British Columbia Committee Hansard (Blues) — Thursday, May 9, 2019, p.m., Issue 253 (41st Parliament, 4th Session) (20190509pm-CommitteeC-Blues)

20190509pm-CommitteeC-Blues

British Columbia — Debates (Hansard)

British Columbia Committee Hansard (Blues) — Thursday, May 9, 2019, p.m., Issue 253 (41st Parliament, 4th Session) (20190509pm-CommitteeC-Blues)

20190509pm-CommitteeC-Blues

British Columbia — Debates (Hansard)

Fourth Session, 41st Parliament

(2019) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Thursday, May 9, 2019

Afternoon Sitting

Issue No. 253

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Orders of the Day

Committee of Supply

Estimates: Ministry of Finance (continued)

S. Bond

Hon. C. James

T. Redies

Estimates: Other appropriations

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Municipal Affairs and Housing (continued)

S. Sullivan

Hon. S. Robinson

J. Thornthwaite

P. Milobar

S. Bond

Estimates: Other appropriations

Proceedings in the Birch Room

Committee of Supply

Estimates: Ministry of Energy, Mines and Petroleum Resources (continued)

G. Kyllo

Hon. M. Mungall

A. Weaver

Point of Order (Chair’s Ruling)

Committee of Supply

Estimates: Ministry of Energy, Mines and Petroleum

Resources (continued)

A. Weaver

Hon. M. Mungall

G. Kyllo

T. Shypitka

THURSDAY, MAY 9, 2019

The House met at 1:31 p.m.

[Mr. Speaker in the chair.]

Orders of the Day

Hon. M. Farnworth: In this chamber, I call continued debate on the estimates of the Ministry

of Finance. In Committee A, the Douglas Fir Room, I call continued debate on the

estimates of Municipal Affairs and Housing. And in Committee C, the Birch Room,

I call continued debate on the Ministry of Energy and Mines.

Committee of Supply

ESTIMATES: MINISTRY OF

FINANCE

(continued)

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

chair.

The committee met at 1:35 p.m.

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

(continued) .

S. Bond: Good afternoon to the minister and her staff. We’re going to talk

about the carbon tax for a few minutes. We’re going to start with one of

the things that we, certainly, heard a lot of concern about. We share

that concern.

People, I think, would have a much better sense of the impacts of

the carbon tax, what the revenue is being used for. The minister,

obviously, and her government made the decision to remove the carbon tax

transparency report. Can the minister explain why she got rid of it in

the first place and whether she’s considering replacing it, returning it

or at least providing some mechanism to be completely transparent with

carbon tax revenue in the province?

Hon. C. James: The member first asked around government decisions on the carbon

tax, so I’ll just start off with the three main areas that we’re focused

on with carbon tax revenue. These were in the budget, so this is

information that’s been out in the public. These were in the budget, in

fact, in 2018.

The three main areas of focus are carbon tax relief for low- and

moderate-income British Columbians, support for emission-intense

industries to transition to the low-carbon economy, and the third one is

new green initiatives to grow innovation and to be able to look at

investments.

Again, as the member will know from the CleanBC plan and the

discussion we’ve had previously, we are developing a new accountability

framework so that people have all of the latest information that’s very

clear. We’ll have comprehensive reports on our progress in those three

particular areas and under the Climate Change Accountability

Act.

S. Bond: Can the minister provide a timeline for when the accountability

framework would be made public?

Hon. C. James: I can get back to the member. I’ll have to have that discussion

with the Minister of Environment, who’s putting together the CleanBC

accountability framework. I don’t have a timeline for the member, but I

can get that back to her.

S. Bond: Well, let’s talk about the fiscal side of the equation then. The

minister is going to collect about an additional $2.35 billion from the

carbon tax increase. Can the minister articulate for us…? She named some

broad categories. Can the minister provide us with a breakdown of how

that $2.35 billion is going to be spent?

[1:40 p.m.]

Hon. C. James: I identified the three areas, as the member knows, and a report

will be coming with the details on the progress on each of those areas.

It’s still to come.

S. Bond: I think it’s safe to say that most British Columbians believe that

if they’re paying a carbon tax, they’re actually paying it — certainly,

this government has said — to invest in green projects, CleanBC, etc. We

know that is a very small portion of the funding that is being collected

from the carbon tax.

Can the minister tell me, then, or give us some sense of what the

amount of carbon tax revenue is that has been allocated to capital

instead of offsetting other tax revenues, or as the minister pointed

out, providing benefits to low-income British Columbians?

Hon. C. James: As I mentioned, that report around the accountability and the

carbon tax revenue and the areas that we’ve done is still to

come.

S. Bond: I appreciate that from the minister. I think the bottom line here

is that that is a significant revenue generator for the government. It’s

part of what’s causing people’s concern at the pumps across our

province. I think it is essential, and certainly we on this side of the

House think that transparency is absolutely paramount, so having a

straightforward transparency report, which was in place with the

previous government….

This minister and government decided that wasn’t going to be in

place. To be told: “Well, we’ll get an account­ability

framework….” Will the minister today commit to putting back in place a

straightforward public transparency report so people know…? They’re

feeling pretty frustrated about the fact that the carbon tax continues

to rise, and it’s impacting them. Frankly, it’s impacting this

government’s affordability agenda.

I think it’s essential that when we’re talking about $2.35 billion

of revenue, British Columbians deserve to know exactly where it’s going.

Is the minister committing to that? An accountability framework — you

know, that’s nice. Those are good words. What we want to know is: will

there be a specific, publicly available transparency report?

Hon. C. James: As I said, through CleanBC, we’re developing that accountability

framework. People have access. That will be a public report. It will be

a comprehensive report on all of our actions, including the carbon tax

revenue and the actions we’re taking, as I mentioned, around carbon tax

relief for low- and moderate-income families, support for

emission-intensive industries and new green initiatives to grow

innovation and investment. That’s still to come, and it’s being worked

on now by the Ministry of Environment.

T. Redies: I think the real question here, given that British Columbians are

facing the highest gas prices in North America, with this government’s

plan to raise the carbon tax 57 percent over its term, is that the

government is going to be collecting about $2 billion plus in carbon

tax. Yet the CleanBC program, so far, is only allocating $300 million a

year for the next three years. So that’s a lot of money that is not

going towards green energy.

Can the minister explain to British Columbians how that is

reasonable when they’re having to pay the highest carbon tax and gas

taxes at the pump, and the minister is categorizing this as a carbon tax

for green initiatives, yet only $300 million a year is actually going

into the three initiatives that the minister spoke to?

Hon. C. James: Again, as I said, we have an accountability framework being worked

on. That will be coming forward, and it will focus, as I said, on the

three areas: green initiatives — that’s obviously CleanBC — and other

initiatives that have been undertaken in our time as government. That

includes support for emissions-intensive industries and includes the

carbon tax relief for low- and middle-income British

Columbians.

S. Bond: Does the minister, at this point, anticipate that a significant

portion of the carbon tax will end up in general revenue?

[1:45 p.m.]

Hon. C. James: Again, it’s going to be the same response. The report is being

worked on, and the report will be coming forward.

T. Redies: Well, that doesn’t sound like being terribly accountable to

British Columbians who are paying through the nose at the pump because

of this government’s voracious appetite for tax.

Again, a lot of British Columbians might even be comfortable with

the carbon tax increases if they knew they were actually going into

initiatives that were targeted at green technologies, rapid transit. But

in fact, what is happening is that this is just another tax grab. It’s

not revenue-neutral, and British Columbians are paying through the pump.

The minister is just basically giving us — I don’t know what it is —

blah, blah, blah, in terms of this accountability framework.

Where’s the accountability to British Columbians? How can this

minister stand up in the House and talk about accountability frameworks

when British Columbians are paying $1.78 at the pump, the highest gas

taxes, and she can’t even articulate where this money’s

going?

Hon. C. James: I would remind the member that the carbon tax is a one cent

increase — certainly not what you’re seeing at the pump. I would agree

that there are huge problems with the price of gas, but it is not linked

to the carbon tax. The member mentioned, in fact, a number of those

initiatives that are being undertaken, including rapid transit. The

member is quite right. All of that will be included in a report, and all

of that will come forward.

I would remind the member, as well, that a number of institutions,

including the Fraser Institute, which I know the members like to quote

quite often, pointed out the folly of the report that came forward from

the previous government that, in fact, did not show revenue

neutrality.

T. Redies: Well, I think that British Columbians will look forward to the

transparency around this tax. I think, for right now, with the revenue

neutrality removed completely and it just going into general revenues to

feed this government’s spending program…. I think British Columbians

definitely deserve an accounting as to where this money is

going.

I’m going to move on to another tax issue. That’s to do with

business property tax. We’ve heard numerous stories of businesses being

driven off their properties by rapidly increasing property taxes related

to highest and best use. Has the minister done any work to ease the

impact of these property tax shocks?

Hon. C. James: Yes. This certainly has been an issue that has been raised. In

fact, right now the Minister of Municipal Affairs and Housing has

announced a review — that’s already been announced — of the highest and

best use valuation. She’s actively consulting now with municipalities,

with business groups and expects to report back in the fall. We’ll

certainly then have some conversations about what the information is

that came back through the consultations.

T. Redies: While we’re going through these consultations, meanwhile

businesses like Interstyle Ceramic and Glass in Burnaby just saw a 250

percent increase that is actually threatening their ability to do

business, but they’ve heard nothing in way of help from the

province.

There is a sense of urgency. Again, I can speak even from my own

riding, where we have seen businesses going out of business because they

can’t afford their rent or the property tax increases, along with all of

the other increases associated with being in business these days,

whether it’s the minimum wage or other tax increases.

Again, is the minister concerned about the impact that these tax

shocks are having to small business? What is she going to do about it in

the meantime?

Hon. C. James: Yes. Government is concerned. That’s exactly why the Minister of

Housing is doing the consultation — to hear the issues, to hear

firsthand the concerns. Ideas are coming forward around how you reduce

the impact on small businesses for transition until something happens.

So the minister will be collecting all that information, and we’ll be

having that conversation when the information comes in.

[1:50 p.m.]

T. Redies: Again, I know the minister must be aware that many, many small

businesses in our province are finding it very challenging to make ends

meet, especially with the situation around triple-net lease costs. For

those handful of viewers that are watching, a triple-net lease, as far

as what it means…. Tenants basically pay the building’s property taxes,

not the landlord. And they pay maintenance fees as well as rent to the

landlord. So as property taxes are increasing, this is creating an undue

burden on independent business owners leasing space.

My question to the minister, again: what is the minister doing

other than the small business tax reduction, which, frankly, I think is

only contributing a small amount of tax reduction to businesses? What

are they doing to help businesses manage rising property taxes? Is there

no relief in sight for these poor businesses?

Hon. C. James: As I said, part of the reason you see the Minister of Housing

taking this issue on and doing the review of the highest and best use

valuation is exactly for the reasons that the member outlines. There are

issues that have been raised, concerns that have been raised. Ideas are

coming forward around how to deal with the impact during the transition.

Municipalities can certainly use assessment averaging. That’s been used

by a number of municipalities to address some of the issue until the

consultation is complete.

T. Redies: Meanwhile, businesses in North Vancouver have seen a 27 percent

hike in their property taxes, but we’ve heard nothing from the NDP about

this threat to local small business. I mean, there are things that the

minister could do while this consultation goes on. Why can’t the

minister enact some relief for these small businesses that are being

driven out of their communities by property tax spikes?

Hon. C. James: I’ve answered the question.

S. Bond: Well, we know this. We know that the minister has heard from

mayors. We certainly know some of them specifically. She’s heard about

property tax spikes. Can the minister tell us whether she has responded

directly to the concerns that have been expressed? And if so, what did

she say to them?

Hon. C. James: Yes, of course, we’ve heard the concerns. That’s part of the

reason, as I said, that the Minister of Municipal Affairs is doing this

consultation — to be able to hear the issues firsthand. The

municipalities have the authority, as the member knows well. But in

fact, we have heard the concerns, and that’s why the Municipal Affairs

Minister is taking this issue on as a consultation.

I think it’s just important to note again, as the previous member

mentioned as well, that there has been a reduction in the small business

tax rate. We have eliminated PST on electricity for businesses, and

we’re partnering, in this budget, $800 million with the federal

government around supports on investments for businesses as well. And I

have to say, certainly from the calls and discussions I’ve had with

business addressing the housing crisis, it is also an activity that

supports businesses in their recruitment and retention challenges that

they’re facing.

[1:55 p.m.]

S. Bond: There are significant concerns in the small and medium-sized

business world in British Columbia, and we’re going to talk about some

of those in a minute. But we should be clear. It’s not just mayors. We

saw the Vancouver city council recently express concerns that spiking

property taxes are going to drive businesses out of

communities.

Here we have a government that has an agenda related to

affordability and also the environment. So let’s just follow that

scenario for a moment. We drive businesses further away. People have to

actually commute to get to them. So now we have people who are concerned

about the impact on the environment and the cost of living.

From the minister’s perspective, does she have any concern? And

obviously expressed by the Vancouver city council, there’s some concern

about the spike in property taxes. That concern is driving businesses

further away. Is the minister aware of that concern of Vancouver city

council? Has she been engaged in any discussion with them? If she has,

what is she prepared to do about that?

Hon. C. James: As the member knows, this is a municipality’s responsibility and

authority. That’s why the Minister of Municipal Affairs has taken this

issue on, because yes, the concerns have come forward. Yes, people have

raised the issues. That’s why the minister responsible is having that

discussion.

She’s already announced the review of the highest and best use

valuation. She is actively consulting with other municipalities, with

business groups. All of government will hear her report when it comes

back.

S. Bond: Thank you to the minister. Yet again, we have a situation that’s

developed. Now we’re going to consult after the fact and try to figure

out what…. And it’s because people stood up and said: “This isn’t

acceptable, and it’s having an impact.”

Let’s talk about another area where there’s been an impact, and

that’s the Vancouver school tax. Did the minister consider the impact on

municipal decision-making on its tax base prior to imposing another tax,

the additional school tax?

Hon. C. James: Yes, we did a thorough analysis, as we do with all of our measures

that we bring forward — looked at all the issues and moved ahead, felt

comfortable moving ahead with this tax.

S. Bond: Well, let’s take a look at what a recent city of Vancouver report

said about the additional school tax. “Implementation of the additional

school tax in 2019 on residential properties…would add $100.7 million,

or 12 percent, to the overall tax levy for the residential property

class. This represents a 30 percent increase in the provincial school

tax and 12 percent to the overall tax levy for residential properties, a

significant, year-over-year increase….”

Can the minister comment as to whether or not she was aware of the

impacts of the additional school tax that she levied?

[2:00 p.m.]

Hon. C. James: As I said earlier, yes, we did an analysis and looked at all of

the issues. I think I just want to make sure that it’s on the record,

again, that this additional tax is on the value above $3 million. That’s

less than 2 percent of properties. Yes, we took a look at all the

issues.

S. Bond: Well, thank you very much. It is just the continuous pattern.

“Yes, we assessed the impacts. Yes, we thought about what it might mean,

but we plowed ahead anyway.”

Nineteen new and increased taxes under this minister’s watch. To

suggest or to even contemplate that that doesn’t have an impact on small

business growth, on people’s ability to…. The minister constantly talks

about affordability yet keeps downloading costs. Eventually, they end up

in one place, and that is taxpayers’ pockets. It doesn’t matter what you

call it — which tax it is, which increase, which new one. We’ve seen 19

new and increased taxes under this minister’s watch.

My last question on this

section is: can the minister tell us…?

There is an intergovernmental working group on split assessments. What

is her role in the working group, if any?

Hon. C. James: As the member knows, this is the responsibility of the Minister of

Municipal Affairs, but yes, we have staff at that table.

T. Redies: We’re going to turn now to the employers health tax. Minister,

we’ve been speaking about the challenges that small businesses are

feeling because of property tax increases. The reality is that the

half-baked employer health tax is also contributing here.

This is actually something that the minister has within her

purview to do something about, in that the employee health tax has been

put onto municipalities, and that burden is then being transferred onto

property owners, including businesses. So not only are businesses

getting hit twice, with the MSP and the EHT, this year. As we all know,

the minister is double-dipping on these taxes. Businesses are also

getting hit with increased property taxes because of the EHT. It’s a

triple whammy.

[2:05 p.m.]

How can the minister defend downloading these costs to

municipalities, which she used to be so critical of and she knows are

going to be passed on to businesses and property owners?

Hon. C. James: I think it’s important just, once again, to talk about why we are

looking at the employer health tax and why we are moving ahead on that.

As the last province left with MSP premiums…. Every other province

eliminated MSP premiums, and the majority of provinces moved to an

employers health tax as a more fair way of approaching the costs to

manage. In our province, we have not done that.

Yes, we are moving to an employer health tax, away from a

regressive tax where, whether you made $50,000 or whether you made

$500,000, you were paying the same amount in medical service

premiums.

I think the piece that is important to remind the member, as well,

is that municipalities pay medical service premiums for their employees.

They, in fact, saved 50 percent on their costs for medical service

premiums last year — 50 percent again this year. So, yes, while there is

an additional cost until MSP premiums are eliminated, January 1, 2020,

they in fact have savings from the medical services premiums being

reduced by 50 percent. Those savings were not clawed back. Those are

savings that municipalities have.

The member mentions the cost to municipalities. In fact, UBCM did

a report that identified some of the costs, and we did an analysis of

that report. In fact, if you took a look at the cost to individual

municipalities when you took into account the net costs, after you take

off the savings for municipalities, if all of those costs were put on

homeowners…. Again, most municipalities share their costs of their taxes

with homeowners and businesses. Even if you took the worst-case scenario

and all of those costs were downloaded onto homeowners, it ranged. In

some municipalities, the homeowner would be ahead because of the

additional costs, and it went all the way up to about $54 per

household.

[2:10 p.m.]

In the savings for medical services premiums, individuals will be

saving $900 a year, and it’s $1,800 a year for families. So the savings

far outweigh the costs.

Then the last piece I just remind the member of, as well, is that

businesses with a payroll of under $500,000 are not paying the employer

health tax, and businesses with a payroll of between $500,000 and $1.5

million are paying a graduated rate on the employer health tax, again to

support small businesses.

T. Redies: Thank you, Minister, for that answer. I have 19 municipalities

here with a list of known property tax increases, and the EHT is

basically contributing to about a third of the property tax increases

that are being put in place by these municipalities. So if the EHT was

so much better than the MSP and they were saving so much money, why

would they be increasing their property taxes?

In fact, Saanich — here’s a good case in point. Percentage tax

increase, 5.37 percent; tied to the EHT, 3.87 percent. New Westminster:

5.28 percent increase; 1.8 percent tied to the EHT. The implication, I

think, from the minister was that it was somehow neutral to the

municipalities.

Why are property taxes going up, and why are municipalities making

it very clear that a significant reason for that is because of the

EHT?

Hon. C. James: Obviously, it’s the municipalities’ information, but I’ll just

give some of the analysis, including Saanich. I think what the member is

quoting is a number for the cost of the employer health tax without

taking in the net savings that are already there for the municipalities

and the money that they already have.

Just to give you an idea on Saanich…. The need to recoup the net

costs in Saanich would have been 1.22 percent, which, if the total

amount, as I said earlier, was put on all residential property — it

often isn’t; often it’s shared — would be a total of $35.60.

S. Bond: We fundamentally disagree with this approach. So did the experts

the minister asked. She actually put together an advisory panel of

experts and, in fact, told them that competitiveness had to be one of

the factors that would be considered. And the very advice that she was

given, she ignored.

[2:15 p.m.]

To suggest that the numbers provided by municipalities, where they

identify that the percentage of increase tied to the EHT somehow doesn’t

net out their savings…. Well, it’s just not accurate. These

municipalities have pointed out that the percentage of increase compared

to their overall tax increase is tied to the EHT.

I guess the other question we need to ask the minister, when she’s

busy touting her affordability mandate and how much the removal of the

MSP premiums is going to save British Columbians, is: did she take into

account that it’s being actually downloaded to those same British

Columbians through increased property taxes and more pain at the pump

and all of the other expenses? There is only one taxpayer in British

Columbia.

It’s fine. We can all deal with the tax policy. To be clear, every

party in this House said they were going to eliminate the MSP. What this

side said was we would eliminate the MSP completely when we could afford

to pay for it instead of downloading it to municipalities, who then

download it to British Columbians. So you bet there’s a difference in

policy approach here.

I just want to give the minister one example, and there are dozens

and hundreds of small businesses who feel this way. We received a letter

from an oil and gas operator in the northeast of British Columbia.

Here’s what he said. I think the minister needs to hear this. It’s easy

to sit in Victoria and write up tax policy, but here’s what it’s doing

on the ground.

“I was frustrated two years ago. Now I am deeply angry, and with the

combination of the election of the UCP in Alberta and the new taxes

under the NDP, I am ready to take action. I am resolved to move my

business operations to a lower tax jurisdiction and one that recognizes

and encourages the oil and gas industry.

“I have now found a way to minimize my EHT payable, at very little

cost to me, by establishing a permanent operation in Alberta. I’m also

working to more accurately allocate our income earned in Alberta versus

B.C. to take advantage of the coming lower Alberta corporate tax

rate.”

That’s something we haven’t even talked about yet. That is going

to have an enormous impact on British Columbians. I can hardly wait to

see the work that this government is doing when Alberta continues to

lower its corporate tax rates. But I digress.

Here’s the last paragraph:

“Please take every opportunity” — for us, that’s today — “to impress

upon your NDP colleagues that their new tax rules will not net more

revenue from me. It will be a net financial loss to the B.C. government.

The B.C. tax rules must be changed to level the playing field with our

Alberta competitors. You cannot overemphasize the importance and urgency

of this point.”

To be clear, British Columbia is becoming an island unto itself.

In the U.S., we’re seeing reduced taxes. There is a focus on driving

down tax rates. Guess what. Our next door neighbour, our primary

competitor, is going to do exactly the same thing. What are we doing?

We’re driving ’em up, and we’re driving ’em out, which is exactly what

this and other businesses are planning to do.

Can the minister provide some comfort or comment or something to

this particular business owner, who has decided that he’s leaving

British Columbia because of her tax policies, resulting in a drop in

revenue? It’s exactly the opposite of what this minister is telling

British Columbians.

Hon. C. James: I think the member is pointing out — I know we had some of this

debate last estimates; I expect to have it again in the next estimates —

the differences that we have in approach. The member is quite right.

There is a difference in our approaches between the past government and

the new government.

There is a difference in approach in that we recognize that, yes,

we need to remain competitive as a province. We need to remain

competitive when it comes to taxes. We need to remain competitive in our

environment. But there are also other areas that are important to

businesses, important to a healthy province and to the people of this

province and that businesses also care about.

[2:20 p.m.]

When I go out and talk to businesses, whether I’m talking with a

chamber of commerce, the board of trade, whether I’m talking with

individual small businesses, they will talk about the importance of

trained workers — making sure that they have the skills and abilities

that they need to be able to keep their businesses growing. They will

talk about the need for a quality health care system and that, in fact,

when people look at coming to their businesses when they are recruiting

and retaining more workers, they will take a look at the importance of a

quality health care system.

They care about child care. I can’t tell the member the number of

businesses who have approached me and talked about the importance of

recruiting and retaining workers and the difference child care will

make. In fact, businesses are approaching us to talk about how they can

expand child care within their businesses. It’s a critical piece when we

look at women’s participation in the workforce.

Again, we have the lowest unemployment rate in the country and

have had that for 22 months. If we are going to be able to keep workers

and keep our economy growing, we will need to have workers in our

workplaces. Quality child care is one of those critical pieces in being

able to recruit and retain workers — women, in particular — and to

assist them in getting back in the workforce. It is a critical piece,

just as critical in balancing along with taxation, housing and the

environment. Those are important pieces.

The member talks about us being isolated. Well, I suppose she

could use the term isolated — isolated in that we’re going to have the

top growth across the country for the next two years, isolated in that

we have the lowest unemployment rate. So I suppose the member could

qualify it in those terms.

I would suggest that we have a balance. We have a balance

economically, and we have a balance in our approach. That’s what the

people of British Columbia are looking for.

S. Bond: Well, I’m sure the minister knows that I’m not going to sit on

this side of the House and let that go without notice.

The trend that’s been developed on the other side of the House….

If there’s a problem too big to fix, the answer of this minister is:

“We’ve only been here 20 months.” On the other hand, when we celebrate

the economic successes of British Columbia, the minister stands there

and takes credit, when she knows full well that it took years of hard

work and concentrated effort to return British Columbia from worst in

the country to first in the country from the last time that this

government was in place. So to suggest that we’re isolated because of 20

months of this government is absolutely ridiculous.

The past government handed over to this government the

top-performing economy in the country, the number one job creator in the

country. Conveniently, the minister refers to the last 20 months. I

would suggest she should go look at Stats Canada numbers for the last

number of years that it took for us to dig British Columbia out of the

hole that this minister and her government put it in.

We should be clear. We are passionate about these issues because

this minister is layering on ongoing tax increases, increases to the

minimum wage.

Of course employers want trained workers. That’s why we spent

years creating a jobs plan, a skills-training plan. And what have we

heard from the minister opposite? Nothing. They don’t have a jobs plan.

The only revenue generation plan that this minister has is taxpayers’

back pockets.

To this business owner, will the minister stand up and at least

acknowledge, instead of simply saying, “Oh, it’s going to be okay”…?

This company is leaving British Columbia because of her tax policy, and

they are not alone. We have heard from dozens of companies who are under

siege because of the tax policies of this minister.

Let’s try it again. We are an island. We are turning into an

uncompetitive island. Our neighbours to the south and our neighbours to

the east are concentrating on tax reduction, making it more competitive

for businesses.

Is the minister aware…? Has she heard from and is she paying

attention to companies like this owner of an oil and gas company who’s

leaving British Columbia?

[2:25 p.m.]

Hon. C. James: I think it’s important to put the facts on the table. I think it’s

important to talk about the reality of British Columbia, British

Columbia’s economy and investments that are being made in British

Columbia’s economy.

I know the member doesn’t have faith in the people of British

Columbia and the investments in British Columbia, but I do. In fact,

we’re seeing it when we see the kinds of investments that are occurring.

For example, in the past year, B.C. has added 79,400 jobs. That’s

happened in the last year. And 68,500 are in the private

sector.

I mentioned the lowest unemployment rate for the last 20 months.

We’re seeing growth in manufacturing. Factory sales grew by 2.4 percent,

and shipment growth grew by 6.3 percent year over year. That’s in

January. We’ve seen the highest wage growth in a decade. Retail sales

are up. The value of exports is up.

Then let’s take a look at businesses that are investing. The

member mentioned businesses. I think it’s important, again, to take a

look at the facts. I can mention LNG, to begin with. The largest private

sector investment in Canadian history — $40 billion for Canada, $24

billion right here in British Columbia. That will mean 10,000

construction jobs, 950 permanent jobs and $23 billion in government

revenues.

Kalesnikoff Lumber announced a massive $35 million expansion

following our government’s changes that we made to allow for 12-storey

wood buildings. Again, a major investment in our communities in the area

of forestry and in the area of utilizing B.C. wood.

Vancouver. Now the world’s top 50 container ports and global

container terminals has just invested $300 million in their Deltaport

terminal, $160 million in their Vancouver terminal…. Again, showing

strong growth in the province and showing an interest in

investing.

SAP Labs, another example, one of the world’s largest companies,

unveiled a 70,000-square-foot expansion of the Vancouver offices to

attract and retain the best and the brightest.

Environmental assessment certificates have been ap­proved

for a Red Mountain gold and silver mine near Stewart. Again, 103 local

jobs, and more again during the initial investment.

And $450,000 — the member would be interested in this — for

further development for a beef-packing plant in Prince George. Again,

it’s going to build 80 direct and 620 indirect jobs.

A Japanese retailer, Muji, opened three stores, including their

largest store outside of Asia, on Robson Street — 150 jobs and, again,

doubling the size of their Metrotown head­quarters.

Amazon, another company, again, showing support for British

Columbia, expanded its B.C. footprint by adding 4,000 new jobs,

e-commercial tech and other skilled jobs that are going to be added by

Stemcell is another example, creating 675 jobs in Burnaby by the

time they complete their expansion in 2022. I could continue on. Silicon

Valley company Workday opened a 17,000-square-foot office — again,

saying that they had confidence — and continued job growth in the

Victoria tech sector. As a Victorian, I didn’t think I’d see the day

when, in fact, tech is surpassing tourism when it comes to investment in

Victoria, but that’s what you’re seeing. The AltaGas export terminal at

Kitimat — again, a further expansion. And the mining sector continues to

grow.

That’s just a short list. I could read more, but that shows the

kind of support and the kind of optimism and the kind of confidence that

people have in British Columbia.

T. Redies: Well, I’d just like to correct the record. This side of the House

has complete faith in British Columbians. What we don’t have is faith in

this government, based on all of their practices.

[2:30 p.m.]

[J. Isaacs in the chair.]

The minister was quoting job stats. Well, I have the stats from

June 2017 to March 2019 in front of me: manufacturing, 13,900 job

losses; retail trade, 8,500 job losses; real estate, rental and leasing,

7,400 job losses; transportation and warehousing, 7,300 job losses;

construction, 5,900 job losses; forestry, 5,700 job losses; mining,

quarrying and oil and gas extraction, 3,800 job losses; accommodation

and food services, 5,600 job losses.

Minister, if things are going so well in the province of British

Columbia, why has business confidence dropped 14 points under your

government’s reign?

[2:35 p.m.]

Hon. C. James: Again, just putting the facts on the table. If you look at the

first three months of 2018 and compare that to the first three months of

2019, which is obviously the comparison you want to be looking for, the

trend that’s happened year over year…. Employment is up 2.8 percent.

There are 70,167 jobs that have been created — 61,600 of those in the

private sector. If we look at the last five months, we’ve continued to

see employment increase over the last five months.

T. Redies: Well, that was just really interesting. I just gave the minister

job numbers from June 2017, when they took office, to March 2019. These

are from Stats Canada. I mean, you can pick two or three months here and

there, but I’m talking about the record of this government, which isn’t

that great.

In fact, I just looked at the total numbers here. Out of 51

categories, there are only 19 sectors where jobs actually have

increased. Two of those, coincidentally, happen to be in provincial and

territorial public administration and regional government, which have

increased about 5,000, almost 6,000 jobs.

Minister, the problem is…. The minister talked about meeting with

businesses who want child care and affordable housing for their workers.

I get that. But I think if the minister had told those businesses that

she was going to hammer them with about $8 billion or $9 billion of

increased taxes over the next few years, they might have had a different

take on things.

In fact, part of the government’s responsibility is to increase

the overall pie and not just transfer taxation from one group to the

other, particularly the job creators.

My colleague from Prince George–Valemount talked about the

challenges of competitiveness that British Columbia is facing on

multiple fronts. Some are due to actions taken by the United States, but

we’ve now seen the results of the Alberta election., and B.C. is going

to face increased competition for investment. I remind the minister that

Alberta doesn’t have a PST. It doesn’t have EHT. It doesn’t have the

carbon tax yet. It’s planning to lower its corporate tax rate, over the

next four or five years, to 8 percent from our 12 percent.

Again, I guess, on this side of the House, we’re very concerned

about this. The reason why British Columbia has been able to put itself

on the map is because they had a very competitive economic environment,

with a past government that was pro making sure that there was

investment and business creation to create and improve that economic

pie.

What actions are this government thinking about at all? Name one

to improve British Columbia’s competitiveness in Canada and with the

United States.

[2:40 p.m.]

Hon. C. James: We’ve gone through this, but I’m happy to go through it again if

the member feels the need to talk about the investments that we have put

into business and the support we are providing to business and to small

business to remain competitive, as I’ve talked about. I’ve talked about

cutting the small business tax rate from 2.5 to 2 percent; eliminating

the provincial sales tax on electricity for businesses, a critical piece

again; and investments in housing and child care.

I know the members don’t like to see those as business and

econo­mic investments, but in fact, they are key economic

investments. The best investments we can make in our province to keep

our economy growing are people. That is our best investment, because

people are the ones who keep the economy growing. In fact, because of

our tight labour market, because of our good employment numbers, we face

challenges when it comes to recruitment and retention.

The investments we make in education; the investments we make in

post-secondary education; the $800 million investment we’re making in

corporate income tax reductions, over the fiscal plan for investments —

again, to have businesses invest….

We have continued and will continue to be both focused on our

competitiveness as well as focused on our support for businesses. You’re

seeing that in the kind of employment that we’re seeing and investments

we’re seeing, as I read into the record, in British Columbia.

T. Redies: Well, let me read into the record something for the handful of

British Columbians that are watching this. Under the NDP, B.C. has lost

36,400 jobs in the goods sector but has gained 33,300 in the service

sector. Jobs in the service sector typically pay much lower money than

jobs in the goods and manufacturing sector. Coincidentally, British

Columbians are now working multiple jobs at a high — now 168,500 people

in British Columbia. It’s the highest number of British Columbians

working at multiple jobs. So much for the affordability

factor.

This government, again, tries to pretend that everything they’re

doing is fantastic, but the minister has failed to answer my previous

question. If things were so great for business, why has business

confidence fallen 14 points since they took power?

[2:45 p.m.]

Hon. C. James: The member is talking about business confidence. And I think, as I

read into the record already, the strongest voice of business confidence

are the investments that are coming to our province and continuing to

come to our province, giving us, as I said, the expected highest growth

rate and the lowest unemployment rate across the country for the next

two years.

The member mentioned the CFIB survey, which is based on responses.

It is people who want to put their information in — a very small sample.

I take the member’s point. I think it’s also important to take a look at

the trends across the country. Once again, we are consistently, in

British Columbia, above the national average.

There is no question that things like trade disputes are causing

some uncertainty for businesses across our country. There is no question

about that. It’s part of the reason that we continue to build on the

diversification of our economy. It’s why we continue to ensure that

we’re making investments to be able to recruit and retain employees to

help businesses with investments like child care, like housing, like

training for employees.

T. Redies: Let’s go back to the Alberta situation. Does the minister expect

any businesses to move from B.C. to Alberta as a result of the combined

tax differences that I mentioned earlier and that are going to be

continuing to reduce in Alberta over the next few years?

Hon. C. James: This comes back to our earlier conversation about business

investment and the fact that businesses…. Perhaps this is one of those

differences between the other side and our government. We recognize that

businesses look at a number of areas and a number of factors when

they’re looking at investments. Yes, taxation, and competitiveness, is

one of those, but there are a number of other pieces that businesses

look at.

[2:50 p.m.]

I think the example that I would point to, of course, is the film

industry. As we saw, provinces play off each other with tax breaks. What

we hear from the film industry constantly is that one of the reasons

they pick British Columbia is that they can hit the ground running

because of the well-trained workforce here. They know they have

stability because they know that that’s there. So labour is a key piece

and, again, it’s why we’re putting our resources into apprenticeship and

trades training, why we’re putting our support not only into employees

for today but employees for the future, for future employment. That will

provide the stability, again, that businesses need.

They take a look at education. They take a look at the resources

being put into education. They look for stability in the province. They

look at lifestyle. I have to tell you, from the businesses that I meet,

particularly in the tech industry, their employees work very long hours

on the days they work, and then they look at providing opportunities for

quality life outside of work. Again, British Columbia is one of those

places because of the supports we’ve put in place in protecting our

environment.

Transportation is a key. Again, major investments we’re making in

transportation, particularly in the Lower Mainland. Forty percent of the

mayor’s plan on transportation will be funded by the provincial

government, because we recognize how critical that is. So I think….

While the member may believe that simply looking at a tax rate in

Alberta is going to make all the difference, we believe that, in fact,

looking at all of the factors that make our province a fantastic place

to invest but also a fantastic place for families to live and to work is

a critical piece.

T. Redies: The Premier of Alberta has said that his tax plan will create

50,000 jobs. Has the minister done any modelling or analysis on how many

businesses could leave B.C. for Alberta? Frankly, most of us in this

room are old enough to remember the 1990s, when there were billboards at

the border between B.C. and Alberta saying: “Would the last British

Columbian to leave British Columbia please turn out the lights.”

Hopefully, the ministry is doing some work in advance of this to make

sure that doesn’t happen again.

I guess what I’m asking is: what modelling have they done, given

the Alberta tax intentions, to determine whether or not we are going to

be losing some businesses to Alberta?

Hon. C. James: I think the first piece to note is that there is no budget from

Alberta yet. As the budget comes out…. We obviously analyze and take a

look at budgets from across the country, and we will do that with

Alberta as well. But there is no budget at this point that has come down

from Alberta.

As I mentioned earlier, we, in fact, are actively recruiting

people to come to British Columbia for the kinds of jobs and vacancies

and, as I talked about, our low unemployment number — to encourage

people to look at British Columbia. Competitiveness is always part of

our analysis of everything we do as a government.

S. Bond: I certainly hope that the minister and her team are taking a

pretty serious look at what Alberta is going to do, because the more

competitive they make themselves, the risks increase exponentially for

British Columbia. And it is about job creation. It is about people who

create those jobs leaving British Columbia. They’ve done it in the past,

and they’ll do it again. Capital is mobile. I know the minister knows

that. People get to choose where they have their head

offices.

Let’s talk a little bit about competitiveness. The minister has

talked about how rosy things are. Let’s talk a little bit about how the

small business sector is feeling. I know the minister knows as well as I

do…. I have spent many years of my career dealing with the jobs and

training and small business files. We know that small business is

actually the heart of British Columbia. The vast majority of businesses

in B.C. would be considered small or medium.

There is a Small Business Task Force. They in fact reviewed the

cost of doing business in British Columbia. Here’s what they had to say.

The minister can quote a bunch of statistics; let’s actually talk to the

people who run small businesses in British Columbia. Here’s what they

said:

“Participants told us the emerging tax on payroll will drive up

their cost of doing business and may result in job reductions, the

reduction or elimination of employee benefit packages or bonus

structures, and price increases.

[2:55 p.m.]

“Participants suggested reducing the EHT, postponing its

implementation to 2020 to coincide with the removal of the medical

services…premiums” — which, I digress, is exactly what experts on the

minister’s very own panel suggested that she do, and she ignored —

“increasing the $500,000 threshold to $1.25 million, implementing

graduated threshold tiers, increasing thresholds in the future based on

inflation, and examining alternative best practices for paying the MSP

premiums, such as amending the EHT to a more even split between

employers and individuals.”

The minister is, I’m sure, well aware of that feedback. What is

her response to the Small Business Task Force?

Hon. C. James: I think, just to start off with some general stats. Then I’ll talk

about some of the work from the task force. Again, we’re tied for the

second-lowest small business corporate income tax rate among the

provinces and the third-lowest general corporate income tax rate —

again, competitive when we look across the country.

I just want to talk about a few of those pieces that were in the

task force and the work that we’re actually doing right now.

[3:00 p.m.]

There were a number of areas the task force pointed to that it was

interested in having work done: areas of procurement; areas of Internet

connectivity; work with businesses to look at access, as I talked about

earlier, with a skilled workforce; and engaging businesses. That’s part

of the work that we’ve already started through the Minister of Jobs.

It’s part of a renewed framework that we’re really looking at to make

sure that businesses have the opportunity to be able to bring their

issues forward.

Affordability. I’ve talked about the investments in child care and

the investments in housing. Again, affordable child care has been

something that has been called for by the B.C. Business Council,

chambers of commerce, the board of trade, municipalities and small

businesses across this province for years. They are seeing record

investments, they are seeing action on the issue of child care, they are

seeing action on the issue of housing, and they’re seeing action on the

issue of transportation — all areas that they identified as

critical.

Connectivity. Another piece that came forward from the task force

and, again, another piece where we’ve made major investments. Since

July, when we came into government, you now see connectivity projects

underway or completed for 43,000 households in 417 communities. That

includes 74 Indigenous communities — again, an issue that wanted to be

worked on with the task force and a piece that we’re very proud that

we’ve moved on. For businesses but also for communities, it makes a huge

difference when it comes to investment coming in for those communities,

particularly rural communities.

Export navigator. We extended the pilot to help small businesses

and entrepreneurs in rural regions to get their goods to market — again,

a piece that was called for.

Then procurement. There’s been a lot of discussion with

businesses, small businesses in particular, around government

procurement. It is, as we know, a powerful tool to be able to deliver

services that people depend on and provide investments for small

businesses.

We have been hearing, for a number of years, the challenges that

small businesses face when it comes to procurement that focuses on large

businesses only and doesn’t provide opportunities for small businesses

to both access new opportunities to scale up and to partner with other

small businesses to be able to bid in on government procurement. The CEO

of the chamber of commerce said that this could be game-changing for

many small businesses, another opportunity to be able to do the work.

Then annual funding, of course, for Small Business B.C. — $686,000 to

support this resource centre for business information, products and

services.

Those are just a few of the pieces focused on the task force

report that we’re already doing work on and are already supporting

businesses with.

S. Bond: There’s no doubt that there were items on that list that have

merit. In fact, there are some items on that list that, when this side

of the House was in government, they’d actually started those

initiatives. Export navigator would be a perfect example of just one of

those on that list. So there’s no doubt that there are issues that have

merit that are benefiting British Columbians.

But we’re talking today about the impacts of the employer health

tax on businesses that are, at the moment, contemplating their future in

British Columbia. We’ve heard of the oil and gas company, but there’s

more. Let me just go to one additional quote from the Small Business

Task Force. These are people who actually run businesses that create

jobs. The vast majority of businesses in British Columbia are

categorized as small or medium.

Here is their recommendation: “Revisit the MSP Task Force

recommendations to consider a combination of measures to address those

impacts, such as increasing the payroll exemption threshold, exempting

employers from paying EHT for youth under 19 years of age covered under

their parents’ MSP, and removing the MSP/EHT overlap” — now known as the

double-dip year — “in 2019 so that proactive companies are not also

charged the EHT in the short term.”

Has the minister considered any of these measures to ease the

impact of the EHT on small businesses in British Columbia?

Hon. C. James: I’ll again remind the member that the formation of the EHT was to

replace the medical services premiums. We were the only province left

that didn’t move to a payroll tax. B.C. now, finally, will be matched up

with the other provinces when it comes to providing those payroll taxes

and getting rid of medical services premiums — saving, again, $900 for

individuals, and families, $1,800.

[3:05 p.m.]

The tax is designed, again, for businesses under $500,000. They

don’t pay. That’s 85 percent of businesses in this prov­ince that

do not pay the employer health tax. Businesses that have payrolls

between $500,000 and $1.5 million will pay a graduated rate. It’s only

businesses above $1.5 million that pay the full rate of the employers

health tax.

S. Bond: The bottom line is that the minister and her government ended the

MSP premiums. As I said, every party in this House had a plan to do that

in a different sort of progression, but the minister, in doing that —

against the advice of the panel that she created — decided that they

would do it and double-dip. They would have employers pay both the MSP —

half of it, granted — and the EHT. It’s having an impact. The minister

can keep saying the same words, but we know that small businesses across

British Columbia are being impacted.

Let me just reference a survey. I’m sure the minister is aware of

this — or, at least, her staff. I won’t go through the survey in its

entirety, but the minister has been happy to reference the chambers of

commerce. Well, here’s what the Prince George Chamber of Commerce did.

They initiated a survey of their members, beginning in April of 2019,

“to better understand the impacts and outcomes of the EHT on business in

our community.”

Lo and behold, the three issues they identified were (1) moving

operations, payroll and head office to Alberta; (2) reducing staff,

wages or locations, which results in less money entering the economy and

increased unemployment; and (3) less funding available for non-profits,

as corporate donors are saddled with new taxes. Let’s look at the

responses at a glance. These are not just two people sitting in the

coffee shop talking. These are dozens of businesses that are being asked

about the impact of this minister’s EHT.

Here’s what they had to say: “Will your business be impacted by

the EHT?” Seventy percent said yes. “Will you need to reduce staffing

levels to accommodate this fee?” Thirty-six percent of businesses said

yes. That means job numbers are going down. “Will your service or

product costs increase as a result of this fee?” Sixty-two percent of

them said yes. The last time I checked, the only place that those fees

and those extra costs are going to hit are taxpayers’

pockets.

Let’s do the math. The minister is the Minister of Finance. Let’s

take her affordability argument that getting rid of MSP premiums will

save taxpayers a certain amount of money. Let’s start by deducting. I’m

wondering how much the minister has reduced the amount of savings. The

fact that costs are going up…. Fees and services and products are going

up. When this minister downloads a new tax on employers, who does she

think is going to pay for it? Taxpayers.

I would suggest the ministry might want to start doing the math

that takes the gross savings that have been articulated by this

government and start subtracting. We could start with paying at the

pumps, and then we can add all of the other taxes that have been

downloaded — 19 new or increased taxes. Those have to come from

somewhere, and that is taxpayers’ pockets.

To the last point that was canvassed, “Are you considering changes

to your structure,” 23 percent responded yes. Here’s what was said: “We

are challenged to see businesses exploring options to relocate all or a

portion of their operations to a neighbouring province.”

Can the minister stand up today and tell us what advice she has to

chambers of commerce, to small businesses in British Columbia? This was

released not months ago, not weeks ago, but on May 2. These are small

business owners sending a message to this minister and this government,

in big numbers, that her employer health tax is impacting them as

employers. Can the minister stand up, take responsibility for her tax

download, and tell small business owners in my community and region what

they’re supposed to do about this download?

[3:10 p.m.]

Hon. C. James: I think there are a number of pieces to put on the table, to put

the facts on the table — and listed in the budget as well. If the member

wants to look at the appendix in the budget, it’s listed there around

the tax bite for families. The member talks about life being more

expensive. In fact, it’s just the opposite — page 117 in the budget, if

the member wants to refer to it. For a family of $60,000, the member

says that costs are going to be pushed down and it’s going to be more

expensive.

In fact, if you are a family with a net income of $60,000, in

2016, you were paying $4,238 in taxes. When policies are fully

implemented — that includes, of course, the elimination of the medical

service premiums and with the child family bonus — you will, in fact, be

paying $1,653. If you have a net income of $80,000, in 2016, you were

paying $5,637. Again, you will pay $3,239 when the policies are

implemented. And a family with a $100,000 income was paying, in 2016,

$7,473 and will be paying, when the policies are implemented, $5,860. So

that’s completely contrary to the member’s allegations.

On the employers health tax, let’s remember the businesses that

were paying medical service premiums saved 50 percent last year and 50

percent this year. That is a fact.

The member talks about job losses. In fact, we have the lowest

unemployment rate in the country, and we have had that for the last 20

plus months. And again on the employers health tax, 85 percent of

businesses are exempt.

I understand the members may not like the facts, but it’s

important to put them on the table.

S. Bond: To the minister, it’s not about this side not liking the facts.

These are comments from business owners in British Columbia who asked us

to convey a message to this minister. I will be happy to share a copy of

the entire survey, because she should spend some time listening to the

comments of business owners in British Columbia. There are pages of

them.

They don’t quote any of the numbers in the minister’s budget, but

they talk about things like…. There are some that I can’t repeat. “This

is a ridiculous and unnecessary tax.” “When you look at it, this new tax

will affect our ability to hire more staff.” “How did they pass this

without involving the very businesses that will provide the money?” “We

are being triple-dipped.” The list goes on.

The minister wants to be dismissive. That’s entirely up to her.

But these are the voices of small business owners in British Columbia

who have spoken out in strong numbers through a chamber of commerce. Two

questions ago the minister was busy congratulating the chamber of

commerce. They have a different message for the minister today on this

file, on the EHT.

Let’s talk about another concern of the chamber of commerce. In

fact, what we know is that there is significant concern. They have a

request, actually, for the Minister of Finance. What they’re asking is

for the minister to consider making an adjustment to the EHT. They

represent businesses all across British Columbia. And the minister has

quoted how they celebrate some of the initiatives. They’re not

celebrating this one, and the minister well knows it.

The B.C. Chamber of Commerce is advocating that this minister

raise the employer health tax threshold to $1.5 million, which would

give more small businesses a chance to scale and grow the economic pie

for everyone. And I really appreciated my co-critic’s comments earlier.

It’s about growing the pie, not transferring the tax burden from one

person to another, one organization, from business to individuals. It’s

about growing the economic pie.

[3:15 p.m.]

What the chamber of commerce is asking this minister to do….

Thousands of businesses across British Columbia…. You know, the minister

wants to ignore the Prince George Chamber of Commerce. I would love for

her to come on up and sit down at a round table with the very, very

engaged employers who have some messages for her. Welcome to attend. I

will share the report with her. Hopefully, her ministry staff already

has it.

Here’s the rationale from the chamber of commerce: “Such a

reprieve would also reduce the burden for smaller companies and

start-ups who are already struggling under the carbon tax increase,

rising federal and municipal taxes and the ongoing minimum wage

increases,” which, by the way, the chamber did support.

What they don’t support is the employer health tax being

downloaded on small and start-up companies. To the minister —

straight-up question, coming from the B.C. Chamber of Commerce,

representing thousands of small businesses: will she consider raising

the EHT threshold to $1.5 million?

Hon. C. James: In fact, not only did I have the report, but I met with the

chamber to discuss the report. We had a very good meeting and a very

good discussion. I’ll continue my discussions. I recognize that they

would like some adjustments in the employers health tax, and I’m always

willing to listen to their ideas.

S. Bond: Fantastic. Is the minister, then, prepared, specifically, to

consider raising the EHT threshold to $1.5 million?

Hon. C. James: The chamber has ideas. Others have ideas. I’ll be reviewing all

those ideas, as I do. The employers health tax applies as designed — to

protect 85 percent of the businesses — but in the future, they are

welcome to bring forward their ideas to make adjustments, as others

do.

S. Bond: Well, I would suggest that the minister move that item right up to

the top of her priority list, because we’ve already heard, from chambers

across the province, that there is a risk of companies moving their

operations and payroll head offices to Alberta. Believe me, when Alberta

decides to make their tax regime significantly more competitive than

British Columbia, we’re going to see capital move where it is

appreciated and encouraged.

Secondly, we’re going to see businesses over the next

per­iod of time reduce staff, wages, locations — less money

entering the economy.

Will the minister expedite her consideration of a request from the

B.C. Chamber of Commerce to increase the threshold of the EHT to $1.5

million?

Hon. C. James: I’ve already answered that question.

T. Redies: Just to be a bit more specific, if the chamber of commerce can

demonstrate that there are job losses happening as a result of the EHT,

will the minister seriously consider — not just consultations — raising

the threshold of the EHT to $1½ million?

Hon. C. James: I’ve already answered that question.

T. Redies: Well, in fact, she didn’t.

The Chair: Do you want to rephrase the question?

T. Redies: The minister did not answer the question. If the chamber can

demonstrate that significant job losses are happening in small business,

will she reconsider the $1½ million threshold — increasing the threshold

to $1½ million?

Hon. C. James: I’ll just repeat my answer for the member. During budget process

and during the year, I receive ideas, approaches and analysis from a

number of different groups and organizations, including businesses and

including the chamber. I always take that information into account

before we determine the budget.

T. Redies: Well, I put the probability of that, probably, somewhere between

zero and zero.

My next question is with respect to the Montney basin. We have

cases in the basin where drill sites are considered workplaces for the

purposes of this tax. What steps is the minister taking to avoid having

the tax discrepancy between B.C. and Alberta negatively impact oil and

gas exploration in B.C.?

[3:20 p.m.]

Hon. C. James: I think, as the member knows well, differences in taxes is not a

new issue, certainly not a new issue between B.C. and Alberta but not a

new issue across the country. I mentioned film tax credits earlier.

That’s one of the bigger issues, where provinces were playing off each

other around taxes to try and encourage business investment and, in

fact, saw that it was a no-sum game and wasn’t helpful to the

industry.

Building up things like opportunities for training, opportunities

for apprenticeship and supports in place for a well-trained workforce

provided the tools to be able to attract investment to British Columbia.

We have companies — including, of course, LNG — that have invested and

are about to invest millions and millions of dollars in our province and

have determined to do that over this last while, when they know the

structures that we have in British Columbia. So as I said, I think that

the realities speak for themselves when it comes to the kinds of

investments we see.

T. Redies: I’m glad the minister raised the situation with respect to the

film industry and provinces undercutting each other, because that raises

a question that we had. Since we last discussed the employer health tax,

Minister, has the minister negotiated any memoranda of understanding

regarding the prorating of EHT with other provinces? If so, which

province?

Hon. C. James: No.

T. Redies: Alberta, as we know, does not have an employer health tax, yet

they are geographically the closest province. What is the minister doing

to prevent businesses from simply moving their head offices to

Calgary?

[3:25 p.m.]

Hon. C. James: This is not unique to the northeast, as we’ve talked about. The

areas that we’re working on, obviously, to both attract and keep

investment, to bring new investment to British Columbia, are not unique

to the northeast. These are issues that are important across the

province.

A well-trained workforce is critical. When we talk to people who

are looking at investments, that’s one of the pieces they talk to us

about. The PST on electricity, transportation infrastructure — again, a

critical piece that is talked about. These are pieces I know we’ve

canvassed already. I’m happy to canvass them more, but these are pieces

that, again, are critical to making sure that we keep investment in

British Columbia and are not unique to simply the northeast.

T. Redies: Again, we’ve been talking mostly about the EHT, but as we’ve said

many times with this minister, it’s not one tax; it’s the plethora of

increased taxes that this government has levied on businesses and

property owners. In fact, of the $13 billion or $14 billion in increased

taxes that this government will levy over its plan and since it came to

power, about $8 billion or $9 billion of that is hitting

businesses.

The minister talks about the PST off of electricity and the small

business tax cut. Between the two of them, they’re only about $80

million a year. So we have $8 billion or $9 billion, and then we have

maybe $700 million in savings over the time this government has been in

office. So businesses are going to be really hurt by this.

The government may not believe us, but we have, again, heard from

lots of businesses where they’re going to be taking action, whether

they’re going to be reducing wages, cutting jobs, moving head offices to

Alberta. I guess the minister is just going to wait to see it

happen.

Here’s another issue. The tech sector oftentimes has remote and

mobile workers. In this case, it would be simply a matter of moving

one’s head office to a different province or south of the border, to

Seattle, for example. So what’s stopping that?

[3:30 p.m.]

Hon. C. James: I think the response I gave for the last few questions certainly

stands for this one as well. It is rare for a business to simply use one

factor to be able to make a change in their investment or to be able to

jump to another province.

[R. Chouhan in the chair.]

Most businesses will take into account a number of factors,

including the competitiveness in the province — again, remember, tied

for second-lowest small business tax rate. They will be looking at

well-trained employees. They will be looking at the opportunity for

recruitment and retention. They’ll be looking at their own lifestyle

issues and the lifestyle issues of their employees.

That happens particularly in the tech industry. If you talk to

tech companies that have moved to Vancouver or Victoria, often it is

lifestyle issues that help them attract employees. The opportunity, as

an employee told me in Victoria, to be able to finish work at the end of

a long day and take five minutes to take your kayak down to the Inner

Harbour and be able to kayak is worth more, from their company’s

perspective in recruiting people into the tech industry, than almost any

other opportunity that’s there.

The member mentioned moving head offices. There’s nothing in the

EHT that incents someone to move their head office. If employees work in

British Columbia, they pay the employers health tax in British Columbia.

The EHT does not, from that perspective, incent people.

I think it is important to note that businesses take into account

a variety of factors when they’re looking at investment.

T. Redies: Thank you, Minister, for that answer, but unfortunately, I don’t

think it holds water. Again, taxation is creeping up to a level that is

making it very uncompetitive to be in B.C. The EHT, of course, is the

big contributor to that, as we know.

I’d like to read into the record a number of comments from

businesses about what the consequences of this tax are on B.C.

businesses and employees and, ultimately, consumers. I’d like to read

one quote from a business in northern B.C.

“I believe this will impact small businesses negatively, as our

profits are smaller than bigger business, but in some cases, our

payrolls reach the threshold, especially being in northern B.C. where,

generally, for trained staff in certain areas, we have to pay more in

hourly wages to attract qualified applicants. I can’t say I’m for

this.”

Another business:

“This new tax will affect our ability to hire more staff, which we

actually need, but we have decided to wait, probably for one more year,

before doing so. It will also affect the raises we were hoping to give

to our existing staff. We are receiving notifications from our suppliers

and shippers of increases due to this tax and the additional taxes on

fuel. Our fuel surcharge for shipping is now 30 percent on top of our

freight charges. We have to cover all these costs, as our profit margins

are not substantial enough to absorb them. We will be forced to raise

our prices.”

Finally, another quote:

“We are a business that has staff in four other provincial

jurisdictions that all cover health care costs through each individual’s

own taxes. The EHT creates an uneven playing field for our employees, as

the employer will be paying in B.C. but not in the other jurisdictions.

That is why we are going to be reducing wage increases in B.C. to be in

line with the new cost of the EHT, but we will be doing raises as usual

— i.e., no reduction — in our other operations outside of B.C.”

[3:35 p.m.]

Minister, there are a lot of unintended consequences. I’m sure the

minister did not want to see higher consumer prices, lower wage

increases. But can she not understand that this tax, along with the

plethora of other taxes that this government has levied on businesses,

is going to have far-reaching consequences on employees, on consumers

and on businesses and jobs in this province?

Again, with the evidence, is there no opportunity here to really

kind of rethink this tax and at least increase the threshold, as the

chamber of commerce has asked the ministry to do, to lessen the impact

on consumers and businesses in the province — businesses that are

already feeling the impacts of a lot of other taxes that this government

has placed on their shoulders?

Hon. C. James: We’ve answered this question a number of times, but if the member

wants to the opportunity to hear the answer again, I’ll take the

opportunity to answer again.

What is bad for business and what is bad for investments is a

speculative real estate market full of money laundering and illegal

activity that was ignored by the other side. What is bad for business is

a lack of affordable, quality child care to help women get back into the

workforce to be able to address the job shortages that we have right now

because we have such a strong economy and a good employment number. What

is bad for business are challenges when employees can’t find housing —

to be able to find employees in their area.

I think, for the member to suggest that a tax is the only factor

that’s taken into account…. In fact, businesses take into account, as

I’ve listed, a variety of factors when they make their decisions. We are

continuing to make sure that we remain competitive. We are continuing to

make investments that support businesses. We are investing in the people

who build those businesses and who help those businesses expand in our

province. That’s good for the economy, and that’s good for the people of

British Columbia.

T. Redies: Well, with all due respect, Minister, what’s bad for business in

this province is the NDP government. When you levy $8 billion or $9

billion onto businesses, in terms of taxation, that doesn’t help them be

competitive. That’s why the Greater Vancouver Board of Trade indicated

last year that Vancouver had fallen to the 14th spot in terms of

marginal effective corporate tax rates. Again, we have businesses all

over the province who are feeling very punished under this

government.

I’m going to move to the SUCH sector. That’s another area that we

would like to get a bit more information on. In a July 4, 2018, news

release, the minister stated that net costs will be fully funded in the

fiscal plan. Can the minister tell us what net costs mean?

Hon. C. James: The net costs would be the difference between the medical services

premiums they’ve been paying and the employer health tax.

T. Redies: Can the minister confirm if this is net of 50 percent MSP or 100

percent MSP?

Hon. C. James: It’s 50 percent until the elimination on January 1, and then 100

percent.

T. Redies: This fiscal year the net cost to the public sector was estimated

at $192 million. How much of that was the SUCH sector?

[3:40 p.m.]

Hon. C. James: For the SUCH sector, $84.5 million.

T. Redies: Could the minister please break that down? How much is going to

school districts? How much is going to post-secondary institutions? How

much to health authorities, and how much to other

institutions?

[3:45 p.m.]

Hon. C. James: To the member, $26.1 million for schools, $19 million for health,

$39.4 million for universities and colleges.

T. Redies: Thank you to the minister for the answer. Could the minister

confirm that basically all of the costs relating to the EHT are actually

going to be covered by government?

Hon. C. James: Yes.

T. Redies: I’d just like to move now to the cost and administration of the

EHT. Can the minister explain in detail and itemize all of the costs

associated with the implementation of the EHT tax?

Hon. C. James: Chair, could I suggest a five-minute recess while we change

staff?

The Chair: This House will be in recess for ten minutes.

The committee recessed from 3:47 p.m. to 4:01 p.m.

[R. Chouhan in the chair.]

The Chair: Estimates for the Ministry of Finance will

continue.

Hon. C. James: For ’19-20, $1.57 million is the cost for the EHT. In ’20-21, it

will go up to $2.6 million. The breakdown for ’19-20: staffing is

$460,000; operational training systems is $1.1 million.

T. Redies: That’s a substantial increase, from $1.75 million to $2.6 million.

Could the minister explain why that’s happening?

[4:05 p.m.]

Hon. C. James: The additional cost for the ’20-21 year would be…. After a year

that the tax is in place, then you have appeals, you have audits and you

have collections, so that’s the additional cost that comes in the second

year.

T. Redies: Minister, could you explain to us how the tax is being

administered? Has the government hired any third parties to deal with

the questions and the registration of British Columbia

businesses?

Hon. C. James: No, it’s all internal. That’s the additional staff that is

referred to.

T. Redies: Could the minister confirm how many people in government are

actually working on the tax?

Hon. C. James: For the ’19-20 year, there is a total of 12 FTEs, and for the

’20-21 year, a total of 22 FTEs.

S. Bond: I want to move to another area, a change of direction

here.

I’m going to start with asking the minister to confirm that the

new Crown, called B.C. infrastructure benefits Inc., comes under the

portfolio of this minister.

Hon. C. James: That’s correct.

S. Bond: We’re going to spend a little bit of time this afternoon talking

about the community benefits agreement. Certainly, my colleague and I

want to better understand the administration and management. I think

that the minister knows — I know it’s been a long four days; I think

it’s been respectful and thoughtful for the very most part — that we

fundamentally disagree with this approach.

We are very concerned about the fact that workers in British

Columbia will be required to join a particular union, a

government-approved union, to work on some major infrastructure projects

in British Columbia. We fundamentally disagree with that approach. We

certainly believe in the right for people to choose to belong to a

union. Many of us, myself included, have lived in families where we

benefited from unions in our family’s case. So it’s not about, from our

perspective, union membership. It’s about being forced to join a union

that you may not want to join.

Again, really clever title — community benefits agreement. It’s

pretty hard to argue with something called a community benefits

agreement, but when you dig down, that’s when the concern arises. We see

that with the speculation tax as well. It’s a speculation tax in name

only, and in fact, the chance of it ending significant and legitimate

speculation is questionable.

[4:10 p.m.]

I believe there are two components to the way this is going to be

managed. I believe there is the Crown — for this afternoon, we’ll call

it BCIB — which the minister now has in her portfolio. There is also the

community benefits office. Can the minister describe for us the two

different pieces — the CBO and the BCIB?

[4:15 p.m.]

Hon. C. James: BCIB is the Crown, and it’s the operational vehicle. That’s

basically how I would identify it. It’s responsible for implementing the

community benefits agreement. The flip side of that…. The community

benefits office is responsible for the policy. It’s responsible to make

sure that the policy is in place and that it’s evaluated and it’s

measured. So BCIB would be the employer, for example, for community

benefit agreement projects that are going ahead.

There are three key pillars for their work. One is the project

stability agreement, which ensures transparent wages regardless of

gender. Their second pillar would be developing and maintaining skills

for B.C. That would be the apprenticeships, the training programs, as

the second pillar. And the third pillar would be priority hiring.

Indigenous communities and women are the two areas that are being

focused on. And then, as I said, the community benefits office is

ensuring that the policy is in place and that it’s measured so that the

accountability framework is in place for all the projects that move

ahead.

S. Bond: Let’s start with the Crown side of this. Is there a board in

place? Were the members of the board selected through the regular board

resourcing process? Let’s start with that.

Is there a board in place, are the names public, and were they

chosen through the regular board resourcing process?

Hon. C. James: There are seven members on the board. Yes, it’s public, and yes,

they were selected through the usual selection process.

[4:20 p.m.]

S. Bond: Thank you very much to the minister. How many employees currently

are involved on the BCIB side, and what is the budget for operating the

Crown?

[4:25 p.m.]

Hon. C. James: The budget for ’19-20 is $8 million. The number of FTEs — I think

the member asked for the number of FTEs as well — is 27.

S. Bond: What kind of accountability measures will be in place? Will they

be similar to the ones for other Crowns? Is there a mandate letter? Is

there a service plan, all of those kinds of accountability

pieces?

Hon. C. James: Again, this is all public information, just so the member

knows.

There is a mandate letter. It’s on line, along with the board. The

service plan will be developed as soon as the transition is completed,

so there will be a service plan as well. But the key accountability, or

the key deliverables, will be, again, related to the three pillars that

I talked about: delivering labour to the projects; delivering

apprenticeship targets that are determined; and priority hiring. Those

pieces will be the deliverables.

Again, the mandate letter is there. It’s public, and the service

plan will be developed as soon as the transition is

completed.

S. Bond: Can the minister now provide for us how many staff are in the

community benefits office and confirm that at least one of them, I’m

assuming, is…. If she could indicate how many people and what type of

appointment they are.

[4:30 p.m.]

[J. Isaacs in the chair.]

Hon. C. James: The community benefits office currently has three FTEs. They’re

just beginning to staff up, so they expect it’ll be four to six months

to move to a full staffing component. They anticipate 11 staff, and

those are public service appointments.

S. Bond: Perhaps the minister could spend a few minutes explaining how we

need 11 staff in a community benefits office when we have a Crown

corporation that’s responsible for overseeing this process — 11 staff in

a policy shop which a Crown is going to run. I compare that to other

Crowns in British Columbia. I don’t think we have 11 public servants

that are backing up some of those Crowns. So can the minister articulate

what on earth 11 people are going to do in the community benefits office

and what the budget is going to be for that office?

[4:35 p.m.]

Hon. C. James: Three particular areas that the community benefits office has

focused on, as I talked about: policy coordination, communications and

performance measurements. As the work goes on, staff will obviously be

hired and assigned to those particular areas. I think, perhaps, the

important piece to note is that while the community benefits agreements

are in place, they only apply to designated projects — a project has to

be designated as a community benefits agreement.

The principles of more apprentices, of opportunities for local

workers, of opportunities for underserved groups — women and Indigenous

communities — are principles that we believe and that we believe that

British Columbians want to see incorporated into all projects. So that’s

part of the work, again, of the community benefits office — to look at

that policy coordination and to look at performance measurement on those

pieces as well.

S. Bond: Aren’t those things already key principles of, for example, the

Minister of Advanced Education and the Minister of Jobs? Wouldn’t all of

those important policy principles be part of the work that’s already

being done? And now we see a policy shop of 11 people that are basically

being introduced in government, related to a specific way of hiring

workers for major projects in British Columbia. Why is that necessary

when in fact…?

I can certainly recall from my time in those ministries that of

course those were important priorities — making sure that people who are

currently underrepresented in the workforce are included, that we have a

skills and apprenticeship agenda. We had a significant one.

You know, I’m not sure that’s a fulsome answer. Those principles

already exist across ministries in their particular portfolios. What

portion of the time and the allocation of staff is related to

communications?

[4:40 p.m.]

Hon. C. James: The member is quite correct that there are various policies in

various ministries related to apprentices or related to underserved or

opportunities for local workers. But that’s exactly the point — that

those policies have been different in different ministries, and there

hasn’t been coordination. In fact, there hasn’t been consistency across

ministries.

Part of the work of this office is to, in fact, look at that

policy coordination, work with those ministries, ensure that we have,

for example, a procurement document that’s consistent, that’s

coordinated, that ensures efficiencies. Rather than every individual

ministry taking on those responsibilities, it can be much more efficient

by being coordinated. And we’ll make sure that we achieve what we aim

to. Again, I think with a lack of policy coordination, it’s very easy

for the outcomes not to be achieved, and we want to make sure that those

outcomes are achieved. So that’s part of the work of the

office.

The member asked about communications and how many staff would be

in communications. It’s expected at start-up, because there’ll be a lot

of stakeholder engagement and other work, that there’ll be three

communications staff of the total staff. But again, that’s expected to

shift after the first year, once the office is up and running and once

some of that coordination work has been done.

[4:45 p.m.]

S. Bond: I am very cognizant of the time, and there are a ton of questions

about this that those comments generate. So three communications

officers. How many communication officers will the Crown

have?

Hon. C. James: One.

S. Bond: This is bringing back a lot of memories about Highway Construction

Ltd. Let me just be clear for the record, then, that BCIB will actually

be the employer of workers for the projects that are designated under

CBAs. Is that correct?

Hon. C. James: Yes, that’s correct.

S. Bond: Can the minister describe how many of the employees in a CBO will

be OIC appointments?

Hon. C. James: The three communications positions.

S. Bond: How will the CBO relate to the Crown corporation? How does that

relationship work?

Hon. C. James: I think, as the member would expect, the relationship is very

close. They have to be closely linked, because one organization is

developing the framework, the policy, and the other organization

operationalizes that framework. So they are very closely linked and, in

fact, share space as well.

[4:50 p.m.]

They have to be linked, because they share the goals of making

sure that the benefits that I talked about, the Apprenticeships, the

opportunity for local workers to be hired, the opportunity to look at

underserved groups to be able to have these kinds of jobs — women,

Indigenous communities…. Those are common goals and shared goals between

the two organizations, so very closely linked.

S. Bond: We’re aware that a working group was created across ministries. It

lists the very kinds of ministries that the minister was talking about.

Interestingly enough, the key principles of that working group are

exactly what the minister outlined — apprenticeship, Indigenous people,

improved access for local workers.

There was a working group of key ministries that were discussing

exactly the same items for achieved outcomes that the minister just

talked about. There is a working group. I’m quite familiar with how they

get formed, cross-ministry working groups across government. Apparently

there was a working group doing that work.

Why does the minister now need 11 people and a community benefits

office to do the work that, in fact, a cross-ministry working group…? I

can list the ministries for the minister, with mandates or program

objectives that align with key principles or responsibilities for

infrastructure delivery. There was a significant working group created

by the government. Now we’re going to pay 11 people. Can the minister

explain why that was necessary?

[4:55 p.m.]

Hon. C. James: Obviously, I don’t know specifically which group the member is

talking about. There was a working group, through Transportation, with

other ministries that carry out projects.

Yes, they were talking about the work that they do in their

individual ministries. I would describe it as basically the consultation

group for the CBO that then has the opportunity to create the policy. So

that group would work on what kinds of things need to be in the policy,

what the recommendations are for individual ministries based on their

own work they do. Then the CBO creates that, basically does the work.

It’s a consultation group that provides the feedback, as I mentioned.

CBO is going to be doing that consultation. That working group provides

the vehicle for them to be able to get that consultation from various

ministries. Then they carry out developing the policy and developing

that common procurement across government.

S. Bond: Thank you, Minister, for that answer. The bottom line is we have

exceptional public servants. We had a working group. Now we have an

office that has 11 people in it, including three communications

officers. I think that speaks for itself, and we will certainly be

watching how the CBO relates to the Crown. It’s a lot of bureaucracy to

make a change.

I want to talk about one case related to this, but I want to ask

one question. Is one of the policy pieces that the CBO will be looking

at across government…? The critical element of the community benefits

agreement is requiring people to join government-approved unions. Is

part of the role of the CBO to look across government and see where that

can be applied in other ministries?

Hon. C. James: The answer is no.

S. Bond: I guess we can suggest this side of the House is relieved to hear

that.

I want to walk through just one case before my colleague moves on

to another important topic. Perhaps this precursor question: how many

contracts have been executed under the framework to date?

Hon. C. James: None.

S. Bond: Is the minister, then, aware of a tender process that took place

recently on a portion of the Trans-Canada Highway? In fact, one of the

things that is extremely concerning about the tender is the fact that

there were only four bidders. On a project of this magnitude — and I

have some experience with this, from my past world — normally, it would

be 12 to 15 bidders. There were four.

As I understand it, for this project, the anticipated costs may

have been in the $35 million range. We look at the low bid in this

process being now $51 million. Is the minister aware of this particular

file? Is she aware of the gap between what the anticipated costs were

going to be and what the low bid was?

Hon. C. James: Yes, I’m certainly aware of the project, aware that it had been

tendered. It has not been awarded yet, so I’m not going to speak to the

specifics.

[5:00 p.m.]

S. Bond: The minister may not want to speak to it, but I think it’s pretty

indicative of where we’re headed. Where we’re headed is a lack of

bidders on major projects in British Columbia. Part of that is the

requirement for the workforce to join a union that they may not want to

join.

We’ve heard over and over that everyone can bid. Everyone can bid.

Well, guess what? Four people bid, and the first time that this process

is put in place, it is significantly over the cost expectations of this

government. And the minister knows it. My guess is that right now,

there’s a whole lot of anxiety working around how they’re going to close

the gap to pay for this one project. That’s just the first

one.

Is the minister aware of any other projects that are in the tender

stage that are in this similar position?

Hon. C. James: No.

T. Redies: I’d like to now turn to something that has really disturbed this

side of the House. It’s disturbed me personally because I certainly

don’t believe in any form of wage or job discrimination. This is to do

with the low-wage redress issues with the social services.

The minister has almost bragged, over the last couple of days,

about having $2.6 billion, I believe it is, in contingency prudence

built into the plan. When we look at the situation with the non-union

side of the social services…. They are only getting a 2 percent wage

increase, where unionized workers are getting 4 percent, or getting a

funded 4 percent additional wage increase on top of that 2

percent.

My question to the minister: with $2.6 billion of largesse there,

why would the minister discriminate against some of the lowest-paid

people in the social services sector? Why would the government think

that was even remotely the right thing to do?

[5:05 p.m.]

Hon. C. James: I think it’s important, first, to recognize the work done by the

community social services sector and, in fact, the work that we’ve been

doing with the community social services sector, not only to provide

support to them so they can support the people that they serve but, more

importantly, to provide resources to them so they can provide support to

the people that they serve.

They have been very vocal about the challenges that they have

faced in the previous number of years when it comes to providing

supports to, often, the most vulnerable people. They play a huge role in

our province when it comes to providing services and supports, a role

that we value. We’ve shown that value with supports, as I said, in many

programs and services that have been expanded over the last two years. I

think that’s a critical piece and a critical piece of work that we’ve

been doing.

That’s why, as the member will know, funding to support wages….

Increases for agencies with non-unionized employees are the same as the

general increases that happen across the public sector, so 2, 2 and 2.

That wage increase goes forward for everybody, whether union or

non-union.

Yes, the low-wage redress is available to agencies covered by

collective agreements. That’s something that they bargained, as unions

do, and has happened with this government and previous governments. But

we also appreciate that there are recruitment and retention challenges

in the non-union sector as well. That’s why the minister is engaging

with the non-union sector. In fact, I think tomorrow those discussions

and that engagement begin, to talk about the kinds of areas where we can

support them.

They are looking forward to the conversation, because there are a

number of issues that they’ve really been wanting to work on with

government and haven’t had an opportunity with the past government. That

engagement began with the past government and fell apart, so they’re

really looking forward to sitting down and having that engagement around

all the kinds of ways we can support the not-for-profit sector and

recognize the incredible work they do in B.C.

T. Redies: Thank you, Minister, for that answer. I imagine they’re happy to

consult, but I guess the question still remains: why would this

government discriminate against non-union workers right off the bat?

It’s a 4 percent difference. I mean, is it this government’s desire to

unionize the province so much that they would actually put people who

are, you know, at the low end of the social services sector in such a

differential?

I just don’t understand it. This is a government that I thought

was supposed to support the social services sector, yet here, right off

the bat, they immediately discriminate against the non-union social

services sector to the tune of 4 percent.

Why? Why do that? Why not just…? I mean, there’s clearly room

within the government’s budget — $2.6 billion in fiscal prudence we’ve

been hearing about. If that’s the case, why not do the right thing and

give the entire social services sector, union and non-union alike, the

same wage increase?

[5:10 p.m.]

Hon. C. James: They are getting the same wage increase. I think that’s the

important first piece to note, that 2, 2 and 2 is going to the union

sector and the non-union sector. Then, as happens in negotiations, as

happened with the previous government as well…. When the previous

government, for example, brought forward the economic stability

dividend, that was something separate and apart that was negotiated by

the unions. Those dollars were provided to the unions, not to the

non-union sector. So in fact, that was exactly the same kind of model

where the unions and labour will negotiate something very specific to

their sector.

The previous government did that through the economic stability

dividend, which has been paid for the last number of years through

contracts to the unionized sector and not the non-unionized sector. But

we recognize that there are challenges and different kinds of challenges

in the non-union sector, and that’s why we’re sitting down and

discussing and having conversations about how we support them in that

way, whether it’s through procurement, whether it’s through services,

whether it’s through making sure they can better support the individuals

that they serve.

Those are the discussions and the conversation and the partnership

that we want to build with the not-for-profit sector because we

recognize that it’s critical. Governments of all stripes have utilized

the not-for-profit sector because of the expertise they have, and we

want to make sure that we’re respecting that. That’s why we’re having

the engagement with them around how we address the challenges that they

face.

T. Redies: Well, it’s hardly a partnership when you discriminate against 50

percent of the workers in the sector. I don’t think those workers,

really, right now…. They’re not looking for more support from the

government to support others. They’re looking for support from the

government to support themselves. It is absolutely atrocious that this

government would put in place a situation where you have workers side by

side, union and non-union, one getting a 2 percent wage increase and one

getting a 6 percent. It’s not fair. It’s a discriminatory practice, and

it shows that this government cares more about unions than it does,

actually, about working people.

Now, Minister, a number of questions were punted over from the

Minister of Social Development and Poverty Reduction to your area, so

I’m going to go through some of them. We might not get through all of

them, but these are questions that the industry is asking, and I think

they deserve a response.

First, why has the government not developed a plan to address the

low-wage redress for non-union employees when organizations with

non-union employees have been completing comprehensive wage and benefit

surveys and submitting them to the CSSEA for three years?

Hon. C. James: As I said, we are, in fact, sitting down with the not-for-profit

sector. We are, in fact, looking at working in partnership with them to

look at all of the challenges. I’m sure these issues will be raised

through that process.

The minister is meeting with them tomorrow. Just as past

governments, as I said, have agreements in place with union and

non-union around the wages but additional or other kinds of agreements,

as happened with the economic stability dividend with the past

government, unions will negotiate for the pieces that are important to

them. We will sit down and have a partnership and a discussion with the

not-for-profit sector to look at how we can support their good

work.

T. Redies: Well, the minister and the Minister of Social Development and

Poverty Reduction have had 20 months to look at this issue, and they’re

only now talking to the sector. They’ve already put in this

discriminatory wage practice right from the get-go. So I’m not quite

sure why they haven’t been able to look at it for the last 20

months.

When was the decision made not to fund low-wage redress for

non-union workers? Why were service providers only informed just ten

days before the wage increase was implemented?

[5:15 p.m.]

Hon. C. James: Just to be clear about the process, as happens in negotiations, we

negotiate with the unions that go through that process. The agreement,

as the member knows, is 2, 2 and 2, and that was an agreement that was

reached. There is an agreement with the not-for-profit sector that they

will get that wage increase, and they receive the 2, 2 and 2, the same

as the union sector.

But if the unions come forward with a different negotiating piece,

as they did with the previous government with the economic stability

dividend — they brought that to the table — that’s a decision that is

decided at the table during negotiations between the employer and the

employees. They make that decision.

Then we have also, as I’ve said, determined that it’s important to

sit down with the not-for-profit sector. We’ve been working with them,

as I said, around program service increases, providing opportunities so

they can better serve their members, but we recognize that they are also

having recruitment and retention issues as well. So now we’re sitting

down with them to talk about their recruitment and retention

issues.

T. Redies: Can the minister tell us when the additional 4 percent with the

union sector was agreed to?

Hon. C. James: That happened during the negotiations. So it would’ve been last

June.

T. Redies: Last June. We now have this contract…. This situation has been

known — that it was going to be a discriminatory situation — since last

June, and the ministry is only now starting to speak to the non-union

workers? I mean, that doesn’t even make any sense. Clearly, there was

going to be a problem here.

Is the ministry honestly saying that they sat on this since last

June and went barreling ahead April 1, implemented a terribly

discriminatory practice and are now just starting to think that they

should be talking to the social services sector about this?

Interjections.

The Chair: Member. Members.

Hon. C. James: Perhaps the member doesn’t recognize how collective bargaining

works or the process that we go through. We sit down, as the previous

government did, with the public sector to be able to negotiate. They

bring issues to the table. We bring our mandate to the table around

wages. It’s determined that that mandate, the 2, 2 and 2, is also the

same mandate that is given to the non-union sector. That is in place.

The non-union sector knows that, and the union sector knows that. Just

as the not-for-profit sector may bring their issues forward, the unions

at the bargaining table bring forward their issues, and that happens at

the bargaining table.

As I said, I know the member is ignoring the issue around the

previous government, but let’s remember that’s exactly the same process

that the previous government followed. They determined an economic

stability dividend was important to be able to get a collective

agreement in place. They signed, with the unions, an economic stability

dividend. That was given to the union sector, not the non-union sector,

by the previous government, because it was part of negotiations with the

unions.

We have gone through the same process. We are now engaging. We’re

collecting information. We’re working together in partnership with the

not-for-profit sector, and we’ll be having those

conversations.

T. Redies: Why weren’t service providers consulted before the low-wage

redress decision was made? At least in every conversation we’ve had with

them, they were blindsided by this.

[5:20 p.m.]

Hon. C. James: Again, just to be clear about the collective bargaining process,

you sit down at the table, you bargain with the union that is at the

table, you determine what the agreement is, and the agreement is signed.

That’s the process that followed.

T. Redies: In what ways did the government consider microboards and their

workers when the low-wage redress decision was made?

Hon. C. James: Just as with the non-union sector, microboards are also going to

be part of that discussion and part of the work in partnership that

Minister Simpson is beginning tomorrow.

T. Redies: I think I know what the answer is going to be to this. In what

ways did the government consider the Aboriginal world view and the

Aboriginal workers when making the low-wage redress decision?

Hon. C. James: There are some Indigenous workers who are union. There are some

Indigenous workers who are non-union. Again, if they were union, they

would be part of the bargaining sector with unions. If they were

non-union, they’re part of the consultation process and the discussion

occurring.

S. Bond: Perhaps the minister…. We want to just make sure that there’s

clarity here. The 2, 2 and 2 mandate was provided, which meant that all

workers received a 2 percent increase. The unions came in and negotiated

a low-wage redress, which now gives a significant increase to union

workers. The government consciously decided that because the union had

negotiated an increase, they would get it and non-union workers would

not. Is that correct?

Hon. C. James: Well, I’ll repeat it again, but I know the member knows this. She

was part of a government that negotiated it. She was part of a

government that negotiated with the union sector and negotiated the wage

increase.

That wage increase is provided to the union and non-union sector,

and then issues come to the bargaining table by the union sector. Just

as they did with the previous government, they brought the economic

stability dividend forward. That was part of the discussion at the union

table, and it was determined that that was part of their bargaining,

agreed at the bargaining table, and the union workers got the economic

stability dividend.

That’s the same kind of process that occurs. Bargaining has not

changed in that respect. And now, as I said, because we value the

workers in the not-for-profit sector, we are ensuring that we are having

those discussions with them to understand the challenges they face

around recruitment and retention.

S. Bond: We have spent four days hearing about the significant,

record-setting prudence that this minister has put in her

budget.

I do understand the bargaining process. But what I understand here

is that unions negotiated a significant low-wage redress, and this

government said, “Yes, work through that process,” and non-union workers

are not receiving equitable pay for equitable work.

Does the minister recognize that these workers work literally

beside one another and care for families and that one wage earner is

receiving significantly more than one who may be working right beside

them?

[5:25 p.m.]

Hon. C. James: The minister will be meeting with the not-for-profit sector

tomorrow, engaging in those discussions. In fact, the kind of support

that we have provided for the not-for-profit sector is support that they

have not seen in a great number of years when it comes to support for

programs and services and the people they serve. I look forward to that

partnership continuing.

S. Bond: I appreciate my colleague raising the question of microboards.

Does the Minister realize that many families have spent a good part of

their lives putting together microboards to care for their children, not

only now but in the future, and that they are exceedingly concerned

about losing their team of workers because they can get paid more

somewhere else? Has the minister heard those stories? Does she

understand those stories? Does she realize that families are extremely

concerned about the direct impact of service to their

children?

Hon. C. James: Yes, we recognize that there are critical recruitment and

retention issues. In fact, this is a field that is close to me

personally, because this was an area that I worked in. As the member

knows, I provided support for adults with disabilities for many years.

So yes, I’ve heard the recruitment and retention challenges. It’s

exactly the reason we are coming together with the sector

tomorrow.

T. Redies: In what ways did the government consider or consult with the

families of people with disabilities affected by this

decision?

Hon. C. James: Well, I’ve run through the collective bargaining process. I could

run through it again for the member. But the process that occurs is that

bargaining happens at the bargaining table. The 2, 2 and 2, the wage

mandate, goes to both union and non-union, and then negotiations occur

with the unions. They will bring other issues forward, just as they did

with the past government when they brought forward the economic

stability dividend. That is determined then and decided at the

bargaining table and then provided to the union.

T. Redies: As a former employer, I can’t imagine having workers who are doing

the same job and getting paid differently. In fact, I think there are

some laws against that. Will the minister commit to addressing this

situation? Now that it has happened, will the minister commit the

additional $40 million to fix this?

Hon. C. James: Again, the Minister of Social Development is going to be meeting

with the sector tomorrow. They’re going to be talking about a whole

range of issues that the sector is looking forward to discussing and

looking at how we can work together in partnership to be able to address

these services that need to be provided for often the most vulnerable in

our province.

T. Redies: Well, it would seem to me that the minister has two choices:

either give the dollars to the non-union to match the unionized workers

or allow them to reduce service levels to make up the difference in the

budget. I mean, those would seem to be the two choices, and one seems a

lot more palatable than the other.

Again, the industry is really just asking for fairness in this.

Frankly, I’m surprised that the minister can’t even commit to addressing

this. It’s $40 million. It’s not like it’s not a lot of money. It is a

lot of money. However, it’s already being given to people in the union

sector for the same work. To do anything else is, really, just to

discriminate against these workers, and that’s

unconscionable.

We’ll wrap with that, but my colleague is now going to go on to

another section.

S. Bond: Thank you to the minister. I would certainly hope, just to

conclude on the previous topic, that one of the options the minister is

contemplating tomorrow in his meeting is fixing the problem.

[R. Chouhan in the chair.]

It has been weeks of uncertainty and difficulty for families. Many

of us on this side of the House have met with families who are feeling

unbelievably distressed, because it is about recruitment and retention.

It’s about caring for their children in a way that they believe they can

continue to do in a sustainable fashion. That is at risk.

[5:30 p.m.]

We will absolutely be looking forward to the outcome of the

minister responsible at his meeting tomorrow, and we’re going to be

hoping he does the right thing, which is to actually fix the

problem.

I’m wondering if the minister can explain. When this government

ran, one of their showpieces in their platform was $10-a-day child care.

Can the minister explain why she only provided or there is only enough

money for pilot projects in communities across the province, where many

families feel like there are winners or losers? In terms of the amount

of money invested in the pilot projects, why are we at the pilot project

stage? How much money would it cost to implement the $10-a-day daycare

program?

Hon. C. James: I think the member knows full well that the minister responsible

for Child Care is responsible for the operation of that program. I’m

responsible for the number in the budget, and the minister’s responsible

for how that is determined and developing the programs. The member

should ask the minister those questions.

S. Bond: This minister is responsible for the budget of British Columbia,

and in it, there is not the $10-a-day daycare program that was promised

by this government. Put in the window on the campaign trail: “We’re

going to have $10-a-day daycare.” Can the minister tell us what period

of time she anticipates it will take for the government to deliver on

its promise?

Hon. C. James: Those are questions for the minister responsible for Child

Care.

T. Redies: The NDP are nowhere close to their promise to eliminate portables

in Surrey within four years and even further away from their promise to

eliminate half of those portables in two years. Is the minister planning

any additional spending or taxes to keep that promise?

Hon. C. James: The member knows well that they can ask those questions in the

Ministry of Education.

Interjections.

T. Redies: That’s why we’re coming to the minister who has the

budget.

I mean, are these wild promises? Ultimately, it all comes down to

the Minister of Finance and the cabinet to make these decisions. Are

Surrey portables going to be eliminated or not?

Hon. C. James: I’ve answered that question.

S. Bond: Let’s try this one, one of the other showcase promises.

One of the things we have spent a lot of time talking about over

the last four days is risks to this budget. We’ve demonstrated that

there are a lot of them. There are a lot of risks to the sustainability

of this budget. We’ve walked through a range of them: forecasts we’re

not sure about, debt that’s climbing, spending that continues to grow at

an unprecedented rate. On top of that, we have showpiece promises, big

spending promises that have been made by this government.

Our concern is that they’re not reflected in this budget. They’re

certainly in the memories of British Columbians. So we want to be sure

that the record is clear that there are a whole bunch of

risks.

The $10-a-day daycare disappeared, other than if you’re lucky

enough to be in one of the pilot projects — basically, winners or

losers. We happen to have a situation where we know neighbours…. One

neighbour has children in the pilot project. The other one is paying

full freight in that circumstance.

Let’s try this one: the renters rebate. Can the minister tell us

when she’s planning to include the renters rebate in her

budget?

Hon. C. James: The member knows well that the budget process means that you go

through consulting. You listen to all the presentations that come

forward. You have opportunities to hear from your colleagues who bring

issues forward, including ministers. That’s a budget process we will go

through this fall.

S. Bond: Well, I would remind the minister that she’s actually been here

for two years, and these promises were made in an election campaign two

years ago. I’m assuming that those ministers have brought those issues

before this minister before.

When we look at the costing, can the minister tell us what the

costing was for the $400 renters rebate?

[5:35 p.m.]

Hon. C. James: When those proposals come forward, they go through the process,

everything is reviewed, and priorities are set.

T. Redies: I believe that the government also promised post-secondary

completion grants. Is that now off the table, since there isn’t any

money in the budget with respect to it?

Hon. C. James: It’s a four-year mandate, I would remind the members. But again,

we go through a budget process. Priorities will come forward, and we

make a determination. Programs and services that support our three

priorities as a government, obviously, are the top of mind — which

include affordability, building a long-term sustainable economy and

improving services for people. We will continue our focus in that

way.

S. Bond: Let’s just review that list. The renters rebate — promised but not

captured in the budget. Post-secondary completion grants — promised but

not captured in the budget. The $10-a-day daycare — pilot projects, no

complete project. Surrey portables. We’re still having a big challenge

there.

The point of raising these issues is to remind British Columbians

that despite the unbelievable spending that this government is taking

part in at the moment — we continue to see that projection heading

skyward; we see tax increases, including 19 new or increased ones — the

platform that this government took before British Columbians and laid

out is not captured in these budget numbers. That causes a great deal of

concern for my colleague and me as we look to the sustainability of this

budget.

Let’s talk about the property tax and transfer tax revenue. In the

2018 budget, the minister was very public about how much revenue was

going to be raised by the property tax measures raised by the NDP. Will

she make publ

Document details

CollectionBritish Columbia — Debates (Hansard)
Citation20190509pm-CommitteeC-Blues
Typehansard
Volume / chapter20190509pm-CommitteeC-Blues
Languageen
Formathtm
SourcePROVINCIAL
Identifier25ca501a907bdc6a37cbd70cba39b4c9235eb990

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