believe that it will be the interests of the

ferry users. Period. As I said before, they’re easy to predict —

more-often sailings, lower prices. Simple as that.

The second innovation of Bill 25 is a redefined

section 45.1,

which will require ferry prices — the key phrase — to be based on

“recovering direct costs.” My underlined portion: some portion of

“indirect costs.” To repeat myself: some portion, underlined, of

“indirect costs.” Since they are not defined in the act, let me guess at

the meaning which will be attributed to direct costs. Fuel. I don’t

think we can argue that if you leave the ferry tied up at dock, it’s not

burning any fuel. Well, there are no direct costs, that’s for sure. It’s

just sitting there.

But how about wages? Well, maybe, but if labour is more or less a

fixed cost, and under contracts it frequently is — laying people off

just because it’s stormy out there; I don’t think they operate that way

— then they could easily be categorized as an indirect cost.

[3:15 p.m.]

Fixed and variable — it’s an old debate among MBA students and

ferry governors. The tendency will be to load up the indirect costs with

everything you can imagine, because the pricing only has an obligation,

under the law, to recover a portion of indirect costs, not all of the

indirect costs.

Well, carrying the analysis a bit further, how about the servicing

of capital interest expense and so on? I don’t think many people would

argue with the proposition that those are clearly indirect costs. So

forget about recovering all of them. I say you’ll be lucky if prices end

up covering, let’s say, a third of them, but I guess it’s anybody’s

guess. It’s discretionary; it’s certainly not specified in the

law.

The parent company would have to pay for the other two-thirds, in

my hypothetical example. Let’s say it comes out of carbon taxes or,

maybe, real estate taxes on those overpriced West Vancouver homes owned

by those old people who won’t move out. That would be fair. So welcome

to the new world of ferry prices under the NDP, at least as I foresee

it.

Possibly disturbing this new picture, however, is that pesky

Auditor General again, always lurking around with clearly inconvenient

ideas from time to time, in this case about the twin labels of

taxpayer-supported debt versus self-supported debt. Where have we heard

those phrases before? In this new world, I believe the AG, the Auditor

General, would find it hard to categorize B.C. Ferries’ financial

obligations, longer-term debt, as self-supporting. They will have to be

subsidized.

Well, it’s almost literally in the law, Bill 25. About $1.3

billion of B.C. Ferries debt will probably show up on the provincial

balance sheet. Oh well, it’ll find good company there. There’s already

$44 billion of taxpayer-supported debt and $20 billion of

self-supporting debt sitting there. We hope the rating agencies don’t

notice an extra $1.3 billion of new provincial debt layered on top of

what is already sitting there — or perhaps they will. Uh-oh.

To conclude, I believe that Bill 25 may signal a turning point, a

shift away from running B.C. Ferries as an efficient, modern enterprise

paying its own way towards a less modern, politically dominated

organization where union interests, island interests, up-the-coast

interests and NDP interests generally will prevail, cross-subsidized by

taxpayers elsewhere in British Columbia. More money spent on ferries,

less spent on hospitals. That’s the unfortunate iron law of government

finance. Bon voyage, Bill 25.

S. Gibson: I want to thank the hon. member for West Vancouver–Capilano for

his insightful ruminations. I do appreciate them. I know they will

contribute to the discourse here today.

When you look at this, Bill 25 looks kind of innocuous — just a

few pages. You could almost miss the agenda that is lurking in there.

But I’m nervous about this government’s aspiration for B.C. Ferries. I’m

anxious; I’m apprehensive. I say this as a former employee of B.C.

Ferries, one of the best summer jobs I ever had. I was living in

Victoria at the time. I was working on B.C. Ferries as a student at

UVic.

[3:20 p.m.]

What a privilege it was to work for four summers for B.C. Ferries,

including up the coast on the Queen of Prince Rupert ferry. I

learned a lot about the ferries and social skills, and all the things

that a young man needs to learn as he enters into his career life. I

also might add that I worked in Duncan and lived in Sidney. I used to

take that little ferry, the Brentwood ferry, across regularly, and I got

to know the captain on there, who invited me up to the bridge and showed

me around.

I have a high regard for B.C. Ferries. And when I hear even

rumblings of the kind of tampering that has been alluded to by my

colleagues and, specifically and more recently, right now by the hon.

member for West Vancouver–Capilano, I too am expressing some

considerable reservations about the direction this government is

taking.

B.C. Ferries. If it was just small, maybe two or three ferries, I

think we probably wouldn’t even notice. But this is a big deal. B.C.

Ferries is one of the largest ferry systems in world, and I am very

proud of it. Tonight many of us are catching the ferry and getting home

to our constituencies, our families. Every time I travel on B.C.

Ferries, I have that sense of pride. Twenty-five routes, 47 terminals

and 36 vessels.

The B.C. Coastal Ferry Amendment Act seems to be typical of the

NDP’s agenda. Once they get in control, they grab onto government…. They

wait, and then suddenly they get into government, and they can hardly

wait to interfere with successful organizations. It’s almost predictable

that they would do this.

Perhaps it’s nostalgia, going back to the warm and fuzzy days of

the 1990s and the NDP governments of the day. Now, I call those days

disturbing, frankly. I know many British Columbians would. We’ve heard a

lot about the fast ferries. I think if we had a vote here right now on

whether the government would like me to talk about the fast ferries,

they’d probably vote against it, which leads me to believe it’s probably

a good thing to talk about.

Remember the fast ferries? They were very fast, all right. They

were fast money-losers. They were fast into the repair shop. Remember

they had some maintenance problems? And they were fast in squandering

taxpayers’ money. They were fast, all right — $450 million to build, and

they were sold to a company in the United Arab Emirates for how

much?

Interjections.

S. Gibson: It was $19 million? I would not hire any of these folks to be my

financial planners, based on that model. What a testament to the

financial incompetence of the government of the day.

I think even newer members here in the House probably lament that

and wish that was something, perhaps, that opposition members wouldn’t

mention. I understand that; I’m not surprised. This is not something

that I am surprised about. This act wants to roll back to those days,

when the government, cabinet, appointed the members of this majority —

and you’ll notice that — on this authority. The control is going to

government.

Now, I would think most British Columbians would want the ferry

fleet to operate in a businesslike manner. I’m sure that if you surveyed

the public and said, “Would you like it to be run by government,

directly through cabinet, or would you like it to be run in a

businesslike manner?” I suspect most people would go for the latter,

right? Probably, I think, that would be the case. This government,

however, is delusional. They think: “Well, no, let’s get involved in

everything. B.C. Ferries — we’re going to get involved.”

That’s not this government. What kinds of powers will be

exercised? We’re not sure. It’s a kind of social activism at the

taxpayers’ expense. Will the Ferry Commissioner still be encouraging a

commercial approach to ferry service delivery? Will he be encouraging

commercial? Apparently not.

I remember the member for North Coast. She had some good remarks a

moment ago — from her perspective, at least. She recommended, in a

previous session of this House, that the ferry system basically be

considered just an extension of the highways. Remember that? That would

be incredibly expensive, if that were adopted by this government.

However, perhaps she did get through to some members of this

government.

[3:25 p.m.]

Maybe that’s the long-term plan — that the ferries will simply

become an extension of the highways, whatever the cost. So if you want

to move to a tiny little island, immediately when you get there, you

demand top-notch, hourly ferry service, because: “I’m here. It’s my

right.” Not a good plan for the interest….

Interjections.

S. Gibson: I’m getting some good support from the other side. Thank

you.

I’m genuinely upset, very upset, that B.C. Ferries is being

politicized at the whim of an activist government. What about the issue

of debt? Now, if the paradigm changes, there’s $1 billion plus that

could show up on government’s books. What will the rating agencies say

about that? We haven’t heard about that. The rating agencies may look at

those ratios, which are very important to them. We already have a

significant debt. Adding that on could have a dramatic impact on our

debt. I’m just pointing that out.

Now, I mentioned the fast ferries….

Interjection.

S. Gibson: Thank you for the response on that; I appreciate it.

With a decade of NDP government, B.C. Ferries had debt problems.

It’s all recorded; have a look. Morale was struggling. When morale is

struggling, the whole system is struggling. There was no real vision for

B.C. Ferries, just kind of, “Keep her going” — no vision, no

plan.

Our side of the House, as government, had a real vision working

with the management and the board of B.C. Ferries. There was a clear

vision, and the people were drawn to that. B.C. Ferries had a vision,

and people liked that. There’s a verse that says: “Without a vision, the

people perish.” It’s a Bible verse; I like it. Without a vision for B.C.

Ferries, B.C. Ferries is going to struggle. Is it going to be set at the

cabinet table? That worries me.

I know that the B.C. Liberal governments of the day took pride in

the fleet. I came here in 2013, but for many years, our side of the

House, as government, took a real pride in the fleet. There was a real

sense of: “This is our system. We’re proud of it.” It was well governed.

It was a good business model, the structure to keep politicians out of

the decision-making.

How many of you have ever heard this term “micromanagement”? Have

any of you experienced that? Any of you been micromanaged? It’s not a

good thing. I had the privilege of teaching human resources at a

university level. One of the first things I would ask my students was:

“How many of you have worked for a micromanager?” Just about all my

students put their hands up.

Thank you. The member for Nanaimo–North Cowichan put up his hand.

He’ll probably share those experiences with the House.

Interjection.

S. Gibson: He’s lamenting that, but he looks like he’s overcome that. I

appreciate that. Maybe he was the micromanager.

In any event, I asked my students, “Who of you have been

micromanaged,” and most of them put their hands up. I said: “How was

that experience?” You know what? They don’t like it. It’s not good

management.

B.C. Ferries needs to have good levels of autonomy — to be

accountable to government, yes, to the taxpayers, but to be allowed to

do its thing with expertise. Once you tamper with that and get

government involved, it squanders that, and there’s immediately a high

level of micromanagement.

Now, the NDP government, according to what I’m reading, is anxious

to run B.C. Ferries. You’ll hear that from most of the speakers on this

side. You’ll notice the continuing message: “We want to continue to be

involved. We want to get involved in B.C. Ferries.” That’s something to

be troubled by.

[J. Isaacs in the chair.]

It eliminates the percentage of appointments. It goes from two to

four. The government is taking over the proportion on the authority. Why

does this government want to tamper with a working model? I think part

of it is the desire to micromanage.

You know, B.C. Ferries did a lot of good planning in the past.

Rate classes were understandable. Low-emission vehicles are underway.

Organizational efficiencies — we’ve heard about that in the reports.

Improvement at the Langdale terminal — we know about that.

[3:30 p.m.]

A developed capital plan, good labour relations — that’s

important. B.C. Ferries has a large number of hard-working employees. A

2.3 percent cap on fares right through to 2024 — that’s

manageable.

I’m troubled that this government wants to politicize the

administration of B.C. Ferries. This is not caring for the taxpayers.

It’s activism that is truly troubling. It could be a disaster in the

making.

Now, I understand the NDP still wants to have ferries built here

in B.C. Is that right? Is that correct? At any cost?

Interjection.

S. Gibson: Okay, now my understanding is…. I don’t know. Are we looking to go

for airplanes to be built here? Is that right? Is that one of the next

ones we’re looking at? What about cars? Is that one we’re looking for

too? I just thought it would be useful to do a checklist, because we’ve

got ferries. Cars? Buses? Motorcycles? Bicycles? Skateboards?

Roller-skates?

The point I’m making is the taxpayer must be respected. Don’t do

things out of social activism. Yes, we want our ferries built here but

not at any cost. I think government’s involvement could destroy this

fleet as we know it. I was saddened to hear some of the remarks by

colleagues across the floor. How passionately they want to manipulate

B.C. Ferries. You’ll notice their comments. They want to get involved.

They want to be activists.

We need to have a plan that not only serves passengers, yes, but

the entire province — all taxpayers, whether they live in Prince Rupert

or Duncan or Abbotsford, where I come from, or Dawson Creek or wherever.

Every taxpayer in this province must be respected, not just the folks

that travel on B.C. Ferries.

B.C. Ferries is something to be proud of. But I worry that with

this act, B.C. Ferries’ financial security is threatened. This kind of

government activism could potentially destroy the fleet.

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

Hon. C. Trevena: It is with great interest I’ve sat through the debate of Bill 25

and listened to the comments of members from all sides. I’m fascinated

to see a sudden passion about ferries from the opposition. When they

were government for 16 years, they ignored the system and exploited the

system and exploited those communities that relied upon the

system.

We’ve had some very eloquent comments from my colleagues who

represent coastal communities about the importance of putting public

interest into the heart of B.C. Ferries, both in the oversight from the

authority board and in the strength and role of the commissioner. The

member for West Vancouver–Capilano gave this outline of the three-legged

stool of B.C. Ferries governance. He might be pleased to know, if he

actually read the bill, that that is still very strongly there. In fact,

we are strengthening the role of the commissioner, and we are changing

the makeup of the authority.

As I say, the fact of the need of the public interest, putting

people at the heart of the ferry system, was clearly reflected in the

comments, the stories that my colleagues from coastal communities gave

about their constituents who are affected and their constituents who

fought long and hard over 16 years of the cuts to the system, the

increase in fares and the devastation that they saw — 16 years of simply

bad governance.

[3:35 p.m.]

The opposition may try to go back to times when some members on

this side of the House were teenagers or even younger on government

benches and try to say that that is the reason why we have to have the

status quo. I would argue against that. That was many years ago. We all

know that there have been advances in very many different fields, and we

need to be embracing that.

We need to be embracing ways of looking at things, whether it’s

when we’re visioning on B.C. Ferries, that good strong vision, or when

we are discussing what the public interest is. Their history lesson does

not justify the devastation they wrought on our ferry system.

A couple of very quick points. I wanted to clarify the Liberal

math. They are very concerned about the fact that we are putting two

extra people, who will be appointed by government, on the B.C. Ferry

Authority board to replace those who are self-appointed — the

members-at-large. There will still be four people who are representative

of communities, of regions, and there will be one person who represents

labour, who is not an active labour member at the time. I believe she’s

retired at the moment. But to clarify Liberal math, that’s still nine

members of an authority board. Four does not become a majority. Four is

not the majority out of nine, just to help the opposition understand

that.

Also, there is the terrible fear about what the Auditor General

may or may not say. The government is not taking direct control of B.C.

Ferries. B.C. Ferries is operating, as I mentioned in my opening

remarks, as a quango. It still operates there as a company, making money

and making sure that people can travel where they need to go.

What we, as a government, are doing…. While we strengthen the

commissioner’s role, we are ensuring that when the authority and the

commissioner are making their decisions to allow for a financially

healthy and fiscally responsible ferry system, they put people at the

heart of it, communities at the heart of it — the people who have been

neglected for so long.

One final note. I notice there was a lot of passion about the

discussion of shipbuilding and the shipbuilding industry. The member

from West Kelowna was particularly concerned and particularly vociferous

about this, but other members have talked about it. I would just like to

note that shipbuilding isn’t any part of Bill 25. Whether or not this

side of the House…. This side of the House, perhaps, would like to see a

vibrant shipbuilding industry with B.C. ferries being built here. That

isn’t part of Bill 25.

I look forward, with great interest and great anticipation, to the

inevitable discussions we’ll have at committee stage and for the

questions at committee stage.

With that, I move second reading of Bill 25.

Motion approved.

Hon. C. Trevena: I move that the bill be referred to a Committee of the Whole to be

considered at the next sitting of the House after today.

Bill 25, Coastal Ferry Amendment Act, 2019, 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. C. Trevena: I call second reading of Bill 19.

BILL 19 — ENERGY STATUTES

AMENDMENT ACT,

Hon. M. Mungall: I move that Bill 19 be read a second time now.

I’m pleased to present the Energy Statutes Amendment Act, 2019.

I’m very proud of this bill. This bill comes as a result of our review

of B.C. Hydro, which, of course, I’ve called, in this House before,

British Columbians’ crown jewel. It’s our public utility. It’s what

turns all of the lights on in this place and most parts of the

province.

The dams in my area, which are responsible for powering up 50

percent of British Columbia — many of them are B.C. Hydro dams. B.C.

Hydro provides electricity to four million customers with reliable

power, serving 95 percent of the province’s population, and 98 percent

of that power that we generate with B.C. Hydro is clean electricity.

It’s renewable power.

[3:40 p.m.]

When we decided, as a government, to review B.C. Hydro, it was

because we have such a value for this crown jewel, for this public

utility. We want to make sure that the electricity it produces and

transmits to people’s homes is affordable. That was the driving factor

behind our comprehensive review of B.C. Hydro.

The legislation that I’m presenting today is essentially part of

the culmination of the first phase of our review. We are also going to

have a second phase of the review that we’re going to be moving into.

The second phase will look at transitioning B.C. Hydro into the 21st

century, into the future.

There are a lot of changes happening right now. We know that we’re

going to see a stronger tech industry in B.C. that’s very dependent on

electricity. I just presented the first introduction of legislation for

a zero-emission vehicle mandate. British Columbians are adopting

zero-emission vehicles at a faster rate than other jurisdictions in

Canada. So we know that that’s going to put demand on B.C. Hydro as

well.

I could go on with that list, but the point of mentioning that is

because we are looking to do that second phase of the B.C. Hydro review

to transition it into the 21st century to meet those demands that we

anticipate are going to be coming. In fact, we know they are going to be

coming.

The legislation we have here is in response to our first phase of

our B.C. Hydro review. It was a structural review, looking at how we can

make sure that rates are affordable, because the costs at B.C. Hydro

directly impact the rates that people have to pay, those bills that they

get every month, every couple of months. We want to make sure that our

utility is running as efficiently as possible so that we are not

overcharging our customer base, those four million British

Columbians.

We want to make sure that our public utility is operating at prime

efficiency. Our review resulted in an ability to reduce the projected

rate increase by the previous government, the B.C. Liberal government.

It reduced their projected increase by 40 percent. That’s very good news

for British Columbians.

This year, for example, the increase that B.C. Hydro is going to

be applying is already applied to the B.C. Utilities Commission. The

increase that they put forward is actually less than consumer price

index. We’re finding ways that we can save people money. Like I said, we

found a 40 percent rate increase reduction from the previous

government’s plan.

But we need to ensure that going forward, B.C. Hydro and the

British Columbia Utilities Commission have the tools they need to ensure

that when they are doing their work, B.C. Hydro, in terms of making its

plans, and the B.C. Utilities Commission, in terms of reviewing those

plans, have the ability to ensure that rates remain affordable, that

they have the tools in their toolboxes to make that analysis.

One of the things that we’re doing with this legislation is

re-empowering the BCUC to do the job that it’s supposed to. That is to

work in the public interest in terms of reviewing, analyzing and

regulating B.C. Hydro. For example….

Actually, before I get there, I want to just take a moment to

acknowledge…. I’ve talked about making life more affordable. Why is it

important that we keep rates affordable? It might go without saying, but

let’s put it on the record.

When we have higher rates and we don’t pay attention to making

sure that we have them at an affordable level, and we let them increase

— for example, 70 percent over the course of the previous government’s

term — we are making life harder for British Columbians.

[3:45 p.m.]

I’ve talked to many people, low-income single moms…. When they get

that hydro bill, they have to make the choice between paying the

electric bill or snacks for their children for that week or that month,

depending on what they can afford. That should never be a choice for

somebody.

While we are lucky in British Columbia to have some of the lowest

electricity rates in the world, that doesn’t mean that it’s still not

difficult for British Columbians when rates go up. We have to be mindful

of things that will impact rates, and we have to be mindful of how

they’re regulated. That’s why this is important.

We need to ensure that B.C. Hydro is working for British

Columbians. We need to ensure that, and this type of legislation does

that.

I’ve mentioned that the previous government let rates increase by

70 percent over their watch, hon. Speaker. Well, one of the things that

allowed that to happen was by hand-tying the B.C. Utilities Commission

from doing the exact job that it’s supposed to be doing. The previous

government sidelined the BCUC and made decisions forcing B.C. Hydro to

advance that government’s own political agenda at the expense of

ratepayers right across the province. Rates for residential customers

can now skyrocket under things like rate rebalancing and also cost

millions for surplus energy purchased from independent power producers,

and that was passed on to ratepayers.

We did a study. A gentleman named Ken Davidson took a look at how

the previous government’s IPP scheme impacted British Columbian

ratepayers: $16.2 million in excess costs that are now borne on the back

of British Columbians —$200 a year for the average British Columbian

household that has B.C. Hydro as its electric source.

That just wasn’t right. That was not okay. We have to look at the

mechanisms by which that happened, and we have to correct that. That’s

why empowering the B.C. Utilities Commission to do its job as the

province’s energy regulator and restore independent oversight of B.C.

Hydro is essential, and we’re doing that with this bill.

It will ensure that electricity rates are kept affordable for

British Columbians and also protect taxpayers from millions in costs. We

are implementing key recommendations made from that first phase with

this bill.

I already talked about how we had the first phase of our review,

and we are going to be moving into the second phase. Part of the first

phase of our review, though, is…. I’ve mentioned the BCUC. Also, we

needed to talk to the BCUC, and we did just that. We worked with them in

identifying ways to make sure that they are able to be the strong

regulator that British Columbians need them to be and that they have the

tools in their toolbox, as I mentioned, to put analysis to B.C. Hydro’s

integrated resource planning. For people at home who might not

understand what that technical term means, you can liken it to B.C.

Hydro’s business plan for a period of time, where they identify what the

demand would be for future electrical demand and how they would meet

that demand.

Going back to the BCUC. We talked to them in terms of…. They had

the tools in their toolbox and provided analysis to the integrated

resource plan, to the rates applications that they put forward, and how

they could ensure that they were also providing analysis in terms of

affordability for British Columbians. Not just that they were making

sure that B.C. Hydro was meeting its costs through its charges to

ratepayers, whether those ratepayers be families, households,

residential households, commercial or industrial ratepayers.

BCUC has been a part of this process, and I greatly appreciate

them doing so, because of course, they ultimately provide that

independent, non-political oversight working in the best interests of

British Columbians, rather than the political whims of the day, which

they change depending on where members sit in this House. But they

provide that consistent, independent oversight over B.C. Hydro working

in the best interests of British Columbians.

[3:50 p.m.]

I know that other members want to speak to this bill. I will not

be an official designated speaker and speaking two hours, as interesting

as I know the full and in-depth explanation of things like feed-in

tariffs and expenditures for export may be. But I will go over some of

those points just so that people who are watching have a good

understanding of what this bill is about, as well as other members of

the House.

The integrated resource plan. I’ve already mentioned that the B.C.

Utilities Commission will be reviewing that now. That’s what this bill

specifically allows. The previous government required B.C. Hydro to

submit its integrated resource plan to government for review and

approval, therefore bypassing the BCUC altogether.

What this meant was that there was no independent oversight over

that forecasting for demand and forecasting for how to meet that demand.

There was no independent oversight over that. Rather, it was a political

oversight. Politicians being politicians and going by what might be

popular, what lobbyists might be saying to them, was not in the best

interests of British Columbians by any stretch, right? Perhaps it’s part

of the reason why we saw the IPP scheme — why we saw that — and why

those types of things would have been better off being reviewed by the

B.C. Utilities Commission.

Now the B.C. Utilities Commission is going to be reviewing B.C.

Hydro’s integrated resource plan. That’s not something weird or out of

the ordinary or unusual. In fact, this is the general practice amongst

other jurisdictions as well — that their regulator reviews the overall

resource planning that their utilities do. This is the right direction

to head towards. It’s the direction that we used to have in British

Columbia, and we need to get back to that.

I’ll also talk about the feed-in tariff that this bill addresses.

It actually removes the government’s power to order B.C. Hydro to

establish what’s called a feed-in tariff. This is a program through

which B.C. Hydro could enter into new purchase agreements with

independent power producers without the approval of BCUC. That’s

essentially what that mechanism does. We want to remove that mechanism

because, as I said earlier, BCUC is the appropriate regulatory body to

be reviewing these types of power acquisitions. BCUC needs to be looking

at that.

B.C. Hydro, of course, is forecast to be in surplus for the future

and does not need to be purchasing new electricity generation, so it is

not required to have a feed-in tariff at all. In fact, this concept of a

feed-in tariff has been quite problematic in other jurisdictions such as

Ontario. Learning from those experiences, we will be removing that here

in British Columbia to make sure that this is not a detriment to

ratepayers.

Rate rebalancing is a point that I briefly alluded to, so let me

speak to it here for just a moment. Rate rebalancing is the process by

which…. The bill will be prohibiting the BCUC from doing rate

rebalancing. This was something that the previous government allowed

for. What it means is that…. Of course, utility can still apply for rate

rebalancing, but it cannot be directed by the BCUC anymore, the reason

being that rate rebalancing can happen between different classes of

ratepayers.

I’ve already mentioned that in British Columbia, we have

residential class, we have commercial class and we have industrial

class. Sometimes, in looking at how we pay for the overall costs of

energy generation, you find different mechanisms to create balance

between the different classes. Rather than just doing the

straightforward approach of…. All residential users — their payment

equals their cost 100 percent, right? That is not the case right

now.

[3:55 p.m.]

Right now, to keep rates more affordable for residential

customers, there’s a little more on industrial and commercial. They’re

paying a little bit more than exactly what their costs are. But this

government, through policy, has removed the PST off of their electricity

— therefore, making it affordable for them as well and attracting

investment.

We want to make sure that if a rate rebalancing does need to

occur, that analysis is done within the utility itself and then they

apply to BCUC for that, rather than putting BCUC into the position of

having to make rates unaffordable for any one of those other classes

without being able to consider a government policy that’s happening

elsewhere.

I know that sounds very convoluted, but the point is that at the

end of the day, we’ve consulted with the BCUC on this. This is now a

tool in their toolbox that will ensure that rates are more affordable

for British Columbians.

Another concept that this bill addresses is called expenditures

for export. We will be removing the concept of expenditures for export

from the Clean Energy Act. Expenditures for export are expenditures on

infrastructure and energy for producing surplus power for sale to export

markets. For example, one could argue that the IPP’s scheme was not

going to ultimately be for domestic use because we have a surplus of

power, but that B.C. Hydro would have to enter into these agreements to

purchase IPP private power and then turn around and sell it through its

subsidiary, Powerex, and sell it on the private market.

That might sound really good, and it would be really good if the

case was that energy prices always stayed high and you could buy low,

sell high. That would be great for ratepayers. Unfortunately, what’s

happening right now, as we learned from Ken Davidson’s report, is that

we’ve been buying high and selling very low. We’ve been buying at around

100 megawatts per hour and selling at around $25 to $35 per megawatt

hour. That’s a major loss. And that’s where he identified the $16.2

million…. Sorry, I believe I misspoke on that one.

Interjection.

Hon. M. Mungall: I know the member over there is expressing what must be jealousy

of a woman being able to nurse a child all night long, still come to

work every day, introduce bills and speak to the bill. Maybe I don’t

have the right number for him, but I know he could not do what I’m

doing.

Back to the issue at hand, though. The point is that we are going

to be removing the concept of expenditures for export from the Clean

Energy Act because they have just not worked in favour of British

Columbians. It’s that simple.

Finally, the bill addresses that Powerex will continue to be

solely regulated by the Federal Energy Regulatory Commission. It’s

important that it remain regulated by this particular body because this

body is used to the type of market activities that require a very quick

response. So it’s in a better position to regulate Powerex. It’s in the

best position to regulate Powerex. So we will be putting that from a

regulatory perspective into a legislative perspective to make sure that

that is enshrined in law — who will be regulating Powerex.

Those are my comments on this bill. I’m very proud of the work

that my ministry has been doing on this and that other ministries, as

well, have been putting into our analysis and our