2010 Legislative Session: Second Session, 39th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the

Legislative Assembly

(hansard)

Wednesday, May 26, 2010

Afternoon Sitting

Volume 18, Number 8

CONTENTS

Page

Routine Business

Introductions by Members

Statements (Standing Order 25B)

Automobile crime reduction

J. Les

Ian Case and theatre arts

C. James

Lower Mainland Local Government Association

R. Howard

Sunshine Coast Trail

N. Simons

Organic agriculture in south Okanagan

J. Slater

Agriculture in Maple Ridge–Pitt Meadows area

M. Sather

Oral Questions

B.C. Hydro advertising campaign

C. James

Hon. B. Lekstrom

J. Horgan

D. Black

R. Fleming

Social support program funding and government spending priorities

J. Kwan

Hon. K. Falcon

A. Dix

Funding for community-based hepatitis C and HIV/AIDS programs

K. Corrigan

Hon. I. Chong

S. Hammell

Community gaming grants for arts festivals

S. Chandra Herbert

Hon. R. Coleman

N. Simons

Tabling Documents

Insurance Corporation of British Columbia, annual report, 2009

Petitions

L. Krog

Orders of the Day

Committee of the Whole House

Bill 19 — Finance Statutes Amendment Act (N o . 2), 2010

B. Ralston

Hon. C. Hansen

D. Donaldson

Report and Third Reading of Bills

Bill 19 — Finance Statutes Amendment Act (N o . 2), 2010

Second Reading of Bills

Bill 17 — Clean Energy Act

Hon. B. Lekstrom

J. Horgan

Hon. J. Yap

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Health Services (continued)

A. Dix

Hon. K. Falcon

S. Chandra Herbert

J. Kwan

G. Coons

D. Donaldson

M. Sather

D. Thorne

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WEDNESDAY, MAY 26, 2010

The House met at 1:34 p.m.

[Mr. Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

Hon. G. Campbell: I am pleased to say that in the precinct today we have a group of grade 11 students from West Point Grey Academy, in my constituency of Vancouver–Point Grey. They're travelling with some parents and their teacher Jenise Boland. They're here to experience the history of the House and the place and to take pictures and to understand how this all works.

I hope that they are having a very good day. I'd ask the Legislature to make them all welcome.

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V. Huntington: I was delighted to be joined earlier today by Mrs. Dale Cotter and 30 of her grade 4 students from Beach Grove Elementary, in Tsawwassen. These students were an exceptionally inquisitive group. I hope the ten parents who accompanied them were justly proud of their well-behaved children. Would the members please join me in welcoming them to the House.

Hon. R. Coleman: Joining us in the House today are 40 grade 5 students from Betty Gilbert Middle School in Aldergrove. They're accompanied by their teacher Gina Crockett and 16 parents. Would the House please make them welcome.

J. Horgan: Joining us in the gallery today are two constituents of the Minister of Labour, Pamela and Dennis Sutton. They were joining me for lunch after participating in a Women's Institute auction. We had a lovely tour. We had some great discussions about the minister and his constituency. Would the House please make them very, very welcome.

Hon. M. de Jong: A few weeks ago the Premier was in the Netherlands. Today a return visit from some folks who hail from Eindhoven in the Netherlands, where they take their football and their beer seriously: Tiny and Gerard Verhoeven and Kees and Ans Pÿnenborg. I hope the whole House will make them feel very welcome.

S. Chandra Herbert: I'd like the House to make very welcome Corbin Murdoch, an artist in his own right as well as a youth program coordinator with the Vancouver East Cultural Centre. Check out his band, Corbin Murdoch and the Nautical Miles. Please make him very welcome today.

Hon. J. Yap: I'd like the House to join me in welcoming 45 grades 6 and 7 students and two teachers, Mr. Don Allison and Mr. Kevin Dimick, as well as nine parents from one of the best elementary schools in British Columbia, Tomekichi Homma Elementary, in my community, Steveston. They're here as part of Mr. Allison and Mr. Dimick's class on parliamentary democracy.

I had a chance to meet with the students and give them a bit of a preview of what question period and the debates in the House will bring. I had some great questions from them, and I know that we will show them exactly how parliamentary democracy works during their visit. Would the House please join me in giving them a warm welcome.

R. Cantelon: I think it's fair to say that engineers built this great province. They supervised and designed the infrastructure on which the transportation systems and, in effect, the foundations of the economy of this great province are built. With us today in the House are two of the best, and their wives. Joining us today are Lee Rowley and his wife, Caroline, and Mike Herold and his wife, Sandy. Please make these guests welcome.

L. Reid: I have two sets of introductions today. The first. I have three lovely individuals in the gallery: Janice Barr, who is the executive director of the Richmond Society for Community Living; Michael McCoy, the executive director of Touchstone Family Services; and he is joined by Lawrence Portigal, a board member.

Now, we all have wonderful agencies. They are the folks that make our communities stronger. My lovely colleague from Richmond Centre and I had the opportunity to have lunch with them today. I'd ask the House to make them very welcome.

My second introduction, on behalf Mr. Speaker, is a group of individuals participating in a full-day parliamentary procedure workshop. This workshop provides a firsthand opportunity for the public service to gain a greater understand of the relationship between the work of the ministries and how that work affects this Legislature. Would the House please make them welcome.

D. Hayer: It gives me great pleasure to introduce five very special students and their principal from Kwantlen Park Secondary School, one of the best schools in Surrey. They are my guests. I took them out for lunch today, and they're touring the Legislative Assembly. As a matter of fact, they're sitting up there.

They are Rachel Wilkinson; Omar Berbar; Cherise Ervin — who couldn't be here; Sophia Mattheakis; and Eric Von Sivers. Joining them is principal Rick Breen.

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[ Page 5768 ]

These students participated in the Rotary Club of Surrey's Adventures in Citizenship speech meet. That event focused on developing greater awareness among the young people of their responsibilities, and these grades 11 and 12 students were asked to speak on why Canada is an exceptional country to live in.

They did an excellent speech on this, and for their great work I promised them that I would invite them here, take them out for lunch and introduce them to the House. Also, they see how our democracy works. Some of them are expected to go into politics. They might be our future MLAs, even our Premier. Would the House please make them very welcome.

Hon. S. Thomson: I've got a very special guest in the gallery today, and it's my first chance to introduce her officially. She's been here for throne speeches and things like that where we don't get the formal introductions, but my wife, Brenda, has joined us in the gallery today, and I am very pleased to thank her for her continued support and want the House to make her welcome.

She also has two girlfriends with her from Vancouver. Barb Elworthy and Dixie Wolfe are visiting as well. Dixie Wolfe is actually the daughter of the late hon. Evan Wolfe, who served this province under two Premiers — Premiers W.A.C. Bennett and Bill Bennett — as Minister of Finance for the province. I'd ask the House to make them all welcome.

Statements

(Standing Order 25B)

AUTOMOBILE CRIME REDUCTION

J. Les: As a society we depend on our vehicles for transportation. For many of us, buying a car or a truck is the second-largest purchase that we will make. Understandably, falling victim to auto crime can be upsetting, both financially and emotionally.

I'm happy to say that auto theft has dramatically reduced and decreased in British Columbia. Since 2003 vehicle theft has decreased by 58 percent in our province, and vehicle break-ins have dropped by 52 percent over the same period. In my constituency of Chilliwack we've seen an impressive 60 percent reduction from 2003. The bait car program that we worked hard to develop in British Columbia has paid off in spades and is now being emulated by many others across North America.

During the Olympic and Paralympic Games we had an influx of cars flooding the province, particularly the Lower Mainland, and car theft was a real concern. Once again our police forces rallied to ensure public safety and vehicle security. Bait cars were deployed with microdot DNA technology, making it easier for police to identify and recover stolen items.

These cars were placed at all 22 park-and-ride locations, VANOC parking lots and departure hubs as well as games training and preparation centres. They increased surveillance, solicited the help of police dogs and traffic helicopters and deployed undercover cars equipped with automatic licence plate recognition technology, which can scan up to 600 plates an hour, to locate stolen vehicles. These efforts paid off. We not only celebrated a very successful Olympics, but we experienced a 14-year low in vehicle thefts and incidents as well during that period.

A reduction in auto theft not only promotes the well-being and security of British Columbians; it also saves money by keeping insurance rates as low as possible. This now longstanding and reassuring trend will continue to keep British Columbians safe, thanks to the hard work of our local law enforcement agencies.

IAN CASE AND THEATRE ARTS

Ian has acted in, directed or produced more than 50 shows in Victoria since the 1990s. Throughout that time he's shared his talents with the Vancouver Island arts community, serving as a mentor and an adviser to his fellow artists and performers. Ian is the former president of ProArt Alliance of Greater Victoria and the former publicist for Langham Court Theatre. Ian has also played a key role in standing up for arts funding in British Columbia.

This summer Ian will be playing in William Shakespeare's Richard III , a part that's very near and dear to his heart. Ian first saw this play in Stratford, England, when he was a teenager. The performance was so powerful that it convinced him to become an actor.

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He'll be joined on the stage by his daughters in this performance, Hannah and Emily. That's going to be a very exciting production for him.

In recognition of his significant and ongoing commitment to the arts and theatre community, Ian was selected as the CFAX community award for arts leader of the year in 2010. He has also been named by Monday Magazine as the hardest-working person in local theatre.

Would the House please join me in congratulating Ian and thanking him for his outstanding contribution to the arts, not only on Vancouver Island but all of British Columbia.

lower mainland

local government association

R. Howard: I recently had the opportunity to attend the annual general meeting of the Lower Mainland

[ Page 5769 ]

Local Government Association, otherwise known as the LMLGA. As a past member of the executive of the organization, I was pleased to see a document entitled Working Together in the Lower Mainland, which is a sustainability snapshot for 2010.

The LMLGA has embarked on a very valuable journey. The report of the Fraser Basin Council represents a very unique opportunity for the LMLGA and the region its membership covers, which is from Lillooet to the Lower Mainland to Hope.

The opportunity to identify issues which transcend local and regional boundaries is a valuable one. This is a starting point for a broader discussion to identify opportunities that allow us to collectively work together to plan for the future of the Lower Mainland, to look out for the region as a whole — a transborder discussion of key issues.

Issues such as agriculture and food, consumption and waste, sewers and water, environmental health and transportation are important issues which transcend local and regional boundaries, and I think it is an opportunity for LMLGA to identify the priority issues that have strong agreement and work to push these forward so that shared action can be taken across the broader region.

The very things that bring many to the region — oceans, mountains and proximity to the border — are also things that restrict and guide our growth. With strong population growth predicted over the next 25 years, it is important that we engage in this kind of dialogue and more often think as a region when it comes to significant decisions on matters relating to the environment, consumption, waste and transportation.

Thank you to the LMLGA, to the Fraser Basin Council and, of course, their funding partners that make this important work possible.

sunshine coast trail

N. Simons: Located on the upper Sunshine Coast and Powell River regional district, the Sunshine Coast Trail stretches 180 kilometres from Saltery Bay ferry terminal to Sarah Point and Desolation Sound Marine Park. The formation of this epic trail began in 1992, led by Eagle Walz and Scott Glaspey and a handful of outdoor enthusiasts. They realized that accessible old growth was vanishing from the upper Sunshine Coast, so they formed the Powell River Parks and Wilderness Society.

The society began building trails with the aim to preserve the natural assets of the region and to provide hikers with access to view an incredible variety of wildlife, vegetation and inspirational views. By connecting existing trails and creating new ones, they formed the Sunshine Coast Trail, which is fast gaining a reputation for being as challenging and inspiring as the iconic West Coast Trail.

By March 2001 the trail was over 180 kilometres long, where only nine years earlier it was 35 kilometres long. One of the attractive things about the Sunshine Coast Trail is that while traversing some rugged and challenging terrain, there are shelters, wilderness campsites and access to supplies along the way. The trail even passes by some quality restaurants and some comfortable bed-and-breakfasts — my kind of hiking.

The whole Sunshine Coast Trail system is broken into smaller segments for shorter hikes, with some wilderness campgrounds also along the way. The segmentation of the trail into sections creates a unique opportunity for hikers of all skill levels to explore portions of the trail or the entire trail. With a bit of research and with the third edition of the Sunshine Coast Trail guide book, any casual hiker or marathon hiker will find the Sunshine Coast Trail to be inspiring.

organic agriculture

in south okanagan

J. Slater: Organic and sustainable agricultural principles have been a long history in the Similkameen Valley. In 1986 a Similkameen Okanagan Organic Producers Association began certifying farms. Since then, South Okanagan–Similkameen growers have been leaders in the advancement of organic principles.

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Cawston Cold Storage Ltd., which operates under the brand name of Nature's First Fruits, is the only 100 percent organic packing facility in British Columbia handling only certified organic fruits and vegetables. Under the leadership of president Billy Potash they grow, pack and sell a variety of organic tree fruits and vegetables. The management and growers of Cawston Cold Storage are able to provide their valued customers a lifetime of experience in the organic industry. Their label, Nature's First Fruits, can be found throughout North America from coast to coast, as well as in parts of Europe and Asia.

The Similkameen Valley has the highest concentration of organic farms in Canada, an impressive 40 percent of all organic farms across the country. Only 1 percent of farms are certified organic across Canada, and approximately 2 percent in British Columbia.

In 2004 a representative group of 34 South Okanagan and Similkameen Valley farmers gathered to discuss moving forward on a concept for a centre of excellence in organic sustainable farming and research. By utilizing the local expertise in 2005, a grass-roots society was formed — the Organic Farming Institute of British Columbia, located in Keremeos, British Columbia.

Farmers were surveyed across four of B.C.'s major farming regions, and results indicated a high degree of interest in education. In 2008, through discussions with the Fraser Valley institute, the first organic farming course was developed.

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AGRICULTURE IN

MAPLE RIDGE–PITT MEADOWS AREA

M. Sather: Agriculture has been a mainstay in Maple Ridge for over 130 years. Three families in particular hold a special place in the history of agriculture in my community. William and Amanda Hampton and John and Mary Laity arrived in Maple Ridge by riverboat from New Westminster in 1879. John Laity paid a dollar per acre for his land, which he asserted was an outrageous price. He only agreed to it because of the fabulous view of the Golden Ears mountains.

The two families began farming next to each other, and their descendants, some six generations later, continue to farm the same land today. Residents and visitors alike were treated to the delightful scene of Bill Laity working his horses in his fields until he passed away recently. Today Bill Laity's sons run a Jersey cow dairy, while their neighbours Paul and Matt Laity run a Holstein dairy herd. Heather and Don Laity, to the south of them, farm the famous pumpkin patch.

Just down the road from the Hamptons and the Laitys is the Davison farm. The Davisons have been farming their property since 1902. The Davisons also have a Jersey dairy herd as well as a cedar hedging business. Kerry Davison is planning to develop an artisan cheese processing plant and shop on their property.

Agriculture is thriving in Maple Ridge, but there is a cloud on the horizon. There's currently an application to convert over 200 acres of prime agricultural land adjacent to the Hampton and Laity farms to an industrial park and associated uses. If accepted, this proposal would spawn more removal applications from the area. This would jeopardize the wonderful farm families in northwest Maple Ridge and adjacent Pitt Meadows.

As a former member of this House, Val Roddick, frequently reminded us, we all have to eat to live. Let's remember that, and all of us do what we can to protect agriculture and farming families.

Oral Questions

B.C. HYDRO ADVERTISING CAMPAIGN

C. James: Just a number of weeks ago the government launched a new advertising campaign with B.C. Hydro. The ads first appeared during the Vancouver Canucks playoff run, and they've been airing every day since. My question is to the Minister of Energy, very straightforward: how much is the ad campaign costing British Columbians?

Hon. B. Lekstrom: We have some exciting times in British Columbia right now with the Clean Energy Act. It's an important new direction that we're setting for the province of British Columbia.

As the member well knows, I think it's extremely important that we communicate with British Columbians. We hear that all the time from our constituents, I'm sure, from both sides of the House. They want to hear what's going on in Victoria, what the policies are.

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We have, actually, a clean energy act that is the envy of North America. We're going to go into full discussion on it. I'm proud of that. I'm proud of the ads, and I know the British Columbians I talk to are proud of those ads too.

Interjections.

Mr. Speaker: Members.

The Leader of the Opposition has a supplemental.

C. James: I can tell this minister and this government they don't need to spend advertising dollars. The public knows what's going on with this government, and they don't very much like it in British Columbia.

These are taxpayer dollars being spent, and it's shameful that when the government can't find funding for rent supplements or nutrition supplements for people with disabilities, they can find millions of dollars for an ad campaign. While they're cutting programs, community programs, public health programs, child care for young women who are going back to school, the government can still spend taxpayer dollars on advertising.

Again my question is to the minister, very straightforward: how can the B.C. Liberals justify spending taxpayer dollars on government advertising when they're cutting vital services for British Columbians?

Hon. B. Lekstrom: As I said earlier, this is an exciting time for British Columbia. We have the opportunity to develop clean, green, renewable energy in this province that other jurisdictions around the world look to us with envy.

The cost — the other one the member should know, as she may be somewhat confused as the Leader of the Opposition. This is funded by B.C. Hydro. B.C. Hydro's ads will be published by the Financial Information Act, which is posted every year.

So to say that programs are being cut — Member, you're wrong. This is a very good ad. I think the member, should she not even be in this chamber, would have to agree. Those are great ads. They're informative, and British Columbians are proud of them.

Mr. Speaker: The Leader of the Opposition has a further supplemental.

C. James: I can't believe the minister would use that as an excuse. B.C. Hydro dollars are taxpayer dollars, taxpayers' money, and they deserve to know how much.

[ Page 5771 ]

Let's look at the facts. Another broken promise from this government. They promised to actually reduce advertising spending, and what's the budget? It was $6.9 million last year, $19 million this year. Again my question is to the minister: how much of taxpayer dollars is this government spending on this ad campaign?

Hon. B. Lekstrom: The Financial Information Act discloses this. B.C. Hydro does that every year, and I know the member will be looking at that. But you want to talk about the ad? It is a great ad. I've had members on your side of the House tell me what a great ad it is, so maybe you should talk to your own members.

J. Horgan: Well, we're in the midst of the largest corruption trial in B.C. history. We're in the midst of a historic initiative campaign to tear down government policy. It's little wonder that the Liberals want to change the channel.

But our question is a simple one. How much is it costing B.C. Hydro ratepayers to tell them that there are rivers in British Columbia? I know that must have been an epiphany when they turned on the hockey game and they saw water in B.C. rivers. How much did it cost to tell them the obvious?

Hon. B. Lekstrom: I'm proud to hear he was watching the hockey game, like most proud Canadians were. The issue, as I've said before, Member, is that the information will be released under the Financial Information Act by B.C. Hydro.

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But these ads…. Let's not lose sight. We're proud of our ability to communicate what is, I think, one of the most significant pieces of legislation we've seen in this province for decades, an opportunity that puts British Columbia at the forefront not just of North America but the world when it comes to clean energy development.

British Columbians and our government are extremely proud. Get on board, Member.

Interjections.

Mr. Speaker: Members.

The member has a supplemental.

J. Horgan: When I took my glasses off and squinted at the picture of W.A.C. Bennett, I could almost see the member for Vancouver–Point Grey there. I could almost see that. Then I thought to myself: "Well, that justified airlifting five planeloads of people to Hudson's Hope, because they were doing the filming of the commercials for B.C. Hydro."

The star of the show, King Lear, says to us now that it's okay to waste public money on advertising. He didn't say that in the 1990s. Why is he doing it now?

To the Minister of Energy: tell us today how much the ad buy is, and how long must we endure pictures of W.A.C. Bennett and water going over turbines?

Interjections.

Mr. Speaker: Members.

Hon. B. Lekstrom: As I said earlier, the Clean Energy Act sets out a new and important direction for British Columbians, one that I think is extremely important that we take every opportunity…

Mr. Speaker: Minister.

Hon. B. Lekstrom: …to communicate.

Interjections.

Mr. Speaker: Members.

Just to remind the minister. That bill is before the House.

Continue, Minister.

Hon. B. Lekstrom: Certainly, I think that the members on the opposite side would have heard that as well, but we'll get into the debate on the Clean Energy Act.

We have actually said that we are going to communicate with British Columbians on the opportunities that we have in this province. We have the opportunity to generate clean, green renewable electricity…

Mr. Speaker: Minister.

Hon. B. Lekstrom: …not only to meet our own demands but to meet the demands of North America, and we're going to do that.

Interjections.

Mr. Speaker: Members.

I want to remind the minister that when a bill is before the House, it shouldn't be discussed. That applies for both sides.

D. Black: The only reason the minister is withholding this information is because it's shameful. It's shameful that the B.C. Liberals spend millions of dollars on ads while telling British Columbians at the same time that there's no money in the cupboard for vital services for their families.

There's absolutely no reason, no reason at all, that the minister cannot release this information right here in this House today. Why won't he make this information public?

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Hon. B. Lekstrom: We have a Crown corporation in B.C. Hydro that is the envy in North America of any Crown corporation. We have amongst the lowest electricity rates in North America, and you're against that. You're against clean energy development.

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Not only are you against enshrining the public ownership of B.C. Hydro for all British Columbians. We enshrined it in legislation. You opposed it. But more importantly, when we have the ability to become electricity self-sufficient, to create jobs and economic opportunities in every region of this province, to develop the electricity not only to meet our needs but to help others meet their needs with reduced greenhouse gas emissions, we're going to do it. We're going to do it well, and British Columbians are going to be proud.

Mr. Speaker: The member has a supplemental.

D. Black: Well, perhaps I can help the minister calculate what it's costing his government for these ads, because each and every 30-second ad during the playoffs on CBC cost $7,000 — each and every 30-second ad — money that could have been spent to help B.C. families in a critical time. Instead, this money is being wasted on government advertising.

So again to the minister: what does it say about a government that can find millions of dollars for an ad campaign while at the same time cutting critical supports for B.C. families?

Hon. B. Lekstrom: The reason we're able to invest in the programs that British Columbians enjoy is because of job creation, because of opportunities we have in this province. In order to have a strong social foundation for the programs that we have to deliver, to ensure the less fortunate in this province can maintain a quality of life and be looked after, is to ensure that we have, actually, an environment where the private sector wants to invest. That's who creates the jobs. We're going to do that. We're proud. I'll put our budget against any one of your budgets from the 1990s.

R. Fleming: The question is simple, and the minister has been asked it six times. The question is: why won't the minister be transparent about his ad-buy binge in the middle of spending cuts across government? The public has a right to know. These are tax dollars. So the question is: why won't the minister tell the House today…? He authorized buying this ad campaign. The minister should tell the House today what the total cost is of this ad campaign splurge.

Hon. B. Lekstrom: I'll give the answer I gave a number of the other members. This information will be posted….

Interjections.

Hon. B. Lekstrom: Slow down. Slow down, Members, and you'll get the answer. Every year under the Financial Information Act this information is posted. The members know they'll get the information.

But if what the member is saying is that you wouldn't communicate with the people of British Columbia, we see it differently. We're going to communicate. We're going to talk about what's important to British Columbians. We're going to talk about what the Clean Energy Act means — pardon me, Mr. Speaker — about what our ability to develop clean, renewable electricity in this province means, what it means to jobs, what it means to communities, what it means to First Nations.

We're proud of what we're doing. We're going to build on it, and you'll all love it too.

SOCIAL SUPPORT PROGRAM FUNDING

AND GOVERNMENT SPENDING PRIORITIES

J. Kwan: What is clear is that this government is willing to spend millions of dollars on government ads while cutting critical programs for the people in greatest need. For 25 years adults with disabilities determined to be independent could turn to a Broadway Connections program, a community program based in East Vancouver for the last 25 years. Through that program, past and present clients have forged relationships and friendships that benefit their lives.

Social support, as the Minister of Health should know, is a key determinant of health. My question is to the Minister of Health. Why is he supporting the government's advertising campaign at a time when he is cutting funding for people who are in greatest need in our community?

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Hon. K. Falcon: Once again we have the NDP, of course, talking about cuts that don't exist in health care, when the health care budget is actually going up 15 percent over the next three years. I understand that the NDP have difficulty understanding that a $2 billion increase in a budget is actually not a cut. That's an increase.

Now, in the world of the NDP, and we've had this discussion many times, no programs apparently should ever change. It doesn't matter whether the information changes. It doesn't matter whether best practices suggest that you can do things differently and drive better results. In the NDP world, apparently, nothing should ever change.

But the fact of the matter is that Vancouver Coastal is looking at all of their programs very carefully to ensure that they are meeting the needs of the residents based on the best practices that are available. That's exactly what they're doing in the case of the Broadway program.

Mr. Speaker: The member has a supplemental.

[ Page 5773 ]

J. Kwan: It is clear that the minister doesn't know what the heck he's talking about. Denise is a 25-year program participant. She took the lead at organizing and advocating for this program at its inception. Betty Ann is a 17-year-old participant who calls this program beloved and vital. Broadway Connections promotes independence and peer-to-peer relationships and prevents isolation.

It is successful because it is unique and specifically designed for people with disabilities. It has adaptive equipment that facilitates full participation. It is one of a kind in Vancouver, and there are no others like it.

Before the minister shuts down the successful program, will he at least go down to the Mount Pleasant Neighbourhood House and meet with Betty Ann and Denise and tell them face to face why he's supporting this government's advertising campaign and cutting their programs today?

Hon. K. Falcon: The Broadway Connections program is a program that — the member is right — has been around for 25 years. It is a socialization program that provides subsidized $3 meals. It provides taking people to movies and to darts and table bowling, etc., and I'm not saying that those aren't important socialization programs. They are not health programs, however.

So what the health authority is doing, I think quite appropriately, having examined that program, is they are actually going to take the dollars, put them into enhanced rehabilitation services for those folks, and allow those folks to connect, in the broader community, to existing programs that allow them to be better integrated in the broader community.

That's actually what best practices suggest is the right thing to do. I get that in the NDP world no change should ever happen. That is actually what the best evidence says in terms of dealing with these folks.

A. Dix: The minister apparently thinks it's best practices to take people out of a program that has been extraordinarily successful for them and to spend money on people to find them other programs that might be successful. This is what he describes as best practices.

The truth is that this program is best practices. It's been long regarded as a model program by Vancouver Coastal itself, and the minister disparages everyone involved when he limits it to talking about people playing darts. It's way more than that, and the minister should know that, if he even bothered to read his briefing note.

Here's a suggestion for the minister. The net cost of the program this year is ten of the Minister of Energy's ads. Ten of those ads would pay for this program this year. Why doesn't he go down and talk to the Minister of Energy, divert that money to these clients, to these people in the community, and restore funding to Broadway Connections?

Hon. K. Falcon: This, of course, is a common theme from the NDP. We have a $2 billion increase in the health care budget. We have a….

Interjections.

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Hon. K. Falcon: I'm willing to give an answer if you're willing to listen to it.

We have a $2 billion increase in the health care budget over the next three years. That is a record level of increase in health care spending in one of the most difficult economic times we've had. We've got Vancouver Coastal actually doing appropriate work to make sure that they are focusing those dollars on direct health care. That's what the public would expect.

I get that the members opposite believe that nothing should ever change in the health care system. That has been a consistent theme. But they have never suggested what they would ever do differently, other than just keep doing exactly the same thing and keep spending more money doing exactly the same thing.

On this side of the House we are saying to our health authorities: "We want you to innovate. We want you to bring about appropriate change. We want you to focus on delivery of health care services." Socialization programs, as important as they are, can probably be better provided in the community, but we want to ensure that rehabilitative services for those with physical disabilities are being provided, which they are doing here, and streaming them into programs that are already available in the community.

FUNDING FOR COMMUNITY-BASED

HEPATITIS C AND HIV/AIDS PROGRAMS

K. Corrigan: A national research study released last week reveals that B.C. women with HIV are more than twice as likely as women in Quebec or Ontario to experience viral-load rebound — meaning their medication stops killing the virus — and they are more than twice as likely to suffer, as well, from hepatitis C. Given these alarming statistics, why has the government slashed funding for community-based HIV/hepatitis C work?

Hon. I. Chong: Our province provides more than $100 million to fight HIV each and every year. And I can tell you that, on a per capita basis, we have one of the most robust programs here in British Columbia. Our recently announced $48 million seek and treat program is yet another opportunity to help those with HIV to ensure that they get the support they need.

Mr. Speaker: The member has a supplemental.

K. Corrigan: Well, the minister well knows that I'm talking about community-based HIV programs, programs

[ Page 5774 ]

that help protect women against more complications and health decline. Millions of dollars for taxpayers' ads, but no money for programs like this. The government has eliminated all the funding of the National Congress of Black Women Foundation to run an effective AIDS program.

This foundation, which is based in my riding, provided essential support to women of African descent who are diagnosed with or affected by HIV. Will the minister please admit that slashing the budgets of effective community HIV/AIDS programs harms women's health?

Hon. I. Chong: I'd like to let all members of this House know that our Centre for Excellence for HIV is world-renowned. It is recognized internationally. We should be proud that British Columbia…. We are a pioneer in our approach to unique issues affecting women living with HIV and their families.

Let me just say this, Mr. Speaker. The $48 million seek and treat program, a four-year program, is going to provide the supports that are needed. It's going to deal with people living with HIV in three specific areas to begin with — definitely in the Downtown Eastside and Prince George and Kelowna. This program is also getting world recognition, and we should be proud of the work we continue to do on HIV prevention.

S. Hammell: Surrey South Fraser Community Services saw its budget for HIV and hep C services decrease by $133,000. Programs that focus on reaching First Nations women and women in ethnic communities are also being hit.

[1420]

For example, community-based programs such as the Asian Society for the Intervention of AIDS and the Vancouver Native Health Society positive outreach program have both, because of cuts, lost capacity to provide outreach and support services — a counterproductive decision because it further marginalizes patients who are already hard to reach.

Again, to the minister: will she revisit these cutbacks to community-based AIDS/HIV programs?

Hon. I. Chong: Once again, I want to acknowledge the excellent work done by our Centre for Excellence in HIV. The work that is being done is recognized by people such as Dr. Julio Montaner.

I also want to say to the member that I have had the opportunity to meet with a number of community-based organizations that support persons with HIV. They have also been looking at our $48 million seek and treat program, acknowledging that that, too, will deliver more outcomes to ensure that people with HIV get the supports that they need. We will continue to advance that program.

COMMUNITY GAMING GRANTS

FOR ARTS FESTIVALS

S. Chandra Herbert: My question for the minister for gaming…. Application for gaming funds have been coming in for over four months from arts groups that produce festivals, and only now are the minister's officials telling organizations that put on film, dance, theatre and music festivals that the government has changed the rules on them, telling them that they are no longer going to get funding because they are not community cultural festivals and they aren't worthy of the support.

Can the minister of gaming tell me when he became the province's arts czar, deciding dance, film, music and theatre festivals aren't supportable community cultural celebrations?

Hon. R. Coleman: We made the changes on the amalgamation of the grant programs on March 5. That information was sent out to organizations. Since then we are answering questions of individual organizations as we try and clarify our priorities as they match up with regards to the applications they may want to make to government.

Mr. Speaker: The member has a supplemental.

S. Chandra Herbert: Well, no arts and culture organization that I know of in this entire province ever received the notice that the minister mentioned, nor were they told by the minister that they weren't worthy cultural festivals in their communities. They are.

The question back to the minister is: why were his ministry officials, who I spoke with, instructed not to release the documents that told the arts organizations that they weren't worthy of support? Why were the ministry officials told they were not allowed to release documents which said things like Green Thumb Theatre was not a youth arts company worthy of support, either, because it was not run by children?

Hon. R. Coleman: Maybe I should just clarify something to the member opposite, who has got so many facts wrong in that statement, it's unbelievable. Let's talk about the Green Thumb Theatre group that the member just mentioned. This group applied prior to the amalgamation of the grant program on March 5. As the grants staff are processing these applications that were received prior to the grant change, they're contacting the applicants to advise them of the changes to the grant program to allow them the opportunity to amend their applications, because we're focusing on youth and arts and culture.

Mr. Ivan Habel, the general manager of the Green Thumb Theatre, was contacted yesterday regarding their application. Arrangements have been made to allow

[ Page 5775 ]

them to make an amendment to their application for their youth focus program. It will then be processed along with other applications, Hon. Member.

N. Simons: Well, what's obvious is that the arts community in the province is being buffeted by rule changes and changes in standards and application procedures and cuts, and they're the ones left reeling. It's impacting on the communities that benefit from assistance from government to put on good arts and culture shows. Not only can't the minister keep track of his own

definitions of what a festival is, he seems not to know the definition of youth, arts and culture either.

Green Thumb is a good example. It's an internationally renowned, award-winning fixture in British Columbia that tours the province by bringing theatre to kids. They've been told that they don't qualify because they're not actually being run by youth. This is the problem facing these arts organizations.

[1425]

I've never been happier to see a red light. It gives me a little bit of an opportunity to explain to the minister, now that we're stopped here, that the arts community is reeling.

The new

definitions come in, in March. The applications were called for in February. It seems to be a complete…. Nobody's told about this, and it just shows that this government is in disarray. I think that the question that the minister should answer is: how can he support, how can he rationalize, taking away arts and culture opportunities for kids throughout this province?

Hon. R. Coleman: Same application, same application period, a different change in criteria made March 5 so that people could understand it. Any organization that doesn't understand can call the branch and get an explanation. We won't make any apology that the arts and culture money in the province of British Columbia under the gaming grant thing is going to be focused on young people and youth in the province of British Columbia this year. That's where we're going to focus the money.

[End of question period.]

Tabling Documents

Hon. M. de Jong: I table the 2009 annual report for ICBC.

Petitions

L. Krog: I rise to table a petition calling on the government to stop the imposition of the HST, signed by over 100 British Columbians.

Orders of the Day

Hon. M. de Jong: I call in Committee A, Committee of Supply — for the information of members, the estimates of the Ministry of Health — and, in this chamber, committee stage debate on Bill 19.

Committee of the Whole House

BIll 19 — Finance Statutes

Amendment Act (N o . 2), 2010

The House in Committee of the Whole (Section

B) on Bill 19; L. Reid in the chair.

The committee met at 2:30 p.m.

Section 1 approved.

section 2.

B. Ralston: Can the minister explain

section 2 and the companion

section in

section 3? They appear to amend a

section that has not yet been proclaimed — a budget bill, 2008. Can the minister explain the purpose for introducing this amendment?

Hon. C. Hansen: What this amendment does is that it provides for the…. This is in terms of

section 2. I'll deal with

section 2. I know he was also referencing

section 3, so I will actually deal with both of those in terms of what the proposed amendment is.

Section 2 provides that the penalty

section of the new interactive digital media tax credit will not be repealed, and in doing so it ensures that the penalty provision with respect to the new interactive digital tax credit will continue in effect after the regulation to repeal the climate action dividend is deposited.

In terms of

section 3, it provides that only that part of the penalty

section with respect to the climate action dividend tax credit will be repealed by regulation. This ensures that the penalty provision with respect to the new interactive digital tax credit will continue in effect, again, after the regulation to repeal the dividend is deposited.

Sections 2 and 3 approved.

section 4.

B. Ralston: This

section amends legislation that just passed in the Budget Measures Implementation Act earlier in this session. There appears to have been a drafting oversight that impacted the northern and rural benefit, depending on the level of taxation that one paid. Can the minister explain, if he might, the error that requires correction?

[ Page 5776 ]

Hon. C. Hansen: The member is correct; it was an oversight. This amendment that's before us today corrects an error in each of the two schedules that set out the amounts to which the homeowners are entitled under the new northern and rural homeowner benefit.

The error is that in the current schedules, that would result in reduced taxes, in some cases below the intended minimum amount of $350 or, in some cases, $100. These corrections ensure that these minimums continue to be applied consistently throughout the province.

Section 4 approved.

section 5.

B. Ralston: This is a proposed amendment to the Income Tax Act of the province, and it refers to "the functional currency tax reporting provisions of the Income Tax Act" of Canada. This was something that I was not aware of and had to do some research on. Can the minister explain briefly what "the functional currency tax reporting provisions of the Income Tax Act" are, how they work, and why this amendment is necessary?

[1435]

Hon. C. Hansen: We tried to make sure that we have consistency between the provincial Income Tax Act and the federal act. The federal act has been changed to allow for corporations to file in U.S. dollars, and we are changing our act, basically, to parallel the changes made by the federal parliament.

B. Ralston: I'd understood, then, that in addition to American dollars, the income tax could be filed in other currencies: the euro, pound sterling or the Australian dollar. Is that accurate?

Hon. C. Hansen: Yes, that's correct.

B. Ralston: Are there any implications for the tax that would be assessed and might accrue to the province by virtue of this reporting provision? One thinks of currency fluctuations. Is the tax calculated in the reporting currency and then recalculated in Canadian dollars? Does that make the corporate tax received subject to currency fluctuation?

Hon. C. Hansen: Actually, it gives more certainty, more stability. This actually avoids some of the uncertainties that come as a result of currency fluctuations.

B. Ralston: If there were a sizable group of corporations who chose to avail themselves of this provision, would the province avail itself of hedging opportunities in currency markets?

Hon. C. Hansen: In terms of corporate tax filings, those are administered by the Canada Revenue Agency. That is something that was harmonized many decades ago. The Canada Revenue Agency, of course, would be the recipient of the funds from the relative corporations. All of the transfers that the province receives from the CRA would come in the form of Canadian dollars.

Section 5 approved.

section 6.

B. Ralston: In this section, the description is that it "provides for the advancement of an alternative argument in support of an assessment at any time after the normal reassessment period." Can the minister give an example of how this might apply?

The Chair: I recognize the member for Delta South, who seeks leave to make an introduction.

Leave granted.

Introductions by Members

V. Huntington: Joining us in the gallery today are 35 grade 5 students from Southpointe Academy in Tsawwassen. The students are accompanied by seven of their parents and by their teacher Dr. Amrit Mangat. Would members please join me in welcoming them to the House.

Debate Continued

Hon. C. Hansen: Again, this is a change to allow for consistency with the federal statutes. An example would be if the CRA is reviewing an assessment and they're proceeding under one

interpretation. If, after they get a ways through that assessment, there is a differing

interpretation that may come forward, it allows them to consider that alternative

interpretation as well.

Sections 6 to 9 inclusive approved.

section 10.

B. Ralston: This

section replaces

section 33 and makes some changes to some technicalities in the application to the federal Income Tax Act provisions. Can the minister explain the second one in the explanatory note? It says that it applies provisions to allow some Canadian-controlled private corporations to pay quarterly income tax and quarterly instalments and to increase the instalment threshold to $3,000.

[1440]

Can the minister explain the purpose of that part of the amendment? Is that, again, to have consistency with the federal act?

[ Page 5777 ]

Hon. C. Hansen: Yes, this is to provide consistency with the federal statutes and allows for the increase in the threshold from a thousand dollars to $3,000, which would allow a corporation to apply for quarterly rather than monthly instalments.

B. Ralston: Could the minister explain how the fourth in the explanatory note, the provision that "enables a corporation to reduce its…corporate income tax instalment amounts by its provincial refundable tax credits" — how would that work? I'm assuming that there may be some disparity in a corporation's ability to use refundable tax credits, that they're on an annual basis,

whereas the tax might be paid monthly or quarterly. Could the minister explain that?

Hon. C. Hansen: Regardless of whether it's a quarterly filing or a monthly filing, if the corporation is entitled to those tax credits, they can deduct the proportionate share of the tax credits from that period's filing, and that would be reconciled when the corporation submits its total annual filing at year-end.

Sections 10 to 17 inclusive approved.

section 18.

B. Ralston: This

section amends the definition of "B.C. labour expenditure." Can the minister explain the significance of the change in definition?

Hon. C. Hansen: It simply provides for a provision that a company can't claim the same labour expenditure or cost as both a film tax credit and a digital interactive media tax credit.

Sections 18 to 27 inclusive approved.

section 28.

B. Ralston: In his introductory speech at second reading, the minister offered a brief explanation of the purpose of these amendments. Apparently, that was to align the tax credit with the programs that were offered. I'm wondering if he might offer a little bit more detail as to the purpose of these amendments.

Hon. C. Hansen: What this amendment does is it provides for a training tax credit to individuals who successfully pass the industry training requirements and receive certification in a trade. So some individuals receive their trades training, for example, in the Armed Forces, but they are never registered as an apprentice with the Industry Training Authority.

It also adds the certification tax credit for individuals. The creation of the certification tax credit for individuals reflects the policy intent of the B.C. training tax credit program to provide a refundable training tax credit to all individuals who obtain certification, including individuals who obtain certification by successfully challenging the final exam for that particular trade.

The amount of the certification tax credit is the same amount that the individual would have received had that individual completed their trades training by graduating as a registered apprentice.

[1445]

B. Ralston: The minister has given the example of receiving the training in the Armed Forces and also an opportunity to receive the credit by simply challenging the exam. Are there any other instances in which that circumstance in this statute would apply?

Hon. C. Hansen: Another example might be an individual who received training in another country. We do have procedures in place whereby that credentialing can be recognized in British Columbia. But in some cases where that process cannot lead to a granting of a certification, then this allows for a process whereby those individuals could challenge the final exam for the trade and thereby get their certifications.

B. Ralston: Perhaps I just need a question of clarification. The requirements say that the individual has to be "resident in British Columbia at the end of December 31 of the taxation year." So is the minister speaking of a program where the prospective applicant to this program completes a course of training in another country, is then resident in British Columbia by the end of the year and makes the application? Is that what is intended here, or am I misunderstanding what the minister is saying?

Hon. C. Hansen: This provision for the credit would actually be…. Somebody would have to be paying income tax in Canada to apply for the tax credit. So this would be in the case of somebody coming from another country — somebody that's come to British Columbia, established their residency and then would subsequently apply pursuant to this section.

B. Ralston: In subsection (2) of the proposed amendment there's reference to level 1, level 2, level 3 and level 4 requirements. There's a different tax credit for each level, and generally, the higher the level, the greater the tax credit. Can the minister briefly explain what each of the levels was and the policy rationale for a greater credit for a higher level?

Hon. C. Hansen: First of all, a level doesn't necessarily correspond to one year of training. In some cases it can be less and in some cases more. For some trades and occupations, it could be two years towards completion of

[ Page 5778 ]

a certification. In other cases, particularly with some of the more traditional trades, it could be as much as four levels. But that doesn't necessarily translate into four years or two years, because each level can take longer in some cases and in some cases shorter.

Sections 28 to 33 inclusive approved.

section 34.

B. Ralston: This part begins the interactive digital media tax credit. The minister, again, set out some of the basic principles in his speech at second reading. I'm wondering if he could, for this particular part, advise in broad terms what the purpose of the amendment is and what its financial implications are for those companies or individuals who might choose to avail themselves of this tax credit.

[1450]

Hon. C. Hansen: This change is really to recognize the convergence that's taking place within the film, digital and interactive media industry — that it's no longer an industry that is really all about film, all about animation, and that side of it. Interactive digital media is really becoming increasingly an integral part of what we have traditionally thought of as the film industry in British Columbia and, quite frankly, a great opportunity for British Columbia to really be on the forefront of this new convergence that's taking place.

With every indication that we've seen from the industry since making this announcement, that is exactly the case. Companies are quite excited about locating in British Columbia specifically because of these relatively minor changes that we have made. So it's really to give these companies an incentive to locate in British Columbia, to grow in British Columbia and to create the jobs in this industry, which are great jobs and, I think, a big part of the economic future of the province.

B. Ralston: In

section 133, which is described as "Eligibility for tax credit," sub (1)(

b) reads: "the corporation has a permanent establishment in British Columbia at any time during the taxation year." Can the minister explain what is meant by that term, "permanent establishment in British Columbia"?

Hon. C. Hansen: The term "a permanent establishment in British Columbia" is an income tax term that is used to determine the place of doing business. Yeah, it's that simple.

B. Ralston: I thank the minister for that answer. I understand and would expect it's one of the criteria that determines eligibility. I was hoping for a bit more meat on those bones, if I can put it that way, given that it describes "a permanent establishment in British Columbia at any time during the taxation year." It suggests that that may not be something that persists through the year. The same term is also used in sub (d)(ii), the provision of eligible services to a corporation who has a permanent establishment in British Columbia.

I'm just interested in the issue of eligibility. There are some sections that set out conditions that preclude a corporation from being eligible for the credit as well.

[1455]

Can the minister explain that more briefly, or more substantially and assist, perhaps, in helping me to understand that?

Hon. C. Hansen: Again, as I indicated, this is a term that's commonly used in income tax matters. I think if it was not on the corporate side but on the individual side, we would use the term "permanent resident" or "has established a residency in the province." In the case of corporations, we talk about "permanent establishment."

Basically, if an organization or a corporation has a permanent establishment in British Columbia, then they are obligated to pay taxes in British Columbia. It is only those companies that are paying taxes in British Columbia that are eligible for this credit.

B. Ralston: As the minister will likely know, I think in the Business Corporations Act some of the requirements to have a permanent establishment or a physical presence within the province were, I believe, amended, and one would be able to incorporate within the province yet not be required to have a permanent establishment or a head office in the province. I think that was canvassed to some extent in the TILMA agreement. I'm just wondering what the minimal requirement is to have a permanent establishment, given that it has….

I understand the tax implications. Are there any implications in terms of physical presence? As I recall, the definition of residence was the place where one habitually slept from sort of the evening until the following morning. I think that was one definition that I recall from years ago. I'm interested in exploring that issue in a little bit more detail.

Hon. C. Hansen: It would be a corporation that has an office. They have people that are physically working in British Columbia. They have an establishment. Those would all be factors in determining what's considered a permanent establishment.

B. Ralston: That helps me better understand it.

In subsection (3) there are a number of corporations that are ineligible. They appear to be related to different alternate forms of the provision of capital — a labour-sponsored venture capital fund, an employee share ownership plan, an employee venture capital corporation,

[ Page 5779 ]

a small business venture capital corporation, a business corporation registered under the Small Business Venture Capital Act and any corporation that's controlled directly or indirectly by any one of those corporations.

Can the minister explain the policy reason for excluding this broad category of corporation from eligibility?

Hon. C. Hansen: This is really to ensure that a company doesn't avail themselves of more than one tax credit program. If they're involved with the scientific research experimental development tax credit program, the B.C. venture capital program, the B.C. employee investment program, or a corporation….

[1500]

If they are availing themselves of those other tax credit programs, they can't, in essence, double-dip and also avail themselves of this labour tax credit.

Sections 34 and 35 approved.

section 36.

B. Ralston: We now embark on the discussion of the International Financial Activity Act. I believe I'm on

section 36. There are a number of

definitions that are added to the

definitions section: the international film distribution business, international patent business, and then international carbon trading, international clean technology, international digital media.

Can the minister explain the purpose for adding those business activities to this international financial activity centre, the prospective business that the province hopes to gain and the basis for that view?

Hon. C. Hansen: We have identified three additional areas of international business activity that have great potential for the future. These are really new sectors where there are individuals globally who are highly specialized in building these types of business activities. We believe that these are very desirable services to be offered from a British Columbia base and an opportunity that, given our ability to attract some of these elite specialists to the province, will mean that we can actually build these sectors and create significant employment in British Columbia in the years going forward.

These are the international carbon trading and certification, the international clean technology business and the international digital media distribution business. These are three areas we've identified where we believe British Columbia is in an ideal position to become a world leader in providing these business services to an international market.

B. Ralston: The report of the Vancouver International Financial Sector Steering Committee, Phase 1 Report, suggested that certainly carbon-trading activity without an exchange was likely not to be as successful as if there were an exchange. Let's put it that way. They did make reference to Offsetters, as they're called. An example was given of an offsetting company based out of the University of British Columbia, which I believe was the official offsetter of the 2010 Olympics.

That all seemed to have been accomplished and that business up and running without the benefit of the kind of tax relief or tax regime that appears to be being contemplated in this legislation.

I'm wondering, given the caution that the report expresses about the absence of an exchange and the fact that a fairly, as I understand it, successful business is already up and running without the benefit of this kind of tax regime, why it's felt necessary to institute this kind of a tax regime for that kind of prospective business.

[1505]

Hon. C. Hansen: We certainly recognize that there are initiatives that have already started in British Columbia. The member mentioned Offsetters, which is a great organization. There's also the Pacific Carbon Trust that we've established, of course, which is a Crown corporation of government that is also looking at the carbon-trading market. This is an area that we think has potential, a huge opportunity for growth, well beyond what is currently underway.

Clearly, some of the early players in this field are well positioned to be the leaders, but I think it's important that the province actually show its leadership in saying that this is not just about the relatively small carbon-trading operations that we have in British Columbia today. Really, there is the potential for some very significant growth in that sector, and we believe that these changes will facilitate that.

B. Ralston: Well, I don't doubt there may well be opportunities, depending particularly on what happens legislatively in the United States. But beyond a kind of, I guess, stereoscopic look at the landscape for this kind of business, what evidence is there of any real likelihood of these kinds of businesses being attracted to British Columbia?

The plan here seems to have been to suggest that they would be attracted by this kind of tax policy. Is there anything beyond what's contained in the report, which is very fragmentary and tentative, that might suggest that this might come to pass?

Hon. C. Hansen: We actually went out and sought the advice of experts that understand some of these opportunities for the growth in the financial and international business sectors from a British Columbia base. The member referenced the report of the steering committee, and I think he's familiar with those individuals who served on the steering committee. Certainly, it was their sense

[ Page 5780 ]

that there is a market for this, that British Columbia is in a good position to attract this type of international business activity.

It's not just around the carbon trading itself, but it's also around the verification and certification of offsets, which is something, again, that requires a very high level of specialization. We believe that some of the people globally that have been developing this expertise and this specialization would be attracted to move to British Columbia and to build those companies and those enterprises from a British Columbia base, given these changes to this legislation.

B. Ralston: A similar question, then, about the clean technology business. We've heard much from the government about this in recent months and, I suppose, years. Again, there is — I think many jurisdictions have recognized this — a potential upside for growth in this sector, but once again, why was it felt necessary?

I referenced in my speech at second reading the reference on page 11 of the report to the international income tax rate, which would be, if this legislation were to pass and a corporation in these areas were to avail itself of these rates…. The rate in Vancouver would be 16.2 percent; in Beijing, 25 percent; Hong Kong, 17.5 percent; Seoul, 35 percent; Singapore, 18 percent; and New York, 39.9 percent.

[1510]

Can the minister explain why, in order to…? I don't disagree that these sectors are potential growth sectors, but can the minister explain why it's felt that it's necessary to offer a corporate tax rate at that level, when one would be, I think, two-thirds of the tax rate of Beijing? Is that really the policy of the government in terms of the tax environment that the government hopes to create here in British Columbia?

It would seem to be out of sync with certainly many other North American jurisdictions, at the very least, who are our direct competitors. And given the differences between Chinese society, average incomes, tax regime, health systems and all the rest of it, one wonders why this level of taxation would be the one chosen.

Hon. C. Hansen: First of all, I think the calibre and the specialization of the individuals that we're trying to attract are unique, and there are a limited number of people globally that have this expertise that we would be seeking out.

But just to have one of these experts come and work from a base in British Columbia in turn generates considerable numbers of other jobs, whether it's jobs in the accounting professions or the legal professions or whether it's the back-end office jobs or whether it's the other jobs that come along because of the activity that is attracted to British Columbia as a result of attracting one of these key specialists.

You know, these are individuals who are, obviously, in high demand, and for us to be able to attract one of them has big economic impacts to the province in terms of job creation, economic growth and, hence, tax generation. So this is one of these things that by forgoing a bit of tax to attract these individuals, we actually can generate a lot more economic activity and more than make up for that forgone tax base that's given up.

These are individuals who are under demand, and we want to establish an environment and a tax regime that is more attractive than any of the other worldwide destinations that they may be considering.

B. Ralston: Well, the minister has framed his response in terms of tax rate for individuals, and that's really a separate provision where the individual income tax would be forgiven 100 percent in the first two years, as I understand it, stepping down to 75 percent in the third year, 50 percent in the fourth year and 25 percent in the fifth year.

But the provisions that are proposed for the corporate tax rate, as I understand it, don't step down. They are in the manner that's been described here. Certainly, the policy is that if this activity continued to qualify, they would be permanently at this very reduced rate relative to Beijing, Hong Kong, Seoul, Singapore.

So I'm looking for the minister to explain, if he will, the reason why the corporate tax rate for these activities, desirable as they may be, needs to be so much lower in the view of the minister in order to attract companies to come to British Columbia and to remain in British Columbia.

Hon. C. Hansen: I apologize to the member. I was answering that previous question in the context of the individual specialist. But he's quite right. When you start looking at the corporations that we are trying to attract, the same principles apply. You know, what we're trying to do is attract companies that otherwise would not be coming to British Columbia, and that does produce a whole range of economic activity that otherwise would not happen in this province.

[1515]

Just to make it clear, this pertains to international business activity. It is not domestic business activity. The tax concession is to those companies that are conducting international business activity from a British Columbia base. That is the type of business activity that really could be located anywhere in the world. We want it to be located in British Columbia because we want to make sure that all of those ancillary jobs come with it.

B. Ralston: I understand the principle that the minister is enunciating, and I understand the policy objective in that sense, but I'm a bit more focused on the rate. I'm wondering why, for the rate that's been selected and the

[ Page 5781 ]

comparisons that are made by the committee, it's felt that it's necessary to be a corporate tax rate — as they say in this report on page 11 — that's two-thirds of the rate of Beijing.

I think that would startle most people in British Columbia, even if it is a business that's externally focused and operating an international business where its incoming supply and its customers are internationally based. I'm interested in the policy rationale for the selection of that and in the felt necessity for that disparity in the corporate tax rate.

Hon. C. Hansen: I think this is one of those examples where, by establishing a lower tax rate, we can actually produce more economic activity and hence result in more taxes that would flow to the provincial coffers to pay for the programs and activities that we rely on.

Having a rate that is lower than other jurisdictions around the world is part of our marketing effort, using these tax rates which we have today. All we're doing is broadening the scope of it. Having these tax rates in place today for those corporations that are eligible under today's rules is a pretty powerful tool in the toolbox for the folks at the International Financial Centre to reach out and to attract these companies to come to British Columbia.

What we're doing is adding three more sectors to that. We think that that will allow us to be even more successful at attracting international companies focused on international business activity to British Columbia and to create those jobs in British Columbia.

B. Ralston: Well, there was a theory in the Reagan years called the Laffer curve, which adopted the very premises that the minister sets out. If that were the case, then, and if that were the only determining factor in a business decision to locate in a jurisdiction, then the financial activity centre focused on international banking would have been much more successful than it has been to date.

Again, I understand the language that the minister is using about competitive tax advantage, but what explains the felt necessity for this, which — I think most people would agree — is a large disparity, a big reduction from the rate in Beijing, according to the report from the experts that the minister presumably solicited the opinion of?

I'm just wondering about the policy reasons for that wide disparity between the corporate tax rate for these activities in Beijing and the corporate tax rates for British Columbia.

Hon. C. Hansen: I think the basic principle is that this is attracting international business activity that otherwise would not come to British Columbia and that we are establishing a tax rate for these companies that is very attractive. It's an important part of our international marketing efforts to attract these companies to come to British Columbia and, hence, create the jobs in this province.

[1520]

When he mentioned Laffer…. I think Laffer actually predates Ronald Reagan by quite a few years. When I was studying economics at the University of Victoria, I know, we were certainly studying the works of Laffer at that time. I hate to admit it, but that predated Ronald Reagan's time in the presidency.

D. Donaldson: I'd like to explore this

section a little bit further with the minister. I agree that there's potential for growth in this sector, but I'm trying to get at some of the intention, the imagining of what that could look like that this section's based on, specifically in regards to the international carbon-trading and certification business.

From the budget, the purpose of this international financial activity program is that it "provides tax refunds for B.C. corporate income tax paid on qualifying international financial activities." Now certification of trading of carbon credits is included in this

definitions section.

The definition of "international carbon trading and certification business" includes "an international carbon trading and certification business that meets the requirements of the regulations." Could the minister describe what the regulations are that have been referred to here and what they say?

Hon. C. Hansen: International carbon trading and certification are very much in their infancy today. By allowing us to shape that with regulation, it allows us to change as that industry matures and evolves.

I think what's very important…. If we want to actually develop British Columbia as a base of operations — the preferred base of operations, hopefully — for international carbon trading, we need to make sure that we are in tune and linked into the emerging

definitions and the emerging standards that are being sought after by other jurisdictions around the world, which will be looking for companies to undertake carbon verification and certification for carbon offsets. This, by doing it in regulation, allows us that flexibility as this industry emerges.

D. Donaldson: The minister can correct me if I'm wrong in my

interpretation of his answer, which is that the regulations referred to in 36(

f) are not yet in existence in B.C. There are no regulations, but he's referring to them coming in at some point.

Hon. C. Hansen: Yes, that is correct. They are yet to be drafted.

D. Donaldson: The budget document, in reference to this, the International Financial Activity Act, discussed details of the qualifying international transactions, and

[ Page 5782 ]

"any required certification process will be provided in the coming months." Certification is also mentioned in 36(

f) around international carbon-trading and certification businesses. Could the minister describe the certification process that's been referred to here?

[1525]

Hon. C. Hansen: The reference that the member makes to the budget documents is actually a broader context. It's not just…. The reference to certification in the budget document on page 82 is not simply around carbon offsets or carbon trading. It actually could be in a broader context of clean technology, for example, that…. Really, there's a whole range of certifications that may be developed, for example, by the Energy, Mines and Petroleum Resources Ministry, or it may be under the carbon trading, as we've been discussing previously.

D. Donaldson: The minister is discussing the potential growth in these sectors, and we're talking about the carbon-trading sector. He mentioned activity — bringing that activity to B.C. So I would like to ask the minister: what is the activity in B.C. around carbon trading that underlies this?

I realize this is international trading, but obviously trying to attract people who are international traders to B.C. is based on B.C. having some expertise in this area. That's according to the Vancouver International Financial Sector Steering Committee Phase 1 Report .

But what is the intention of this

section and of this act? This has to be based on some visioning by the government on what carbon trading looks like in B.C. So what are some of the carbon-trading opportunities that this represents?

Hon. C. Hansen: As I mentioned, this is an industry that really is in its infancy still, so it is obviously going to change and evolve. But the kind of business activity that we envision that would be generated from these provisions might be a broker, a firm that is actually buying offsets on behalf of other companies.

It could be, for example, a company in the United States that wants to buy quality offsets that are verifiable by the highest of accounting standards, and those offsets might wind up being in the United States as well, or they might be somewhere else on the globe. They might even be elsewhere, perhaps, in Canada. But that can be done from a British Columbia base.

We recognize that this is a very unique skills set that the individuals have that are involved with this type of verification and certification process, and it is that type of business that we want to attract to British Columbia, because we think we have a great environment in which to grow that industry here.

D. Donaldson: The buying of the offsets — is this section, this act, this initiative, linked to other government policies around offsets in B.C.? Can you describe some of those offsets in B.C. that could be traded under this section?

Hon. C. Hansen: Our involvement with the establishment of the Pacific Carbon Trust has given us a bit of a window on this industry in terms of the opportunities that are and will be presenting themselves globally for the growth in this industry.

[1530]

It has achieved a certain level of maturity in Europe today, but we think there is tremendous growth that we will see in North America, particularly with some of the new directions that they're exploring in the United States. This gives us an opportunity to really build that expertise right here.

In terms of the experience that we have to date, we are still very much at the early stages with the Pacific Carbon Trust, but it certainly has given us a window on the industry to the extent that we know that we have an opportunity to build this.

D. Donaldson: I appreciate that this is new and trying to get in on the leading edge of what could be, as you describe, a potential growth sector. Along those lines, the minister might be aware that there's been some debate about the efficacy of carbon-trading systems in addressing the underlying issue. I know that this

section deals with trying to capitalize on the potential growth in that area, but that potential growth is based on a carbon-trading system. Was there an analysis done on the debate around the carbon-trading system before the drafting of this section?

Hon. C. Hansen: We have certainly looked at, globally, some of the other initiatives, forays into carbon trading and verification and certification. I think that's why we recognized that whether it's the Pacific Carbon Trust that we are launching or whether it's international business activity that could flow from this particular process, we need to ensure that British Columbia builds a stellar reputation for the verification side of this. There are standards that need to be set, that need to be met so that globally, if any organization is embarking on trading or certification….

They want to know that British Columbia is synonymous with quality and is synonymous with accountability when it comes to achieving the objectives that are desired.

B. Ralston: Just to follow on the questions from the member for Stikine, one of the areas that I've heard expressed as a potential future area for carbon trading would be offsetting tree planting in British Columbia. The minister has referenced Pacific Carbon Trust. I'm not sure that that's an activity that they have yet drawn into their business plan.

But given the international focus of this legislation, would offsetting activity such as replanting of forests in

[ Page 5783 ]

British Columbia qualify as an international business in the definition

section of this act, for example?

Hon. C. Hansen: While I don't have as much firsthand knowledge of the standards that are being looked at globally around carbon offsets as, I think, we mentioned in the estimates debate, I noted for the member that there is the cabinet committee on climate action. I'm not a member of that committee, and I know that members of that committee would be much more familiar with the international discussions that are going on with regard to how reforestation or afforestation fits into carbon offset schemes globally.

That is something that is certainly being worked on, but I think what we want to make sure is that as we develop the standards for this, they are standards that will be respected globally. As to how exactly reforestation and afforestation can fit into that are issues that still need to be determined.

B. Ralston: In the definition

section there's a new definition which is described as an IB specialist. That's an international business specialist. It refers to

section 14 of the current act, which talks of an IFA specialist, an international financial specialist.

[1535]

Can the minister tell the House how many IFA specialists there are under the present act?

Hon. C. Hansen: Currently, there are none. There have been two that have taken advantage of these provisions.

B. Ralston: I wanted to ask a question about the international digital media distribution business. I'm presuming that adding this definition to the list of the

schedule of activities has some basis and is related to the earlier part of this bill, which hopes to attract digital media to British Columbia. Is that the basis on which this is potentially added as a topic or a subject of the act?

Hon. C. Hansen: Just as we had a very active and successful film production industry in British Columbia over the past decades, what we saw was, basically, the completion of those films, and then they would wind up being distributed out of some other centre globally.

The same is true for digital media. We've had a strong interactive digital media industry in B.C. for numbers of years. Typically, when those products are completed, they then go to some other centre for the distribution side of the business. We believe that that's an important area that can grow.

We don't have any significant distribution being done out of British Columbia today, so any of that business that we can attract to British Columbia would be a net gain for the province. That, in turn, has a couple of implications. It helps to encourage intellectual property to stay resident in British Columbia, and it also is a significant job generator.

Sections 36 and 37 approved.

section 38.

B. Ralston:

Section 38 amends

section 2 and "adds an additional restriction to the international financial activities to exclude lending activities conducted with related parties." Has this been an issue in terms of the regulation of any businesses that are here, or is this just in the interests of a comprehensive piece of legislation?

Hon. C. Hansen: The International Financial Activity Act, now to be named the International Business Activity Act, is not aimed at domestic transactions or domestic business but at what is, in fact, truly international business.

[1540]

This amendment that we are bringing in place under 38(

d) is really to ensure that there are not loopholes to that that would provide for the appearance of international business activity when, in fact, none existed.

Sections 38 to 40 inclusive approved.

section 41.

B. Ralston: This

section creates new categories of specialists, as they're called. The minister alluded to this earlier when he said it was desirable to attract certain highly skilled or uniquely skilled individuals who run these kinds of businesses and that that would have an economic benefit to the province.

This

section permits the application for registration of administrative support specialists and executive specialists, specialists in designated international business. It would not seem — and I don't intend to denigrate the work that people in administrative support do — at first reading, to fit the definition that the minister spoke of earlier.

As I understand it, the successful application for registration in this area would trigger the income tax rebate of 100 percent for the first two years and 75 percent and so on. Is the purpose of this

section to permit a successful applicant as an executive specialist to bring with him his or her executive support team?

Is that the purpose of this section? Otherwise, I confess that I don't understand the purpose for this proposed designation.

Hon. C. Hansen: Again, this is still targeted at specialists. It is not a provision that just says that if you've got administrative staff, they can come in under this provision. It is still very limited, and it does allow for administrative support and backup office service specialists for an international financial business. Again, this is not about

[ Page 5784 ]

somebody coming in to provide a domestic service. This is purely aimed at international business activity but having that done from a base within British Columbia.

B. Ralston: I understand the intention. I suppose the practical difficulty that may be encountered is an ability to describe the functions as unique and specialized to that degree. I gather from the response to previous questions that these

definitions in their detail will be appended to the act in the form of regulation. Is that how it's intended to do it? Is this the exhaustive definition of the qualifying individuals who might make these applications?

[1545]

Hon. C. Hansen: I think, first of all, individuals who would qualify for this provision would have a minimum salary requirement of $100,000 a year. Also, the Commissioner of Income Tax has the ability to go in and request information regarding the international business activities that are being undertaken by these individuals to basically ensure that this is purely international business and not something that is really domestic business under the auspices of an international business activity.

I think there are the checks and balances in place to ensure that we are attracting these specialists in these areas and that we achieve the objective of the act and the changes, and that is to ensure that we can build these industries in British Columbia and ensure that there are job opportunities not just directly involved with the companies that we are talking about but also with regard to the service sector industries, whether it's the legal or accounting professions, etc., that would be servicing these companies.

B. Ralston: In

section 13.1(3) there's a limit of four specialists to be certified under that provision, and under

section 13.2, for executive specialists, two or more. Can the minister explain the thinking that's led to the drafting of those subsections?

Hon. C. Hansen: I think, going back to our earlier discussions, our intent is to make sure that we can attract the specialists or the individuals who are key players in growing an industry in British Columbia. This is not about saying that a company can come and establish in British Columbia and everybody on the payroll is going to get this specialized tax treatment. It is meant to be limited to those key individuals.

In the case of the one section, as the member noted, it is limited to two individuals for that company, and in the other case, it's four individuals. It's really meant just to put a cap on how many can take advantage of these provisions.

B. Ralston: Is it intended or is it expected that existing law firms or accounting firms, for example, might choose to carve out of their existing personnel an internationally oriented unit that would qualify for this centre and the tax reductions that would come with that?

One can imagine…. For example, there are shipping companies which locate here because there's a similar federal law that forgives a certain amount of income tax or corporate tax as well. So one can easily envisage that there might be certain highly specialized individuals and law firms or accounting firms, for example, whose activity would be solely internationally oriented and might well qualify, at least in that respect. Can the minister explain how that might work?

[1550]

Hon. C. Hansen: The individuals that would qualify for this would have to be new to Canada.

Sections 41 to 48 inclusive approved.

section 49.

B. Ralston: I hope I was quick enough. I just wanted to…. It might have been

section 48. Just let me look at my note here.

There were some changes to the definition of "international patent business" and how the income for that was calculated. I wanted to ask the minister how many qualifying businesses there are at present that meet that definition of an international patent business. That was an amendment, as the minister may recall, that was brought in, I believe, in the 2006 budget but perhaps the 2007 budget.

Hon. C. Hansen: I don't have that specific information, but we believe it's probably two or three.

Sections 49 to 52 inclusive approved.

section 53.

B. Ralston: Can the minister explain, under the existing refunds of income tax under this

section of the IFAA, the existing section, what dollar amount of personal income tax has been refunded, and is there an estimate? I appreciate that may be difficult to give, given the uncertainties of future business. But is there any modelling or anticipated number as to future refunds of personal income tax that might be accorded under this provision?

Hon. C. Hansen: As the member knows, the scope of the provisions in the act up until now has been quite limited, but in terms of the international financial specialists, the uptake was small. We believe with these changes that we're making, we will get better uptake going forward, but the total in terms of forgone revenue to

[ Page 5785 ]

date is about $100,000. When I say "forgone," the argument is that that's revenue that would not have gone anyways, because it's only because of the International Financial Activity Act that we were able to attract these individuals to British Columbia.

Going forward, we have not done projections. We will be examining this over the coming years of rollout of these new provisions to determine what uptake would be expected, and from that basis, we'd be able to do the projections.

[1555]

Again, it's not that we will lose revenue in the future. It's either a question of whether we're going to attract these individuals and this activity or not. So regardless as to whether it's ten individuals or a hundred individuals that take us up on these provisions, it would not result in a decline in revenues but only an upside.

B. Ralston: Can the minister advise where, in the future, the refunds that might be paid under this provision would be reported?

Secondly, I just wanted him to confirm…. There does seem to be a disparity between the personal tax refunds claimed and the refund of corporate income tax on page…. In the September budget update, I'm advised, the International Financial Activity Act refunds of corporate income tax totalled about $20 million in '08-09, estimated to be $5 million in '09-10, although they had assumed about $20 million in the September budget and are estimated to total $10 million in this year and the next two.

First of all, then, where would the personal refunds be reported? Secondly, can the minister confirm those figures as to refunds of corporate income tax? Given that there would appear to be corporate activity, can he explain the disparity between that and the absence of any specialists making the personal claims?

J. Brar: Madam Chair, I seek leave to make an introduction.

Leave granted.

Introductions by Members

J. Brar: Visiting us today is a group of students from Frost Road Elementary School in Surrey-Fleetwood, the best school in the city of Surrey. There are 75 grade 5 students, and they are accompanied by their teacher Ms. Kerry Schwab. There are 20 parents and other adults with them as well. They are here to watch the debate and also see how parliamentary democracy works. I will ask the members from both sides to please make them feel welcome.

[C. Trevena in the chair.]

Debate Continued

Hon. C. Hansen: As we indicated earlier, the refunds to date under the international financial specialists program have been very small. So normally, what we would do with the personal income tax side…. Sorry. As the member noted, on the corporate income tax side we actually document the refunds under the International Financial Activity Act as a reduction from our corporate income tax revenues.

On the personal side — because we're talking about billions of dollars of personal income tax and a reduction from that of $100,000 over five years is actually a fairly small amount — should the amount that we would be refunding on the personal income tax side become substantive, we would look at reporting it under that section.

B. Ralston: Just to follow up, can the minister explain the disparity between the corporate income tax rebates under this program and the absence of any personal income tax? Obviously, there were companies engaged in the business that qualified but chose not to — for reasons best known to themselves, perhaps — have a specialist apply and get the personal income tax rebate.

[1600]

Is there anything to that? Is there any explanation for that, or is it simply that the companies chose not to apply?

Hon. C. Hansen: Hopefully I've interpreted the member's question properly. There's nothing that says that if you have a company that qualifies for the tax refunds under this act, it would automatically mean that there would also be individuals with that company who would qualify for the income tax provisions. So you could have, for example, a company that qualifies for the corporate income tax benefit, but nobody in the company qualifies for the personal income tax side of it.

Sections 53 to 61 inclusive approved.

section 62.

B. Ralston: This initiates a new series, or at least a single amendment, to the Land Tax Deferment Act. The minister touched upon this in his speech at second reading. Can the minister explain the purpose of this amendment and what its effect will be?

Hon. C. Hansen: This amendment provides that a property tax deferment agreement is not terminated where a portion of the owner's interest in the property, subject to the agreement, is transferred to the spouse of the owner subject to an agreement amending the original property tax deferment agreement.

This is really to provide for more flexibility when the title to the property is transferred between spouses. As it

[ Page 5786 ]

currently is worded, it would require that the entire tax that has been forgiven would have to be repaid and then a new application for deferment be applied. In the case of transfers between spouses, we believe that it is appropriate to provide this flexibility.

B. Ralston: Is this to cover the case where one spouse transfers the entire ownership of the property to another spouse and the agreement then continues? Or is it designed to cover the case where one spouse is on title and transfers ownership to the other spouse and they're joint owners of the property after the transfer? There are two different situations. Is it intended to apply to one, the other or both?

[1605]

Hon. C. Hansen: This is to provide for a spouse being added to the title. As long as the original owner who is a party to the tax deferment agreement continues to have at least a partial ownership of the property, then the spouse can be added to title without triggering the requirement for total repayment.

Sections 62 to 64 inclusive approved.

section 65.

B. Ralston: These are several amendments to the Logging Tax Act, and I understood from the minister's explanation at second reading that this was to match or accord with the

section with the Income Tax Act. Do I have that right, or can the minister confirm that?

Hon. C. Hansen: This is similar to the changes that we made to the Income Tax Act, but this is really to provide authority for…. It's to avoid the circumstances where we have to ask for the same information twice. If I can just read this explanation of the amendment, it's to authorize the disclosure of relevant logging tax information. Otherwise, the same information must be requested twice from the same person, once for the purposes of the Logging Tax Act and once for the purposes of the Forest Act.

Sections 65 to 68 inclusive approved.

section 69.

B. Ralston: This amends the Social Service Tax Act in relation to the purchase price of a parking right, and there's a series of amendments that follow. Part of the purpose here is to transfer to TransLink the authority to collect the parking tax within its jurisdiction. Can the minister explain the purpose of this series of amendments and their effect?

Hon. C. Hansen: Several years ago this Legislature gave the authority to TransLink to apply a parking tax in Metro Vancouver. While this tax was determined and designated by TransLink under that delegated authority, the process of collecting the tax was provided through the Social Service Tax Act.

With our initiative to repeal the Social Service Tax Act, that mechanism will no longer exist. Therefore, these series of amendments establish the ability for TransLink to collect their own tax rather than having it collected by the province.

B. Ralston: Perhaps the minister can confirm this: as I understand it, the revenue will go to TransLink, but the provincial portion of the HST will be added on top of that and will go to the province. Can the minister confirm that?

Hon. C. Hansen: This tax is totally separate from the HST tax, but the goods and services tax as it currently exists — and, hence, the HST as it will exist as of July 1 — will be charged in addition. That portion will be collected by the Canada Revenue Agency, as it will collect all of the HST, and this portion will be collected directly by TransLink.

B. Ralston: Regardless of who collects it, will a portion of that, then, flow to the province?

Hon. C. Hansen: Yes. All of the HST that is collected in British Columbia will be collected by the Canada Revenue Agency. They, in turn, will return to the province of British Columbia the provincial government's share. The HST on parking will be a part of those dollars that flow from the CRA to the province.

[1610]

B. Ralston: I just want to confirm, then, that as of January 1, 2010, the effective tax rate on parking in Metro Vancouver increased from 12 percent to 27.05 percent — that's because TransLink's portion is being increased — and that on July 1, 2010, when the HST is implemented, unless there's a change of heart somewhere, it will increase again to 35.52 percent, which by the calculation I'm provided with here, will mean an extra 8.74 percent tax on parking, not just the 7 percent nominal amount.

Hon. C. Hansen: What was in place prior to January 1 was a tax on parking in Metro Vancouver, the 7 percent parking tax that was the TransLink's tax collected through our social service tax collection mechanisms. The 5 percent GST was applied on top of that, so that total amount was slightly over 12 percent as a result of the GST being applied on top of the 7 percent TransLink tax.

Effective January 1 TransLink chose to increase that rate from 7 percent to 21 percent, so what happens today

[ Page 5787 ]

is that the 5 percent goods and services tax, of course, still exists, and it is on top of the 21 percent TransLink tax. As of July 1 the adoption of the harmonized sales tax will mean that there will be 12 percent tax applied on top of the 21 percent TransLink tax.

Sections 69 to 83 inclusive approved.

Title approved.

Hon. C. Hansen: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 4:13 p.m.

The House resumed; Mr. Speaker in the chair.

Report and

Third Reading of Bills

Bill 19 — Finance Statutes

Amendment Act (N o . 2), 2010

Bill 19, Finance Statutes Amendment Act (No. 2), 2010, reported complete without amendment, read a third time and passed.

Hon. I. Chong: I call second reading of Bill 17, the Clean Energy Act.

Second Reading of Bills

Bill 17 — CLEAN ENERGY ACT

Hon. B. Lekstrom: Hon. Speaker, it is my pleasure to move second reading of Bill 17, the Clean Energy Act.

This government has set out a new vision to be a leading North American supplier of low-carbon energy and technologies and clean, reliable and competitively priced power. The Clean Energy Act is a key step in achieving this vision.

British Columbia has a proud history of producing clean, reliable electricity at rates that are among the lowest in North America. This legacy is the result of a vision of British Columbia's leaders 50 years ago and a vision that helped build and shape our province.

[1615]

The vision of W.A.C. Bennett 50 years ago led to the development of hydroelectric projects on the Peace and Columbia, the two-river system.

When it was completed in 1968, the W.A.C. Bennett dam was the largest earth-fill structure ever built. It was followed by the Mica dam, one of the Columbia River projects. Then in 1980 a second dam on the Peace system, the Peace Canyon, opened, followed by the Revelstoke dam in 1984.

More than a series of electricity projects, the two-river system was the backbone of B.C.'s industrial strategy and made possible a whole series of economic activities. Energy from the Peace and Columbia has made possible our forest industry and our mining industry, industries that have opened up our province and sustained a high quality of life for families and communities across B.C.

Over the long term, the single most important market advantage for our industries has been our incredibly competitively-priced electricity rates. Competitive power rates have allowed entrepreneurs to innovate, to grow new businesses and to thrive in domestic and export markets. That's helped our province and helped B.C. families.

B.C. is blessed with enormous untapped clean energy potential that allows us to build on the two-rivers legacy, to create new wealth and jobs in communities across British Columbia while lowering greenhouse gas emissions at home and beyond B.C. borders.

The Clean Energy Act builds on the 2007 energy plan, the 2008 climate action plan and the recommendations of the Green Energy Advisory Task Force. In November 2009 government appointed the Green Energy Advisory Task Force to recommend strategic action for turning British Columbia's clean power potential into real economic, environmental and social benefits for British Columbians.

When the task force reported to us in January, one of its main messages was: "Clean energy will be one of this century's driving economic and environmental forces. British Columbia has tremendous opportunities to leverage its clean energy resources and clean technology sector and stimulate economic development and environmental improvements throughout the province."

The Clean Energy Act responds to these opportunities and establishes a long-term vision for British Columbia to become a clean energy powerhouse. It sets out 16 specific energy objectives that will guide and align government, B.C. Hydro and the British Columbia Utilities Commission in advancing British Columbia's energy vision.

[C. Trevena in the chair]

Through this act these energy objectives are legally tied to B.C. Hydro's planning requirements, decision-making by the BCUC and regulatory authorities in the act. B.C. Hydro will be required to have regard to these objectives in developing its plans. These objectives must be used by the B.C. Utilities Commission in performing its role, and in particular, the Utilities Commission will be required to consider and be guided by these principles and these objectives.

There are various regulation-making authorities set out in the act that either must be or can be tied specifically

[ Page 5788 ]

to these objectives. Key among the objectives are ensuring that B.C. is self-sufficient in electricity once again, achieving higher levels of conservation and a greater share of energy from clean and renewable resources, ensuring B.C.'s ratepayers continue to benefit from heritage assets, meeting B.C.'s greenhouse gas–reduction targets, encouraging First Nations and rural communities to use and develop clean and renewable resources, economic development and job creation, becoming a net exporter and a leading supplier of clean and renewable energy to western North America.

B.C.'s actions to implement the clean energy powerhouse strategy will focus on three areas: meeting the long-term electricity needs of British Columbians at low rates, harnessing British Columbia's clean power potential to create jobs in every region, and strengthening environmental stewardship and reducing greenhouse gas emissions.

The Clean Energy Act strengthens self-sufficiency by placing the commitment into legislation and by requiring B.C. Hydro to acquire an additional 3,000 gigawatt hours of electricity by no later than 2020, referred to as insurance. Over the next 20 years, we expect our electricity demand to grow between 20 and 40 percent.

[1620]

Achieving self-sufficiency and meeting growing demand will require a renewed emphasis on energy efficiency and conservation and major new investments by the public sector and private sector in B.C.'s electricity system.

Conservation and minimizing electricity waste will continue to be the cornerstones of achieving long-term electricity self-sufficiency and low rates now and into the future. The 2007 energy plan set an aggressive conservation target for B.C. Hydro that required the utility to meet 50 percent of its load growth through conservation.

B.C. Hydro's Power Smart program, one of the most successful energy conservation programs in North America, has been delivering energy conservation programs at homes, businesses and industry since its launch back in 1989.

Since the 2007 energy plan, Power Smart has been kicked into overdrive and has helped consumers achieve over $150 million in bill savings, and annual energy savings have grown to approximately 1,800 gigawatt hours per year. That is the equivalent to powering almost 168,000 homes. Conservation also supports local jobs and economic growth, with Power Smart initiatives creating 6,400 jobs each year.

But we will need to be even more aggressive with energy efficiency and conservation. The Clean Energy Act includes a new commitment to meet 66 percent of B.C. Hydro's future incremental power demand from conservation and efficiency improvements by 2020, an increase from the current target of 50 percent.

The Clean Energy Act also gives consumers and utilities new tools to better manage electricity use and save on power bills. The act includes a renewed commitment to smart meters and smart grids. B.C. Hydro is automating, modernizing and upgrading its electricity grid and metering system and is required by the Clean Energy Act to replace all of its 1.8 million customer meters with solid state smart electricity meters by the end of 2012.

Smart meters include two-way communication, enable in-home displays and provide customers with much more detailed information about their electricity use, and when customers get better data about how their electricity use affects their bills, they get interested. You can see it with other purchases. People will drive past three service stations to buy gas from one that charges two cents a litre less because they can see the price.

The smart grid will also be critical to manage the charging requirements of electric vehicles as more and more of these penetrate the market. A single vehicle charging at 220 volts can double a household's peak-power usage, so it will be critical to make sure that they don't plug into the grid at 6 p.m. Smart meters make it possible for pricing that varies by time of use so that homeowners can be encouraged to charge their vehicles in off-peak hours.

Government is also playing a key role in supporting conservation and efficiency through energy codes and standards for homes, buildings, appliances and equipment and by renewing the LiveSmart energy retrofit with an additional $35 million.

But even with aggressive new conservation targets, meeting future energy needs will require new investments in the electricity system. British Columbia has benefited for decades from the investments in hydro infrastructure made in the 1950s, '60s and '70s. It's time now for new investments and an expansion of B.C.'s heritage assets to ensure that future generations of British Columbians benefit as we did.

British Columbia is planning to build major generation and transmission infrastructure on a scale not seen since the Revelstoke dam was completed in 1984. Site C and new turbines at Mica and Revelstoke will ensure a source of clean, reliable, competitively priced power for decades to come. They will also continue to provide B.C. with the long-term economic advantage of affordable electricity prices.

A major expansion of the transmission system, the northwest transmission line, will electrify the Highway 37 corridor.

On April 19 Premier Campbell and I announced that the Site C project will move forward into detailed environmental assessments and reviews. By building Site C, we will be building the next generation of power on the Peace River, taking advantage of the W.A.C. Bennett dam and the Williston reservoir behind it.

Subject to approvals, Site C will be a source of clean, renewable electricity for more than 100 years. It will

[ Page 5789 ]

produce 30 percent of the power of the Bennett dam with only 5 percent of the reservoir area. As a source of firm energy, Site C will facilitate the development of clean energy projects by providing additional capacity to back up intermittent resources such as wind and run-of-the-river hydro.

[1625]

Site C will provide lasting economic and social benefits for northern communities, aboriginal groups and the province. It will create an estimated 7,650 construction jobs — those are direct construction jobs — and up to 35,000 direct and indirect jobs through all stages of the project. Construction of Site C will be subject to regulatory approvals and to ensuring that the Crown's constitutional duties to First Nations are met.

The Revelstoke and Mica dams are key heritage assets located on B.C. Hydro's Columbia River system, and both can be expanded with no impact on the reservoirs. The Mica generating station began operating in 1977 with four of the planned six turbines. B.C. Hydro is planning to add two 500-megawatt turbines to complete the station.

The Revelstoke generating station began operating in 1984 — again, with four of the potential six units, like Mica. The fifth unit should be completed by the fall of this year, 2010. B.C. Hydro plans to add one 500-megawatt turbine to the sixth and last bay.

The expansions of Mica and Revelstoke are some of the lowest-cost capacity projects available to be built in North America. They will both be required, to meet domestic needs in future.

The northwest transmission line, or NTL, will electrify the Highway 37 corridor by extending B.C.'s high-voltage transmission grid to the region. Northwestern British Columbia has 2,000 megawatts of green energy potential, and the NTL will create new opportunities for renewable power producers to connect their clean energy to the grid.

The project will provide clean electricity to support industrial developments in the area and will reduce greenhouse gas emissions by connecting communities now relying on diesel generation. They will be connected to the grid.

These new heritage assets — Site C, the Mica and Revelstoke expansions and the northwest transmission line — are critical to self-sufficiency, economic development and our government's clean energy vision.

To ensure that these critical projects proceed and are not subject to unnecessary, lengthy and costly processes before the B.C. Utilities Commission, the Clean Energy Act exempts these projects from the B.C. Utilities Commission review.

All will still be subject to environmental assessments and to ensuring that the Crown's obligations to First Nations are met. Let me read that again. All will still be subject to environmental assessments and to ensuring that the Crown's obligations to First Nations are met.

The Clean Energy Act also protects the benefits of both new and existing heritage assets by reinforcing the existing prohibition against selling or disposing of heritage assets and strengthening it by adding new heritage assets to the list: Site C, Mica and Revelstoke dam expansions, and B.C. Hydro's purchase of one-third of the Waneta dam and generating facility.

By law, the low-rate benefits that come from B.C.'s existing and future heritage assets will flow exclusively to British Columbians and will not be used to subsidize foreign power sales.

In addition to Crown investments, new independent power projects will also be needed to achieve the self-sufficiency requirements. The clean and renewable electricity and technology sector has contributed significantly to the development of British Columbia's electricity system, and the Clean Energy Act creates new opportunities for investments, jobs and economic growth in every region of our province.

Since the late 1980s the private sector has developed 63 independent power projects in B.C. that account for approximately 14 percent of British Columbia's domestic electricity requirements. These projects have contributed more than $1 billion to the provincial gross domestic product and created more than 11,000 person-years of employment.

The Clean Energy Act will expedite B.C. Hydro's electricity purchase agreements with clean and renewable electricity producers to secure sufficient supplies of additional clean, renewable electricity that will ensure electricity self-sufficiency by 2016 and beyond.

B.C. Hydro will be required to advance its acquisition of an additional 3,000 gigawatt hours of electricity by 2020 instead of by 2026 — beyond the amount specified in its base electricity supply obligations for self-sufficiency by 2016.

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New energy projects approved under the 2008 Clean Power Call to acquire up to 5,000 gigawatt hours of electricity will move forward, along with the phase 2 bioenergy call for up to 1,000 gigawatt hours of electricity from wood waste and projects to increase power generation and efficiency at B.C. pulp mills.

These specific clean power procurement processes that provide the power to achieve self-sufficiency will not be put at risk or delayed. They will be exempt from costly and time-consuming reviews under the Utilities Commission Act, yet they will still be subject to the B.C. Utilities Commission oversight with respect to rate-setting requirements and to all existing environmental requirements and standards, as well as to the Crown's constitutional obligations to First Nations.

Following the 2007 energy plan, B.C. Hydro introduced the standing offer program to take supplies of private power as and when ready and has so far signed six electricity purchase agreements. The Clean Energy

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Act enables repricing to reflect the results of recent calls, includes the option to increase the maximum project size above ten megawatts and allows for technologies to be specified.

The Clean Energy Act will result in major new private and public sector investments in energy infrastructure and strengthened conservation efforts to ensure that we meet the long-term electricity needs of British Columbians at low rates.

A key purpose of the Clean Energy Act is to ensure that government, B.C. Hydro and the Utilities Commission are all aligned with the same objective: to make British Columbia a leading North American supplier of low-carbon energy and technologies and reliable, competitively priced power.

To ensure that alignment, the Clean Energy Act introduces a new regulatory framework for long-term electricity planning. The current multitude of planning processes will be replaced with a long-term integrated resource plan that allows for public input and long-term stability for the industry. B.C. Hydro will be required to submit to government a long-term integrated resource plan that considers B.C.'s electricity needs over the next 30 years.

The integrated resource plan will set out B.C. Hydro's demand forecast and supply plans to achieve self-sufficiency, B.C. Hydro's plans to implement government's energy objectives, and results of the public and First Nations consultations. The integrated resource plan must be submitted within 18 months of the Clean Energy Act coming into force and must include a description of clean and renewable electricity potential in the province and the infrastructure needs for the transmission system over the next 30 years.

This incorporates and replaces the B.C. Utilities Commission's long-term transmission inquiry that commenced in 2009. Subsequent plans must be submitted every five years, and plans may be amended to adapt to changing conditions.

The act introduces a major change in the review and approval process for B.C. Hydro plans. Cabinet will approve or reject the integrated resource plan, rather than the Utilities Commission. If it chooses, cabinet may use its power to exempt specific projects, programs, contracts or expenditures in an integrated resource plan from further Utilities Commission review.

Otherwise, the projects, programs, contracts or expenditures will be subject to the Utilities Commission review, although the Clean Energy Act will require the Utilities Commission to consider and be guided by British Columbia's energy objectives and the IRP approved by government. This process will ensure that B.C. Hydro and the Utilities Commission are aligned with government's energy policy objectives.

The Utilities Commission will c