2010 Legislative Session: Second Session, 39th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Tuesday, March 23, 2010

Afternoon Sitting

Volume 12, Number 2

CONTENTS

Page

Routine Business

Introductions by Members

Tributes

Gurdev Singh Grewal

D. Hayer

Birthday congratulations

Hon. M. de Jong

Hon. G. Campbell

Introductions by Members

Statements (Standing Order 25B)

Quesnel and District Chamber of Commerce

B. Simpson

Brain health and Alzheimer's disease awareness

L. Reid

North Island protocol agreement between First Nations and local government

C. Trevena

Fundraising auction for Haiti by Fraser Valley farmers

J. van Dongen

Elimination of racial discrimination

H. Lali

Ridge Meadows Chamber of Commerce

M. Dalton

Oral Questions

Dental program for low-income children

A. Dix

Hon. M. de Jong

Funding for community social services worker pension plans

S. Simpson

Hon. C. Hansen

N. Simons

J. Kwan

First Nations consultation on Enbridge oil pipeline proposal

G. Coons

Hon. G. Abbott

R. Fleming

Hon. G. Campbell

D. Donaldson

Public release of budget documents

B. Ralston

Hon. C. Hansen

Impact of harmonized sales tax on membership costs

M. Farnworth

Hon. C. Hansen

Funding for retraining programs for forest workers

K. Conroy

Hon. M. Coell

Burnaby school district costs and funding

K. Corrigan

Hon. M. MacDiarmid

Petitions

N. Macdonald

Orders of the Day

Committee of the Whole House

Bill 2 — Budget Measures Implementation Act, 2010 (continued)

D. Donaldson

Hon. S. Bond

B. Ralston

Hon. C. Hansen

Hon. R. Coleman

S. Simpson

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Citizens' Services (continued)

D. Routley

Hon. B. Stewart

H. Lali

M. Elmore

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TUESDAY, MARCH 23, 2010

The House met at 1:36 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

L. Reid: We're joined in the gallery today by Dr. May Tee. She was born in the Lower Mainland and currently resides in Richmond East. She received her bachelor's and her master's degrees from the University of British Columbia. On receiving her MD in 2008, she began her residency in general surgery.

She is this year's president of PAR-BC, which is the Professional Association of Residents of British Columbia, who advocate on behalf of the best training possible for the future physicians of this province.

I would ask the House to please make her welcome.

M. Mungall: Today in the House we have Dino Falcone. He's a constable with the Nelson police department. He's here with the B.C. Police Association this week, speaking with members on both sides of the House.

May the House please make him welcome.

Hon. S. Bond: We're delighted to welcome a very special person to the legislative gallery today. She is a faithful watcher of the question period process. In fact, she has told me that she actually encourages us and prays for all of us, and Lord knows, we need it. I would like us all to make very welcome Mrs. Ione Robinson, who is visiting today with Tim Schindel.

R. Cantelon: I'd like the House to welcome Ron and Connie Adamson, old friends from Nanaimo. They were supporters of the Port Theatre, and they're also celebrating their anniversary. So let's give them an anniversary welcome.

D. Barnett: Today in the House I would ask that you welcome Chief Joe Alphonse of the Tl'etinqox-t'in national government. Along with our chief, we have Juan Cereño, who is with the Tl'etinqox-t'in national government as a health director. I ask you all to welcome them here today.

Tributes

GURDEV SINGH GREWAL

D. Hayer: A very prominent member of our community, Gurdev Singh Grewal, passed away last Sunday, March 21. He was 87 years old. He was a veteran of the Second World War who served in Burma with the Indian army. He was an active member of the Royal Canadian Legion in Nanaimo and Surrey-Cloverdale for over 29 years.

He was the vice-president of the Ex-Servicemen Society and provided great assistance to veterans within the Indo-Canadian community by providing them with assistance and information on pensions, employment opportunities, language services and discrimination issues.

He helped veterans acquire work throughout the greater Vancouver area. He participated in all parades and Remembrance Day ceremonies. He was very active in the community at workshops, striving to promote dialogue and dispute resolution. As a result of his lobbying effort, he succeeded in getting the city of Surrey council to establish a seniors centre in the Bear Creek community park.

Mr. Grewal was a true mentor. He made Surrey a better place to live and helped improve the quality of life for seniors and veterans. His funeral service will be held on March 27, 2010, at Five Rivers funeral home. He is survived by his wife, Surjit Kaur, three daughters, three sons-in-law, nine grandchildren and five great-grandchildren. If anybody is available, please come and join us.

[1340]

I just want to thank his family and recognize all the work he did to make British Columbia, this province, a better place to live.

BIRTHDAY CONGRATULATIONS

Hon. M. de Jong: Occasionally in this chamber we recognize birthdays — sometimes infants, sometimes the very young, frequently those amongst us — but we rarely get an opportunity to honour someone who has joined the ranks of the octogenarians in our society.

Such a person is amongst us. Though the years have passed, his backhand volley and serve have not withered. He is the longest-serving Table Officer in the British Commonwealth of Nations. He is George MacMinn, QC. On the weekend, I am told, he turned 80 years of age, and that I think is befitting a musical tribute.

I invite all members to join me in singing.

[The members sang Happy Birthday .]

[Applause.]

Hon. G. Campbell: I can say that's the first time I've actually seen the Clerk smile in this House. I'm glad to see that, Mr. Clerk. You held the proper decorum throughout. Congratulations.

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Introductions by Members

Hon. G. Campbell: I'd also like to inform the House that I am now the proud grandfather of Sydney Roy Campbell, born just last week. He's got a brother, Jimmy Mitch, and I think it's going to be a great time for all of us. I hope we'll make him welcome.

Maybe someday he'll be the Clerk, Mr. Clerk.

Statements

(Standing Order 25B)

QUESNEL AND DISTRICT

CHAMBER OF COMMERCE

B. Simpson: This year marks the 100th anniversary of the Quesnel and District Chamber of Commerce. For the past 100 years the chamber has not only worked hard to support business growth in Quesnel; it has also played a critical role in the development of the region as a whole.

Immediately upon the founding in 1910, the chamber took on the task of attracting a doctor to Quesnel and setting up a hospital. The current hospital, G.R. Baker Memorial, is a standing testament to that first physician and a lasting legacy of the chamber's early success as a community advocate.

Five years later, in 1915, the Quesnel Cariboo Observer newspaper reported that in just one year, the chamber of commerce, then known as the board of trade, had increased police protection; obtained a promise from the government that a permanent bridge over the Fraser River would be built; employed a night watchman for the summer months; acquired the location of the fire station; regulated speed limits; enforced the pound bylaw, resulting in a cleaner and safer Quesnel; and completed a number of other projects which improved the quality of life for residents in Quesnel and the district.

If the chamber accomplished all that in one year, imagine the impact it has had over the last hundred.

In 1967 the Quesnel Board of Trade officially became the Quesnel and District Chamber of Commerce and that year was awarded Gavel of the Year for outstanding activity in all categories.

Now chamber president Darlene Osborne, her board and the chamber staff, led by manager Coralee Oakes, are rolling up their sleeves to take on the challenge of the mountain pine beetle's impact on their community. They're committed to developing a positive vision for the Quesnel region based on a realistic appraisal of the challenges confronting one of its traditional backbone industries.

For over 100 years the Quesnel and District Chamber of Commerce has provided outstanding leadership to their community. There is no doubt that they will continue to demonstrate that leadership for the next 100 years. I ask the members of this House to recognize their leadership.

BRAIN HEALTH AND

ALZHEIMER'S DISEASE AWARENESS

L. Reid: Brain Awareness Week was March 15 to 19, 2010. Brain Awareness Week continues the conversation about the latest in brain research and the importance of brain health.

[1345]

I would like to dedicate my remarks today to all of those who care for individuals who suffer from Alzheimer's. The Alzheimer's Society report, the Rising Tide study, recently updated information on the prevalence of Alzheimer's and related dementias.

The significance of these numbers reinforces the need for British Columbians to learn more about healthy eating and regular exercise. They say that what is good for the heart is also good for brain.

It is also a good time to learn more about the many achievements from our own researchers at the Brain Research Centre at the University of British Columbia. Research is key to uncovering inroads to prevention and possibly discovering a treatment to delay the onset of this disease and, frankly, to reduce its impact.

For more than 25 years the society in B.C. has played an important role in the lives of people with Alzheimer's disease and other types of dementia, their families and their caregivers.

In 1981 a group of caregivers gathered to discuss the challenges of caring for a person diagnosed with Alzheimer's disease. Out of their compassion and determination, the Alzheimer Society of British Columbia was ultimately founded. Their ultimate vision is to create a world without Alzheimer's disease and related dementias. The society does exist to alleviate the personal and social consequences of Alzheimer's disease and related dementias, to promote public awareness and to search for causes and for cures.

When an individual receives a diagnosis of Alzheimer's disease, they are not the only ones who are affected. Dementia can profoundly impact the lives of those closest to the person, including caregivers, family members and friends. These individuals today reside in all our constituencies, and I believe our compassion, our outreach, needs to continue to ensure that caregivers have the support they require.

The Alzheimer Society Resource Centre helps those concerned with or facing dementia to build the knowledge, skills and confidence to maintain quality of life. Resource centres offer information, educational opportunities, support groups and the ability to speak directly with a knowledgable team member. Contacting a resource centre in your area may provide you with those supports as you go forward.

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If you're concerned with memory loss or brain health, get in touch with the Alzheimer Society of British Columbia or go to their website at www.alzheimerbc.org.

NORTH ISLAND PROTOCOL AGREEMENT

BETWEEN FIRST NATIONS

AND LOCAL GOVERNMENT

C. Trevena: Last week I and a couple of my colleagues had the honour to be in attendance at a significant event for the north Island, the signing of the north Island protocol agreement. First Nations and local governments came together to sign the document which, it's hoped, will help both to foster respect and to increase cooperation amongst the neighbouring communities.

The agreement has been a long time coming. It's the result of seven years of community-to-community fora and lengthy discussions between the Winalagalis Treaty Group and the regional district of Mount Waddington. Eight First Nations are among the signatories, along with the regional district and its municipalities.

Mutual recognition and cooperation and the maintenance and strengthening of relationships are at the core of what's being seen by all parties as a living document. It doesn't mean that all the communities will be working hand in hand on every project. Each, naturally, has its own priorities, but it will make working together easier and more natural.

The 'Namgis First Nation and the village of Alert Bay have long had a historic accord, which helps those two communities navigate their close relationships on the small island they share. This protocol will be a guide for all communities.

The signing took place during the B.C. Rural Summit, which was held in Port Hardy last week. It was marked by singing, by drumming and dancing and by the words and the presence of community elders. It's been described as "significant" and "a very proud moment."

The north Island has strong and resilient communities — First Nations who've been in the area for untold generations and those who've been moved to new homes there, towns that have seen the boom and bust and reinvention that resource dependency creates. This protocol should further strengthen all of them by helping them to work through the uncertainties and the opportunities of the future together.

FUNDRAISING AUCTION FOR HAITI

BY FRASER VALLEY FARMERS

J. van Dongen: Two weeks ago Fraser Valley farmers gathered together to support fellow Haitian farmers at this year's Make a Difference auction in Abbotsford. The auction drew donors from around the Fraser Valley, Vancouver Island and the Okanagan. While cattle were the most common donation, cattle-trucking equipment, fishing trips and food were also up for bid.

Everything at the auction was donated, including the McClary Stockyard's auction yard and services. All proceeds from the auction, $90,000 and counting, will be given to the Canadian Foodgrains Bank, which will send the donations to Haiti where they will be used to restore farming activities in the region.

Our B.C. farmers took into account that the planting season in Haiti begins in March. If planting season is missed, no food will be produced for the rest of the year, and food prices are already on the rise.

A regular supply of locally grown food is crucial for Haiti's recovery. The Make a Difference auction will give Haitian farmers the funds necessary to purchase seed, fertilizer and the tools so they can grow badly needed local food for the people of Haiti.

[1350]

On behalf of all members of the Legislature, I would like to recognize and thank Clarence and Jenny Tuin for their many years of dedication in organizing the Make a Difference auction. This charity auction began in the Fraser Valley many years ago and has since spread to Vanderhoof and Williams Lake.

Thank you to Sheila and Jono Rushton of McClary auctions and their staff. A special thanks to all the generous farmers, donors, bidders and volunteers who are truly making a difference for the farmers and people of Haiti.

Thank you for this opportunity to honour the farmers of British Columbia.

ELIMINATION OF

RACIAL DISCRIMINATION

H. Lali: Racial discrimination or any kind of discrimination is an ugly thing.

In 1919 in Amritsar, Punjab, the British Army opened fire and murdered nearly 1,600 unarmed men, women and children at a peaceful rally in what became known as the infamous Amritsar, or Jallianwala Bagh, massacre.

On March 21, 1960, in Sharpville township, South Africa, the police opened fire and killed 69 innocent people who were peacefully demonstrating against apartheid. Subsequent to that, the United Nations declared that March 21 would be known as International Day for the Elimination of Racial Discrimination and called on nations to commemorate that tragedy and also to work together to end racism and discrimination.

Racism leaves its ugly scars, especially on a child. I first began to witness discrimination when I was almost ten years old. I came to Canada in 1966 and couldn't figure out why so many kids in our new school were treating us Punjabi kids in a mean way, especially since we didn't do anything to deserve it. I couldn't understand why Mrs. Strukoff, my grade 2 teacher, would never let me go to

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the bathroom while all the other kids were allowed. I couldn't understand why Mr. Kiest, my grade 6 teacher, was quick to pull out the strap while other kids got away with much worse. The principal couldn't understand why I ended up in the office all the time.

Name-calling and slurs are one thing, but when people started to get physical due to your skin colour, you really had only two options. Either keep on taking it, or you fight back. You guessed it. I fought back, quite literally, and hence I would end up in the principal's office.

I have been fighting racial discrimination all my adult years through education. Today as a society, we must encourage interaction of cultures and civilizations through education and awareness-building. We must promote dialogue, mutual respect, tolerance, integration and equality of races, genders, religions, cultures and other differing ways of life. Society needs to unite to fight racism and discrimination whenever and wherever it raises its ugly head.

RIDGE MEADOWS CHAMBER OF COMMERCE

M. Dalton: This weekend Maple Ridge and Pitt Meadows also celebrated the 100th anniversary of the chamber of commerce, originally called the Port Haney Progressive Association. The name and the organization have gone through a few permutations, but its purpose has remained to advocate for issues important for the community, to promote businesses and to play a visible role in supporting community events and organizations.

Last year the Ridge Meadows Chamber of Commerce won the Chamber of the Year award. This was in recognition of the great growth it has seen. There are now nearly 700 members, up 30 percent in the past three years.

Dean Barbour is the chamber's current executive director. Along with the chamber staff and the board of directors, including current president Jeremy Bekar, they have all played instrumental roles in seeing this organization revitalized. It is one of the few chambers that is totally self-sufficient, and its frequent events are often sold out.

In the early years, it pressed for the first high school, electricity service, weekend CPR rates to Vancouver, a highway to Mission and the creation of the volunteer fire brigade. Later on, it was involved in the 1957 opening of the Maple Ridge Hospital, the Pitt River swing bridge and the Albion Ferry.

Transportation and infrastructure have remained in the forefront of its priorities. The chamber is enthusiastic about opportunities that the new Golden Ears Bridge and Pitt River Bridge present for the communities. The benefits from the bridges are just beginning to be felt.

[1355]

The last 100 years have seen many stories of success, and there's every reason to believe that the years ahead will be no different for Maple Ridge, Pitt Meadows and the Ridge Meadows Chamber of Commerce.

Oral Questions

DENTAL PROGRAM FOR

LOW-INCOME CHILDREN

A. Dix: My question is to the Premier, and it's with respect to cuts to the Healthy Kids dental program in the recent budget. In the budget the Premier cut eligibility for low-income children eligible for this program from two to one basic cleaning every year.

In contrast, MLAs — such as the Premier and all of us — and the children of MLAs receive access every six months. In other words, the government has chosen a lower standard for low-income children than we would expect ourselves as MLAs. In fact, the coverage that the Premier and all MLAs get is every nine months.

Can the Premier explain why a lower standard of care is justifiable for low-income children in British Columbia?

Hon. M. de Jong: I'll take the question on notice for the Minister of Housing.

FUNDING FOR COMMUNITY SOCIAL

SERVICES WORKER PENSION PLANS

S. Simpson: Yesterday the Finance Minister avoided questions concerning the funding of pension plans in the social service sector. He did this by claiming there was a tentative agreement that was subject to ratification. This is simply not accurate. There is no bargaining, and there are no agreements other than the one the B.C. Liberals signed in 2006.

In March 2006 the government committed to fund the pension plan it negotiated. The affected agencies would never have ratified that agreement without such a commitment. In March of this year the B.C. Liberals broke that promise, creating a $32 million liability for these agencies over the next two years.

With no bargaining to hide behind, will the Finance Minister commit today to funding the pension plan they negotiated?

Hon. C. Hansen: This is a subject that is part of the collective bargaining process with that particular employer group and that group of unions that are involved. As I said yesterday, we will honour the commitment, but there is still work to be done at the bargaining table. I don't want to engage in that bargaining process on the floor of the Legislature.

Mr. Speaker: The member has a supplemental.

S. Simpson: Between yesterday's question period and today, I have spoken to the agencies, and I have spoken to the unions. They all tell me there is no bargaining

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going on, and there is no discussion around this. The agreement comes up March 31 — the commitment. This minister is sitting on his hands and not supporting these agencies.

On March 24, 2006, the deputy from the Ministry of Children and Family Development told these agencies in writing: "I will direct MCFD staff to work with the funded agencies to ensure that appropriate funding to reflect increased compensation negotiated in the social service sector agreement flows to agencies." On that basis, these agencies voted for the collective agreement.

In March of this year the government broke that promise and told these 200-plus groups that they would have to cut services and lay off staff to pay for this agreement.

The minister owes these groups and these workers an answer. Is he going to keep the government's promise and fund this pension plan, or should those agencies start slashing staff and slashing programs next week?

Hon. C. Hansen: As I said yesterday and said earlier, the response to his first question is that government will live up to our obligations and that these are matters that are subject to the collective bargaining process. They will be resolved, in part, at the bargaining table.

N. Simons: Earlier this month the Minister of Children and Families announced a $10 million cut to community social services agencies. They're already reeling from the lack of funding to provide programming for vulnerable children in this province.

Now we have an added cost that this government seems to be flip-flopping all over, unable to come up with a response that they think is going to satisfy anyone. Well, they're right.

As we speak, there are organizations in this province that are planning program cuts to children who are vulnerable, including children who have been sexually abused, children who've witnessed violence, youth in transition, and the list goes on.

[1400]

Will this minister finally tell the people of this province and in particular those agencies what they're going to do to make sure their programs aren't going to be cut?

Hon. C. Hansen: It was a little unclear from the member's question whether he was following up on his colleague's earlier question with regard to the pension fund. As I said, we will live up to our obligations, and we will negotiate provisions in good faith between the employers' representatives and the union representatives on the basis of the collective agreement that will be, hopefully, successfully concluded at the earliest opportunity. We will be able to determine exactly how we can proceed going forward.

Mr. Speaker: The member has a supplemental.

N. Simons: To make it more clear, will the minister — anybody, any minister — make sure that no programs will be cut because of this government's inability to come up with an agreement to provide proper funding for these community social services agencies? Will he say right now whether or not his decision is going to have a negative impact by cutting programs available to children because of funding for the municipal pension plan?

Hon. C. Hansen: We have increased funding to the Ministry of Children and Families over the last few years. There is more support in the budget this year for those agencies. Until such time as the collective agreement process is concluded and we can determine exactly how the costs will be imposed…. It is not possible at this stage to determine exactly how that will be, because we owe it to the respect of the collective bargaining process to allow those issues to be determined at the bargaining table.

J. Kwan: I have a straight-up question for the Minister of Finance, and I hope that he can give a straight-up answer. Will the minister commit today to fully fund the pension plans for these community groups, and will he guarantee that as a result of the pension plans, there will be no program cuts?

Interjections.

Mr. Speaker: Members. Members.

Continue, Minister.

Hon. C. Hansen: I can assure the member that we will fully live up to all of our obligations, including those that are finalized at the bargaining table.

Mr. Speaker: The member has a supplemental.

J. Kwan: We're not looking for weasel words. We're actually looking for a full commitment and for the minister to honour their commitment and the promise that they made, unlike what the Premier did in tearing up the HEU contracts. The government said before the election that they would fully honour the HEU collective agreement. We're now down that path again with this minister.

I'd like to ask the Minister of Finance a straight-up question, and I'm looking for a straight-up answer. Will he commit today that the pension plan will not impact these organizations and the delivery of the programs? Will he commit today to fully fund the pension plans?

Hon. C. Hansen: I would not want to prejudge the outcome of the collective bargaining process and what may be agreed to between the employers and the employee

[ Page 3548 ]

representatives at the bargaining table. As I said before, we will fully live up to the obligations that are finalized at the bargaining table.

FIRST NATIONS CONSULTATION ON

ENBRIDGE OIL PIPELINE PROPOSAL

G. Coons: Today was a historic moment for First Nations in British Columbia and indeed across the province as dozens of nations and tribal councils from across the province joined together to oppose the Enbridge tar sands pipeline.

My question is to the Premier. Will he show respect for First Nations by standing up today and saying no to the Enbridge pipeline?

[1405]

Hon. G. Abbott: I appreciate the member raising this important issue. There are extensive discussions underway already around the proposed Enbridge pipeline project. It is far from even proceeding to the intensive environmental assessment stage. We will certainly watch with interest the concerns of First Nations, but there is much to be played out in terms of process around this issue.

Mr. Speaker: The member has a supplemental.

G. Coons: That's a concern, as this minister sits here watching with interest. There's a major concern with this pipeline, and he needs to act on it.

The message from First Nations is clear. They say: "In upholding our ancestral laws, rights and responsibilities, we declare that oil tankers carrying crude oil from the Alberta tar sands will not be allowed to transit our lands and waters."

The Premier talks endlessly of his commitment to a new relationship with First Nations, and to date no First Nation in Canada and no municipality has publicly supported Enbridge's proposed pipeline. Statistics show that it's not a question of if an oil spill happens but when. It's time for this government to show they can walk the walk, not just talk the talk.

Again to the Premier: will he rise today and say no to the Enbridge tar sands pipeline?

Hon. G. Abbott: It's always interesting to listen to the opposition and some of the positions that they take. We heard the other day in the Legislature that the outcome of every environmental assessment process should be consent by all parties before any economic activity could proceed on the land base in British Columbia. Now I am hearing this member say that Enbridge should not even talk to First Nations. They shouldn't have an opportunity to explain their project. They shouldn't have an opportunity to explore the possibilities of that project with First Nations in the province.

I find this an extraordinary example of a kind of destructive paternalism on the part of the opposition — that they won't even have industry talk to First Nations. Apparently, these members are prepared to submit their judgment on this important project for important consideration by First Nations. That is an astonishing assertion and an unfortunate one, indeed, from a First Nations perspective.

R. Fleming: The minister should know that Enbridge and First Nations in British Columbia have talked and talked for six years, and First Nations have said no to the project definitively today.

The Enbridge pipeline would make an oil spill on B.C.'s pristine north coast outside the Great Bear rain forest an accident waiting to happen. That's been predicted time and time again. That's the conclusion of a recent study by 12 scientists that took five years and studied 14,000 kilometres of our coast. When a significant oil spill occurs, it could eradicate killer whales. It could exterminate 150 species of marine mammals and birds on our coast.

My question is to the Premier. It's the 21st anniversary of the Exxon Valdez spill off the Alaskan coast today. Will he stand up and reject the oil sands pipeline today?

Hon. G. Campbell: Enbridge has a proposal…

Interjections.

Mr. Speaker: Members.

Hon. G. Campbell: …which is going through a process. That process will include consultation with First Nations. It will include consultation with all those First Nations individually. It will include the most rigorous environmental regime there is anywhere in North America, and it potentially could include billions of dollars of investment, thousands of jobs for people across the north, particularly for First Nations, and build the capacity for First Nations that they've been asking us to build for a number of years now. All of that will be done within an environmental framework that is secure for the long-term future of British Columbia, First Nations and non–First Nations alike.

[1410]

The way that you actually move to a successful conclusion of these is to include First Nations, talk to them directly, talk about the benefits that they may have, talk about their concerns and see if there is an answer. If there's an answer, it will proceed. If there is not an answer, it will not proceed.

Mr. Speaker: Member has a supplemental.

R. Fleming: Well, I think we've heard from the Premier on what comes ahead of First Nations and the

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environment, and it's Enbridge. In October a freighter ran aground in the same channel that is proposed for supertankers. The Queen of the North sank in these very waters four years ago, and Enbridge now proposes to move 525,000 barrels a day of tar sands oil — oil with three times the greenhouse gas emissions of conventional crude.

Maybe the Premier would like to hear the science on this. Environment Canada lists the Douglas Channel and the north coast interior passages as the fourth most dangerous in the world. The risk of human error, the harsh weather — those things can't ever be taken care of by the Premier's assurances that we've just heard.

Again to the Premier: will he reject this unacceptable risk to B.C.'s environment and say no to the Enbridge pipeline?

Hon. G. Campbell: Well, let me tell you this. I accept jobs for First Nations people across this province that will build the capacity they've been calling for, for generation after generation. I accept a rigorous environmental assessment process, which every major project in British Columbia and Canada must go through.

Evidently, that is unlike the opposition, who reject environmental assessment, who yesterday rejected wind power, who have rejected the benefits of reducing carbon across the province, across the environment.

This is a time to reach out to First Nations, to talk about opportunities and how we actually create economic opportunity within the framework of a sound environmental and scientific policy. That's what we intend to do, and that's how we'll build the future for First Nations in British Columbia and for all British Columbians.

Interjections.

Mr. Speaker: Members. Members.

D. Donaldson: Well, the fact is there are absolutely no long-lasting jobs associated with the Enbridge pipeline, and that's why the First Nations of the north are unanimously opposed to this project. Experts in the shipping and pipeline sectors say, "You move oil; you'll spill oil," and this Enbridge project will spill oil.

My question is to the Premier. Ecotourism, hunting and fishing are major economic drivers in my region. That is why 45 businesses, most of them located….

Interjections.

Mr. Speaker: Members. Members.

Continue, Member.

D. Donaldson: Ecotourism, hunting and fishing are major economic drivers in my region. That is why 45 businesses, most of them located in the northwest, have signed on to a declaration opposing the Enbridge pipeline.

My question is to the Premier. Will he show his commitment to sustainable local development by standing in the House today and saying no to the Enbridge tar sands pipeline?

[1415]

Hon. G. Campbell: There's no question that the opposition will say no to anything — any opportunity for investment, any opportunity for jobs, any opportunity for economic development. That opposition has said no year in and year out for almost a decade and a half.

Here's what we have said quite clearly. We believe in economic and environmental assessments. We believe in wind power. We believe in new independent power projects.

To that member opposite, his constituents call our offices and come to us every single day and say: "Please provide us with jobs, encourage investment and do it with First Nations." We will work with First Nations.

Unlike the opposition, I can guarantee the member opposite this: we will work with First Nations, we will work with community leaders, and we will generate investment in jobs that meets our environmental objectives in British Columbia.

PUBLIC RELEASE OF BUDGET DOCUMENTS

B. Ralston: On April 23, 2009, in the middle of the election campaign, the Premier said publicly that the deficit would be $495 million maximum. We learned later that it was actually nearly six times that amount.

Last week, on Friday, through a freedom-of-information request, a number of documents requested at the end of May 2009 were finally released, but they were heavily censored. It does appear clear that the government, on the eve of the election period, received an updated fiscal forecast. Will the minister or the Premier commit today to release those documents to the public in an uncensored form?

Hon. C. Hansen: The member is referring to documents that were prepared for the advice of cabinet and cabinet committees. They were prepared by civil servants who provided that information on the understanding that they were cabinet documents.

Interjections.

Mr. Speaker: Members.

Hon. C. Hansen: I can tell the member that the documents that were prepared for the March 24 meeting were pertaining to the year-end that was actually happening seven days later. I went back and reviewed the

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original documents, and they actually pertained to the 2008-2009 fiscal year.

Mr. Speaker: The member has a supplemental.

B. Ralston: The minister clearly wants to have it both ways. He's refusing to release those documents, yet he claims to give a selective view of what they contain. Why doesn't he simply agree to release the documents? One can well understand what the B.C. Liberals have to hide and benefit from this kind of censorship, but surely the public has a right to know. What possible public purpose is served by continuing to hide these documents?

Hon. C. Hansen: We have a Freedom of Information and Privacy Act in this province. It has served this government. It actually served the NDP government in the 1990s. It is not politicians that make decisions around what gets severed or doesn't get severed in the release of information. It's actually public servants that make that decision, and they made the decision with regard to these documents in accordance with the legislation.

IMPACT OF HARMONIZED SALES TAX

ON MEMBERSHIP COSTS

M. Farnworth: Every day the people of this province are finding out just how the HST is going to impact them, from a more expensive cup of coffee to a more expensive bike if they want to buy one for their kids.

Well, today they're finding out that it's membership fees — going up by 7 percent. So all those people — and there are tens of thousands of them in British Columbia who shop at places like Costco looking for a bargain and a deal — are now finding their membership fees going up by an additional 7 percent on April 30.

Interjections.

Mr. Speaker: Members.

[1420]

M. Farnworth: Can the Minister of Finance tell us why he punishes British Columbians who are trying to save some money so that they can pay the increase in MSP premiums and the increase in hydro rates?

Hon. C. Hansen: When you have every leading economist in Canada saying that the HST is the single biggest thing we can do to stimulate the economy and create jobs, that's good news for British Columbians. We've got one of the leading tax economists in North America, Dr. Jack Mintz, who's done a study and analysis that shows that it's going to realize an extra $11.5 billion of investment in British Columbia over the next years.

His study shows that it will result in an additional 113,000 net new jobs in British Columbia. Those are British Columbians who are going to have more money in their pockets. They're going to be able to enjoy the purchases they want to make in the province because of the fact that they're going to have jobs and be receiving that income, and that may include purchases at Costco.

FUNDING FOR RETRAINING PROGRAMS

FOR FOREST WORKERS

K. Conroy: Laid-off workers in this province are trying to retrain to get back into the workforce. However, the government has decided to cap retraining funds for laid-off workers at $4,000.

There are a number of training programs for good-paying and in-demand jobs that exceed that cap. Will the Minister of Labour lift the cap on retraining funding so that the unemployed can get retrained in good family-supporting jobs and get back to work?

Hon. M. Coell: The member mentions training. I can tell her that we've invested hundreds of millions of dollars in training in this province.

Interjections.

Mr. Speaker: Members.

Hon. M. Coell: We've increased training in the college in her riding. We've increased training in every college and university across this province. We've helped forestry workers get back into training programs in every part of this province, and we'll continue to do that.

Mr. Speaker: Member has a supplemental.

K. Conroy: Obviously, this minister hasn't heard about the training woes in the Kootenays, because in our area many unemployed forest workers are trying to get into new careers, like trucking. We have one of the best trucking training industries in the province, in Castlegar, and they can't get people into the course now because of the cap on training.

So we have lots of forest workers who want to retrain and become truckers, and they can't get the funding to do it. Again, will the minister — perhaps this minister, perhaps the Minister of Forests, one of the ministers…? Will someone stand up and say yes to forest workers that have lost their jobs, that want to get a new job, that want to get a job in an industry that needs workers, and say no to that cap and let people get back to work?

Hon. M. Coell: It's nice to hear the opposition talk about jobs. We've continued to invest in advanced education. The Industry Training Authority is accepting

[ Page 3551 ]

thousands and thousands of new applicants every year. All of the things that we put forward in budget after budget for increases for advanced education and training, this group voted against.

If they're going to talk about jobs, they're going to have to support some of the things we're doing to create jobs. That includes increasing training programs throughout this province.

BURNABY SCHOOL DISTRICT

COSTS AND FUNDING

K. Corrigan: The Burnaby school board is facing a $7.8 million shortfall, which means almost $8 million worth of cuts to services for kids in our district. Last week on a conference call, the secretary-treasurers of the district were told by ministry staff that they could not lessen the impact by having some cuts this year and therefore using any surplus that they had left over next year.

[1425]

They were told they weren't allowed to do that and that they could only save half of it. So that means a $2½ million hit for the district of Burnaby.

To the Minister of Education: can the Minister of Education please explain why the minister will not back off and allow school boards in this province to make decisions that will cause the least impact on districts when they're making their budget decisions?

Hon. M. MacDiarmid: We are investing record amounts in education, as the member opposite is well aware.

Interjections.

Mr. Speaker: Members.

Continue, Minister.

Hon. M. MacDiarmid: In this particular school district, enrolment is expected to be the same as it was in 2000 and 2001, and this district is expected to receive $3.5 million more in funding this year. We continue to invest in this district as we do in the other district. The per-pupil funding next year will be 33 percent higher.

We're aware that school districts are, in the province, as are all levels of government right across North America…. They are finding that these are difficult times. It is not business as usual. Our government, in spite of the challenges, in spite of the worst recession in decades, is investing in education, increasing amounts this year. We're investing in our students. We're investing in full-day kindergarten, and we're investing in Burnaby.

[End of question period.]

Petitions

N. Macdonald: I rise to present 70 more petitions from residents in the Columbia Valley stating their clear commitment to seeing that stroke survivor Norm Gagatek continues to receive provincial funding for his intensive rehabilitation program in Ponoka.

Orders of the Day

Hon. M. de Jong: I call in Committee A, Committee of Supply — for the information of members, the continuing estimates of the Ministry of Citizens' Services — and in this chamber, continued committee stage debate on Bill 2, Budget Measures Implementation Act.

Committee of the Whole House

BIll 2 — BUDGET MEASURES

IMPLEMENTATION ACT, 2010

(continued)

The House in Committee of the Whole (Section

B) on Bill 2; L. Reid in the chair.

The committee met at 2:29 p.m.

section 4.

D. Donaldson: Hon. Chair, thank you for suggesting that the question I had before we broke would be best put in

section 4. So I'll restate it for the benefit of the minister and staff as they are making their way in.

I asked about the value of the B.C. Rail operations, and the minister provided an answer which was appreciated. My question that I'd like to pose again is….

[1430]

The ideological position of this government is to sell off public assets to private entities. That's not the bent or the automatic fallback position of members on this side of the House. In fact, we're in favour of public ownership when it makes sense. But people look for consistency, and for this government's ideology it seems an inconsistent approach to be proposing this amendment around the incorporation of the B.C. Rail assets into government.

Would the minister agree that bringing B.C. Rail under the ministry is inconsistent with what they've done in the past?

Hon. S. Bond: In fact, the member opposite and I discussed earlier that the throne speech in 2009, in September, actually said that we would take a look at Crown corporations and decide how best to actually proceed. That's exactly what we did.

We did an internal review. We looked at how we could maximize the benefits for British Columbians. We have

[ Page 3552 ]

a structure in place within our ministry that would actually fit very nicely with what needs to be done with the B.C. Rail properties portfolio. So our intention is to bring it back. We will manage it within the ministry. Our goal is to maximize the benefits for British Columbians.

D. Donaldson: The internal review looking at maximizing the benefits…. Is this what the minister referred to earlier — that there was no report or no documents associated with?

Hon. S. Bond: The member's correct.

D. Donaldson: I'd like to ask a question specific to

section 4, which provides that the company must make payments to the government or a government organization as directed by Treasury Board — the company being the B.C. Rail entity under what is now the B.C. Transportation Financing Authority and under the Ministry of Transportation.

What type of payments could be made? Could the minister describe the type of payments that are anticipated under this addition to

section 4?

Hon. S. Bond: The type of payment and the amount would be determined by Treasury Board, as is laid out in

section 4.

D. Donaldson: Well, there's not a lot of detail in

section 4 about the kind of payments, but they are saying that the company must make payments. Perhaps the minister could shed some light. They had these discussions around maximizing the benefits of incorporating this Crown corporation. They must have had some discussions around the type of payments that would be anticipated that Treasury Board would be demanding.

Hon. S. Bond: The fact of the matter is there isn't a significant degree of detail, because it's a very simple process. In fact, Treasury Board manages the financial affairs of government, and this is one of the transactions that will take place. Treasury Board will determine what payments, if any, will be made and to whom they will be made.

B. Ralston: The minister spoke earlier of a financial plan for the new, reconfigured B.C. Rail within the ministry. Is it contemplated within that plan — and I appreciate that the plan is in relatively preliminary stages of development — that there will be regular transfers of revenue to the consolidated revenue fund from B.C. Rail? Is that contemplated? Obviously, Treasury Board will make that decision, but surely there must be some forward planning in terms of anticipated revenue in the next three to five years.

[1435]

Hon. S. Bond: In fact, our plan will line up with the legislation that we intend to pass, and that is that it will be at the discretion of Treasury Board in terms of when, to whom and how much that would be.

B. Ralston: Well, clearly the legislation will be at the discretion of Treasury Board. I'm asking the minister if it's possible to look beyond simply the words and look at the process by which Treasury Board will exercise this discretion.

Clearly, this amendment is put in for a purpose, because I would expect there's some anticipation that there will be some opportunity for revenue. Is there a plan to do that, and is the minister in a position to give a sense of what sort of revenue might be looked at?

I understand there's a real estate portfolio. Is there a sense that the newly reconfigured corporation will be, over the years, liquidating its real estate holdings? Does it intend to become a developer of real estate and to develop industrial parks, for example, and generate revenue for the Crown in that respect?

There are a number of alternatives that one can easily imagine when looking at this legislation. The concern, I suppose, is: what kind of a source of revenue is this new reconfigured B.C. Rail going to be for the Crown in the future?

Hon. S. Bond: Yes, we do expect there to be revenue generated, even as BCRC is actually transferred to the Ministry of Transportation. In fact, we intend to build on the success of the work that they've done. Over the last number of years they've returned $1.5 billion in terms of resources to taxpayers and, in particular, $180 million in gross land sales.

There are a number of areas where we expect there to be revenue generation, including the port sub. I mentioned these this morning in the earlier questions. The port sub, and we also are looking at lease and sale of property.

I think another component for which it's difficult to speculate about the revenue generation is its link to the Asia-Pacific strategy — incredibly important infrastructure and assets.

So yes, we expect there to be revenue generation. We will be reflecting our strategic plan around that through our service plan as we transition. The final component of that is that it will be at Treasury Board's discretion as to any payments that are made and to whom and how much those payments are.

B. Ralston: Can the minister advise whether it's contemplated that the newly reconfigured B.C. Rail will be in the business of acquiring industrial land? I appreciate that there's a portfolio, the minister mentioned, of some 300 properties throughout the province. But will it be part of the specific mandate of either the port subsidiary

[ Page 3553 ]

or B.C. Rail itself to acquire real estate for the purposes of development? What place might that play in the future revenue of the newly reconfigured organization?

Hon. S. Bond: I appreciate the member opposite's question. Yes, in fact, that is possible. As we develop the plan and the thinking around our strategy, it is entirely possible. That is an option. Again, as we develop the strategic plan, that would be reflected as part of our direction and thinking in the service plan.

I think it's important to remind members that we have said earlier this morning that as we transition BCRC, it will now be a regular part of our service plan report and of how we intend to maximize benefits and look, potentially, at the acquisition of property as well.

[1440]

B. Ralston: I believe that my colleague from Stikine canvassed this, at least peripherally, earlier this morning, but I just want to be sure that I understood it. The service plan that the minister speaks of is one that's in development and will be provided not in this set of estimates but for debate and concern next year. Is that correct?

Hon. S. Bond: Yes, that is correct. We did share that earlier this morning — that it would be in subsequent service plans and that it would become a regular component of our normal service plan process.

Section 4 approved.

section 5.

B. Ralston:

Section 5, I believe, amends

section 4 of the Budget Transparency and Accountability Act. I believe that will call for the return of the Minister of Finance. He may have officials who wish to assist him, so perhaps we could politely wait for that, Madam Chair. I am prepared to, of course.

The Chair: Member for Surrey-Whalley continues.

B. Ralston: This proposed amendment reduces by two the number of persons appointed by the minister to sit on the Economic Forecast Council. One can well imagine a number of reasons why this might be so — perhaps the difficulty in obtaining that number of people to give their time to this sort of endeavour. Can the minister advise why this change is being advanced now?

Hon. C. Hansen: This amendment actually specifically implements one of the recommendations that came from the Budget Process Review Panel, which tabled its report in September, I believe it was. It was in recognition of the fact that we've been very fortunate to have the time and energy that the Economic Forecast Council members have contributed. But it may, in the future, get to a point where we may not be able to find a full complement of 12 individuals prepared to serve on this council.

They felt that the objectives of the forecast council could be met with a smaller number, and the number of ten was their specific recommendation. Interestingly, just in the last few months we have actually increased the membership on the forecast council. We currently have 14. This simply establishes a minimum number for the future.

B. Ralston: Yes, I believe that on page 125 of the budget it does say that there are currently 14, and their names are set out. They all look very qualified, at least to the casual observer. I'm wondering what will be the effect of this reduction if and when this amendment is passed.

Hon. C. Hansen: I think we would continue to gain the benefit of the full membership of the Economic Forecast Council. It may be that the council will continue at 14 members. If we have a time in the future that we are not able to recruit that number, then we would be obligated, according to this legislation, as amended, to have a minimum of ten members. But in terms of the function of the council, we expect that it would continue to serve the province as it has in the last number of years.

Section 5 approved.

section 6.

B. Ralston: The Deputy Minister of Finance in the prologue to the budget speaks of, as a way of explaining some of the changes that the minister is introducing here and in the sections that follow….

[1445]

The accounting profession is being consumed by the transition, at least on the commercial side, to international financial reporting standards within GAAP. Can the minister explain briefly the implications of that, and specifically the implications of that transition for the operations of government.

Hon. C. Hansen: I think the member, from the wording of his question…. I know he is familiar with some of the dynamics that are happening in the accounting profession globally as a result of issues that developed with private corporations over the last number of years. I think his comment where he said that there are changes happening, particularly in the commercial sector, is absolutely correct.

But we now have to determine exactly what the implications are for some of these changes on public sector

[ Page 3554 ]

accounting. So we remain fully committed to keeping the province's books according to generally accepted accounting practices. But that is in a state of evolution and a state of change in terms of how that may affect public sector accounting in the future because of the changes that are taking place with regard to private sector accounting practices.

So with some of the changes that we have in this budget implementation measure, it is reflecting the reality that there are certainly pressures for change, and we are obviously analyzing them, making sure that we continue to be consistent with generally accepted accounting principles, but recognizing that what is a generally accepted accounting principle is evolving and may be changing in the future. These amendments in this legislation are in anticipation of that flexibility that may be required.

B. Ralston: Again, in his introductory letter to the budget, the Deputy Minister of Finance says: "In some respects, IFRS is a significant departure from current Canadian accounting practice, and its adoption will introduce significant volatility into government's operating statement and could materially affect the fiscal plan."

I appreciate that this transition, and explaining it, may be long and complicated, although you do have the very able comptroller general there to assist in fashioning any response. Can the minister briefly explain what the concern is that the deputy minister has expressed about significant volatility into the government's operating statement.

Hon. C. Hansen: There are probably two things I can point to in terms of that uncertainty that is in the accounting profession today as it pertains to public sector accounting.

One is with regard to how we reflect unrealized gains. If you take organizations in the provincial government reporting entities such as ICBC…. Perhaps you could take some of the post-secondary institutions as examples, where they have investment holdings that would be subject to the volatilities of the market.

Whether or not you actually take those values into consideration at the time that the gains are realized, or whether there is a market price of the day on that particular day — for example, the end of a fiscal year that has to be incorporated into the financial statements…. The net result of that, especially when you look back over the last two years, at a time of significant volatility in the value of investments, can produce huge volatility in financial reporting.

[1450]

Partially connected to that are also regulated utilities, for example, and rate-based accounting that, depending on where this lands in some of the international determinations, could produce significant volatility for utilities in Canada. It's something that we are following very carefully.

We are actively involved with discussions, nationally, with the accounting profession to determine exactly what is in the best interest of the citizens of the country and of the province. We want to make sure that we reflect our books accurately and in keeping with generally accepted accounting principles, but we need to determine exactly what the new generally accepted principles would be.

B. Ralston: One can foresee that a principle of mark-to-market — in other words, have the financial statements reflect the current value of assets — might well cause volatility. But some might say: "Well, that merely reflects market value, and therefore, it's a more accurate accounting of the value of a going concern or of an organization." Is there not a danger…?

How would the minister respond to that point of view? The answer that's been given suggests that the minister, at least, in the advice he's receiving, is opposed to that position and sees it as something that will introduce uncertainty or volatility into those assessments of the value of an ongoing concern.

Hon. C. Hansen: The rules that we have been following under generally accepted accounting principles for rate-regulated accounting really provide for stability over time. In many cases — when you have utility rates that are being driven by commissions, for example — they are often required to change rates to reflect valuations.

The existing approach is to make sure that there is an effort to stabilize that over time, rather than incurring whatever may be — for example, a spike or a sudden precipitous drop that would occur on the day of a year-end. The practice in place now is to provide that stability over time to level out some of that volatility. But it's not a case of not disclosing any information with regard to the value of assets.

The current Canadian standards…. The practice that is currently there recognizes fair-value risk, but they will recognize that in notes to the financial statement rather than in the actual valuations as of the date of the year-end or the quarter.

[1455]

B. Ralston: What the minister seems to be saying, in speaking of rate-based accounting, is that the closed commercial Crowns, where the revenue is largely subscriber-based…. Whether it's the Insurance Corporation of British Columbia or B.C. Hydro, it seems that these Crown corporations — or commercial Crowns, as they're sometimes called — will be the ones most likely to be affected by these accounting changes. Is that a fair

summary of the advice that the minister is receiving?

[ Page 3555 ]

Hon. C. Hansen: The short answer to the member's question is yes. This would apply to ICBC, B.C. Hydro and other commercial Crowns. The shift to international financial reporting standards is currently being directed by the Canadian public service accounting standards board to take effect in 2012. The degree to which the IFRS would apply to other parts of the government reporting entity is still to be determined, and we still need to work those through.

B. Ralston: Again, to return to the note of the Deputy Finance Minister, the Deputy Finance Minister says: "While government remains committed to having its financial reporting conform to GAAP, this issue may result in government adopting alternate accounting standards from other accredited standard-setting organizations." Indeed, that is the amendment that's proposed to

section 11 of the Budget Transparency and Accountability Act.

Can the minister give an example of alternate standards and guidelines that are contemplated by this amendment?

[1500]

Hon. C. Hansen: When we talk about alternative standards or guidelines, there are within the accounting profession several different approaches to what constitutes generally accepted accounting principles. We are looking at these transitions that are taking place with regard to international financial reporting standards for large private companies. Part of the whole discussion that's been taking place is: are those the new GAAP, or what does constitute a new GAAP for the purposes of the province as a whole and various entities within the provincial government?

There are Canadian standards for public sector, for example. There are also Canadian standards for not-for-profits, and there are certain aspects of the provincial government that may fall into some of those other standards. There are Canadian standards for small companies. There is also a push — or certainly discussion — to look at having a common standard for public sector reporting — public sector GAAP — throughout North America and, again, common reporting standards or accounting standards for North America in the private sector applications as well.

There is no one thing that you can say is GAAP and that it has a finite definition to it. It is something that evolves. It is something that has different applications in different circumstances. What we are committing to is that we are committing to GAAP, and we are saying that we will only use an

interpretation of GAAP that would be consistent with a standard or guidelines that have been adopted externally as appropriate for GAAP.

B. Ralston: Based on the minister's answer, can one, then, safely assume that this process will contemplate a period of analysis by the comptroller general and Treasury Board staff — a decision, then a recommendation and then the use of this amendment? Is that how it would work?

Hon. C. Hansen: Yes, and what this provision…. This specific

section that we're talking about —

section 6 — actually requires that once Treasury Board has made that determination or has made any policy changes in this area, we must disclose that publicly.

B. Ralston: Just to return, then, to B.C. Hydro and the Insurance Corporation of British Columbia, I gather that the date has been set and there's no choice about making the transition. Can the minister advise what effect, if any, given the volatility that's referred to, this might have on the regulatory capital required for the ongoing operations of these commercial Crowns?

[1505]

Hon. C. Hansen: I can't give the member an answer to that question yet because this is still something that Hydro and the accounting professions are working through. But when it comes to the implementation of IFRS for B.C. Hydro and the other commercial Crowns, as I mentioned, the Canadian standards-setters have indicated that that transition should take place in 2011.

We have expressed concerns, as have other governments, about the impact. There is still the possibility that those Canadian standards-setters may look at the challenges that are going to result from that change and the volatility that would flow as a net result of it.

It may well be, although these are just possibilities, that the Canadian standards-setters may decide to retain the existing rate-regulated accounting systems in place until such time as there is more international certainty with regard to how the new accounting rules should apply to government entities, including commercial Crowns.

B. Ralston: The minister has made oblique reference to other governments. I take it that's other provincial governments. Is there a common position or a consensus position among the provinces, and where does British Columbia fall within that discussion among the provinces?

Hon. C. Hansen: Not all jurisdictions in Canada have regulated utilities and regulated commercial Crowns, but certainly all of the jurisdictions that have such entities have expressed concerns with regard to the blanket adoption of IFRS, as has been proposed by the Canadian public sector accounting standards board. We continue to have discussions with the board and with the accounting profession generally.

[ Page 3556 ]

B. Ralston: Obviously there seems to be some discretion available to the government. Can the minister advise: what is the limit of that discretion? Is there a point at which a failure to adopt would be negatively viewed by the rating agencies — in New York, for example — or is that not something that's a concern in this discussion?

Hon. C. Hansen: With regard to the rating agencies, they will look for specific information. They have templates that they provide to us with specific information that they may require for their approach to evaluating the rating for the province of British Columbia. That would continue.

[1510]

Whether we were to adopt IFRS for the reporting standard or not would not, in our view, affect the work that the rating agencies do.

D. Donaldson: Welcome to the staff and the minister. In the introductory letter to the budget by the Deputy Minister of Finance, he references that the Canadian accounting profession is in the process of adopting the IFRS standards within GAAP. I'm not sure if I heard in the minister's answer yet what is the…. Does he have an idea of the IFRS timetable for implementation?

Hon. C. Hansen: IFRS is something that is being implemented internationally. It's being implemented in different ways in different countries according to the generally accepted accounting practices and the determinations of the various standards-setters within those jurisdictions.

In the case of the Canadian public sector accounting standards board, they have indicated that commercial Crown corporations in Canada should be prepared to shift to IFRS effective for all fiscal years that start after January 1 of 2011.

D. Donaldson: Thank you for that answer. These are understandably standards and procedures that many find fascinating, but trying to decipher it is our job here, and I would ask the minister: what are the implications to GAAP of the Canadian accounting profession adopting IFRS standards?

[1515]

Hon. C. Hansen: I think the member's question was around what the implications are. I think probably the biggest implication is the degree to which we would see volatility in the financial results and financial statements for a point in time, as opposed to the stabilization that is implemented today to make sure that valuations are properly reflected over time but not exacerbated by what may be a particular degree of volatility at a point in time.

With regard to the switch to IFRS, the only thing that is currently sort of in the timeline to be implemented is what I mentioned with the shift for the fiscal year starting after next January 1 for the largest commercial Crowns. In British Columbia that's about seven of our commercial Crowns that would be caught in that unless there is reconsideration by the Canadian public sector accounting standards board.

Just to give the member a sense of what some of that volatility could look like and the implications of it…. Today, for example, we will go out to do valuations of the assets of a pension plan, and if a pension plan is underfunded, that can, in some circumstances, trigger an immediate change in contribution rates.

Now, if you wind up with a valuation where there is suddenly a short-term decline in asset values for that pension plan that happens on the day of that valuation, then you could actually trigger a contribution rate increase for workers that would be totally unnecessary.

So part of the debate that is going on now is how you ensure that you get an accurate reflection of the assets that an organization holds but in a way that actually ensures that you can reflect the stability of that over a period of time and not necessarily just for a point in time that the valuation may be done.

Section 6 approved.

section 7.

D. Donaldson: Well, first, I thank the minister for that last answer. Giving a clear example really helps to provide some definition of what we're talking about here.

Section 7. There are a number of strike-outs and additions in this

section regarding the Budget Transparency and Accountability Act. I'd just like to ask the minister: what's the intention of these amendments? What problem are they addressing?

Hon. C. Hansen: I think this goes back to really the degree to which there are varying

interpretations as to what constitutes generally accepted accounting principles, particularly at a time when those principles are evolving and changing. What we want to ensure is that across all of the government reporting entities we have consistency in our approach.

So rather than having various bodies within the government reporting entity embarking on their own

interpretation that we then have to amend and adjust in order to fit into our consolidated financial statements, we want to make sure that we can actually give direction to ensure that we have consistency in

interpretation across the entire provincial government reporting entity.

Section 7 approved.

[ Page 3557 ]

section 8.

D. Donaldson: Well, that's a nice segue. I find this

section quite interesting, and it's a nice segue into consistencies, as the minister talked about.

This

section allows the government to adopt different accounting practices within certain limits. In this

section a few of the standards are discussed. The minister, in a previous answer, briefly touched on them. The GAAP for organizations in Canada other than senior governments. Another standard is the GAAP applicable in a jurisdiction outside of Canada. And then there's the standard GAAP for senior governments in Canada.

So my question to the minister is: what are the implications of using, potentially, three different standards within this section?

[1520]

Hon. C. Hansen: Currently we have four different accounting standards that get followed and practised within the broad public sector, the government reporting entity. The four are the public sector standards, the not-for-profit standards, the rate-regulated standards, and we also have commercial standards.

Our hope, through this approach and the powers that would be given to Treasury Board to provide this direction, is that we can actually reduce the number of standards that might get utilized across the public sector. But more importantly, it's to bring consistency to how these various entities keep their books so that when we consolidate them with our books, there is one comprehensive and consistent approach.

D. Donaldson: The way I understand this section, it allows a certain leeway for Treasury Board to decide on which standard to use. Could the minister advise how Treasury Board would, in his opinion, decide on which standard to use in which circumstance?

Hon. C. Hansen: I think the short answer is that advice would come forward to Treasury Board from the comptroller general. The comptroller general, in turn, would take into consideration what the advice is that's coming from the accounting standards boards that look at these issues.

We would also look at what happens in other provinces, because not only do we want some consistency with regard to our own government reporting entity in British Columbia, but we also want to ensure that the measures we take are consistent with the approaches taken by other jurisdictions in Canada.

Also, in B.C. we've got the benefit of what's called the Accounting Policy Advisory Committee. This is a group of leading accountants in British Columbia who provide us with advice from time to time in terms of how British Columbia should be implementing and reflecting various directives that come from the various standards-setters. That is a body that's particularly invaluable to us as a ministry, and me as a minister, when it comes to particularly new areas that need to be explored for new

interpretations that need to be established.

D. Donaldson: Are the minutes of the accounting advisory committee available for public scrutiny? Do they report out on a basis that would allow public transparency?

Hon. C. Hansen: This is a body that has been established to provide advice to the Minister of Finance. I don't receive written reports directly from them. I meet with them from time to time, and I certainly get the benefit of their advice.

D. Donaldson: It's interesting. We had the Minister of Transportation in here earlier, and she doesn't get written reports either. I'm glad you have good memories because there's lots of dialogue going on without any record, it seems.

[1525]

My question relates back to Treasury Board — how they would make decisions on which standard to use. Thank you for your answer on that.

I think you alluded to it, but perhaps you could elucidate a bit more on what mechanisms are in place for explaining the decision of the Treasury Board about which standard to use and mechanisms to communicate so that there's a level of scrutiny and accountability and transparency.

Hon. C. Hansen: In response to the member's question, there are several mechanisms by which the accounting policies of the province are presented and disclosed. First of all, with regard to the estimates that are tabled on each budget day, there are, actually, in there…. The accounting policies that are followed by government are set out in that document. Also, in public accounts there's a full disclosure of public accounting policies, including a legislative compliance-and-accounting policy report.

Given the changes that we're making in this legislation, we can anticipate that in future presentations of public accounts there will actually be an even more extensive presentation of the accounting issues as they evolve over these coming years.

Then finally, it's the work done by the Office of the Auditor General, looking at and reporting on the accounting policies of government.

D. Donaldson: Just to make sure I got that straight, through the three mechanisms referenced by the minister, a person would be able to discover which of the four

[ Page 3558 ]

standards that the Treasury Board has at its disposal was used in applying the standards. Is that right?

Hon. C. Hansen: The short answer is yes. In addition, there is also the opportunity by the Public Accounts Committee of the Legislature to review any accounting policy issues that they may choose to do.

D. Donaldson: I'd like to go to the other side of this

section 8. We've been talking about the ability of Treasury Board to have some leeway in which accounting standards it uses. It's also referenced in this

section that the Treasury Board has the ability to decide which government organizations to apply the different standards to.

How does the minister see that happening? How will the Treasury Board decide which government organizations it applies which standards to?

Hon. C. Hansen: What we will be doing is taking the advice of officials with regard to what would be the most appropriate accounting standard to be applied to each organization.

[1530]

It is our intent that…. We want to have as many government entities as possible reflecting public sector accounting standards. That is what the majority of government reporting entities do today. We want to see even more bodies adopt that standard, so that may come as part of that directive.

What it really boils down to is that we'll be looking at the substance and the operations of each of these organizations to determine which standard is most appropriate for that. Our overall objective is to get to as much consistency across the government reporting entity as we can achieve.

D. Donaldson: I have a final question, I believe, for this section. We have a number of standards that the Treasury Board could use, and we have a number of different government organizations that they could be applied to.

I think the minister would agree that what we're seeking is clarity so that the people in the province who are concerned about the proper accounting of how we spend the revenue in the province have a clear picture of that. When would you anticipate that that clarity would be resolved — as in having fewer standards and one, perhaps, clearer process?

Hon. C. Hansen: It's fair to say that this is an evolving process. There was certainly more certainty and more stability around what constituted generally accepted accounting principles four years ago. It's because of the events worldwide that have really triggered some of that re-evaluation as to what should constitute GAAP.

We expect that it's not going to be a process that we're going to get through, and suddenly we're going to be back to certainty and stability again. It will continue to evolve over time, and we will continue to have to modernize and re-evaluate the standards that we apply, on an ongoing basis. But it is our hope that we will get to a point of having more certainty and considerably more stability in the accounting standards within 12 months from now than we have today.

I think the critical time is going to be over this next 12 months, as we evaluate what some of the standards-setters are determining both nationally and internationally and we determine how our practices can best reflect whatever that new generally accepted accounting principle evolves into.

B. Ralston: Given the ambiguity and uncertainty that the minister has referred to, does this pose any particular personnel challenges? Obviously, it makes work for the accounting profession, but is there the range of people that are literate and proficient in understanding the various evolving standards? Or are there specifically recruitment problems that may be contemplated at some levels of government or in some of the government organizations?

Hon. C. Hansen: This is an issue that was foreseen by our comptroller general a number of years ago. Actually, about two years ago we specifically hired an expert in international accounting standards into government, into the comptroller general's office. That individual is providing invaluable advice as well as providing training for others throughout the government entity in terms of the implications of the transition to these new standards.

It's also in terms of our commercial Crowns that are being impacted and need to be ready if in fact the transition to IFRS goes ahead next year. Those commercial Crowns have already to date done a considerable amount of work to prepare for that transition for when that day may come.

[1535]

Section 8 approved.

section 9.

B. Ralston: This appears to be a routine amendment, just striking the Homeowner Protection Act from a list of designated acts under the Business Practices and Consumer Protection Act. Can the minister confirm that that's an accurate explanation — the homeowner protection? This is part of the windup of the Homeowner Protection Act?

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

[ Page 3559 ]

Section 9 approved.

section 10.

B. Ralston: I'm going to ask the minister to explain the purpose of this amendment. It appears to be a fairly technical amendment that redefines what is categorized as expenditure for the purpose of the College and Institute Act. Can the minister describe the problem that this amendment is intended to remedy?

Hon. C. Hansen: I think, like the discussions we had earlier in the broader context of the government reporting entity, that this is intended to make sure that we have consistency and stability in financial reporting.

Today there is actually a discrepancy between the practice followed by post-secondary institutions in their financial reporting and the practice followed by the government reporting entity as a whole.

When we consolidate the financial statements using the accounting principles that we apply for the GRE, we actually have to go in and convert the numbers presented to us by post-secondary institutions because they're using a different standard, different

definitions.

This amendment is to ensure that we have the same amendments, the same

interpretation and the same definition that are used by the post-secondary institutions in determining their expenditures and their revenues and that that is consistent with the

definitions that we're using for the broader public entity.

B. Ralston: It seems, then, that there was a disagreement and that both sides weren't able to come to an amicable settlement. I don't know whether I'm reading too much into it.

What was the consequence of that disagreement in terms of reporting by colleges and universities? Was there a perception or a reality on the government side that colleges and institutes were not accurately reporting their expenditures and their revenues?

Hon. C. Hansen: To clarify my previous answer, this is actually not about their financial reporting. It's about their financial planning and their budgeting process.

For example, if you wind up using unrealized losses today, in their planning purposes, it could result in them having to reduce courses and reduce program offerings that they otherwise would not have to do if they were to use the same consistent

definitions that we use in the broader provincial government entity.

[1540]

B. Ralston: Is this something that the chief financial officers of the institutions requested, or is this something that Treasury Board and the comptroller general have urged upon the minister for legislative change?

Hon. C. Hansen: This is something that is coming from the provincial government, because we saw this as a looming problem that we felt needed to be addressed and to ensure the consistency in

definitions.

B. Ralston: The minister has mentioned that this amendment is intended to be focused on forward planning. But I note on page 63 of the budget, in the

section entitled "Expenditure management in remaining Crown agencies and the SUCH sector" — I'm going to quote just so that I'm sure that I have it accurately:

"In addition, changes are proposed to the legislation governing the post-secondary sector in order to clarify some important accounting terminology contained in the relevant acts. For example, those acts do not provide a clear definition of 'revenues' and 'expenditures' at present, which has created challenges for government financial management and reporting processes and the fiscal plan."

So it seems to be a slightly…. Well, in fact, more than slightly. It seems to be referring to the full range of financial operations of government and their relationship with these institutions — management, reporting and the fiscal plan. So would the minister care to expand upon his previous answer?

Hon. C. Hansen: In terms of the paragraph that the member quoted out of the fiscal plan, I think all three elements of those get addressed in various measures that we're taking.

But this specific

section 10 addresses primarily around the ability of our fiscal management. Because of the specific language that had previously been in this act, which was not consistent with the

definitions that we would use generally, this specific act needed to have this consistency, or this change, to bring it in line with the general approach in terms of our forecasting and our financial management.

It does not in itself alter how these institutions report, but it does alter how they would approach their fiscal planning.

[1545]

B. Ralston: The amendment refers, at subsection (1)(b), to "endowments received by the institution." The amendment proposes to treat them other than as "revenue of the institution from other sources."

Can the minister explain why it's proposed by this amendment that endowments be given that treatment? I think I understand the explanation of the previous subparagraph, "unrealized gains or losses…." But perhaps the minister can explain why endowments are included in this subsection as well.

Hon. C. Hansen: It's because of the nature of endowments. They are not established to be spent in an operational sense but rather to earn an investment income from, and it's that investment income that would subsequently be

[ Page 3560 ]

available to the institutions. By saying that these cannot be specifically reflected as revenue, it's because they need to be reflected as assets and not revenues.

B. Ralston: I think I understand. It's a distinction that's drawn between, I suppose, revenue and capital, would be the standard way it might be expressed. Thank you for that. Those are the questions I have on this section.

Section 10 approved.

section 11.

B. Ralston: I understand this is simply a consequential amendment that follows the one that we've just dealt with. Is that correct?

Hon. C. Hansen: Yes.

Section 11 approved.

section 12.

B. Ralston: Can the minister explain the purpose of this amendment? It appears to be fairly inward-looking, as it refers to the Budget Transparency and Accountability Act, but perhaps the minister can quickly confirm why this amendment is necessary.

Hon. C. Hansen: This is a very technical amendment. It simply reflects the fact that throughout the Financial Administration Act, the term "government organization" is used in various places. It does not currently have a specific definition, and it was felt that that definition would be appropriate. For consistency, we have aligned this definition with the same definition as currently is presented in the Budget Transparency and Accountability Act.

Section 12 approved.

section 13.

B. Ralston: This proposed amendment appears to give new powers to the comptroller general. It both directs the comptroller general, from the perspective of the Treasury Board, and gives the comptroller general the authority to issue directives and guidelines to government organizations.

Can the minister explain why this amendment was necessary? It would appear that there is a fairly well-established chain of command and direction within government, certainly on the financial side. So why were these, what appear to be additional powers, necessary at this time?

Hon. C. Hansen: This

section is not language that currently exists. It's new. It is totally consistent with the role that the comptroller general has had up till now. But I think probably the most important distinction is that up till now that role of the comptroller general applies only to the consolidated revenue fund. What this amendment does is broaden that role to apply to the general government reporting entity.

[1550]

Section 13 approved.

section 14.

B. Ralston: The explanatory note for this

section says that it "allows for recoveries from a vote to be based on funds received in previous fiscal periods." It doesn't appear to be obvious from what is available in that explanation. Can the minister explain the purpose of this section?

Hon. C. Hansen: I think the specific issue that this is addressing is when the federal government will flow money to the province for a two- or three-year program, or even longer, they will provide that funding up front. So in many cases, we've actually had transfers from the federal government with regard to multi-year programs, and they arrive right at the end of a fiscal year.

What we need to be able to do in a much more streamlined way and with better disclosure is to be able to say, "Yes, we can receive those moneys, and they are for future years," so that the accounting principles that would apply would, in fact, reflect the fact that these disbursements would go out over a number of years.

[C. Trevena in the chair.]

B. Ralston: Madam Chair, welcome to the chair.

I think I understand that explanation. I'm looking at the amendment: "(

i) the actual credits or recoveries…in accordance…as revenue of the government for the fiscal year to which the appropriation relates." This is to authorize the Treasury Board, then, to allocate to either the current fiscal year or a series of future fiscal years.

How far forward does accounting practice permit that kind of designation of a future fiscal year to be made without running afoul of the Auditor General? I think I understand the principle that the minister has enunciated. I'm wondering: what's the outer limit of the power that's being conferred here upon Treasury Board?

Hon. C. Hansen: That would be determined by the agreement that would be struck with, in the example we used earlier, the federal government or whoever was the organization transferring those funds. The federal government transfers in recent years would be an example of that.

[ Page 3561 ]

I think the examples that come to mind in recent years have been anywhere up to about…. I think five years would probably be the longest. But that would be determined by the comptroller general, who would look at what the appropriate accounting treatment would be given the nature of the agreement.

B. Ralston: I suppose there is a very traditional concern that one has when looking at balance sheets — that the power to shift from either expenditure or revenue from one year to another can lead to an inaccurate or even a distorted view of the financial state of affairs for a given fiscal year. Certainly governments and, indeed, private companies or public companies are sometimes accused of using that kind of sleight of hand.

[1555]

What is the check on that power that's being given here to transfer revenue, either forward or backward, in a manner that might be more congenial to a government — say, a government trying to avoid a deficit or reduce the size of a deficit or to increase revenue in a subsequent fiscal year for other purposes? What's the check on that?

How can the public feel assured that what's being reported is indeed an accurate state of affairs for a given fiscal year rather than the product of a series of fiscal shuffles?

Hon. C. Hansen: What this amendment will do is actually allow for better disclosure, specifically when we have these kinds of transfers coming from, say, the federal government. The timing and the value of these can be explicitly set out in estimates, which would be an improvement over the disclosure that we have today.

In terms of the check on it or the…. I think there are a couple of things. First of all, it would have to follow accounting standards in terms of how this would be implemented. That would be determined by the comptroller general and would have to pass the approval of the comptroller general in how this was presented.

Ultimately, I think that there's always the power of the Auditor General to review how those accounting standards were applied as well with regard to these particular multi-year funds.

B. Ralston: The example that comes to my mind is the change in the expenditure for security costs at the Olympics. The minister will remember that the federal government contributed further funds and there was an offsetting reduction of the province's commitment to joint capital projects in future years. Would this amendment increase the transparency of that sort of accounting decision?

Hon. C. Hansen: This amendment would not affect the example that the member refers to. What happened in that case is that we gave up the right to a future transfer of funds from the federal government with regard to capital projects.

I will add that we have had an ongoing look at that particular issue, and there is still discussion in terms of what the appropriate accounting treatment of that agreement with the federal government is. There is still more work that is being done on the agreement that he refers to.

B. Ralston: I'll look forward to that update because it certainly was, at the very least, a creative solution.

The amendment also refers to estimated credits or recoveries set out in the details. How do recoveries factor into the treatment here? In the minister's example, he talked about a transfer of a flow of federal funds and then allocating it in different fiscal years. What's the impact that's contemplated here by a reference to credits and recoveries?

[1600]

Hon. C. Hansen: What this would pertain to is where…. For example, if the province is undertaking to deliver a program on behalf of the federal government over a number of years and instead of the federal government saying that they will transfer X number of dollars to be allocated in each of the coming years, they may, for example, say that they will transfer a certain amount of funding per participant. The participants in the program could vary.

We could do estimates as to what the uptake of that program would be, but we wouldn't, with any certainty, be able to put into the spending estimates an appropriation for the amount that would be spent.

What this says is that if a program, for example, is more successful than was originally estimated, and there is more money that flows from the federal government to the province with regard to covering the costs of that program, then we would have the legislative authority to actually spend the additional amount that the federal government would transfer in without coming back for a special appropriation in the House.

B. Ralston: I think the minister made me believe that I understood that explanation, so I want to thank him for that. Then, that's really the only further question I have on that section.

Section 14 approved.

section 15.

B. Ralston: I think the amendment here is very straightforward. I just want the minister to confirm that it strikes out "as defined in the Budget Transparency and Accountability Act ." Is that correct?

[1605]

[ Page 3562 ]

Hon. C. Hansen: This is simply a very minor consequential amendment as a result of us putting the definition into the

definitions section. It is no longer required in this particular clause.

Sections 15 to 19 inclusive approved.

section 20.

B. Ralston: This begins a series of amendments which relate to the transfer of the Homeowner Protection Office to B.C. Housing. I also may be assisted here by my colleague from Vancouver-Hastings, who's the critic in this area.

Can the minister briefly set out…? I'm not sure whether it's going to be the Minister of Finance or the Minister of Housing and Social Development who will be taking these questions, but could the minister who chooses to answer — the appropriate one — explain briefly what's contemplated here and why?

Hon. R. Coleman: Madam Chair, maybe we could take about a three-minute recess while I get my staff here.

The Chair: Committee will recess while staff are brought in.

The committee recessed from 4:06 p.m. to 4:11 p.m.

[C. Trevena in the chair.]

Hon. R. Coleman: Maybe just before we start, I'll introduce the staff that I have with me. I have Shayne Ramsay, who is the president and CEO of B.C. Housing and the Homeowner Protection Office. I have Jeff Vasey. Jeff is the executive director of the building, safety and policy branch. And Tracy Green, who is the manager of liaison and safety policy, is behind me.

S. Simpson: There are a lot of issues related to homeowner protection changes and the role that B.C. Housing will play. We'll deal with most of those in estimates, when we get to the estimates for the ministry, at that time.

Dealing very specifically with the changes that are reflected in Bill 2. This

section repeals

definitions of the advisory council, the director of research and education, the office and the program. Could the minister maybe just tell us a little bit about what the role of the advisory council is currently that will be repealed by this?

Hon. R. Coleman: Later on in one of the sections we actually identify this. Basically, the provincial advisory council is being replaced by the Industry and Consumer Advisory Council. The HPO is dissolved, effective April 1, 2010, and administration of the residential builder regulatory system is transferred to B.C. Housing.

The reconstruction program stopped accepting applications for financial assistance on July 31. It continues the reconstruction loan portfolio in this section. The advisory council and its purposes are established in

section 10.2, and there are no other references to it in the act.

S. Simpson: The exclusion of the advisory council…. I believe the minister referenced a body that will replace some or all of the functions of the advisory council. Could the minister tell us: are there functions currently practised by the advisory council of the Homeowner Protection Office that will not be covered by this new body?

[1615]

Hon. R. Coleman: I'm going to jump forward to

section 27's description, which is a technical description of the technical amendment in

section 20. Basically, the provincial advisory council today gives advice on builder licensing and compliance enforcement, builder registry, mandatory new-home warranties, owner-builder authorization, and research and education. The new council will do exactly the same thing. The difference will be that the new council will be adding consumers to the advisory council.

S. Simpson: Moving on,

section 20 also, in terms of the repeal

definitions, repeals the definition of the director of research and education. Could the minister tell us essentially what the role of the director of research and education is in the current HPO at this time?

Hon. R. Coleman: Again, I'm going to bounce forward to another

section which actually deals with this. The last one, we bounced forward to

section 25. This one, I'll bounce forward to sections 28 and 29 and try and give the member the explanation from there because those are the sections that deal with the member's question. I know that's not the normal practice with regards to whether we…. But whatever we deal with in the section, if later on…. I don't have a problem with that.

Basically, the Homeowner Protection Act,

section 11, establishes that the CEO of the Homeowner Protection Office must establish a division for research and education and appoint a director. Then it goes on, under

section 12, to establish the purposes of the division within the company, which would no longer exist, and then

section 13, an advisory council on homeowner protection.

Basically, what the amendments are doing is repealing those sections to reflect that B.C. Housing has an established organizational structure already that also includes a research and education department. It amends

section 12 to establish the responsibility that B.C. Housing will

[ Page 3563 ]

have with respect to research and education to residential construction for the purposes of the Homeowner Protection Act. Then it also establishes a new advisory council.

The reason for the amendment is that the research and education respecting residential construction is one of the key purposes of the act established in subsection 2(1). This

section now focuses on the research and education responsibility that B.C. Housing will have under the Homeowner Protection Act versus having a separate Crown corporation, a separate entity. Being folded in, there's no need to have the language in and around the specific sections of divisions within a company that no longer exists.

S. Simpson: I certainly have no problem with the minister kind of bouncing to other sections in order to clarify these things so that we understand them better. With this — and I guess if we're bouncing around a little bit, I'll just reference….

[1620]

I know that in other sections it talks about — in things like

section 24 — how B.C. Housing must designate employees as compliance officers, as a registrar, etc. It doesn't make that requirement around research and education, though I know there is a

section that talks about the function. I'm not sure whether this is the place for this question. If not, I will ask it someplace else.

Is there an increase in the budget of B.C. Housing to cover off these functions, or are they taking people and budget from what is the HPO office and folding it into B.C. Housing so that they have increased resources or capacity to fulfil these responsibilities?

Hon. R. Coleman: The Homeowner Protection Office has always been funded by licensing fees. That doesn't change. There are no additional dollars that are required by B.C. Housing because the fees will continue to do that for the compliance, licensing and research and education. The licensing fees will still come in and be applied the same way they were under the HPO.

S. Simpson: Currently, there's a line item, presumably in the HPO office, for research and education purposes, and X amount of dollars are spent by that office presently, up until this legislation is enacted. Can we expect a comparable or greater amount of dollars to be spent by B.C. Housing in relation to research and education as it affects home construction and the functions here?

Hon. R. Coleman: It always depends on how many licences a year, but we would anticipate — because of not having the duplication of the same amount of administration and management, because we're bringing this into B.C. Housing — that we would actually have more dollars to invest in the infrastructure of research and development with regards to building code and building environment.

At the same time, we're also working on the built environment with our building standards branch, which would also be working with B.C. Housing, so that we're not duplicating as we try and improve on the built environment. There's no reduction. We actually think there will be more money that will be available to go into research.

S. Simpson: I appreciate the minister's confidence that there will be more money. Could the minister tell us: what is the budget for research and education currently in the HPO? What is the budget that B.C. Housing anticipates once they have full responsibility for this?

Hon. R. Coleman: I don't want to throw this into difficulty for the member opposite, but that's more of an estimates question. We don't have that information here today. I mean, we're dealing with

section 20, which deals with the change in the bill.

We're happy to get the information for the member. We don't have it at our fingertips at the moment.

S. Simpson: I would appreciate that information. We will explore those questions further when we get to the estimates process. With that, I have no more questions that relate directly to

section 20.

[1625]

Section 20 approved.

section 21.

S. Simpson:

Section 21, if I understand this properly, is essentially the

section that begins to remove the responsibilities around the reconstruction loan program. Could the minister explain whether that's correct, or what the purpose here on

section 21 is?

Hon. R. Coleman: This is a technical amendment to the act. The previous

section read that the purpose of the act is "the administration of the reconstruction loan portfolio, as defined in

section 24.1." It's changed to be just the administration of the portfolio rather than the loan program, and the reason for that is because there's no longer a loan program. That disappears.

Basically, the reconstruction program stopped accepting applications on July 31. That portfolio now represents outstanding loan and interest subsidies approved by the Homeowner Protection Office under the reconstruction program.

We're renaming it to the portfolio because what happens now is that the loan portfolio will not stay with the Minister of Housing and Social Development. It will now be managed by the Ministry of Finance, because we're

[ Page 3564 ]

not, basically, the manager of loans for the province of British Columbia, so that will go to Ministry of Finance. Basically, that

section sets out the requirements for administering the reconstruction of that loan portfolio.

S. Simpson: Could the minister tell us: what is the current size of that portfolio in terms of value dollars?

Hon. R. Coleman: Again, that's more of an estimates question, but we know that there are about 2,500 outstanding loans that are managed under the program. The actual dollar value we'll have to get for you.

S. Simpson: We'll get that specific dollar number at a later time. That's not a problem. When I read

section 21, the change, it says: "…the administration of the reconstruction loan portfolio, as defined in

section 24.1…." Am I to understand…? The minister says the responsibility for the loan portfolio essentially moves over to Finance, where these kinds of matters rest, as a rule. That administrative function, though, continues…. B.C. Housing continues to administer that on behalf of the government, on behalf of Finance as well? Is that correct?

Hon. R. Coleman: Just so we're clear, the change in the act is changing the word "program" to the word "portfolio." That's all the change is in the section, and that is because there is no longer a program.

The portfolio. Finance will administer the loans to maturity, and they will also do all the functions relative to the administration that go with the loan portfolio — to Finance as well.

[1630]

S. Simpson: Just so I'm clear, all the responsibilities, then — and the minister can…. All the responsibilities related to the reconstruction loans…. There's no program, but there's an existing portfolio. Everything responsible for that, the administration of that and all those functions, will now be removed from B.C. Housing and will sit solely with the Ministry of Finance. B.C. Housing, as the agent for these services, will have no role in relation to that anymore. Is that correct?

Hon. R. Coleman: Essentially yes, with one hiccup, one exception, and that is upon the receipt of warranty, which is also administered through the licensing program that B.C. Housing has, there's a collection of a $750 levy for the loan portfolio. That money will still be collected by B.C. Housing but transferred directly to the Ministry of Finance.

Section 25 speaks to that further on in this discussion.

S. Simpson: One last question, and this may not be answerable. This may be a matter for Finance estimates or the estimates of the minister at a later time.

I know the minister said that he had roughly about 2,500 properties, I think, that were still under the program currently. Does the minister have an estimate of when the obligations around those properties are anticipated to be fulfilled and there to essentially be no more portfolio?

Hon. R. Coleman: There are sections — sections 30-plus — that deal with Finance's obligation in this. Actually, you could probably ask those questions of Finance at that time. The estimate is between seven and ten years that they will all be dealt with going forward, so somewhere around 2020 this whole thing should sunset.

Section 21 approved.

section 22.

S. Simpson:

Section 22 covers what was the Homeowner Protection Office, a description of the office and a number of the functions that relate to that.

Part 2 talks about the purposes of the office, which were: "(

a) to license residential builders and other persons required to be licensed under this Act, (

b) to carry out research and education respecting residential construction in British Columbia, and (

c) to administer the program."

On the first of those matters, "to license residential builders and other persons required to be licensed" under the act, could the minister tell us how that licensing will occur now and under whose responsibility that will occur?

Hon. R. Coleman: The licensing will now be done by B.C. Housing.

S. Simpson: Having B.C. Housing take this responsibility on, will this require B.C. Housing to take on functions that it currently doesn't apply? If so, what is the expectation of the staffing or the resource obligations for that? Maybe we'll just wrap all these questions up. Does that come out of the $750 fee?

[1635]

Hon. R. Coleman: Most of the existing staff of the HPO have been transferred to B.C. Housing to become employees of B.C. Housing as a division within B.C. Housing. The cost of that division will come out of the licensing fees, which on first licensing is $600 and on renewal is $500 a year for a licensed builder in B.C.

The $750 levy for the reconstruction loan program will stay in existence until such time as the loan program is extinguished. That's what it was put in place for — to pay down that loan program and manage it.

S. Simpson: I appreciate that, and I'll get back to that.

If I could just get a clarification from the minister on his answer, which I'm not sure is specifically this section.

[ Page 3565 ]

I believe the minister said the $750 fee will remain in place until the portfolio is extinguished, until it's done. Is it the expectation of the minister, then, that at the time the portfolio is done, the fee is done?

Hon. R. Coleman: Yes. Once the portfolio and its costs are extinguished, the fee would disappear.

S. Simpson: The second of the purposes of the office is to carry out research and education respecting residential construction in British Columbia. To the minister: is that function also to essentially be paid out of the $600 and $500 assessments that the minister spoke about earlier that will pay for the licensing, or does it come from a different source?

Hon. R. Coleman: Yes, status quo. That's exactly correct. That's what will fund that as well.

S. Simpson: I want to follow up a little bit on this purpose again, the research and education respecting residential construction in British Columbia. We know there's a lot of discussion over the last couple of years around innovation — construction innovation, green buildings, new ways to build that are more energy-efficient, etc.

Is it the expectation now that B.C. Housing, if it has taken this function on, will have particular responsibilities or be paying attention to those new technologies as part of the responsibilities of this function?

Hon. R. Coleman: Just so the member understands, they will perform a function in an integrated manner with the building standards branch and other aspects of government, whether it be the Fire Code, and those sorts of things. The research and education respecting residential construction in B.C., although it's one of the key purposes of this, will also be integrated with the other key purposes as we build into the built environment.

As we go forward, we need to deal not only with what exists in residential construction but also in multifamily and other areas of commercial construction with regards to the management of water, sewer, electricity — those functions. Those are actually with the building standards branch.

The reason for actually bringing this together is to make sure it's integrated so that we're not doing two things at once. Basically, the research and development will integrate the changes to the building code going forward so that it's always integrated across government in one ministry.

[1640]

S. Simpson: I think I understand that. We're going to bring it all together, and that makes some good sense.

Where will that rest when it comes together? Will it rest with B.C. Housing under their responsibilities? Will it rest someplace else? Who's going to have the responsibility for what was the function of (2)(b), which is now being repealed under Bill 2? Is that function going someplace else, or are other things coming to B.C. Housing on that function?

Hon. R. Coleman: I'll try and answer the question for the member as it is laid out in

section 29. Basically, B.C. Housing is responsible for the following: to establish and maintain "expertise in building science, especially as it applies to British Columbia and the British Columbia Building Code;" to "conduct research into cost effective building techniques, processes and materials appropriate for use in British Columbia." Those are the functions, and some other stuff, that the Homeowner Protection Office will be doing.

But the B.C. building code itself is the responsibility of the building standards branch. The building standards branch will take advice from the research and work of B.C. Housing, which will formulate our future designs or changes that may be required under the building code. That's always been the case.

The two agencies have actually — even when one was the Homeowner Protection Office — worked well together as far as sharing that information and trying to have one coordinated response with regards to future building opportunities and stuff with regards to the code in B.C.

At the same time, we have a lot of expertise at B.C. Housing on the different renovations and expertise on building that we're doing and products. Coordinating that with the Homeowner Protection Office function along with the coordinated effort with regards to the building standards branch and the code are how we will actually drive the next agenda, which I described earlier, which is really dealing with the built environment for the future of buildings and housing in B.C.

S. Simpson: I'll get into that a little bit further when we get farther on in the bill.

Just one last question in relation to this section. Under "Board" functions, is it a fair assumption that those functions will essentially become the responsibility now of the board of B.C. Housing?

Hon. R. Coleman: Yes.

Sections 22 and 23 approved.

section 24.

S. Simpson: This applies to some of the functions under that.

Section 24 says: "For the purposes of this Act, BC Housing must (

a) designate an employee as the registrar, and (

b) designate one or more employees as compliance officers."

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Could the minister tell us, currently, how many compliance officers there are in the Homeowner Protection Office?

Hon. R. Coleman: About five or six.

S. Simpson: I should have probably been more specific — that that would be five or six. The minister could maybe just clarify in the answer to this next question that those are FTEs — five or six FTEs? And is the expectation that there will be an equivalent number of compliance officers brought in to provide these functions under B.C. Housing?

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Hon. R. Coleman: The reason I say "five to six" is because that's what I'm told it is, approximately. Of course, it's more like an estimates question. But in reality for the member, the question is: is the same number of people coming over from Homeowner Protection Office? Is it still being the same number of people in the positions before and after? The answer to that would be yes.

Section 24 approved.

section 25.

S. Simpson: I think I know the answer to this. Is this just a change of terminology and, essentially, "assessments" to "fees"? This is the $750, and it just changes the terminology but doesn't essentially change the reality of the dollar?

Hon. R. Coleman: That's correct.

S. Simpson: Just on

section 25(b), which repeals subsections (2) and (3) on the collection of fees and then puts in place replacement information. Could the minister tell us essentially what the differences are between the new wording and the old wording?

Hon. R. Coleman: I'm not sure which portion of the fees the member was asking about, so I'm going to do both.

The

section allows for B.C. Housing to be the recipient of the licensing fees now and also the recipient of the reconstruction levy, but it also recognizes that the fee established under

section 20, more commonly known as a reconstruction levy, will continue to be collected by the registrar at the same time as certain licence fees come due. Since this fee supports the ongoing administration of the reconstruction loan program, it will be transferred to the Ministry of Finance for that purpose. It identifies that the fees are the same.

Now, if somebody's going to write a cheque for their licensing fee, they would write it to B.C. Housing, rather than to Homeowner Protection Office, because that Crown will no longer exist — the same thing with the reconstruction fee. It also identifies that those fees are transferred to Finance for the reconstruction loan program — the reconstruction loan portfolio now.

S. Simpson: Hon. Chair, I think that I'm good for

Section 25 approved.

section 26.

S. Simpson:

Section 26 creates

section 10.1, which seems to lay out in some more detail the responsibilities around residential builders, how they pay and what happens in the instances should they not pay their appropriate fees as prescribed under the section.

Could the minister tell me…? The remedy is here. It's my understanding that if fees are not paid, then the registrar, presumably, who's here, would have the ability to lift the licence of the builder in the province.

Hon. R. Coleman: That's correct. If they don't pay their fee, we can take their licence.

S. Simpson: If you have the situation where you have a builder, they're delinquent in their fees and then the government takes action to deal with this, to either suspend or to impose some restrictions, what might that include? Because I think the registrar…. It says here: "…may be cause for the registrar to refuse to issue or renew, or to suspend, cancel or impose restrictions on, the licence of a residential builder."

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I understand suspension of the licence or cancellation of the licence. What kind of restrictions did the minister have in mind? I understand the other ones. They're pretty clear-cut. You cancel it or you suspend it. The restriction is a little less clear. What kind of restrictions might we be looking at?

Hon. R. Coleman: It might be something like: we would impose additional oversight on behalf of the warranty company with regards to a particular builder that there were a lot of complaints about or something like that,

whereas they're actually paying their licence fee, but there may be other issues around the particular builder.

It is something that we would like to, frankly, improve on as we deal with the warranty program going forward, to just be able to have that ability or use that ability in the future. These provisions, by the way, are the same, basically, as they were in the previous act. There's no real change here.

S. Simpson: Under 10.1(3), it says: "If the registrar is satisfied that the new home for which a residential

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builder paid a fee prescribed under

section 26 (1) will not be constructed, the registrar may refund to the residential builder the amount of the fee and any interest paid on the fee."

Could the minister tell us why the choice of the word "may" versus "shall" or "must"? Assuming that…. And this acknowledges that under

section 4 it says if there's outstanding money owed to the Crown, obviously, it might be taken for that purpose. Why else would it be "may" and not "shall"?

Hon. R. Coleman: My experience with legislation is that "may" and "shall.