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British Columbia — Debates (Hansard)

Fourth Session, 38th Parliament OFFICIAL REPORT OF DEBATES OF THE LEGISLATIVE ASSEMBLY (HANSARD) Tuesday, April 8, 2008 Morning Sitting Volume 30, Number 1 THE HONOURABLE BILL BARISOFF, SPEAKER ISSN 0709-1281

PROVINCE OF BRITISH COLUMBIA (Entered Confederation July 20, 1871) LIEUTENANT-GOVERNOR His Honour the Honourable Steven L. Point, OBC FOURTH SESSION, 38TH PARLIAMENT SPEAKER OF THE LEGISLATIVE ASSEMBLY Honourable Bill Barisoff EXECUTIVE COUNCIL Premier and President of the Executive Council ............................................................................................................Hon. Gordon Campbell Deputy Premier and Minister of Education and Minister Responsible for Early Learning and Literacy...................... Hon.

Shirley Bond Minister of Aboriginal Relations and Reconciliation ........................................................................................................ Hon. Michael de Jong Minister of Advanced Education and Minister Responsible for Research and Technology ........................................... Hon. Murray Coell Minister of Agriculture and Lands.......................................................................................................................................................Hon.

Pat Bell Attorney General and Minister Responsible for Multiculturalism............................................................................... Hon. Wally Oppal, QC Minister of Children and Family Development ................................................................................................................Hon. Tom Christensen Minister of State for Childcare ........................................................................................................................................................Hon.

Linda Reid Minister of Community Services and Minister Responsible for Seniors’ and Women’s Issues........................................... Hon. Ida Chong Minister of Economic Development and Minister Responsible for the Asia-Pacific Initiative and the Olympics.................Hon. Colin Hansen Minister of Employment and Income Assistance ...........................................................................................................Hon.

Claude Richmond Minister of Energy, Mines and Petroleum Resources .......................................................................................................Hon. Richard Neufeld Minister of State for Mining......................................................................................................................................................Hon. Kevin Krueger Minister of Environment and Minister Responsible for Water Stewardship and Sustainable Communities ...............Hon.

Barry Penner Minister of Finance.......................................................................................................................................................................Hon. Carole Taylor Minister of Forests and Range and Minister Responsible for Housing ............................................................................. Hon. Rich Coleman Minister of Health ......................................................................................................................................................................Hon.

George Abbott Minister of Labour and Citizens’ Services ......................................................................................................................................Hon. Olga Ilich Minister of Public Safety and Solicitor General and Minister of State for Intergovernmental Relations............... Hon. John van Dongen Minister of Small Business and Revenue and Minister Responsible for Regulatory Reform............................................ Hon.

Rick Thorpe Minister of Tourism, Sport and the Arts ......................................................................................................................................Hon. Stan Hagen Minister of State for ActNow B.C. ............................................................................................................................................ Hon. Gordon Hogg Minister of Transportation...........................................................................................................................................................Hon.

Kevin Falcon LEGISLATIVE ASSEMBLY Leader of the Official Opposition .........................................................................................................................................................Carole James Deputy Speaker ....................................................................................................................................................................................Sindi Hawkins Deputy Speaker ...........................................................................................................................................................................

Katherine Whittred Assistant Deputy Speaker.....................................................................................................................................................................Sue Hammell Deputy Chair, Committee of the Whole................................................................................................................................................. Harry Bloy Clerk of the Legislative Assembly .........................................................................................................................E.

George MacMinn, OBC, QC Clerk Assistant.........................................................................................................................................................................................Robert Vaive Clerk Assistant and Law Clerk .......................................................................................................................................................Ian D. Izard, QC Clerk Assistant and Clerk of Committees ....................................................................................................................................... Craig H.

James Clerk Assistant and Committee Clerk ..........................................................................................................................................Kate Ryan-Lloyd Sergeant-at-Arms............................................................................................................................................................................. A.A.

Humphreys Director, Hansard Services ...................................................................................................................................................................Jo-Anne Kern Legislative Librarian ..................................................................................................................................................................................Jane Taylor Legislative Comptroller...............................................................................................................................................................................Dan Arbic

Party Standings: Liberal 46; New Democratic 33 ALPHABETICAL LIST OF MEMBERS Abbott, Hon. George (L) .................................................................... Shuswap Austin, Robin (NDP)............................................................................. Skeena Bains, Harry (NDP).................................................................. Surrey-Newton Barisoff, Hon. Bill (L)..........................................Penticton–Okanagan Valley Bell, Hon.

Pat (L) .............................................................Prince George North Bennett, Bill (L) ........................................................................ East Kootenay Black, Iain (L) ............................................................ Port Moody–Westwood Bloy, Harry (L)................................................................................Burquitlam Bond, Hon. Shirley (L).....................................Prince George–Mount Robson Brar, Jagrup (NDP).....................................................Surrey–Panorama Ridge Campbell, Hon.

Gordon (L) .........................................Vancouver–Point Grey Cantelon, Ron (L)..............................................................Nanaimo-Parksville Chong, Hon. Ida (L) .................................................... Oak Bay–Gordon Head Chouhan, Raj (NDP) ...........................................................Burnaby-Edmonds Christensen, Hon. Tom (L) ................................................. Okanagan-Vernon Chudnovsky, David (NDP) ......................................... Vancouver-Kensington Coell, Hon.

Murray (L) .....................................Saanich North and the Islands Coleman, Hon. Rich (L)...........................................Fort Langley–Aldergrove Conroy, Katrine (NDP) .......................................... West Kootenay–Boundary Coons, Gary (NDP) ....................................................................... North Coast Cubberley, David (NDP)............................................................Saanich South de Jong, Hon.

Michael (L) ...................................Abbotsford–Mount Lehman Dix, Adrian (NDP) .........................................................Vancouver-Kingsway Evans, Corky (NDP).................................................................Nelson-Creston Falcon, Hon. Kevin (L) .......................................................

Surrey-Cloverdale Farnworth, Mike (NDP) ...............................Port Coquitlam–Burke Mountain Fleming, Rob (NDP) ..............................................................Victoria-Hillside Fraser, Scott (NDP) ..............................................................Alberni-Qualicum Gentner, Guy (NDP).......................................................................Delta North Hagen, Hon. Stan (L) ................................................................ Comox Valley Hammell, Sue (NDP) ................................................... Surrey–Green Timbers Hansen, Hon.

Colin (L) ..................................................Vancouver-Quilchena Hawes, Randy (L).......................................................... Maple Ridge–Mission Hawkins, Sindi (L) ............................................................... Kelowna-Mission Hayer, Dave S. (L) ................................................................ Surrey-Tynehead Hogg, Hon.

Gordon (L).....................................................Surrey–White Rock Horgan, John (NDP)......................................................Malahat–Juan de Fuca Horning, Al (L)........................................................... Kelowna–Lake Country Ilich, Hon. Olga (L)...............................................................Richmond Centre James, Carole (NDP).......................................................Victoria–Beacon Hill Jarvis, Daniel (L)..................................................

North Vancouver–Seymour Karagianis, Maurine (NDP) ........................................... Esquimalt-Metchosin Krog, Leonard (NDP)......................................................................... Nanaimo Krueger, Hon. Kevin (L) .....................................Kamloops–North Thompson Kwan, Jenny Wai Ching (NDP)........................... Vancouver–Mount Pleasant Lali, Harry (NDP)........................................................................

Yale-Lillooet Lee, Richard T. (L)....................................................................Burnaby North Lekstrom, Blair (L).............................................................. Peace River South Les, John (L)........................................................................ Chilliwack-Sumas Macdonald, Norm (NDP).................................... Columbia River–Revelstoke MacKay, Dennis (L)....................................................

Bulkley Valley–Stikine Mayencourt, Lorne (L).......................................................Vancouver-Burrard McIntyre, Joan (L).................................................West Vancouver–Garibaldi Neufeld, Hon. Richard (L) .................................................. Peace River North Nuraney, John (L).............................................................Burnaby-Willingdon Oppal, Hon. Wally, QC (L).......................................... Vancouver-Fraserview Penner, Hon. Barry (L)...........................................................

Chilliwack-Kent Polak, Mary (L) ....................................................................................Langley Puchmayr, Chuck (NDP)...................................................... New Westminster Ralston, Bruce (NDP) ............................................................. Surrey-Whalley Reid, Hon. Linda (L) ................................................................ Richmond East Richmond, Hon. Claude (L).............................................................

Kamloops Robertson, Gregor (NDP) ................................................Vancouver-Fairview Roddick, Valerie (L).......................................................................Delta South Routley, Doug (NDP)..................................................... Cowichan-Ladysmith Rustad, John (L) ........................................................

Prince George–Omineca Sather, Michael (NDP).........................................Maple Ridge–Pitt Meadows Simons, Nicholas (NDP) ...................................Powell River–Sunshine Coast Simpson, Bob (NDP)..................................................................Cariboo North Simpson, Shane (NDP) ....................................................Vancouver-Hastings Sultan, Ralph (L) ....................................................West Vancouver–Capilano Taylor, Hon.

Carole (L).....................................................Vancouver-Langara Thorne, Diane (NDP) .................................................Coquitlam-Maillardville Thorpe, Hon. Rick (L).......................................................Okanagan-Westside Trevena, Claire (NDP) ..................................................................North Island van Dongen, Hon. John (L)............................................ Abbotsford-Clayburn Whittred, Katherine (L)........................................

North Vancouver–Lonsdale Wyse, Charlie (NDP) .................................................................Cariboo South Yap, John (L)...................................................................Richmond-Steveston LIST OF MEMBERS BY RIDING Abbotsford-Clayburn....................................................Hon. John van Dongen Abbotsford–Mount Lehman .......................................... Hon. Michael de Jong Alberni-Qualicum..........................................................................

Scott Fraser Bulkley Valley–Stikine ...........................................................Dennis MacKay Burnaby North ...........................................................................Richard T. Lee Burnaby-Edmonds........................................................................Raj Chouhan Burnaby-Willingdon................................................................... John Nuraney Burquitlam.......................................................................................Harry Bloy Cariboo North..............................................................................

Bob Simpson Cariboo South..............................................................................Charlie Wyse Chilliwack-Kent ..................................................................Hon. Barry Penner Chilliwack-Sumas............................................................................... John Les Columbia River–Revelstoke................................................. Norm Macdonald Comox Valley........................................................................ Hon.

Stan Hagen Coquitlam-Maillardville..............................................................Diane Thorne Cowichan-Ladysmith ................................................................. Doug Routley Delta North ...................................................................................Guy Gentner Delta South ............................................................................. Valerie Roddick East Kootenay................................................................................

Bill Bennett Esquimalt-Metchosin.........................................................Maurine Karagianis Fort Langley–Aldergrove ..................................................Hon. Rich Coleman Kamloops.....................................................................Hon. Claude Richmond Kamloops–North Thompson ............................................Hon. Kevin Krueger Kelowna–Lake Country.................................................................. Al Horning Kelowna-Mission ......................................................................

Sindi Hawkins Langley ...........................................................................................Mary Polak Malahat–Juan de Fuca .................................................................. John Horgan Maple Ridge–Mission ................................................................ Randy Hawes Maple Ridge–Pitt Meadows ..................................................... Michael Sather Nanaimo......................................................................................

Leonard Krog Nanaimo-Parksville .....................................................................Ron Cantelon Nelson-Creston .............................................................................Corky Evans New Westminster .................................................................. Chuck Puchmayr North Coast....................................................................................

Gary Coons North Island ...............................................................................Claire Trevena North Vancouver–Lonsdale................................................Katherine Whittred North Vancouver–Seymour..........................................................Daniel Jarvis Oak Bay–Gordon Head ........................................................... Hon. Ida Chong Okanagan-Vernon......................................................... Hon. Tom Christensen Okanagan-Westside..............................................................Hon.

Rick Thorpe Peace River North.......................................................... Hon. Richard Neufeld Peace River South..................................................................... Blair Lekstrom Penticton–Okanagan Valley .................................................Hon. Bill Barisoff Port Coquitlam–Burke Mountain ............................................Mike Farnworth Port Moody–Westwood.................................................................... Iain Black Powell River–Sunshine Coast ...............................................

Nicholas Simons Prince George North.................................................................... Hon. Pat Bell Prince George–Mount Robson ............................................Hon. Shirley Bond Prince George–Omineca................................................................ John Rustad Richmond Centre......................................................................Hon. Olga Ilich Richmond East........................................................................Hon.

Linda Reid Richmond-Steveston...........................................................................John Yap Saanich North and the Islands ............................................ Hon. Murray Coell Saanich South ........................................................................ David Cubberley Shuswap............................................................................Hon. George Abbott Skeena.......................................................................................... Robin Austin Surrey-Cloverdale............................................................... Hon.

Kevin Falcon Surrey–Green Timbers ................................................................Sue Hammell Surrey-Newton............................................................................... Harry Bains Surrey–Panorama Ridge.................................................................Jagrup Brar Surrey-Tynehead ....................................................................... Dave S. Hayer Surrey-Whalley...........................................................................Bruce Ralston Surrey–White Rock ............................................................Hon.

Gordon Hogg Vancouver-Burrard..............................................................Lorne Mayencourt Vancouver-Fairview.............................................................Gregor Robertson Vancouver-Fraserview .................................................Hon.

Wally Oppal, QC Vancouver-Hastings .................................................................Shane Simpson Vancouver-Kensington.......................................................David Chudnovsky Vancouver-Kingsway ......................................................................Adrian Dix Vancouver-Langara ........................................................... Hon. Carole Taylor Vancouver–Mount Pleasant........................................ Jenny Wai Ching Kwan Vancouver–Point Grey ................................................Hon.

Gordon Campbell Vancouver-Quilchena.........................................................Hon. Colin Hansen Victoria–Beacon Hill...................................................................

Carole James Victoria-Hillside ...........................................................................Rob Fleming West Kootenay–Boundary........................................................Katrine Conroy West Vancouver–Capilano...........................................................Ralph Sultan West Vancouver–Garibaldi ........................................................Joan McIntyre Yale-Lillooet..................................................................................... Harry Lali

CONTENTS Tuesday, April 8, 2008 Morning Sitting Routine Proceedings Page Introduction and First Reading of Bills........................................................................................ ....................................... 11021 Oil and Gas Activities Act (Bill 20) Hon. R. Neufeld Committee of the Whole House................................................................................................... ........................................ 11021 Utilities Commission Amendment Act, 2008 (Bill 15) (continued) J. Horgan Hon. R.

Neufeld Report and Third Reading of Bills .............................................................................................. ......................................... 11031 Utilities Commission Amendment Act, 2008 (Bill 15) Second Reading of Bills........................................................................................................ ................................................. 11032 Greenhouse Gas Reduction (Renewable and Low Carbon Fuel Requirements) Act (Bill 16) Hon. R. Neufeld J. Horgan On the amendment J.

Horgan Proceedings in the Douglas Fir Room Committee of Supply............................................................................................................ ................................................. 11035 Estimates: Ministry of Advanced Education and Minister Responsible for Research and Technology (continued) Hon. M. Coell B. Ralston R. Fleming

11021 TUESDAY, APRIL 8, 2008 The House met at 10:02 a.m. [Mr. Speaker in the chair.] Prayers. Introduction and First Reading of Bills OIL AND GAS ACTIVITIES ACT Hon. R. Neufeld presented a message from His Honour the Lieutenant-Gover nor: a bill intituled Oil and Gas Activities Act. Hon. R. Neufeld: I move that the Oil and Gas Activities Act be introduced and read a first time now. Motion approved. Hon. R. Neufeld: Mr. Speaker, I am pleased to present the Oil and Gas Activities Act. The oil and gas industry in British Columbia has become a major force in our provincial economy since 2001.

The oil and gas industry is the largest resource contri butor to B.C.'s provincial revenues. In this recent fiscal year we set a record- breaking $1.2 billion in oil and gas rights sales, which contributed to an estimated $2.5 billion in total oil and gas revenues. This illustrates the confidence that industry has in investing in British Columbia and in British Columbia's energy plan, released in 2007.

The B.C. energy plan outlined the province's commitment to become one of the most competitive oil and gas jurisdictions in North America and to lead in en vironmentally and socially responsible oil and gas development. The sector has expanded and matured since the current regulatory framework came into effect a decade ago. The Oil and Gas Commission was established as the agent of the Crown and the regulator of the oil and gas industry.

The Oil and Gas Commission approved all elements of oil and gas activity and relied on a number of acts governing the oil and gas sector, such as the Petro- leum and Natural Gas Act, the Oil and Gas Commission Act, the Pipeline Act and the Forest Practices Code Act.

The Oil and Gas Commission will now have one act. [1005] There are a number of ne w elements in this new legislation, particularly the strengthening of environmental regulations such as streamlining the application and approval process for oil and gas permits; creating a modern, comprehensive compliance and enforcement regime that fully equips the Oil and Gas Commission with the compliance and enforcement tools needed to regulate a complex industry; encouraging and enabling innovation for an increasingly efficient and environ- mentally sound industry; setting new requirements for notification and consultation with individuals affected by oil and gas proposals; establishing new regulatory powers to improve the protection of environmental interests; and establishing a new appeals process to address administrative fairness principles with respect to the decisions of the regulator.

This new legislation complements our approach as set out in the B.C. energy plan. The Oil and Gas Activities Act will strengthen B.C.'s position as a great oil and gas jurisdiction in which to invest and foster industry inno- vation while at the same time supporting commitments to job creation, healthy an d prosperous communities and environmental leadership. I move that the bill be pl aced on the orders of the day for second reading at the next sitting of the House.

Bill 20, Oil and Gas Activi ties Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today. Orders of the Day Hon. C. Richmond: In this chamber I call committee stage of Bill 15, Utilities Commission Amendment Act, 2008, hon. Minister of Energy, Mines and Petroleum Resources; and in the little House, Committee of Supply, estimates debate on the Ministry of Advanced Education. Committee of the Whole House UTILITIES COMMISSION AMENDMENT ACT, 2008 (continued) The House in Committee of the Whole (Section

B) on Bill 15; K. Whittred in the chair. The committee met at 10:08 a.m. On

section 14 (continued). J. Horgan: Good morning to members on the other side, members here. I look forward to a briefing on Bill 19, the other energy bill — the other, other energy bill — at some time in the near future. We were yesterday, when we adjourned the debate, speaking about

section 14, which is the energy supply contract

section of the existing act. I'm wondering if the minister could tell me if there's anywhere in this amendment where the commissi on is to consider price as a factor in approving or rejecting a contract. Hon. R. Neufeld: Before we start, maybe I'll re- introduce the staff with me here today: Deputy Minister Greg Reimer; and from the ministry, Les MacLaren, the assistant deputy minister fo r electricity and alternative energy. Shelley Murphy is the director of the electricity policy branch in the ministry . They're the people with me today. [1010]

11022 B RITISH COLUMBIA DEBATES T UESDAY, APRIL 8, 2008 Yesterday we left off…. We didn't have very much time to discuss this section, so I want to give a little more context to this section. I know the member had asked for that yesterday, and in the shortness of time w e c o u l d n ' t e x p l a i n i t a s f u l l y a s h e p r o b a b l y w o u l d have liked to have happen. What happens now when B.C. Hydro or a utility goes out and makes a call for electricity? They first have to go to the commission and actually get approval to do that process.

Then, on ce they've received interest — bids from companies that want to supply electricity — they have to take each on e of those individually to the commission for a review. There's a way that we can actually do this a little simpler and with less staff time involved and actually streamline the B.C. Utilities Commission process. What this

section does…. It does deal with costs. The utility will come before the commission and say: "Here are the terms and the conditions and the prices that we think we would get in this call." There could be a range of prices that are for different types of generation, but some range. Utilities have a pretty good idea what those costs are. Everybody has a good idea what it costs to build this generation, whether it's in British Columbia or some place else. They'll put that before the commission.

The commission will review that, in the first instance — the terms and the conditions and the prices that are set out there. What happens then is that the utility makes a call, and they can actually move forward with awarding energy purchase agreements if in fact the proposals meet the terms, conditions an d prices that were set out in the first place to the commission. It makes the second step unnecessary, where the commission has to individually go through every contract and look at them — as long as they meet the conditions, terms and prices. In

section 2, and to answer the member's question about, "Is there any place that the commission can deal with prices?" — yes. We know that prices would be something that would be forefront, but (2.6) is where they do. The other one is in (2.5)(d): "the interests of the persons in British Columbia who receive or may receive service from the public utility…." That's the ratepayers. Then (2.6) says yes. That maybe briefly explai ns better to the minister — I mean the member — where we left off yesterday. Interjection. J. Horgan: Prescient — yeah. I love saying prescient, just for the ring in my ear.

I don't have a ring in my ear. The ringing in my ear would be a better way to say that. Well, I thank the minister for that, and I reviewed the

section overnight just so that we could have a quicker debate on this section. I believe I get where the minister is going and why staff have recommended these changes, but this is where I would like to move an amendment to, in my opinion, add a little bit more certainty to this

section in the interests of ratepayers. It would be an amendment to

section 14, 71(2.6)(b), and it would go as follows: [SECTION 14 The following text, highlighted by underline, is added: 71

(2.6) If the commission issues an order under sub- section (2.4), the commission may not issue an order under subsection (3) with respect to a contract (

a) entered into exclusively on the terms and conditions, and (

b) as a result of the process Referred to in subsection (2.3), unless the commission determines that the price of the electricity to be supplied under the contract is excessive.] On the amendment. J.

Horgan: It's my view that by including this clause, particularly with the word "excessive," it would provide some certainty to the broader community that doesn't spend a lot of time reviewing the Utilities Commission hearings and looking at orders and so on — that the fundamental objective of the commission in this instance, when it comes to energy supply contracts, is to ensure that the costs of those contracts are not excessive. With that, I think I'll give this to the Clerk. [1015] The Chair: It's on the order paper, Member. J. Horgan: It's on the order paper. Oh, good enough.

Just speaking briefly to the amendment, as I said, not everyone…. I know that many members of this place don't spend a lot of time contemplating the activities at the Utilities Commission. I myself have said on occasion: "Mothers, don't let your babies grow up to be regulatory lawyers and attend Utilities Commission hearings." I am eternally grateful to all those interveners and all those staffers at the commission who go through the very, very difficult and sometimes tedious work of ensuring that complicated contracts — whether they be with independent power produc ers or they be projects initiated by B.C.

Hydro — are done in the least cost fashion and done with the ratepayer in mind. One of the concerns that certainly we've been echoing on this side of the House — and the minister would probably be tired of me saying it — is that we're significantly concerned, in fa ct, that the cost of inde- pendent power contracts are above what the market would bear because of the value of that power, the time, the dispatchability, the reliability and so on.

What I believe we're doing by adding this amend- m ent is ensu ring that at the end of the day, when the contracts are being deliberated upon by the commission and the interveners have ha d their say and the utility has had its say, the commission can, in the interests of the public, reject those contra cts if they believe that the costs are excessive. I know that is a layer of complexity that the minis- ter, by introducing this amendment, is trying to relieve. I believe it's something that the public wants to see. I believe it's something that the public expects from its regulator.

When it comes to increasi ng energy costs, we talked about this when we introd uced the lifeline amendment

TUESDAY, APRIL 8, 2008 B RITISH COLUMBIA DEBATES 11023 yesterday to do what we could in this place to relieve some of the pressures of escalating energy costs for seniors, people on fixed income, low-income British Columbians. There are mechanisms available to us as legislators that take this esoteric discussion down to a plane where ordinary folks can understand it, and excessive cost is something that everybody under- stands. If you can buy something for $45 a megawatt hour, why would you then pay $75, which the minister said yesterday was the average cost of the last call from B.C. Hydro?

I think most people try and find least cost options when they're doing their household purchases. When they're preparing for any eventuality, they try and save as m u ch m oney as they can. It do esn't g row on trees. The minister is fully aware of that. Some might argue that it grows under the ground in the Peace, and we're pumping it out.

The minister just said, in introducing his last bill, that certainly there's a great deal of wealth coming to the treasury from energy costs that are being realized a s b e n e f i t s t o u s h e r e i n t h i s L e g i s l a t u r e a n d t h r o u g h other ministries such as Health and Education and social services. We all want to see more revenue coming to the Crown, but we don't want to see more costs coming to consumers. It's my view that this amendment, by including in

section 14 excessive costs, would meet that test and would demonstrate to the public that we in this place are working on their behalf, not necessarily in the interests of independent power producers or in the interests of utilities who want to find power that may be easier to get but more costly. We would like to see people sharpen their pencils. I know that the minister, when he was on this side of the House in debate …. I can remember many times talking about inflated costs at B.C.

Hydro and an ex- pectation by the then opposition that the commission had an obligation to ensure we were paying as little as possible for our energy. When the minister stands, I know he's going to say that we do have among the lowest electricity costs in North America, and that's a good thing. We want to preserve that position. And why not? When we have an opportunity, when we're opening up a complex bill like the Utilities Commission Act, why not take that opportunity, as we did wi th the lifeline amendment, and ensure that the regulator has a bottom line — that is, excessive cost.

There are projects out there that may appear on the surface to be easy to get off the ground. We have now in this bill a date certain for self-sufficiency.

Again, we talked about this yesterday, and I'm not going to belabour the point, but the minister should take some comfort that we won't have to spend a lot of time on this in estimates. [1020] There is a silver lining in this debate, and that is that if we have to go into a negotiation in 2015 to meet our 2016 objectives, I think that the public would expect that the commission will override the policy directive of self-sufficiency if it's not economically viable to do so.

If excessive cost would result from signing those contracts to meet a policy objective that's now becom- ing a law with respect to the 2016 date for self- sufficiency, I would think that at a minimum, the public would expect us to protect their interests by saying that we will not pay more than we have to pay for electricity in 2016. That's the motivation for this amendment, hon. Chair. I know that the minister will have some comments on it. I hope other members of the House will participate in this debate.

I think everyone here has constituents who are on fixed incomes, who are feeling the squeeze of increasing energy costs and other costs. Energy costs, of course, lead to increasing costs for food, increasing costs for other services and goods in the community. It's the backbone, in fact, of our economy. The minister has said that many, many times, and I share that view. But again, as legislators, we have an opportunity here today, while this act is open before us, to amend it in a way to assist individuals, not just streamline public policy for the government of the day. Hon. R.

Neufeld: We're not streamlining for the government of today. I would assume that these amendments to the Utilities Commission Act will remain in the act for a long time into the future, as long as they're useful to meet the needs of British Columbians and as they relate to electricity supply across British Columbia and how our Crowns and other utilities actually develop those resources across the province. I get that the member wants to be dependent on the U.S. and Alberta for electricity in the province of Brit- ish Columbia.

I get that the NDP wants to spend $300 million or $400 million, and an escalating number at hundreds of millions of dollars per year, in those markets in the United States and in Alberta to acquire electricity — what he thinks and deems to be real cheap electricity. It's not always cheap electric ity, as I brought out to the member yesterday.

We think and we believe — and I think most British Columbians believe — that with the resources we have in the province of British Columbia, we should actually develop those resources in the best interests of ratepayers in the province so that we can actually be self-sufficient in British Columbia with electricity, as we were for decades prior to the 1990s. That's when we started going backwards. That's when we started being net importers. That, and in the early 2000s, is when we started requiring up to ten to 15 percent of our total consumption of electricity in the province of British Columbia….

We had to depend on places like the U.S. — Washington, Idaho, not California so much, but Arizona, Neva da, all of those places — and Alberta to actually meet our needs in the province of British Columbia. I get that the member wants to send that investment, those jobs and that certainty to some other jurisdiction. I get that the NDP doesn't want the jobs and the activity to happen in the province of British Columbia. I under- stand that. They've made it very clear that they don't

11024 B RITISH COLUMBIA DEBATES T UESDAY, APRIL 8, 2008 care about jobs in British Columbia, that they don't care about the investment in British Columbia, that they don't care about actually having enough electricity to meet our needs in the province of British Columbia. I get that. I don't understand it, and the member has not said to me anything yet that would make me think that t h a t ' s w h a t w e s h o u l d b e d o i n g o r t o a g r e e w i t h h i m that that's what we should be doing. I get lots of calls and people talking to me abou t the fact that we should be electricity self-sufficient.

This isn't built on any particular sector. This is actually to look at how we can be energy self-sufficient in the province of British Columbia. So the amendment that the member brings forward is not needed because it's already taken care of in the act. I explained to the member earlier that it's already there. [1025] Subsection (2.3). I'll say it again. Subsection (2.3) says: "setting out the terms and conditions of the contract…." The one thing that I did neglect to tell the member is that the commiss ion does not have to use this if it wishes not to.

This is a part of the act, the amendment, to actually streamline how the commission operates, not to interfere with how the commission operates. I mean, we get information from people that work on the commission that they would like to see some streamlining. I know streamlining and moving into the new world is something the NDP doesn't care about. We do. We actually like to see people use their time productively. If the commission has the utility come before it and say: "Here are the terms, the conditions, the prices.…" It may be a cap. It may be a range.

It may be different rates for different production of electricity. The commission has the opportunity to say: "No, I don't want to do that. I actually want to review every one of those EPAs individually." So it's entirely up to the commission. We've given a lot of ability to the commission to actually review these in totally different ways, to streamline it. I think that would make sense. I can't imagine why the NDP wouldn't want to streamline some of this and still maintain the prices.

The amendments say that price is still a huge part of this, but what they have to deal with along with price are the environmental concerns in the province of British Columbia, and those kinds of things. There's nothing wrong with that — nothing at all. So the amendment is not needed. It's already there in the act. It's already contemplated in the act. The sections lay it out. In fact, the commission would not approve and has never approved a project that is way out of balance. We know that.

Even when the NDP were in power, when they were constantly giving direction to the commission to exempt different projects…. Then the commission doesn't have the authority. But in here, the commission has the authority to accept from the utility the terms, conditions, the prices — all of those kind of things that might surround a call for electricity — and say: "Yes, if you actually come in with your EPAs that meet those terms and conditions and prices, you're okay to award an energy purchase agreement." That's called streamlinin g.

There's nothing wrong with that, but I want to say, again, that the commission doesn't have to do that if it doesn't want to. It can actually stay and do it the way they've always done it. First the utility has to come to the commission and make the pitch. They have to back it up that they need electricity. It's certainly not a secret that we need electricity in the province of British Columbia. Those are not my numbers. B.C. Hydro came forward in their integrated electricity plan — a Crown corporation. Certainly, I didn't tell them how to write that IEP. They wrote it.

They said that in the next 20 to 25 years we need 30,000 gigawatt hours of electricity — new incremental supply for growth that's taking place in British Columbia. They came forward with that. They didn't just release that. They went to the commission. A quasi-judicial body reviewed that IEP. In fact, I think they asked some 3,000 questions about it , and the Crown actually had to answer those question s. The BCUC approved it — totally arm's length from government.

It said: "Yes, we need that." I think it's incumbent now on government to say: "Well, if it's 30,000 gigawatt hours, we better figure out how we're going to get it." Now, if the member is comfortable, and I guess he is, with acquiring that new incremental supply, as we move forward for another 20, 25 years, from the United States of America, from other jurisdictions, from Alberta and who knows where else, he can go ahead and do that. He can sell it to the public.

He can say to the public: "We think that we should be dependent on another jurisdiction for up to 30 percent or 40 percent or 50 percent of our electricity goin g into the future." Or you can actually start sticking up for British Columbia, like we do, and say: "You know, there are entrepreneurs in British Columbia. There are people in British Columbia. There are Crowns in British Columbia — Columbia Power Corporation. B.C.

Hydro has the ability to go out and build new generation." There are all of those kinds of things that could happen in British Columbia that provide jobs and provide security for the province of British Columbia in electricity supply, which we enjoyed through the '60s and '70s and '80s. What's wrong with that? I can't see anything wrong with it.

Why would you want to spend, in today's world, $300 million in the United States and Alberta for electricity that we consume here today if we can actually generate it ourselves and sell some of that back into the market instead of having to buy it off the market? [1030] We can have an argument about market rates and all that. They are volatile, an d they change. I know that the member tries to use average market rates. I appreciate that, but they don't always stay at that. And you know, other jurisdictions are growing too.

In fact, I understand that a lot of the pension funds are buying into things that are happening just south of the border with generation of electricity, with billions

TUESDAY, APRIL 8, 2008 B RITISH COLUMBIA DEBATES 11025 of dollars of expansion. I for one think we ought to be able to build that here in British Columbia. This act allows that to happen, and the commission has every right under this part to actually streamline how they do things or to stick with the old way of doing things. They have the control, because they are there to represent the ratepayers of the province of British Columbia, to make sure that they're meeting their needs in the best way possible. I don't agree with the amendment. We can deal with it in a hurry. We don't need the amendment.

It's already there. Member, we already put it in the bill before you brought the amendment forward. I appreciate that you brought the amendment forw ard and that you bring forward the issue you're talking about — excessive. The commission already has that ability and, under sections of this, has the ability to say yes or no to those. J. Horgan: Again, the minister simplifies a complex debate and, therefore, is maybe taking the public and those in the gallery here on a course that I'm going to have to now correct. That's unfortunate, because we were going to be moving through this fairly quickly this morning.

For the minister to characterize the position of the opposition as not recognizing the need for new energy supply is not correct. Everyone understands that we need new energy supply. We 've always needed new energy supply. In the 1990s new energy supply did come on stream. The minister knows that. Some of it was natural gas–fired, which at the time was acceptable and was happening all across North America. We pull out of the ground a significant amount of natural gas. We distribute that throughout North America, and it is burned to generate electricity in many, many jurisdictions.

If it's against his ethic to burn natural gas, then perhaps we might not want to bring it out of the ground and sell it to other people. When he comes up and says that Elk Falls — 300 megawatts of new energy supply in the 1990s — was somehow misguided and wrong, I think I would beg to differ with that. I also feel that the Keenleyside power plant, the Brilliant expansion in the southeast, upgrades at Stave Falls, Seven Mile, and on and on the list goes…. The minister is aware of that. To characterize the 1990s as a time of no growth is not correct.

To characterize the opposition as being opposed to finding new sources of energy is not correct. Our issue is with a directive to the Crown, to the utility, that they cannot go forth and generate new sources of supply by way of micro-hydro, by way of alternative energy supplies. That's the direction from the 2002 energy plan as I read it. Certainly, based on the complete absence of any proposals being put forward by B.C. Hydro, I would assume they are taking that direction to heart, and we're leaving the field completely open to the private sector. The minister knows that I support a mix of public and private.

We can have a debate. We have a debate internally on that issue, and I'm certain the members on the other side have a debate internally on that issue. For those in the gallery, for those at home watching, they want balance; they want flexibility. Ultimately, they want the Crown corporation, which has served British Columbians for generations, to do what it can to k e e p c o s t s d o w n , t o d o w h a t i t c a n t o g e n e r a t e n e w sources of supply in a clean and green and environ- mentally conscious way. Everybody wants that, Minister. It's not an us-and-them issue. Where we divide, again, is on this

section in par- ticular — referring back to the directive to the commission, when this bill passes — in the act that says that we shall be self-sufficient by 2016. I then go to new energy contracts that come forward in 2015 to meet that 2016 date. Where's our negotiating ability at that time? Where's the protection for the public?

What will the commission say or do in 2015 if it doesn't have some point to go to in the act to say, with these contracts, whether the terms and conditions were arrived at through consensus, negotiation and compromise, as the minister suggests? [1035] Where is the public comfort that least-cost energy supply is going to be a higher priority than just meeting the objective of self-sufficiency by a certain date? That's the problem with this policy , Minister, and I'm not the only person in B.C. who feels that way. I'm not the only person in this Legislature who feels that way.

It strikes me that for the minister to say, "We're in favour of this, and they're ag ainst that," is just not the appropriate way to proceed with this debate. I know we're going to be doing that from now until the election, and I guess that's the way it's going to go. We have a significant difference of opinion on how best to meet our energy targets into the future. Where we do agree is on conservation. We've talked about that. We patted each other on the back. There's consensus. We are one on the question of enhancing our conservation capacity at B.C. Hydro. But why not allow B.C. Hydro to get into the game?

Why not put into that marketplace a competitive player who has experience in electricity generation, understands the market, kn ows the landscape, knows when they need power or when they don't need power? Why wouldn't you want to see the utility play- ing the market in the interest of its ratepayers, not just in the spot market but on generating new sources of energy? Why wouldn't you let B.C. Hydro build micro- hydro in appropriate locations to provide power at appropriate times? High value, useful to the utility and certainly acceptable to the commission.

My concern and the rationale for this amendment are quite simple. It's specifically to do with what will be

part 3,

section 13, of this bill — which will become

section 64 of the Utilities Commission Act — which is to ensure that when we get closer to the self-sufficiency date that the minister has now prescribed in legislation, the commission has an overriding requirement to ensure that any new contracts coming forward in that final year or subsequent years, which is a requirement of that

section of the act….

11026 B RITISH COLUMBIA DEBATES T UESDAY, APRIL 8, 2008 It says as follows: "… by the 2016 calendar year, achieve electricity self-sufficiency according to the pre- scribed criteria" — which is critical water years, if I recollect what the minister said yesterday — "and maintain, according to the prescribed criteria, electricity self- sufficiency in each calendar year after achieving it." So every year after 2017, the imperative self- sufficiency may well override least-cost options for ratepayers.

By including this amendment, by this one simple line, "unless the commission determines that the price of the electricity to be supplied under the contract is excessive," I believe it protects ratepayers. It protects the utility, B.C. Hydro, from having to purchase high- priced power to meet the self-sufficiency objective. I think it's a reasonable compromise. I think the public would be quite satisfied to know that in this place, at least on this day, there was una- nimity that the ratepayer should be paramount in these objectives.

It shouldn't be independent power producers; it shouldn't be perpetuating government policy, whether it be ideologically driven or not. The priority for B.C. Hy dro, the priority for the commission, should be to ensure that costs remain low for British Columbians. That's why we have a public utility. That's why we've been served well by it for generations. That's why we should continue to do that into the future. I don't know if the minister might be reading more into this than he has to, but I see this as a golden opportunity for compromise in the Legislature.

It's an amendment brought forward thoughtfully in consultation with stakeholders. We've talked to intervener s about this. They believe that it's a good course of action. It's not just me saying this. There's a range of people that frequent the Utilities Commission who believe this is a reasonable amendment to ensure that in outgoing ye ars, as we get closer to the date that the minister has selected for self-sufficiency, ratepayers will be protected — not an unreasonable thing to do. Not an unreasonable thing for legislators to do.

From all across British Columbia we're assembled here, 79 of us coming from different communities and different perspectives. Each and every one of us, virtually, with the exception of those in the southeast of B.C. and maybe a few in Prince Rupert and New Westminster, is provided our electricity by B.C. Hydro. By picking a date in the future to beco me self-sufficient when we know there are ups and do wns in the marketplace, there are mill closures…. I think 30 mills have closed in British Columbia in the past 18 months.

That's a big hit on our energy demand, I would think — a significant hit on our energy demand. [1040] When Hydro brings forwar d its integrated energy plans, or its IEPs, they're taking forecasts as they assume industrial growth is going to continue in a certain direction. Well, we've had a downturn in the forest sector. We had a strike in the forest sector before that, which shut down our pulping capacity, which is a big driver of energy use in British Columbia. It goes up and down year after year. It's compli- cated. The minister knows it's complicated.

So to stand and say simply, "Oh well, you're against this, and you don't want to generate power in B.C.," is just not correct. O f c o u r s e w e w a n t t o g e n e r a t e p o w e r i n B . C . W e would prefer to see it being public power. Public power has served us well. We talked about this at great length at seco nd reading, and the minister has had it ringing in his ears for at least a few days on this particular bill.

If public power is important to those o n t h a t s i d e o f t h e H o u s e , i f r a t e p a y e r s h a v e a h i g h priority in the consciousness of the government side, why wouldn't they support an amendment that says that contracts can be rejected if the price is excessive? It seems to me a reasonable thing to do. Hon. R. Neufeld: Yeah, it is. The commission has the authority to do that already with these amend- ments. That's what I'm trying to tell the member.

We don't need a convoluted amendment from the opposition at this present time to take care of what's already in the act and already in the amen dments that we're putting forward now. The commission has the ability to reject it. If the terms and conditions are not in the interest of the rate- payers of the province of British Columbia, yes, they can turn it down. I think th at's pretty well known. I'm not sure whether the opposition doesn't know that or doesn't want to read it into this. What this is, is streamlining. I explained the process of streamlining now twice.

I have explained it twice that, actually, the commission doesn't have to do the streamlining if they don't want to. This enables them to do it. I can't imagine that the member or the NDP would want to not streamline some processes that we have, instead of stringing them out forever. This has the ability of actually looking at all the things that the member talked about — the prices, all of those kinds of things. What we're giving to the commission is enabling t h e m t o s a y : " Y e s , w e c a n d o i t u p f r o n t .

Y e s , u t i l i t y , you can come forward to us with the terms and condi- tions, which include the prices . If we think that's in the best interests of the ratepayers, we can say to you, 'Yes, go ahead and do your energy purchase agreements under those terms and conditions and prices.'" Or they can say: "No, we don't agree with that. We think some of the conditions and terms or prices that you've put forward are the wrong ones. What we want to do is actually review every one of them." Nothing wrong with that.

It gives th e commission some latitude to actually look at all of those kind of things, and they're there already, Member. I mean, it's an interesting discussion that we have. There's a huge difference of opinion. Actually, the dif- ference is that on that side of the House, the NDP thinks everything has to be built publicly. Government knows best. A while ago you were talking about B.C. Hydro being excessive in things. So what you're saying is that B.C. Hydro should build it all. I don't think B.C. Hydro has to build it all. I think there's opportunity here to use the entrepreneurship

TUESDAY, APRIL 8, 2008 B RITISH COLUMBIA DEBATES 11027 and the ability of other people to build some smaller projects. B.C. Hydro's expertise is not building two- and three-megawatt run-of-the-river plants or those kinds of plants across the province. There could be a whole host of different things. Their expertise is in large projects. You know, the member says that they're cu rtailed from actually doing anything. Well, that's wrong. I want to remind the member that they're actually in the process now of installing another 500-megawatt turbine in Revelstoke — 500 megawatts.

They're actually in the process of talking about another 500-megawatt turbine in Revelstoke. They're actually contemplating two more 500-megawatt turbines in Mica. They're now working at W.A.C. Bennett and Peace Canyon dams across the whole province of British Columbia, actually increasing the generation from those projects that were built a long time ago with new technology. They're not curtailed from doing that. In fact, they're explicitly to ld to do that. That wasn't so in the '90s, if we want to get back to the '90s. The member talked about the '90s. [1045] Interjections. Hon. R.

Neufeld: Across the way they say they do. Be careful what you wish for. In the '90s Campbell River…. The member talks about Campbell River — the largest project in British Columbia that's an IPP ever undertaken. That was undertaken in the 1990s. It's a natural gas–fired plant on Vancouver Island. Remember, this is an IPP. I go back to the '90s, and I can find dozens of com- ments — from ministers responsible for B.C. Hydro to Premiers from the 1990s — from the NDP era that all said: "There's nothing wrong with IPPs. We should be building them in the province.

This is good for the province of British Columbia." In fact, the present House Leader for the NDP is on r e c o r d i n m a n y p l a c e s s a y i n g t h a t i t ' s g o o d f o r t h e province to have independent power producers build generation in British Columbia. It came from Glen Clark. It came from Ujjal Dosanjh. It came from the member for Yale-Lillooet. On and on and on. In fact, even my critic, the member that's questioning independent power producers now, is on the record saying it at different times.

Maybe he forgets that he's i n f a v o u r o f I P P s , t h a t h e ' s i n f a v o u r o f i n d e p e n d e n t power production — until we get in the House, where he wants to try and make some political hay on: "Oh, we're not in favour of it. It just has to be public power. You can't actually use any of the private power." What is so contrary in that whole argument is the fact that that member will talk…. The NDP have en- dorsed it. I guess they have a policy about this. It would be interesting to see their energy policy, because it changes day to day.

They want to actually be totally dependent on the market for, it could be, up to 50 percent of our electricity needs in the future — the market, folks. To those out here listening, the market is in the U.S. and a little bit in Alberta. Both those jurisdictions are building generation as we speak today, too, that costs about the same as what it does in British Columbia to build. But those are independent. That's private power, privately developed power, in those jurisdictions, which the NDP advocate that we should actually depend on for our electricity.

I can only take from that that you actually want to depend on privately developed power, independent power producers in other jurisdictions, to meet our needs into the future, but yo u're totally against having any of that generation happen in the province of British Columbia. You would rather spend $300 million or $400 million a year buying electricity off the market from the U.S. or Alberta than actually spend that money in British Columbia. I don't know how that socialist theory works, but it's interesting. It's really interesting to me to listen to that argument. You know, Member, when you talk about….

We set a date in here — 2016 — to be energy self-sufficient so that they can actually plan for that. I told the member how we arrived at 2016 — through the integrated elec- tricity plan; through B.C. Hydro; through studies; through studies by the B.C. Utilities Commission, an independent quasi-judicial body — and that 2016 was chosen as the day that could actually be met. So there's a target for them to go to. The member says: "We shouldn't have a target. We shouldn't have a date. It's crazy to have a date ." Well, that's a very quick way of not meeting the target.

The target to be first in a game is actually to win, to cross the finish line at a certain time. We actually want the Crown, the utilities in the province, to be at that finishing line in 2016 so that we're self-sufficient, so that we have enough electricity in the province to actually meet our needs in British Columbia — still trade on the market, still buy and sell off the market, still do those kinds of things. The development of those projects in the province wouldn't go ahead — the commission wouldn't allow it to go ahead — if those costs were exorbitant. It wouldn't.

But it's within the realm of what it costs today to build that new generation, regardless of who's doing it — whether the public purse is doing it or private devel- opers. All we're saying is that we believe in the private developers to actually be able to go out there and do those kinds of things across British Columbia for the benefit of us here in the province. [1050] The member talked about mill closures. Yes, unfor- tunately, there are mill closures. There are some nega- tive things happening in the forest industry. None of us relish the idea that that's great. I don't think so.

But we certainly can't plan electricity generation by saying: "Oh, I guess all of those mills are going to stay closed forever." I think the member was referring to that a bit. We can't do that. We actually have to make sure that we have electricity. We'll always be able to buy and sell off the market.

11028 B RITISH COLUMBIA DEBATES T UESDAY, APRIL 8, 2008 We're in an integrated market. We can do that. So I have full confidence in the commission. Maybe unlike the opposition, I have full confidence in B.C. Hydro and in the utilities to actually do what's in the best interests of British Columbians moving forward. There are two checks and balances there. The utilities have to plan it, and then the B.C. Utilities Commission gets an opportunity to review that and say yes or no. It's a great system. It works good. All this

section does is allow the commission to say there's a different way we can go about it so that we don't have to do things twice, so that we can actually look at them in a reasonable fashion. So I do have full confidence in the commission. The member talks a little bit about Campbell River. You know, I would caution the member. Campbell River, as I said, is an independent power producer. It's an American company that built a plant in British Columbia and burns natural gas. The contract that was signed by the NDP at the time was that the people of the province of British Columbia — the ratepayers, B.C.

Hydro — would have to guarantee the fuel supply, would actually have to guarantee the space in the pipeline, would actually have to guarantee to the company that they will take X amount of electricity. If Hydro doesn't need it and they curtail that plant, they still have to pay that plant for that electricity. That 's just kind of a high level of the contract. Maybe that's why the members opposite don't like IPPs anymore. I don't know. But they're certainly on record — in radio talk shows, in Hansard, all over the place — that they approve of IPPs. That was in the '90s.

This is a little bit later, and today it seems to be in vogue to oppose them. I appreciate that. There is a huge difference between that side of the House and this side of the House as to how we should get new power. Hydro is not curtailed in the development of elec- tricity from its present plan ts, and they're investigating Site C today. But let me te ll you, when the member says that if we haven't reached self-sufficiency by 2015, my goodness, those prices are going to jump enor- mously…. Well, let me tell you, by 2015 if we aren't really close to self-sufficiency, we're in trouble.

You can't build a plant, you can't go through all the processes that the member and I talk about here through the B.C. Utilities Commission, you can't go through all those processes, and you can't go through all the environmental processes and all the community processes you have to go through and actually build a plant and get it on stream in a year. That doesn't happen. It just doesn't happen. You have to start planning for those things long before that magic date of 2016 happens. That's what we want to actually have happen. That's the difference — the huge difference.

We actually want to have enough electricity in the province of British Columbia for our own use and well into the future for future British Columbians. This act allows everything to take place. This

section is a well-worded section. The amendment that the member put forward is not needed in this

section at all because it's already there. In the interest of the ratepayers in the province of British Columbia, the commission will make those decisions. So excessive prices would be, I would assume, without telling the commissioner, because I don't do that…. I don't tell the co mmissioner unless something actually happens, and this act allows that to happen. You can actually send in an order that tells the com- mission what to do. But I don't tell the commissioner to look at all those contracts. They make those decisions themselves with all the information they have, and I think they do a darn good job.

We should depend on them and know that they will continue to do that. J. Horgan: I don't know. I guess the minister wasn't listening. I said not 20 minutes ago that I believe there needs to be a mix of public and private in the energy sector. So I don't know if that's being on the record or not. Those who were here heard it. Hon. R. Neufeld: That's the first time you said "mix." J. Horgan: No, it's not the first time I've said it. I say it all the time. I'm Mr. Middle-of-the Road, hon. Chair. You know that.

I get tremendous support from my middle-of-the-road friends on the other side when I say that. [1055] We can go around and around on this. I think we need to come to a vote on the question. C e r t a i n l y , w e o n t h i s s i d e o f t h e H o u s e w a n t t o ensure that energy costs are not excessive now and in the future, to protect ratepayers, to protect the people who vote for us and send us here to do their business — the people who anticipate that when we come here, we're working on both sides. Mr.

Middle-of-the-Road, myself, my friend from Peace River South — I k n o w t h a t h e h a t e s i t w h e n I associate myself with him because it brings him down in the eyes of his more zealous colleagues…. Those of us in this place who come here to try and do business in the interest of all British Columbians don't think that this is a problem to say: "Let's put one more caveat on this

section of the act to ensure that prices remain low." What better way than to say in the legislation — all of us assembled here, laymen and women from around B.C., not experts in regulatory processes, not experts in energy policy but ordinary citizens elected by our peers to come here and speak for them…. I came here today after consultation with people who attend the commission regularly, after consultation with people who watch the energy market very closely. I said to those individuals and groups, "Would it be appropriate to put this amendment forward?" and they said that it absolutely would be.

With the support of those who were paying attention, with the support of the people in my community and those middle-of-the-road members on the other side — I know there are four or five of them — I think it might

TUESDAY, APRIL 8, 2008 B RITISH COLUMBIA DEBATES 11029 be appropriate that we put this question to a vote, hon. Chair, and just see how we go. [1100] Amendment negatived on the following division: YEAS — 27 S.

Simpson Fleming Farnworth Kwan Ralston Cubberley Hammell Coons Thorne Simons Puchmayr Gentner Routley Fraser Horgan Dix Trevena Robertson Karagianis Evans Krog Austin Chouhan Wyse Sather Macdonald Conroy NAYS — 36 Coell Ilich Christensen Les Richmond Bell van Dongen Roddick Hayer Lee Jarvis Nuraney Cantelon Thorpe Hagen Oppal de Jong Campbell Taylor Bond Hansen Penner Neufeld Coleman Hogg Sultan Lekstrom Mayencourt Polak Hawes Yap Bloy MacKay Black McIntyre Rustad [1105] Sections 14 to 16 inclusive approved. On

section 17. J. Horgan: This section, again for those who don't have the benefit of this weighty tome, the actual Utilities Commission Act…. We're now amending

section 125.1, if anyone's following on thei r computer. In this

section it's the "Minister's regulations." [S. Hammell in the chair.] I'm just wondering if the minister could explain. In the existing act it says "regul ations." That refers to the Lieutenant-Governor-in-Council, which, as we talked about yesterday, is the cabinet, of course. I'm wondering if the minister could explain why we've added his, in this case, or future ministers as the "Minister's regulations." Hon. R. Neufeld: The regulations actually will speak to the energy plan. It would make sense that the minister responsible for Energy be responsible for this section. J.

Horgan: Well, there is some concern that these amendments again give additional and potentially extraordinary powers to the minister responsible for B.C. Hydro. The Utilities Commission Act is the responsibility of the Attorney General, and yet it's the Minister of Energy who's prescribing regulations. In those regulations,

section 2, "The minister may make regulations respecting the government's energy objectives, as defined in

section 1, including, without limitation…" the following…. It goes on from there for a number of clauses. My concern is that when we're doing such legislation as this, we as legislators don't have a clear understanding of what those regulations mi ght be. They'll come in the future. They will come in waves. They will come without notice to this place, and you have to be paying attention to pick up on it. When will the minister be completing these regulations as outlined in this section? Can he give me an indication? Again, this is an opportunity for the minister to look forward.

I know that he likes to do that, and I appreciate that, sincerely, when I say that. My concern is that…. By the amendments that we've been doing to this point in time — getting to this stage, the very last few pages of the bill — we've been saying, in essence, that the government's energy policy is now to be the overriding preoccupation of the com- mission when it's setting ra tes, when it's deliberating on contracts, when it's reviewing plans for the trans- mission authority, plans from B.C. Hydro and others as we get to the back of the act.

How does the public get comfort that this is not going to be just a moving target pending on the whims of the minister? I'm not suggesting that the minister is whimsical when I say that, but again, the Queen sends us here as her loyal opposition to shine light on these issues. I'm wondering if the minister could give some comfort in the substance of this debate, as to what authority he believes the minister now has by setting out regulations prescribing government policy — which, in essence, is ideological, party-driven policy rather than in the interest of ratepayers. Hon. R. Neufeld: I appreciate the question.

I think yesterday we spoke a number of times that when those regulations become available that I'll make sure, as I always have since the member has been my critic…. [1110] I've always been forthcoming and have had staff actually brief the member on legislation and, in fact, estimates and those kinds of things. I will not stop that with the regulations. I committed to the member that when the regulations come out, we will make sure, once they're adopted by cabinet, obviously, that he's aware of it and that the opposition is aware of it. It's to deal with the detail.

We now have an energy plan in the province of British Columbia. In fact, we've had two energy plans — both brought forward by me as the minister responsible. This government is proud of both those energy plans. What we want to do is have the Crowns, B.C. Hydro, actually respect those

11030 B RITISH COLUMBIA DEBATES T UESDAY, APRIL 8, 2008 energy plans when they make their proposals to the commission. The commission has to know, also, what kind of direction they should follow, what kind of policy. What we're trying to do is put in this act the basic pol- icy. The member, I know, has been around long enough to know that there are all kinds of nuances that come from that, depending on who's interpreting one word. What we need to do is make sure that the plan is followed and that the minister responsible for B.C. Hydro and the Power Authority Act has the ability to make some of those regulations so it doesn't get off base and off line. That's what this

section actually allows us to do. J. Horgan: I do appreciate the minister's openness and the amount of access I have to his very capable staff. I've appreciated that right from the beginning of our relationship as adversaries in this place. For those who are watching or here in the gallery today, this is an adversarial relationship, but the essence of what we're trying to do here on both sides of the House — and unfortunately, we weren't able to achieve a positive amendment to the bill — is try and improve it, as we see it, to meet the needs of ratepayers.

I know that the minister and his staff are always at my disposal for discussions or questions on these issues. I'm grateful for that. But not everybody has that access. One of the privileges of being in this place is that I'm able to steep myself in this stuff, not just through access to the public servants, who do such good work every day for the people in this place, but also through talking to people who are participating as interveners, people w h o h a v e a x e s t o g r i n d , a s i t w e r e , p e o p l e w h o a r e unhappy with some of the decisions that the commission makes or that B.C. Hydro makes.

That's the essence of this place. Most days it's adversarial, but every now and again the minister and I nod at each other. I think the public should know that it's not always beating each other up. That's in the interest of public policy development. I'll just continue. We're al most through this, Minister. You can take a breath before we start the next bill. I'd like to go to the

section in

section 17 which will be the new 125.2, "Adoption of reliability standards, rules or codes." There are a number outlined here — standard- making bodies such as "(

a) the North American Electricity Reliability Corporation, (

b) the Western Electricity Coordinating Council, and (

c) a prescribed standard-making body." Can the minister explain to me what those are and why they're in the act? Hon. R. Neufeld: The reliability standard is actually something that B.C. Hydro and B.C. Transmission have dealt with for decades. [1115] There's a reliability standard set by the North American Electricity Reliability Corporation, the Western Electricity Coordinating Council. What we're saying is that we want to actually make sure that our system reflects what is in place in the Pacific Northwest in the areas that we specifically trade in.

We should make sure that our system is compatible so that we can continue to do the trade and continue to sell and buy in the market south of the border.

What we've said, to be sure that we still remain in control, is subsection (2) of 125.2: "…the commission has exclusive jurisdiction to determine whether a reliability standard is in the public interest and should be adopted in British Columbia." What we're saying to the commission is: "We believe that you have the ability to make sure that what happens here to become…." I'm not saying we're not in sync with the North American Electric Reliability standards, but to make sure, as we move forward in the future, that we are.

The commission has the oversight to actually look at that and make sure that we remain as masters of our own house, of our own transmission system. Sections 17 to 20 inclusive approved. On

section 21. J. Horgan: Well, we're at the end of the bill. We're on

section 21, page 17. The

section is called "Com- mencement," and it makes reference to when the provi- sions of the act will commence, at royal assent. It par- ticularly makes reference to

section 11, the rate rebal- ancing component, which we voted unanimously in support of yesterday. I want to conclude my remarks on this bill by high- lighting just one more time for the record our concerns and those areas which we support. We do support the decision by the government to introduce legislation with respect to the rate rebalancing component, and as I said, we supported that unanimously yesterday. We did submit an amendment in that

section that would have provided for a lifeline rate which would have been a new tariff for electricity consumers in British Columbia. It would have pr ovided an opportunity to protect low-income seniors, particularly those who are hardest hit by the increasing costs of energy in our cur- rently prosperous economy, by trying to find a way that we can protect and buffer those residents, those citizens of B.C., from the negative impacts of our prosperity.

As costs go up, as profits are made and people do well, those at the lower end of the socioeconomic strata quite often are captured in this, and in a negative way. We believe that the lifeline rate would be an appropri- ate way for government to intervene through the commission to ensure that those that need the protection most are afforded it. So I was disappointed that the lifeline rate was not supported by government. We've talked at length about the smart meters, the standing offer, and the energy self-sufficiency components of the bill, where we took issue on this side of the House with government.

There are significant issues there, and I'm not going to rehash those. Those who are interested in what was going on in that debate can review Hansard. They'll see that our primary concern with respect to smart meters was not the implementation of the

TUESDAY, APRIL 8, 2008 B RITISH COLUMBIA DEBATES 11031 technology. It was not seeing that as a demand-side management technique to reduce consumption, to encour- age ratepayers to not use as much electricity as they're using today. It's not the principle that we have trouble with; it's the implementation. The implementation, as I understand it, as I read this, is to see these smart meters proceed…. Hon. R. Neufeld: It's actually on

section 21. J. Horgan: It's on the commencement section, yes. That's what I'm speaking to,

section 11 and the rate rebalancing. I'm right on target, Minister. Fear not. [1120] Those issues were raised in debate and are profound concerns for us on this side of the House. The last amendment, which we just defeated…. For those who have been watching or paying attention this morning, it was the view of the opposition that this was an opportunity, while we're debating the Utilities Commission Act, to provide certainty to residents that excessive costs of new contracts, which are being primarily supplied by independent power producers, were held in check by the commission.

With that, we will be voting against this bill. That was fairly clear at second reading. I know that my good friend, my dear friend, from Peace River South, who I constantly draw toward me in the interest of spreading joy in this place, will recognize that we will be voting against the bill for the reasons I've outlined. We do support those elements that bring costs down for residents. We do support new energy supply in British Columbia, but we prefer to see a mix on the marketplace. We prefer to see B.C.

Hydro back in the game, looking at micro-hydro as an opportunity for new energy supply developed by the Crown, not exclusively by independent power producers. Hon. R. Neufeld: I know — on

section 21, the commencement — we outlined all th e things that this government has done to actually deal with people who may find themselves in a po sition where they're on a fixed income or something that allows them not to meet some of the lowest hydro rates in North America. We talked about the SAFER grant. We talked about removing income tax to zero on people below $15,000 a year in revenue, something that the NDP had in place prior to that. We talked at length about those kinds of things.

We talked about smart meters, and I'm glad to see that the member is starting to realize that there is some technology out there that can start helping us meet our demand-side management targets of 50 percent. I'm glad to see that they're talking a little bit in favour of conserving, instead of just continuing to buy off the market. I know that self-sufficien cy is an issue, and the member brings it up again. I think the public says it would be pretty smart to actually be able to be self- sufficient in the province of British Columbia and that we should move forward with that.

We talked at length, in the last amendment, about the ability of the commission to review costs associated with new projects. The member brought up Campbell River. It was interesting to me that he would bring up Campbell River in the context that he believes that the commission should review those kinds of contracts really closely — should actually pick them apart, should actually make sure that they're in the best interests of the public, all of those kinds of things. He talked about that an aw ful lot.

But lo and behold, when we look at the Campbell River deal, it's the largest IPP ever built in the province of British Columbia — 265 megawatts of natural gas–fired power where the province, the ratepayers, take on the expensive pipe- line space. That's a yearly cost of millions of dollars. They take on the cost for the natural gas, and that's an awful lot. That's the biggest part of the contract. Actually, if they curtail Campbell River for any length of time, they have to pay the proponent for electricity that isn't generated. They felt so secu re in that deal that they exempted it from B.C.

Utilities Commission oversight. Public, when you hear the ND P talk about, "We want to have the commission look at excessive rates and to be there for the public," that's today. It wasn't yesterday, when they were in government, because what they did was just direct. It's similar to directing B.C. Hydro to go to Pakistan to build a plant in Pakistan instead of in the province of British Columbia. That happened under the NDP's reign also. Those two things, I think, stick in everyone's mind when we listen to people that think they want to use the Utilities Commission to its best advantage.

We do, and this bill allows them to look at the energy plan, to say, "This is where British Columbia wants to go. Sustainability is smart. Smart meters are smart" — to look at those kinds of things, review all those costs as we move forward. [1125] I think it's a great bill and one that everyone on this side of the House — and I know, in their hearts, on that side of the House — actually supports.

Section 21 approved. Title approved. Hon. R. Neufeld: I move that the committee rise and report the bill complete without amendment. Motion approved. The committee rose at 11:26 a.m. The House resumed; Mr. Speaker in the chair. [1130] Report and Third Reading of Bills UTILITIES COMMISSION AMENDMENT ACT, 2008 Bill 15, Utilities Commission Amendment Act, 2008, reported complete without amendment, read a third time on the following division and passed:

11032 B RITISH COLUMBIA DEBATES T UESDAY, APRIL 8, 2008 YEAS — 40 Coell Ilich Chong Christensen Les Richmond Bell van Dongen Roddick Hayer Lee Jarvis Nuraney Whittred Cantelon Thorpe Hagen Oppal de Jong Campbell Taylor Bond Hansen Abbott Penner Neufeld Coleman Hogg Sultan Bennett Lekstrom Mayencourt Polak Hawes Yap Bloy MacKay Black McIntyre Rustad NAYS — 29 Brar S. Simpson Fleming Farnworth Kwan Ralston Cubberley Hammell Coons Thorne Simons Puchmayr Gentner Routley Fraser Horgan Dix Trevena Bains Robertson Karagianis Evans Krog Austin Chouhan Wyse Sather Macdonald Conroy Hon. C.

Richmond: I call second reading of Bill 16, intituled Greenhouse Gas Reduction (Renewable and Low Carbon Fuel Requirements) Act — hon. Minister of Energy, Mines and Petroleum Resources. Second Reading of Bills GREENHOUSE GAS REDUCTION (RENEWABLE AND LOW CARBON FUEL REQUIREMENTS) ACT Hon. R. Neufeld: I move that the Greenhouse Gas Reduction (Renewable and Low Carbon Fuel Requirements) Act be read a second time now. I am pleased to present the Greenhouse Gas Reduction (Renewable and Low Carbon Fuel Requirements) Act. British Columbia is a national leader in climate action and clean energy.

We are taking positive, practical steps to reduce our greenhouse gas emissions and decrease our reliance on non-renewable fuels. This legislation directly addresses a significant source of greenhouse gas emissions in British Columbia — transportation fuels. It creates a regulatory framework that will reduce the carbon emissions intensity of transportation fuels to meet our reduction target of 10 percent by 2020. It will enable the province to set requirements for the amount of renewable fuel in B.C.'s diesel fuel and gasoline blends. [1135] [S.

Hammell in the chair.] This will enable us to meet the B.C. energy plan commitment of having an average of 5 percent of renewable fuel provincially by 2010. It meets our commitment to adopt a low-carbon fuel standard similar to California's. This legislation uses market-based mechanisms to ensure that it will be responsive to consumer needs and cost effective. It uses performance-based standards with averaging, crediting an d transferring to facilitate implementation and compliance. The Greenhouse Gas Reduction Act will promote a diverse fuel supply that includes renewable and low-carbon fuels.

This legislation will help to establish a sustainable market for renewable fuels and low-carbon fuels in our province and create new economic opportunities at the same time as reducing greenhouse gas emissions from transportation and support ing our important climate action goals. I am now pleased to move second reading. J. Horgan: It's just a delight to be on my feet again here at second reading of Bill 16, which is the low- carbon fuel standard bill, the Renewable and Low Carbon Fuel Requirements Act. I have tabled with the Cl erks an amendment, or a motion, and I'm just getting a ruling on that.

So I'll con- tinue on with my remarks here at second reading in the hope that the Clerks can advise us on whether my motion is in fact in order. I will be the designated speaker for Bill 16, so that the Speaker is aware of that. I want to begin my remarks by saying this is enabling legislation. For that reason, I think that I can have some comfort that the debate on this issue will be thoughtful. I'm advised it will be — I'm hopeful — useful to the minister and the government. One of the challenges we have as a community with low-carbon fuel standards is that it, in essence, perpetuates the fossil fuel econ omy.

It just provides an opportunity to reduce the amount used at any one time. The theory goes that by reducing the amount of carbon produced by the burning of the fuel, you're somehow achieving a savings along the road. But the science on this matter, hon. Chair, is shifting. What we thought in the mid-1990s — even late 1990s, even the turn of this century — about alternative fuels, biofuels, ethanol and so on…. The science on these questions is starting to shift. I know that the minister will know this. He gets briefed regularly by his very capable staff on these matters.

Just recently the World Wi ldlife Federation issued a very substantive report following on the OECD. It's called Plugged in: the End of the Oil Age . It's a very thick and useful document. If members of the Legislature haven't had an opportunity to look at it, I know they

TUESDAY, APRIL 8, 2008 B RITISH COLUMBIA DEBATES 11033 can pick it up in the Legislative Library, and I commend it to their attention as we debate this bill at second reading. Again, one of the things that we see in the community, I know here in the south Island, Columbia Fuels, provider of home heating oil for residents in my community of Malahat–Juan de Fuca and across the south Island and in fact, across the Island, have a big push on for biodiesel, biofuels to reduce greenhouse gas impacts on using fossil fuels. The challenge, however, is that we're finding that in some instances….

I'll interrupt my own remarks to move the following motion. [That the bill be not now read a second time but that the subject matter of Bill 16 be forwarded to the Select Standing Committee on Legislative Initiatives to discuss the impli- cations of this bill as it relates to issues of food security, sustainability and secrecy.] Deputy Speaker: The motion is in order. So we will now debate the amendment. [1140] On the amendment. J.

Horgan: So I am again on my feet, and for those who are trying to keep track at home, what I've just done is introduce a motion to suspend debate on this bill until such time as a committee of the House, all members, both sides of the House, can sit and review the subject matter, to ensure that it is in the public interest. This is an appropriate thing to do, I believe, on an issue such as biofuels and alternative fuel sources. I made reference to food security as one of the challenges.

What we've seen, and what the scientific community is telling us, is that ethanol production primarily from corn here in North America and across the Peace has led to the creation of food for fuel. It has displaced other food sources because there's a dollar to be made selling corn for ethanol production. That displaces other food sources and pushes up the cost of wheat, soy and other products, which has a negative impact not just on consumers but also has a negative environmental impact. The other challenge we have is in terms of sustain- ability when it comes to this matter.

Is it sustainable to use greenhouse gas–producing fertilizers to rapidly grow food products for energy use? This is a significant debate, one that we can have in this place, but I think, more appropriately, it can be done at a committee where interested parties from across British Columbia and international experts…. There's no shortage of them on this matter. If we could find international experts to come to advise legislators here in this place about the needs of food security versus the needs for alternative fuel production…. As I say, it's not just me.

The OECD and numerous periodicals have been writing about the challenges of food for fuel: Time magazine, New York Times — noted periodicals such as that. Just recently, B.C. Stats, an entity of the government of British Columbia, issued a report in January of 2008. Hon. Speaker, I'll read from it, if that's all right with you. Environmental Statistics is the heading, and the headline on the

article from January is: "It Ain't Easy Being Green: Why Biofuels May Not Be the Answer." Now, I pay a lot of attention to this stuff as the en- ergy critic, and I know others do as well. Certainly, many of my colleagues do. My good friend from Saanich South is an avid watcher of these things. Emis- sions are profoundly import ant to him and the people in his community. So we watch these things quite closely to ensure that, as legislators, as people sent here to make decisions about issues such as these on behalf of the broader community, we're as informed as we can be.

I know, certainly in the Peace, that the notion of food for fuel may or may not be an acceptable debate to have in this Legislature. I think that it's an appropriate debate to have at a committee where we can work together in a non-partisan way — a bipartisan way, rather — to come to some answers for the broader public, because there is a divided community, whether it be the scientific community, the agricultural community and so on. So this is a bill that….

Although I was pleased to see it when the minister tabled it, I looked at it carefully, and I looked at the enabling components of it, and it felt certainly to me and to those of us on this side of the House that this was an appropriate piece of legislation to be referring to the committee on legislative initiatives in the hope that we could have a fulsome debate and bring in experts from arou nd the world and bring in our local experts from B.C. Stats, who, as I said, have produced this recent report. It talks about the su pposedly environmentally friendly alternatives to fossil fuels.

The theory behind that, of course, is that there are benefits in reducing our greenhouse gas emissions from burning traditional fossil fuels. It's interesting to note that, in this bill, the only two fuels covered are diesel and gasoline. Marine fuel is not covered by this. Jet fuel is not covered by this. I don't know if we've…. Hon. R. Neufeld: Pretty easy to figure out what jet fuel is. J. Horgan: Exactly. The minister is quite right.

One of my colleagues said he didn't want to be on that pilot project when they're testing biofuels on 747s. [1145] But certainly marine fuels are a great contributor to greenhouse gases. B.C. Ferr ies, as I understand it, would be exempt from this. As a Crown when it wants to be a Crown, as a private company when it wants to be a private company, you would think that they w o u l d w a n t t o b e o n t h e v a n g u a r d h e r e a n d p r o v i d e some leadership with respect to alternative fuels.

A g a i n , i t ' s a n o p p o r t u n i t y f o r u s t o h a v e a b r o a d e r discussion on these issues in committee, where we can have a free flow of ideas and exchange of views on the matter.

11034 B RITISH COLUMBIA DEBATES T UESDAY, APRIL 8, 2008 As I said, just from January, B.C. Stats has found that recent studies claim that previous research has underestimated the impacts of fertilizers. When you're growing food for fuel, your threshold for nitrous oxide and other harmful climate ch ange–producing chemical fertilizers is not restricted. If you're growing food for consumption, there are levels of fertilizers and growth enhancers that you are not allowed to use, and that's a good thing.

When we move to massive food-for-fuel agriculture, what we see is that the emission savings or the carbon intensity of the process, the ratio of carbon produced to generate the product to reduce the carbon at the other end of the life cycle is not in balance. In fact, in some instances, according to the scientific community…. Again, I'm not an expert on this. I try to be as well read as I possibly can be.

It's the contradiction in the literature that brings me to this place today, standing here on behalf of my consti tuents, urging this Legisla- ture to support a motion to refer this bill — an important bill and one that we were welcoming when the minister tabled it. But as our in-boxes have started to fill with people who are very concerned about us embarking on an alternative fuel strategy over the next two to four years, that may well not be in the interests of our climate change objectives.

One of the challenges we've got in general about the government's climate change policies is that they are, by and large, being made in back rooms. Whenever you hear the backroom argument, it's implied that there are some nefarious aspects to that. That's not what I'm trying to do. What I'm saying, though, is the discussion…. Interjection. J. Horgan: Sure. R. Lee: Madam Chair, I would like to seek leave to make an introduction. Leave granted. Introductions by Members R. Lee: I have a group of visitors from Jilin province in China.

They are led by the vice-director of the foreign affairs office of Jilin prov ince, Mr. Zhanwu Wang. The members include Dong Chen, the deputy chairman of Jilin City Committee of Chinese People's Political Consultative Conference; and Dahuo Chen, deputy mayor of Baishan City; Jianhua Lai, vice–secretary general of the government of Songyuan City; Xianglin Chen, division chief of the overseas Chinese affairs office of Jilin province; Yi Luan, director of the foreign affairs office of Tonghua City; Jianguo Zhang, director of the foreign affairs office of the Baicheng City. Welcome. Debate Continued J.

Horgan: I thank the member for that introduction. It gave me an opportunity to wet my whistle. So I'll continue on. The debate in the scientific community, who are passionate about these greenhouse gas issues, is that there ar e mixed reviews. I'll read again from the B.C. Stats report from January with respect to the impact of fertilizers. I believe that's where I was at when the member took his feet. The study claims that we are underestimating the impacts of fertilizer. It goes on and reports on the ni- trous oxide emissions from biofuel production as calcu- lated in what they call a carbon dioxide equivalent.

Put more simply, what this report says is that the fertilizers used in the production of bi ofuels contribute as much or more to global warming as the amount saved by not using fossil fuels. [1150] Again, B.C. Stats. has done this as a result of a broad literature search, reviewing all of the scientific data, and they've come to the co nclusion that there are downsides to this biofuel initiative. [Mr. Speaker in the chair.] Now, that comes as a surprise, I think, to many people at hom e or those wat ching in this p lace t oday .

We've had campaigns by producers of biofuels, producers of ethanol, extolling the virtues of these additives and the reductions to greenhouse gases as a result of using them for combustion and en ergy use. That's fair enough. What we've discovered, probing a little bit deeper — peeling the onion, as it were — is that the life cycle of the carbon dioxide train or the greenhouse gas emis- sion train is not as simple as just looking at the end result.

As much as this is enabling legislation — and the minister has brought it forward with the best of intentions, I'm certain — it's not really up to the mark with respect to ensuring that all of us in this place and all British Columbians, in fact, have a clearer under- standing of the pros and cons of biofuels and ethanol as alternatives to gasoline and diesel. So I believe that my motion to refer this bi ll to a committee of this Legislature is an appropriate one to discuss at this time. I've mentioned three issues in the motion to refer. One was the question of food security.

We've seen costs go through the roof. Wheat has never been so high. If you're growing wheat on th e prairie, you probably couldn't be happier with that. If you're growing wheat in the Peace, you probably couldn't be happier with that. What's the impact of high wheat prices on consumers across British Columbia and North America? More money out of your pocket. The prices, as I understand it, are artificially inflated because land is being dis- placed from agricultural production for food consump- tion to growing food for energy consumption.

We need to have a clear understanding as legislators, before we approve or reject a bill such as this, that we're doing it in the best interests of the broader community. A s m u c h a s w e n e e d t o d o e v e r y t h i n g w e c a n t o reduce greenhouse gases, we want to ensure that by taking two steps forward that we're not taking three steps backward. That's why I would prefer to see a

TUESDAY, APRIL 8, 2008 B RITISH COLUMBIA DEBATES 11035 little bit of transparency on the climate change file from the government on the other side, allowing more input from members on this side of the House and from broader community interests. I know that the Climate Action Team has met with a number of British Columbians over the past number of weeks and months. I don't know who they are. Freedom-of-information requests have gone into the Climate Action Team for a request of their meetings, their minutes, what's going on, and what they are talking about. Nothing comes back. We get a lot of whiteout paper, a lot of

section 12s and

section 13s. It's difficult for us on this side of the House and, in fact, for all British Columbians to have any confidence that these discussions and issues are being conducted in a transparent way. A g a i n , i t ' s n o t j u s t u s o n t h i s s i d e o f t h e H o u s e . I have in front of me a letter dated April 4 to the Minister of Energy from the Privacy Commissioner, copied to me, expressing concern about th e Freedom of Information and Privacy Act exemptions within this bill. That speaks to the secrecy in my motion. This is a serious question.

The Privacy Commissioner doesn't comment on every bill that comes before the House, but he has commented on Bill 16 and Bill 18, the two flagship pieces of legislatio n that we're dealing with in this session to address climate change. We have a challenge here. We have a concern on this side of the House that not all members are getting equal access to information to service our communities and our constituencies.

Not all members of this place are getting information so that we can go back to our peers, the people who sent us here, and explain in lay- man's terms just what the heck is going on with respect to climate change. It's a profoundly important issue to people in my community. They want to know that I'm making decisions in their best interests and in the best interests of the planet.

When it comes to Bill 16, when it comes to the Greenhouse Gas Reduction Act with respect to low- carbon fuel standards, I'm not confident today, as the Energy critic, that I can give them a reasonable expla- nation as to why we should proceed down the road toward energy additives such as ethanol and biofuels. We're going to hear over the course of this debate, I'm sure, pros and cons on both sides. I know my col- league for Esquimalt-Metchosin has some very strong views on biofuels.

She's a strong advocate for biodiesel here in our community, and I listen to her very care- fully. [1155] In fact, she has been such an advocate that she's won me over to her position without difficulty at all. Then again, I read Stats B.C. , I read the OECD reports, I read the report by the Wo rld Wildlife Federation, and I'm concerned. What's the deal here? Who's right? Who's wrong? If we can't decide….

If I can't say in good con- science to this Legislature and to my colleagues in the official opposition on behalf of Her Majesty that this is the right way to go, then I would think that my motion is an appropriate one. I don't do it frivolously. As much as I enjoy standing in this place talking about is sues of importance, issues of public policy, this is a profound issue that will set us down a course that we may well not want to follow. It's with that sincerity that I move the motion. Secrecy, food security, and the third issue of con- cern to me is sustainability.

One of the challenges we have, as we chase our tail on climate change…. We're well behind the eight ball. You'll know, hon. Speaker. You were a member of this place back in 2000. I was not. There was a green- house gas plan, a climate ch ange plan, put forward by the government of the day in 2000. It was exhaustive. It was following shortly on the heels of the Kyoto protocol. Everyone now knows the Kyoto protocol. It happens t o b e j u s t a c i t y i n J a p a n , b u t i t h a s t a k e n o n m y t h i c proportions. A leader of another Liberal Party named their dog Kyoto.

That's how profound the shift has been toward trying to get an understanding of the importance of climate change. Interjection. J. Horgan: I need a rest, says my friend from Saanich South. J. Horgan moved adjournment of debate. Motion approved. Committee of Supply (Section A), having reported resolution, was granted leave to sit again. Hon. C. Richmond moved adjournment of the House. Motion approved. Mr. Speaker: This House stands adjourned until 1:30 this afternoon. The House adjourned at 11:58 a.m.

PROCEEDINGS IN THE DOUGLAS FIR ROOM Committee of Supply ESTIMATES: MINISTRY OF ADVANCED EDUCATION AND MINISTER RESPONSIBLE FOR RESEARCH AND TECHNOLOGY (continued) The House in Committee of Supply (Section A); H. Bloy in the chair. The committee met at 10:08 a.m.

11036 B RITISH COLUMBIA DEBATES T UESDAY, APRIL 8, 2008 On Vote 12: ministry operations, $2,251,994,000 (continued). Hon. M. Coell: I promised to get as much informa- tion as I could for one of the members regarding UBC asset-backed commercial paper. I have contacted the University Presidents Council and asked them a num- ber of questions. I can just read them into the record for the member, if that's all right. Who will be accountable for the potential $67 mil- lion loss? The response back was: "We're not aware of any projected $67 million loss.

UBC's current impairment projection for the third quar ter financial statements is $18 million. When first made aware of the challenge in this area, the university moved quickly to limit its exposure and to communicate the challenge to the community." The other question was: where did they get the investment advice from? Along with the other institu- tions and corporations, UBC tr easury took advice from money market brokers of the major chartered banks and relied upon the ratings approved by Dominion Bond Rating Services. I think those were the two questions in general. B.

Ralston: Yesterday the minister, in response to some of the questions I raised about this issue, suggested — indeed, stated — that UBC is an autonomous institution, that he was confident in their ability to manage their finances and that everythi ng seemed to be running very smoothly there. [1010] Usually, when one raises these types of questions, one is often referred to the website. Indeed, the websites of public institutions are often considered to be the portal through which public inquiries are attempted to be answered. So I did go there last night. This information is rea- sonably current.

The most recent minutes of the board of governors of UBC are May 22, 2007. So almost 11 months have gone by since the last minutes of this public institution were posted to their website. According to what's on the website, minutes will be posted to the minutes

section of this site once available. According to their website again, they ha ve meetings in January, March, May, September, November and a retreat in July. By my calculation, they met — if that

schedule is to be followed; one doesn't know, because there are no minutes posted — in July, September, November, January and March through 2007 and into 2008. Given that this public institution, on its website, doesn't bother, apparently, to publish the most basic public disclosure — the minutes of its board meetings — and that the cabinet appoints the majority of the people to the board, is the minister satisfied that UBC is performing basic public disclosure? And does that give him in- creased confidence in some of the statements he made yesterday? Hon. M.

Coell: I was not aware of that, and I will look into it. B. Ralston: Well, perhaps I could suggest that it doesn't appear that the minister's oversight of this important public institution is taking place at all. This is the most basic level of public disclosure, and it's not being done. I think it's shocking, frankly. This is an issue of fina nce. On the website someone named Nicole Byres is listed as chair of the finance committee. Again, on the website she's not listed as a member of the board of governors.

Can the minister explain why the chair of the finance committee, who would be overseeing this loss, isn't listed as a member of the board of governors? Or is that too trivial for the ministry to make that inquiry? Hon. M. Coell: It's my understanding that she is rotated off the board, and they would have a new chair. B. Ralston: Well, once again, the public disclosure of this important public institution doesn't seem to have caught up. There's a media relations department that appears to have a number of people working for it.

Can the minister explain why basic public disclosure doesn't appear to be a prio rity of this institution, particularly under his watch? Hon. M. Coell: The member knows that there is disclosure from all the universities and colleges. I will check in to see what problems they're having with their website. B. Ralston: Doubtlessly there are back-channel discussions between senior employees of the university and senior employees of th e ministry, but the point here is that this is a public institution with some obligation, I would suggest, to make public disclosure on what it's doing.

It hasn't published its minutes for almost a year. The list of the board of directors…. The chair of the finance committee, when this important issue is taking place, isn't even the actual chair. It seems to me an absence of even the most basic elements of public disclosure. [1015] I want to just continue for a few moments on what the universities council has apparently reported. It is indeed true that when this matter first came to light as a result of my questions to the Minister of Finance in January of this year, the UB C treasurer, Peter Smailes, calculated a write-down of $18 million.

What has happened since then is that this issue has moved quite a bit. There are a number of national discussions led by Purdy Crawford, and the calculation that I provided is something that took place at the end of March. I would suggest — and for the minister's comment — that this calculation of a write-down of $18 million is completely out of date. More current information would suggest that the write-down is much more likely to be in the neighbourhood of what I've suggested.

Given that this information and that comment came out in early January from the treasurer of UBC, does the minister have any further update on what has taken place over the last several months?

TUESDAY, APRIL 8, 2008 B RITISH COLUMBIA DEBATES 11037 Hon. M. Coell: As the member knows, all of our institutions have audited financial statements every year for accountability. They also have a budget letter that is public every year as well. They did have, in UBC's case, a press release in October of '07 with re- gard to the issue that we're discussing. The comments I made earlier are from the University Presidents Council as of yesterday. B. Ralston: Back when this issue arose in January, Mr. Smailes — and I'm quoting from the story in The Vancouver Sun — said that the impacts….

"'There will be no budget cuts to univer sity teaching and research,' Smailes said, 'and no core programs will be affected. New students will have the same opportunities and programs will continue.' He said: 'The impact of the write-downs will be on discretionary spending, such as classroom upgrades, additional teaching assistants or additional research support.'" That was when the write-down was calculated to be $18 million. If it is, as I suggest, the more realistic and more prudent write-down of $67 million, can the minister advise what the im pact on UBC's operations, students, faculties and programs will be?

Hon. M. Coell: UBC has confirmed this morning that their write-down will be $18.3 million. B. Ralston: Based on what? Hon. M. Coell: Based on them getting back to me with a number. I'm sure it's based on sound financial practices. B. Ralston: Well, the minister may be willing to accept a simple assertion from the UBC treasurer. I'm not, and I don't think that the minister should either. More prudent and up-to-date analysis of this evolving financial crisis of asset-backed commercial paper would suggest the write-downs are far bigger than $18 million in this particular case.

I gave him the example of the analysis from the RBC Dominion Securities analyst, Andre-Phillipe Hardy, who estimated that the market value of asset-backed commercial paper is approximately 56 percent of its face value. A simple assertion, I would suggest, is not satisfactory. Can the minister advise the public in a more fulsome way than simply rehashing — and a simple assertion from someone at UBC? Hon. M. Coell: I can tell the member that the UBC website is being revamped and the board package for February '08 and board of governors are on the website, not just the minutes.

The advice that I get from UBC is that they'll have a write-down of $18.3 million. B. Ralston: With respect, that answer is simply unsatisfactory. The minister knows that the Lieutenant- Governor-in-Council, the cabinet, appoints the majority of these governors to the UBC board of governors. Has the minister had a discussion with Mr. Bennett, who is the chair of the board, about this financial problem, or is that politically off limits to the minister? [1020] Hon. M. Coell: Both the staff of UBC and my staff have discussed this issue. B. Ralston: Well, with respect, that wasn't my question.

The chain of accountability, I would suggest…. As the minister said yesterday, this is an autonomous institution, according to him, and the cabinet appoints the majority of the board of governors. Mr. Brad Bennett is the board chair. Has the minister had a discussion with Brad Bennett about this write-down? Hon. M. Coell: I've met with the board chair and the president of UBC many times over the last three years. B. Ralston: Since January 11, 2008, has the minister met with the chair of the board, Mr. Brad Bennett, and had a discussion with him and had an explanation from him of this write-down? Hon. M.

Coell: I can assure the member that UBC's credit rating has the highes t rating of any Canadian university, and there's no reason to be concerned. I have met with the president and the board chair to discuss future growth of th e institution and where we move to enhance the institution. B. Ralston: Then I'm going to make the following suggestion, and I'll ask the minister to disagree with me if it's wrong. The minister has not met with Mr. Bennett, the chair of the board of governors, to discuss this write-down at all since January and has no intention of doing so apparently. Is that correct? Hon. M.

Coell: The president of UBC and the chair are doing a fine job. I know my staff have discussed this and many other issues with him. I have not. B. Ralston: I'm going to suggest, with respect to the minister, that the absence of any discussion between the chair of the board and the minister on this impor- tant point — where UBC says the write-down is $18 million, a more prudent and realistic assessment would be $67 million, I would suggest — will have a major impact potentially on UBC programs and teaching staff, courses, teaching assistants and other UBC programs.

For the minister to simply leave that to staff to discuss, I would suggest, is an abdication of his duty to prudently supervise and oversee one of the leading public institutions in the province. Hon. M. Coell: The member and I may disagree over a number, but the auditors this year will do their audit of UBC finances and report out.

11038 B RITISH COLUMBIA DEBATES T UESDAY, APRIL 8, 2008 B. Ralston: While we're waiting for that leisurely process to unfold over the next nine months, I'm interested, and I'm sure others are interested…. I would suggest there's an obligation to re port publicly on what the impact of the real write-down will be on UBC programs. These funds are taken from what UBC describes as its $525 million working capital fund. I would suggest that the impact of…. First of all, the $122 million is frozen. The $18 million write-down is an accounting entry. There's no access to the $122 million at all, because it's simply frozen

Document details

Collection	British Columbia — Debates (Hansard)
Citation	H0408am 01
Type	hansard
Volume / chapter	H0408am 01
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	44358e233270f4636794bdd97f78491dbdc7d9e8

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