Third Session, 41st Parliament

(2018) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Thursday, March 1, 2018

Afternoon Sitting

Issue No. 92

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Routine Business

Point of Privilege (Reservation of Right)

E. Foster

Introduction and First Reading of Bills

Bill 4 — British Columbia Innovation Council Amendment Act, 2018

Hon. B. Ralston

Orders of the Day

Government Motions on Notice

Motion 4 — Committee of Supply to sit in two sections

Hon. M. Farnworth

Second Reading of Bills

Bill 3 — Tla’amin Final Agreement Amendment Act, 2018

Hon. S. Fraser

D. Ashton

N. Simons

Hon. S. Fraser

Bill 2 — Budget Measures Implementation Act, 2018

Hon. C. James

S. Bond

J. Brar

P. Milobar

S. Gibson

A. Weaver

R. Sultan

T. Stone

C. Oakes

Hon. L. Popham

T. Redies

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Public Safety and Solicitor General

Hon. M. Farnworth

M. Morris

C. Oakes

T. Shypitka

D. Barnett

THURSDAY, MARCH 1, 2018

The House met at 1:33 p.m.

[Mr. Speaker in the chair.]

Routine Business

Point of Privilege

(Reservation of Right)

E. Foster: Mr. Speaker, I rise on a point of personal privilege and reserve my

right.

Introduction and

First Reading of Bills

BILL 4 — BRITISH COLUMBIA INNOVATION

COUNCIL

AMENDMENT ACT, 2018

Hon. B. Ralston presented a message from Her Honour the

Lieutenant-Governor: a bill intituled British Columbia Innovation Council

Amendment Act, 2018.

Hon. B. Ralston: I move that Bill 4, the British Columbia Innovation Council

Amendment Act, 2018, be introduced and read a first time now.

I’m pleased to introduce the British Columbia Innovation Council

Amendment Act. This important legislation establishes Innovate B.C., an

innovation commission to further develop British Columbia’s thriving

technology and innovation sector, to help create more life-sustaining

jobs and to further strengthen our diverse economy. Establishing an

innovation commission is a key commitment made by this government and

will provide broader support to British Columbia’s tech

sector.

[1:35 p.m.]

Innovate B.C.’s mandate includes advising government on science,

technology and innovation policy. Innovate B.C. will provide a single

point of contact for tech support and streamline services for developing

technological entrepreneurs and businesses. Innovate B.C. will also work

to ensure that benefits of technology are felt around the

province.

Mr. Speaker: The question is first reading of the bill.

Motion approved.

Hon. B. Ralston: I move that the bill be placed on the orders of the day for second

reading at the next sitting of the House after today.

Bill 4, British Columbia Innovation Council Amendment Act, 2018,

introduced, read a first time and ordered to be placed on orders of the day

for second reading at the next sitting of the House after today.

Orders of the Day

Government Motions on Notice

MOTION 4 — COMMITTEE OF SUPPLY

TO SIT IN TWO

SECTIONS

Hon. M. Farnworth: I move the motion in my name under

Schedule A on the order paper.

I can read the whole thing, but I believe that the opposition is fine

with just the motion. I see my counterpart…. The motion will authorize

the Committee of Supply to sit in

section A and

section B.

[Be it resolved that this House hereby authorize the Committee of

Supply for this Session to sit in two sections designated

Section A and

Section B;

Section A to sit in such Committee Room as may be appointed

from time to time, and

Section B to sit in the Chamber of the Assembly,

subject to the following rules:

1. The Standing Orders applicable to the Committee of the Whole

House shall be applicable in both Sections of the Committee of Supply

save and except that in

Section A, a Minister may defer to a Deputy

Minister to permit such Deputy to reply to a question put to the

Minister.

2. All Estimates shall stand referred to

Section A, save and except

those Estimates as shall be referred to

Section B on motion without

notice by the Government House Leader, which motion shall be decided

without amendment or debate and be governed by Practice

Recommendation #6 relating to Consultation.

Section A shall consist of 17 Members, being 8 Members of the

New Democratic Party and 8 Members of the BC Liberal Party and one

member of the Green Party. In addition, the Deputy Chair of the

Committee of the Whole, or his or her nominee, shall preside over the

debates in

Section A. Substitution of Members will be permitted to

Section A with the consent of that Member’s Whip, where applicable,

otherwise with the consent of the Member involved. For the third session

of the Forty-First Parliament, the Members of

Section A shall be as

follows: the Minister whose Estimates are under consideration and,

Jagrup Brar , Mitzi Dean , Bob D’Eith ,

Mable Elmore , Anne Kang , Rick Glumac ,

Rachna Singh , Simon Gibson ,

Jane Thornthwaite , Peter Milobar ,

Coralee Oakes , Joan Isaacs , Mike Morris ,

Teresa Wat , Ellis Ross and

Sonia Furstenau.

4. At fifteen minutes prior to the ordinary time fixed for

adjournment of the House, the Chair of

Section A will report to the

House. In the event such report includes the last vote in a particular

ministerial Estimate, after such report has been made to the House, the

Government shall have a maximum of eight minutes, and the Official

Opposition a maximum of five minutes, and all other Members

(cumulatively) a maximum of three minutes to summarize the Committee

debate on a particular ministerial Estimate completed, such summaries to

be in the following order:

(1) Other Members;

(2) Opposition; and

(3) Government.

Section B shall be composed of all Members of the

House.

6. Divisions in

Section A will be signalled by the ringing of the

division bells four times.

7. Divisions in

Section B will be signalled by the ringing of the

division bells three times at which time proceedings in

Section A will

be suspended until completion of the division in

Section B.

Section A is hereby authorized to consider Bills referred to

Committee after second reading thereof and the Standing Orders

applicable to Bills in Committee of the Whole shall be applicable to

such Bills during consideration thereof in

Section A, and for all

purposes

Section A shall be deemed to be a Committee of the Whole. Such

referrals to

Section A shall be made upon motion without notice by the

Minister responsible for the Bill, and such motion shall be decided

without amendment or debate. Practice Recommendation #6 relating to

Consultation shall be applicable to all such referrals.

9. Bills or Estimates previously referred to a designated Committee

may at any stage be subsequently referred to another designated

Committee on motion of the Government House Leader or Minister

responsible for the Bill as hereinbefore provided by Rule Nos. 2 and

8.]

Motion approved.

Hon. M. Farnworth: I call, in this chamber, second reading of Bill 3. If that is

dealt with this afternoon, then we will be followed by the second

reading of Bill 2. In Committee A, the little House, I call the

estimates for the Ministry of Public Safety and Solicitor

General.

Second Reading of Bills

BILL 3 — TLA’AMIN FINAL AGREEMENT

AMENDMENT ACT,

Hon. S. Fraser: I move that Bill 3 be now read a second time.

I am pleased to introduce the second reading of Bill 3, the

Tla’amin Final Agreement Amendment Act. This bill will provide the

Provincial Court with the authority to issue an enforcement order or

orders related to convictions under Tla’amin law enacted in accordance

with the Tla’amin foreshore agreement. The Tla’amin Nation is supportive

of the amendment. The orders would be in respect of payment for damages,

costs associated with investigations and prosecutions or declarations

prohibiting or ordering specific actions.

The amendments in this bill are equivalent to the provisions for

local governments set out under the Community Charter and the Local

Government Act. The province and the Tla’amin Nation signed the

foreshore agreement in April of 2016. The foreshore agreement is a side

agreement to the Tla’amin final agreement.

The foreshore agreement delegates comparable local government

law-making authority to the Tla’amin Nation for foreshore areas adjacent

to Tla’amin treaty lands. This is done to provide continuity of

governance between Tla’amin treaty lands and the adjacent foreshore. In

2015, this Legislative Assembly approved a similar amendment act to the

Maa-nulth First Nations Final Agreement Act in respect to the Maa-nulth

Nations foreshore agreement.

The amendment to the Tla’amin Final Agreement Act provides the

statutory provisions that will make specific clauses of the Tla’amin

foreshore delegation agreement operable. Amendments like this remind us

of the enduring natures of treaty and that reconciliation does not end

when the treaty comes into effect.

[1:40 p.m.]

We have a strong, ongoing government-to-government relationship

with the Tla’amin Nation, based on rights, respect, recognition and

reconciliation. This government’s relationship with all Indigenous

nations is grounded in these principles: recognition of rights and title

and building powerful government-to-government relationships and

partnerships.

[L. Reid in the chair.]

Reconciliation is a cross-government priority, anchored by the

adoption and implementation of the United Nations declaration on the

rights of Indigenous peoples, the Truth and Reconciliation Commission’s

calls to action and the Tsilhqot’in decision. We are committed to an

approach that respects the priorities of Indigenous peoples, one that

fundamentally redesigns the Crown-Indigenous relationship and makes a

clean break from colonial modes of thinking and doing.

I’m proud that we are making choices that are grounded in true

recognition and respect and that make life better for Indigenous

peoples.

D. Ashton: I would like to thank the minister for his very good

remarks.

It is my great pleasure to rise in the House today to speak in

favour of this important piece of legislation — Bill 3, the Tla’amin

Final Agreement Amendment Act, 2018.

The Tla’amin Nation is located just north of the city of Powell

River in British Columbia, along Highway 101, and is one of many

Indigenous Coast Salish Tribes inhabiting the Pacific Northwest Coast.

The Tla’amin Nation is one of rich heritage and history, and

archaeological evidence has shown there has been occupation by the

Tla’amin people in that region, which dates back almost 4,000

years.

This bill will provide the Provincial Court with the important

power to issue and enforce orders and convictions under Tla’amin laws.

The orders that are referred to under this amendment are in respect for

paying for damages; costs associated with investigations, prosecutions

and declarations; prohibiting or ordering specific actions.

Three years ago, in 2015, the previous government made the very

same amendments to the Maa-nulth First Nations agreement act, and I’m

proud to say that amendment passed this House unanimously.

Over the last 20 years, the Tla’amin Nation has been negotiating a

fair treaty settlement with the province of British Columbia. Bill 3,

the Tla’amin Final Agreement Act, is the fourth, final agreement under

the framework of the B.C. Treaty Commission process.

The treaty removed the Tla’amin Nation from the federal Indian

Act, and I have a question: why do we try and negotiate treaties?

Because it is one of the right things we should do. Treaties are a way

for First Nations to get out from under the burden of the Indian Act and

to once again have self-government. This has provided the Tla’amin

Nation with autonomous authority that will allow them to conceptualize,

design, shape and deliver programming in a way that best supports the

Tla’amin community and their families.

This treaty converted the uncertainty of the Tla’amin Nation’s

Aboriginal rights and titles into defined treaty rights. The treaty

established ownership, management of the lands and resources within the

Tla’amin traditional territory, and it provided land and financial

resources so that Tla’amin can create economic opportunities and jobs

for their families.

As we are all aware, the treaty process can be terribly slow and

sometimes incredibly frustrating, but we are actually seeing progress.

The treaty will bring many benefits to the Tla’amin Nation in future

generations and will dramatically alter the status of the nation in a

very encouraging way.

I’m honoured to support, in this House, Bill 3, the Tla’amin Final

Agreement Amendment Act, 2018, as we move forward to a more just and

inclusive future for all in our province.

In closing, many in this House have heard me say that my dad

always told me: “Never walk behind anybody. Never walk in front of them.

For a better future for all, walk beside them.” I, myself, and all of us

in this House, cannot change the past. But we can have an effect on the

present and on the future.

I know — and I know this with the utmost sincerity — the minister

and his thoughts and the direction that he would like to see it go are a

very good indication, which we should all think about in this province,

of how we can try and rectify some things that did happen in the

past.

Madame Speaker, thank you very much for allowing me to speak to

this today.

N. Simons: It’s a pleasure to be able to stand and support Bill 3, the

Tla’amin Final Agreement Amendment Act. I thank the Minister of

Indigenous Relations as well as the member for Penticton for their words

about the importance of this amendment.

[1:45 p.m.]

I think it’s just another step that demonstrates how working

together in partnership, we can help rectify some of the past injustices

and continue moving towards a system where we all work really well

together. I think this is just one more step in that

direction.

I congratulate Chief Clint Williams of the Tla’amin Nation and the

elders and all those who have continued to push for a fair resolution to

outstanding issues. This is, I think, an important step in that

direction.

I thank the minister, and I support this bill.

Deputy Speaker: Seeing no further speakers, the minister closes debate.

Hon. S. Fraser: Before I ask to move second reading on Bill 3, I’d like to just

thank my critic opposite for his support of this and his kind words, the

member for Penticton, and also my colleague and friend from Powell

River–Sunshine Coast for his words in support.

I would also like to acknowledge and thank Chief Clint Williams

and the Tla’amin people for the hard work and perseverance that they

have shown, leading to the point where they have made and are making

life better not just for their people, the Tla’amin people, but for the

people of the region and the people of the whole province. It’s an

honour to be standing here today with Bill 3.

Then, I’d also like to finish by noting that my colleague from

Powell River–Sunshine Coast has been a strong supporter of the Tla’amin

people inside and outside of this House, and those relationships will

last forever.

With that in mind, I would like to move second reading of Bill

Motion approved.

Hon. S. Fraser: I move that the bill be referred to the Committee of the Whole to

be considered at the next sitting of the House after today.

Bill 3, Tla’amin Final Agreement Amendment Act, 2018, read a second

time and referred to a Committee of the Whole House for consideration at the

next sitting of the House after today.

Hon. C. James: I’d now like to call second reading of Bill 2.

BILL 2 — BUDGET MEASURES

IMPLEMENTATION ACT,

Hon. C. James: I move that Bill 2, the Budget Measures Implementation Act, be now

read a second time.

This bill amends 21 statutes in order to implement many of the tax

measures in Budget 2018. The Income Tax Act is amended, and I will take

the time to go through each of the pieces, each of the amendments, and

just give a quick description. I know we’ll have more opportunity as we

get into committee stage — but a quick description of each of the

pieces.

The Income Tax Act is amended to expand, extend or eliminate

several tax credits. The first is the caregiver tax credit and infirm

dependent tax credit. They are replaced with a new B.C. caregiver credit

for 2018 and subsequent tax years. This is going to increase support for

people who provide care to relatives in need, and it’s also going to

simplify tax administration because it will harmonize with federal

credits. So it will be easier for people to apply for, and it’ll provide

increased support for individuals who are caring for relatives in

need.

When the previous government tabled Budget 2017, included in that

budget in 2017 was the elimination of the education tax credit, as of

January 1 of this year. In Budget 2018, we’ve delayed the elimination of

the credit to 2019 to continue the benefit for one more year, just to

look at how best to support post-secondary students in B.C.

People may remember…. I know the critic certainly does. In

September, we had a number of measures where the federal government has

eliminated a credit. B.C. had matched up a tax credit and now is

coordinating those tax credits and eliminating them as the federal

government is in place.

This is a very similar one. The federal government as well as

Saskatchewan, Ontario and New Brunswick have already eliminated the

education credits. As I said, the previous government brought it forward

in their budget as well, in 2017. So we are continuing it until 2019 to

give some time for transition and to be able to look at how better to

support our post-secondary students.

The education tax credit wasn’t based on income and provided very

minimal support when students need it the most. So our hope is that

we’ll be able to look at further opportunities there.

[1:50 p.m.]

The mining flow-through share tax credit is extended for another

year, to the end of 2018. Certainly, we recognize that the mining sector

is a vital part of our economy. This extension will continue to

encourage investment in British Columbia in mineral exploration and in

development.

The farmers food donation tax credit is extended for one more

year, to the end of 2019. Again, this extension reaffirms our

government’s commitment to support B.C. agriculture, while providing

food banks with local, nutritious food.

The interactive digital media tax credit is extended for five

years, to August 31, 2023. By expanding this credit, the government

ensures continued support for B.C.’s dynamic and growing tech sector. I

think we just heard an introduction around innovation and looking at

innovation. This certainly continues to provide our government’s support

for innovation and for B.C.’s tech sector to be a high priority when it

comes to our economy, and a growing part of our economy.

I certainly have to say, as an almost lifetime Victorian, I’m

amazed to see the kind of expansion that we’ve seen around tech in the

last number of years. I think people will be surprised to know the kinds

of dollars that are coming into our economy, even here in Victoria.

People picture it in the Lower Mainland, but in fact, it’s all across

the province. It is one of those sectors that, as long as there are

connections, can locate almost anywhere in British Columbia. So it

really continues to be a growing part of our economy.

We’ve continued the book publishing tax credit for another three

years, to March 31, 2021. The extension of this credit certainly

continues our government’s support to book publishers in British

Columbia. We know we have a thriving book publishing industry here in

our province. We certainly hope that the extension of this credit will

continue to see that industry grow and provide support.

The Film Incentive B.C. tax credit is also expanded to include

scriptwriting expenditures for B.C.-based writers. There has certainly

been a push to make sure that we provide incentives and support for B.C.

writers, for film producers to use B.C. writers, to give them the

experience, to be able to expand the B.C. film industry.

A strength that we have here…. The reason people often talk about

coming to British Columbia is that we have a well-trained,

well-experienced workforce here in the industry. We want to make sure

that B.C. writers also get that opportunity. Taking a look at the

incentive and expanding that is another opportunity to encourage

that.

As the House will know, we’re also looking a number of areas and

changes to areas related to combatting tax avoidance. This is a critical

measure, critical pieces and a critical agenda for us as government — to

make sure that there’s fairness in our tax system and that people are

paying their fair share of taxes. I think it is an issue of fairness

that all British Columbians agree with.

We are making a number of changes to be able to look at better

tracking of information, better reporting of information, which then

gives us the ability to audit and gives us the ability to enforce when

people aren’t paying their fair share. The Income Tax Act is amended to

add a reportable transaction rule and to strengthen the existing general

anti-avoidance rule.

The Income Tax Act, the Land Tax Deferment Act and the Home Owner

Grant Act are amended to allow taxpayer information to be shared between

the Income Tax Act and the Land Tax Deferment Act. This is going to,

again, as I said, enhance tax enforcement by allowing administrators to

ensure that only B.C. residents can benefit from property tax deferment

and, also, to verify that residential information is being reported

consistently.

Again, the biggest, most important piece when we’re looking at

dealing with enforcement or dealing with auditing is getting the

information and making sure we have the information. That’s what many of

these changes relate to.

Both the Income Tax Act and the Logging Tax Act are amended to no

longer require preapproval from the Lieutenant-Governor-in-Council prior

to entering into information-sharing agreements under that act. These

acts now follow the same procedure for information-sharing agreements as

B.C.’s other taxation acts. So this is a cleanup, making sure that there

is consistency across our tax acts.

The Property Transfer Tax Act is amended to increase the transfer

tax rate on residential properties to 5 percent, from 3 percent, for the

assessed above $3 million, effective February 21, 2018. I think it’s

important again to state that this is on the value of the property above

$3 million. That’s where the tax applies.

[1:55 p.m.]

We believe, again, in looking at a fair tax system, that people

who have been able to see value in their homes provide a little bit more

towards supports that all of us, including those individuals, enjoy in

British Columbia.

The Property Transfer Tax Act is amended to exempt transfers of

the bankrupt’s principal residence from a trustee in bankruptcy to the

bankrupt or the bankrupt’s spouse or former spouse. This is going to

provide the bankruptcy trustee with greater flexibility in trying to

find solutions which benefit both the creditor and the bankrupt, so this

provides support for both and ensures the flexibility is there to look

at all opportunities. The Property Transfer Tax Act is also amended to

strengthen audit and enforcement powers.

There are a total of five administrative amendments also made to

the act. First, the limitation period for property transfer tax

assessments is extended to six years. That matches with the limitation

period for transactions with an additional property transfer tax

liability — again, coordination, cleaning up, making sure that there are

similar kinds of provisions.

Second, the collection of additional information on transactions

through property transfer tax returns is enabled — again, getting back

to making sure we’ve got the information to do audits, to do

enforcement.

Third, an administrative monetary penalty is introduced to

increase enforcement powers and deter non-compliance.

Fourth, the general anti-avoidance rule is extended to cover the

entire act, instead of applying exclusively to transfers with an

additional property transfer tax liability.

Fifth, the act is amended to enable access to additional

information on property transactions, including information contained in

a Multiple Listing Service database.

The School Act is also amended to increase the school tax on

assessed values above $3 million on high-valued homes. I think it’s

important to state — it said it clearly in the budget but just in case

people didn’t have a chance to see all of the details — that this

includes detached homes, stratified condominiums, townhouses and vacant

residential land outside the agricultural land reserve, which will be

subject to the additional school tax.

The higher rate does not apply to non-stratified apartments or

rental buildings with four or more units. I think that’s important to

state, because there was some concern that this would include rental

buildings. There is no intent for this to include rental buildings or,

as I said, non-stratified apartments. About 2 percent of people are

looking at the number of homes that have a value over $3 million. You’re

looking at about 2 percent of homes in British Columbia that will be

subject to this additional school tax.

The tax rate is going be 0.2 percent of any value of residential

property between $3 million and $4 million, and a rate of 0.4 percent

will be applied on any value over $4 million. This increase starts in

the 2019 tax year.

The School Act is also amended to include a new rental

revitalization exemption. Again, people will have heard the discussion

in the budget, as a part of our 30-point plan, that one of the things

that we are looking at is ensuring that we have partners to come to the

table to support affordable housing in our province. Addressing the

issue and the crisis that we’re facing around the lack of affordable

housing is not something that is going to be solved by government alone.

It’s going to be solved in partnership with the private sector, with

municipalities, with First Nations, with other partners.

We are bringing in an amendment on the revitalization exemption —

new rental revitalization. This exemption will be available on newly

built or substantially renovated rental properties which have more than

four units and receive a municipal revitalization exemption

certificate.

Right now there’s a tool for municipalities to take a look at

giving a municipal revitalization exemption certificate to provide a

break for the building of rental housing. What we are saying is we are

also stepping up to the plate as a province, and we will waive the

school tax in those areas. We will give an exemption on the school tax.

It’ll be effective in 2019 and subsequent tax years. That, again,

supports municipalities and the work that they’re doing to come to the

table and partner. You will, hopefully, spur and encourage

municipalities to take a look at their revitalization agreements and for

developers to look at that as well, to provide the support.

[2:00 p.m.]

The School Act amendments I’ve listed also require consequential

amendments to a number of acts. Assessment Authority Act, British

Columbia Transit Act, Hospital District Act, Indian Self Government

Enabling Act, Islands Trust Act, Local Government Act, Local Services

Act, South Coast British Columbia Transportation Authority Act, and the

Vancouver Charter. All of those acts will see consequential amendments

to ensure that we’ve made the changes that I listed

previously.

Effective April 1, 2018, the Tobacco Tax Act is also amended to

increase the tax rate on cigarettes to 27.5 cents per cigarette from

24.7 and to increase the tax rate on loose tobacco to 37.5 cents from

24.7 cents per gram. I think all of us know that British Columbia is

well known for doing everything we can to decrease the rates of smoking.

Certainly, higher tobacco prices can be a very effective deterrent to

those who are looking at starting to smoke — for young people, in

particular — and also an incentive to quit for current smokers. So we

believe this is not simply a change in a tax measure but, in fact, a

health measure, if we look at British Columbia.

The Motor Fuel Tax Act is also amended to increase the fuel tax

rates on gasoline and diesel in the capital regional district to 5.5

cents per litre from 3.5 cents. This has been a longtime request by the

transit council here in the capital regional district. They have

requested this increase to be able to provide support for expanding

transit services — increasing buses, dedicated bus lanes. So this will

provide an opportunity for the region. All the additional revenue will

go directly to the Victoria Regional Transit Commission for the Victoria

regional transit system. This is, again, a request that came forward

that we believe provides that additional support.

We’ve also amended, in this bill, the Carbon Tax Act and the Motor

Fuel Tax Act. They are amended to clarify that fuel sales between

refiner-collectors are exempt from security. This, again, simplifies

administration and avoids the potential for the double taxation of

fuel.

Bill 2 also includes several amendments to the Provincial Sales

Tax Act. This act is amended to enable on-line accommodation platforms

to register to be collectors of provincial sales tax and the municipal

and regional district tax. You will remember, hon. Speaker, that we

talked about this in relation to Airbnb coming to the table. We

certainly hope that you will see other on-line accommodation providers

come to the table to work out similar kinds of arrangements, to provide

that support to municipalities through what is known as the hotel tax

but otherwise known as the municipal and regional district

tax.

The act is also amended to increase the luxury surtax rates on

passenger vehicles with a purchase price of $125,000 and above. We

believe, again, this is going to improve the fairness of the tax system

and also help provide funds for services and supports that every British

Columbian receives.

The government is also making three amendments to the Provincial

Sales Tax Act to clarify and simplify provincial sales tax

administration. First, the software provided and optional as-needed

maintenance agreements are now taxable. This actually just clarifies the

long-standing

interpretation of the act. That is the

interpretation, and

that is what people were following.

We’re ensuring that that clarification is there in the act for

people. Second, services are now permitted to be included in the tax

payment agreements between the province and railway companies that

operate across jurisdictions. Again, this is going to simplify their

remittance of provincial sales tax on services. Third, cruise ship

retail operators will no longer be required to collect provincial sales

tax on sales made during scheduled sailings.

The Carbon Tax Act, the Motor Fuel Tax Act and the Provincial

Sales Tax Act are also amended. It will allow a fee to be charged to

taxpayers to recover costs associated with out-of-province audits.

Audits are needed to ensure compliance with and the fairness of our tax

system. There are some taxpayers who keep their books and keep their

information, their records, outside of British Columbia.

We are collecting a tax to be able to enable the auditors to do

their work that they need to do. Of course, taxpayers have the

opportunity to bring those books and those records into British

Columbia. Then, obviously, there would be no fee charged. This is simply

a charge, for those who wish to keep their books and their records

outside the province, to enable us to be able to have access and to be

able to do the audits.

The Hydro and Power Authority Act is also amended to clarify that

B.C. Hydro’s school tax liability is limited to land it owns in fee

simple and its improvements. Again, this is a clarification of the

long-standing

interpretation of the legislation.

[2:05 p.m.]

This clarification doesn’t affect Nisga’a lands or taxing treaty

First Nations lands. It doesn’t impact, as well, B.C. Hydro’s ability to

pay grants in lieu for its holdings on their lands. So no changes to

those pieces. It’s simply a clarification on the long-standing

interpretation of the legislation.

Finally, the Petroleum and Natural Gas Act is amended to improve

administration and information-sharing by allowing for the collection of

oil and gas data under the petroleum information network, which is also

used by Alberta and Saskatchewan, and for the information collected to

be shared between relevant ministries.

I know that’s a long list of changes. I appreciate the opportunity

to listen to other speakers who may wish to speak to this

bill.

S. Bond: I appreciate the opportunity to get up this afternoon and make

some comments about this bill. I think the comments made by the Minister

of Finance certainly are probably a perfect example of the number of

changes that are being made in this bill. It is a lengthy bill. It is, I

think, about 62 pages long. When you look at legislators in this place

and the kinds of things we have debates about, this is probably not the

bill that springs to mind for most people and that would generate an

energized discussion.

It is an absolutely essential bill, and that’s why it’s called the

Budget Measures Implementation Act. When I think about it, it’s the

framework on which government’s policy decisions, their taxation

decisions — those pieces of policy that they’ve announced in their

budget…. This is the framework which brings those pieces to

life.

I view it as the black-and-white version. This is the technical

information that is required to bring budget decisions to life. It is,

in essence, a fundamental bill in this House. In fact, some would

suggest that it is absolutely critical to the confidence of the

government. I think you can tell from the very long list: 21 acts that

are impacted by the decisions that were announced by the government in

their recent budget.

As I said, if this is the black-and-white version, what’s missing

from this piece of legislation — and rightly so, because the nature of

the bill is such that it’s technical — is the colour version — what

those policy decisions make, the changes that they make in people’s

lives. We list off 21 acts that will have some implication, some change

as a result of the budget. What we need to be careful about is what the

implications are for British Columbians.

I want to spend just a few minutes talking about some of those. I

can imagine that most British Columbians today aren’t (

a) tuned into

Hansard to listen to our comments and (

b) will probably likely never in

their lives have the opportunity or the desire to look at the Budget

Implementation Act. That’s why it’s important that members of the

opposition and the Green Party will stand today and ask some

questions.

Today is just the overview of the direction we’re going to take.

In committee there will be some very specific questions about the

legislation that is in front of them. We have to remember that the

legislative piece that we see in front of us does not lay out the

details around some of the more significant pieces of legislation, some

that have already caused British Columbians concern. Those are

additional tax measures, and I’m going to have something to say about

those shortly.

Some of the amendments in this bill would be considered minor, and

legislation does that. There are places where there are, in essence,

housekeeping measures taken to correct something. The minister very

clearly articulated what some of those are. When the federal government

makes changes, the provincial government needs to align their taxation

measures or programs with federal government change. There are sections

here which do that. They align federal and provincial

programs.

There are things that were clearly laid out by the government and,

in fact, by the previous government in terms of the elimination of the

education tax credit and a variety of other things. There are some very

matter-of-fact things contained in this bill, and I’m sure that when we

go through committee, they will take less time than some of the other

pieces.

[2:10 p.m.]

The minister mentioned a number of acts that will be modified to

look at the issue of information-sharing. Obviously, when you want the

government and the ministries and the branches of government to work

more efficiently together, you do want to be able to share information.

But I can assure you that British Columbians are as concerned about the

protection of privacy as they are about the freedom-of-information side

of this.

As we get into committee later, we will be talking about what kind

of information is being collected and for what purposes. Those are

important details, as we look at the implication of the collection of

new taxes, the collection of information about property taxes and those

kinds of things. I think British Columbians will want to know exactly

what information they will be asked for.

When I look at one of the things…. I can remember…. I think it was

particularly the member for Nanaimo. When we were in government, he

would constantly remind us that we shouldn’t be doing…. Why do we do so

many things in government by regulation?

Well, interestingly enough, one of the sections that is added in

regard to the Property Transfer Tax Act is “Ministerial

regulation-making power.” In fact, it says, “The minister may, by

regulation, require additional information to be provided under

section

12.13 on returns that must be filed….” In essence, this authorizes the

minister, by regulation, to require information. We’re going to be

asking exactly what kind of information and in what circumstances, by

regulation — that means it doesn’t take place in this House, and there

isn’t debate — information would be collected from British

Columbians.

There are, though, important areas where information will be

shared between agencies to allow for a more efficient process for both

the taxpayer and for government agencies. So there are both positives

and, obviously, some concerns about some of those potential

implications.

We also note that there are a significant number of tax measures.

As I said earlier, not all of them are even reflected in this piece of

legislation. I think, from our perspective, one of the most significant

concerns we have is the confusion that has been created regarding some

of the new taxation measures.

When you think about the kinds of commentary that we’ve heard from

not just business in British Columbia but from owners of houses, from

employers and from employees, there seems to be a great deal of

confusion and concern. In our view, it is absolutely incumbent upon the

government, not only through this piece of legislation but other work

that they do, to explain exactly what the implications of those tax

changes are. We’re going to pursue a line of questioning related to some

of those pieces as well.

We also have to take into account the fact that…. There were tax

measures contained in the September budget update, and we had a fulsome

discussion about that. But we want to actually look at the discussion

about whether British Columbians are going to be better off after these

tax changes. Or is there an unfair tax burden being placed on business

and individuals in this province?

I think one of our most significant concerns is that there seems

to be a lack of connectivity. When you add a tax burden to businesses,

it has a trickle-down effect to the employees and, thus, British

Columbians in this province. We’ve had a very vigorous debate, although,

as I said, clarity…. Apparently, it’s very difficult for people to

understand.

When you talk about eliminating MSP premiums, as an example, and

say that it’s going to bring a benefit to employers, we need to have an

accurate description of what’s happening. We’re eliminating MSP

premiums, and we’re replacing it with a new tax. In fact, we are looking

at one year — and the minister has been forthright about that — where

the 50 percent reduction of MSP premiums does bring a benefit. But we

should be extremely clear that in the subsequent years there are impacts

on businesses in British Columbia. Ultimately, that will translate and

will impact consumers and employees in this province.

[2:15 p.m.]

Why don’t we, just for a moment, think about what exactly is

expected of business as a result of this budget? Well, we have a new

employer payroll tax — technically, $4.2 billion. The carbon tax is up

16.7 percent. Yes, we see those acts being amended in this bill. The

minimum wage is up by 11 percent, and the corporate tax rate is now at

12 percent.

In essence, this budget, this framework that’s being put in place,

is actually being funded by businesses in British Columbia. The members

of the government seem to think that you can layer that on to businesses

in British Columbia and somehow it won’t be felt by British Columbians,

by consumers or by employees in those businesses. We know that’s simply

not accurate. We have been deluged by stories from family-supporting

businesses that create well-paying jobs for British Columbians. What are

they saying to the members of the opposition? They are deeply

concerned.

Every day those concerns are brushed off by members of the

government simply saying they’re going to get a benefit by reducing MSP

premiums by half. They neglect to finish the rest of the story, to add

the colour. The black and white in this bill lays out that framework,

but what’s missing is the trickle-down effect on those businesses.

Ultimately, that will affect British Columbians far more

broadly.

When you look at recent articles…. Let’s be clear here: when our

comments or thoughts are simply set aside, often it’s not the voices of

MLAs on this side; it’s the voices of business owners. We should be

clear. These are not business owners who are million-dollar

CEOs.

Here’s a

summary of the fiscal plan unveiled by the Finance

Minister, not in my words but in a recent

article in Business in

Vancouver . “Massive new spending and balanced budgets. But it

only accomplishes that balance through more than $5 billion worth of new

taxes or tax hikes over three years.” While many businesses welcome the

government’s $1 billion child care plan, because of lack of access to

affordable child care, “they were blindsided” — not my words — “by the

employer health tax, which will replace Medical Services Plan

premiums.”

Let’s be clear. While the government wants to celebrate the

elimination of MSP premiums, they also need to stand up and reflect on

the fact that they are replacing those premiums with another tax. It’s

not quite as simple as “it’s going to be really good for everyone,”

because there are subsequent years which will have ongoing

impacts.

That is an enormous concern for members of the opposition, and we

continue to hear from business owners — large, medium and small, all

across this province — who have no idea how they are going to manage

those changes. Not to mention the complexity now. What about those

public service organizations? What about school districts? What about

hospitals?

If you do the math, if you’re looking at a budget, you can’t

simply say, “Our budget is based on this income” and then incrementally

start to exempt groups. “Oh, we’re going to take care of this one.”

“We’re going to make sure that one is held whole.” “We’re going to look

at this.” “We’re going to discuss this.” Very, very quickly the

credibility of a budget begins to disappear. You can’t create a budget

that makes assumptions about revenue and then start to minimize that

revenue by exempting people.

From our perspective, there are significant concerns about a plan

that, first of all, ignored the advice that was given to this minister,

not just by her own MSP Task Force but also by the Canadian Federation

of Independent Business. They say that they warned the Finance Minister,

in a prebudget meeting, that small and medium-sized businesses do not

support using a payroll tax to replace MSP premiums. You can imagine why

they might not.

While we’re simply talking about, in my comments at the moment,

the employer health tax, let’s talk about the other things that are

impacting those businesses. We’ve mentioned some of them

already.

[2:20 p.m.]

The corporate tax is going up. There’s an 11 percent minimum wage

increase. There’s a 16.7 percent increase in carbon tax. The commentary

goes on to say: “The one bit of tax relief for business is the

elimination of PST on electricity.” I seem to recall that, as

government, we actually introduced that initiative.

From my perspective, there needs to be a thoughtful and thorough

dialogue that explains the entire story to British Columbians. It’s not

enough to stand in question period every day and simply say: “This is

fantastic. It’s great for employers because they’re going to get a

benefit.”

Yes, they’re going to have a year where they will benefit from a

50 percent reduction in MSP. But what is completely missing from the

dialogue — and I think that is very unfair to British Columbians broadly

— is the fact that, yes, MSP premiums will be eliminated, but they are

being replaced by another tax. To suggest that that will not have

implications for businesses of any size in British Columbia, in my view,

is just simply not accurate.

I do want to spend a couple of minutes talking about some positive

things. As I noted in my initial comments after receiving the budget,

when it was tabled…. While everyone’s here in the Legislature, we’re in

a little room. People come in and drop the budget books on a table, and

they say: “Here they are.” Then, lo and behold, you arrive in the

Legislature to provide remarks about that budget.

In those opening remarks I made, we did compliment the government.

We did recognize that important investments were being made in areas

like child care and housing. But what’s important is that the rest of

the story be told, that British Columbians understand what was required

in order to make those investments. As we have heard from

businesses….

While it would be convenient to be able to characterize businesses

in British Columbia that will be impacted by the budget as the rich, the

exclusive — all of those kinds of descriptors — the vast majority of

businesses in British Columbia are small businesses. The definition of

“small business” is 50 persons that are employed. That hardly reflects

the view of a million-dollar CEO.

When we make these kinds of decisions based on how you pay for

what it is you’re going to announce, you need to be able to lay out the

entire story for British Columbians, and we certainly will be looking

forward to continuing to do that. We will do that through asking

questions as we work our way through this bill in committee.

I also want to reflect on another concern that we have. Though our

briefing was short, questions like when you look at how assessments will

be done for taxation purposes…. The bill speaks to fair market value.

Well, it will be very important to clarify for British Columbians what

that means.

At what point is fair market value determined, and how does that

impact homeowners? There are few things in a family’s world that have

more value — literally, financially and from a quality-of-life

perspective — than their home, and we are very concerned about some of

the implications of the housing strategy that’s been laid

out.

I do want to look at a couple of new initiatives that we were very

pleased to see. We’re looking at the extension of the book publishing

tax credit. While people think that that might be just a small sector,

it is an important one. The measure was first introduced by our

government, and I am very pleased to see that the minister has chosen to

extend the book publishing tax credit for three years. It will give

certainty.

The book publishing tax credit, for example, primarily applies to

book publishing corporations that carry out business primarily in B.C.

It might interest Madame Speaker to know that British Columbia is home

Canada.

[2:25 p.m.]

Amongst all of the changes that are being made, there are things

that we are very supportive of. Ironically, many of them didn’t occur

overnight. Many of the initiatives that are contained both in the budget

and in this bill relate to initiatives that have been undertaken after a

lot of work over the last decade or so. The book publishing sector is

incredibly important in British Columbia, so we were very pleased to see

that included.

As I listened to the minister’s list today, when we look at things

like the interactive digital tax credit, that is also an important part

of looking at building on the success of our film industry, our tech

sector, celebrating some of the fantastic work that’s done in British

Columbia in television and film and in digital. Having worked with that

sector, it is an incredibly important one.

The mining flow-through tax credit. All of those kinds of things

are important. It’s great to see them being continued, but it is so

important that we take the time necessary to look at the Budget Measures

Implementation Act in the context of what it means related to the

budget, what it means to everyday British Columbians.

It’s hard to argue against closing loopholes that are related to

tax avoidance. It’s hard to argue against enforcement measures and

looking at how we deal with audit in British Columbia, finding a better

way to do that. I think everyone in this House wants to ensure that

there is a fair and appropriate process for paying the taxes that are

required. So those are important measures that are included in this

bill.

Another tax measure where the implications are significant is the

carbon tax. We’ve had discussion about that in this House before. We

know from the September budget update, and now confirmed in the budget,

that the carbon tax is going up. Our biggest concern remains that the

carbon tax is no longer revenue-neutral. Again, it just builds on the

narrative that while announcing important investments….

No one denies that making sure there’s affordable child care,

making sure that British Columbians can afford a home, making sure that

those people who struggle are supported…. But it has to be presented in

the context of: how are we going to pay for those things?

What we’ve discovered and what we have certainly heard from many

British Columbians over the last week or so, since the budget was

tabled, was that businesses are going to bear the brunt of budget tax

hikes. The very people who are responsible for creating jobs, supporting

families in this province, making sure we can have a strong and growing

economy, are the people who are going to carry the burden to pay for all

of the announcements that have been made.

The carbon tax is no longer revenue-neutral. There is less public

focus. There is not a sense of immediate accountability about what those

dollars are going to be used for. We were very disappointed to see the

loss of revenue neutrality in terms of the carbon tax. In fact, our

government, as has been said before, won awards for the very progressive

nature of that carbon tax.

Part of the responsibility of government is to explain to British

Columbians…. If you’re going to take additional dollars at the gas pump

and people are going to be paying more to fill up their gas tanks, they

deserve to know where that money is going, not simply: “It’s going into

general revenue to pay for a variety of other things.” We are very

disappointed at the loss of revenue neutrality when it comes to the

carbon tax.

With those comments, I want to simply remind and urge the Minister

of Finance to remember that this is the black-and-white version and the

framework on which the policies that her government has decided are

priorities…. The implications of those tax changes, of the amendments of

all of the acts, really, when you list all 21 of them, most British

Columbians…. It’s probably not on their radar screen or a high priority

for them to understand that.

What they do deserve to know is exactly how they will be impacted.

In fact, we know there will be impacts.

[2:30 p.m.]

We will very likely see costs that are being downloaded on

employers. They will be transferred in a number of ways. Either the

services that are provided…. You’re going to see them become more

expensive. Or, in the case of many of the people who have contacted my

office, you’re going to see them consider whether or not they require

staffing reductions, whether or not they will consider expanding. There

are significant implications.

I appreciate the Finance Minister laying out the acts that we’ll

be discussing in committee. I look forward to a very constructive

committee discussion. I am sure there will be a lot of questions. And I

want to thank you, Madame Speaker, for giving me the opportunity to

provide some remarks this afternoon.

J. Brar: I’m very excited to stand up in this House today to speak in

favour of Bill 2, the Budget Measures Implementation Act, 2018. Before I

say anything, I would like to say thank you to the member for Prince

George–Valemount for her very thoughtful comments, because that’s what

this House is for. We debate the issue when it comes in front of

us.

[R. Chouhan in the chair.]

This bill proposes a number of changes to a number of existing

acts. That will provide us with the kind of framework that will allow us

to make decisions for new investments, for new taxation — the promises

we made to the people of British Columbia. So I am very excited to stand

in this House to support this bill, introduced by the Minister of

Finance and the Deputy Premier of this province.

I support this bill because, after 16 years of neglect, British

Columbians finally have a budget that is not only balanced but a budget

that puts people first. We live in a province rich in people, resources,

natural beauty and opportunities. Yet those opportunities have become

further and further out of reach for too many people. Families are

working harder than ever and can’t get ahead. Young people can’t find

affordable housing, and seniors can’t get services that they depend on.

It’s time for a totally different approach. That’s why I support this

bill, Bill 2 — because people are at the centre of every choice that we

have made in this budget.

Bill 2 opens the doors wide open to share prosperity in the

province of British Columbia, to make life more affordable, to improve

the services that people count on and to build a strong, sustainable

economy that supports jobs in every part of the province. With this

bill, we are charting a path to a more affordable, balanced and hopeful

vision for B.C. For 16 long years, the previous government worked for

the top 2 percent — wealthy British Columbians. Our government wants a

better B.C. for each and every person in this province.

I come from Surrey, and I support this bill because this bill is

good news for the people of Surrey — the news the people of Surrey have

been waiting for, for 16 long years. I have received a number of phone

calls and emails from the people of Surrey, and they’re all happy with

the new investments this government is making to build a new

infrastructure and to improve services for the people of

Surrey.

The city of Surrey is the fastest-growing community in the

province. We welcome over 1,000 newcomers every month. Our great city

has led the province in population growth and in building new homes.

Clearly, we have been paying our dues to the provincial coffer, but the

previous government made bad choices and completely ignored the needs of

our growing community for 16 long years. People are paying the price for

those bad choices.

[2:35 p.m.]

Housing affordability is in crisis. Every year 4,000 kids are born

at Surrey Memorial Hospital, but parents can’t find child care spaces,

and 7,000 children in the city of Surrey don’t have real classrooms.

Patients suffer in pain over six long hours at Surrey Memorial Hospital,

but the Liberal government sold the land which was purchased by the

previous government to build a new hospital. There were no plans to

replace the Patullo Bridge, which is completely unsafe at this point in

time. People are paying more but getting less.

That’s what the people of Surrey got under the previous

government’s so-called good economy. They left our city in a big and

ugly mess, and we need to fix that. Bill 2 offers concrete steps to fix

those problems that people in Surrey have been facing for too long. I

would like to talk about what the bill offers to the people of

Surrey.

We are making historic investments for affordable housing. While

the B.C. Liberals ignored the housing crisis for 16 long years, we have

taken bold steps to begin to tackle the housing crisis. This includes

our commitment to the largest investment in housing in the history of

our province. Our investment will support almost 34,000 units of

affordable rental, supportive and student housing. Our government is

also going to permit colleges and universities to borrow to build

much-needed student housing, and together, we will help finance 5,000

new student housing beds under this bill.

I support Bill 2 because it is a path to help build 114,000

affordable units which we promised to the people of British Columbia

during the last election. The city of Surrey will receive capital

funding of approximately $13 million for three modular housing projects,

totalling 160 supportive housing units for people who are homeless and

at risk of being homeless. B.C. Housing is going to provide $15 million

in capital funding to Surrey for 50 transitional beds and 50 shelter

beds for men and women who are homeless or at risk of becoming

homeless.

I support this bill because this also allows us to take action to

stabilize the housing market. We are taking steps to counter tax fraud

and money laundering. It starts with closing loopholes and ensuring that

we can crack down on tax frauds. That’s what this bill is all

about.

This bill also includes the largest investment for child care in

B.C. history. While the previous government said no to people who are in

need of child care, this budget offers the largest investment in child

care in B.C. history, with a $1 billion child care investment over three

years to lower costs for parents, increase the number of child care

spaces and make sure those spaces meet the highest standards for quality

care.

The plan starts with the new affordable child care benefit

starting in September. It will provide up to $1,250 each month per

child. It will lower fees for an estimated 86,000 families per year by

the end of 2020-21.

[2:40 p.m.]

Also, starting April 1 of this year, a child care fee reduction

program will provide funding directly to licensed care providers. It

will provide up to $350 a month for a child care space. These fee

reductions will benefit an estimated 50,000 families per year by

2020-21.

Together, this is the largest investment government has made to

reduce child care fees ever in the province of British Columbia. It’s

good news for the people of B.C. It’s good news for the people of

Surrey. I am proud to say that this marks the beginning of a

made-in-B.C. universal child care plan. That’s why I’m excited to

support Bill 2.

Nothing is more important than our children’s education. Investing

in our education means investing in our future. Today, young people will

graduate into a global job market, and we will need to make sure that we

have a public education system that will help them compete in the global

market.

The result of 16 years of the B.C. Liberals’ neglect is that we

have 7,000 students in Surrey who have no real classrooms, and we can do

better. After a long time, this bill of our government will provide

about $200 million of capital funding to build new schools and for

seismic upgrades to ensure our kids are safe. These investments include

the following new schools.

They’re going to build Grandview Heights secondary, a new

secondary school to provide 1,500 student spaces; Burke Road Elementary,

a new elementary school to provide 605 student spaces; Regent Road

Elementary, a new elementary school to provide 655 student spaces;

Salish Secondary, a new secondary school to provide 1,500 student

spaces; Edgewood Drive elementary, a new elementary school to provide

655 student spaces; and Pacific Heights Elementary, a 12-classrooms

addition to provide up to 300 more student spaces in Surrey. In

addition, Bear Creek Elementary will get a seismic upgrade. Mary Jane

Shannon Elementary will also receive a seismic upgrade.

That’s a huge investment. It’s a historic investment, which the

city of Surrey got after a long, long time.

Transportation is another area which is a challenge for the

growing community of our city with a growing population. This bill also

provides a significant new investment to build transportation

infrastructure for the growing city of Surrey.

Our government has already eliminated the tolls on the Port Mann

Bridge and the Golden Ears Bridge as of September 1. It is free to cross

the Port Mann and Golden Ears bridges. These were unfair tolls put, by

the previous government, on the people of Surrey, particularly on the

people of Surrey and Port Coquitlam. A driver who commutes to and from

work each and every day on the Port Mann Bridge will save approximately

$1,500 a year, and that’s a huge savings for any working family. So we

are making life more affordable for people who cross the Fraser River

every day.

In addition, our government has made a new, exciting announcement

to replace the Pattullo Bridge, and that is a $1.3 billion announcement.

A new investment to replace the old bridge that had been, actually,

replaced a long time ago, and the completion date for that one is 2023.

It’s good news for the people of Surrey as well.

[2:45 p.m.]

There’s also $19 million in funding for south of Fraser’s effort,

funding early work. That funding will be spent on that one, and that

includes the widening of the Bear Creek Bridge and utility relocation,

as well as upgrades to transit exchanges at future LRT

stations.

As you know, Mr. Speaker, we have made the commitment to provide

40 percent funding to LRT in Surrey, which the previous government had

constantly refused to do. Now that project is going to go ahead because

we have given them the initial funding. I hope that we will see that

project moving forward soon.

This bill, the Budget Measures Implementation Act, marks a new

direction in our province. It puts us on a path where people are put at

the centre of the government’s decision-making. Budget 2018 takes

significant steps to help our businesses get the workforce they need by

addressing child care and housing affordability issues. There are many

more items in this bill that I won’t have time to go into

today.

A key announcement to serve…. It will include building more

schools and more hospitals; improving access to team-based care for

people who do not have a family doctor; helping seniors live at home

longer and access the quality staff they need in residential care;

improving access to the justice system through family justice centres,

legal aid and reduced court delays; and investing in building a strong,

sustainable economy, which includes making a record level of investment

in capital projects, including, as I said earlier, schools and transit.

That will create 50,000 direct and indirect jobs throughout the province

for the people of British Columbia.

Mr. Speaker, I support this bill, as I said to you earlier. This

bill is good news for the people of Surrey. With this bill and with this

budget, we are focused on making life more affordable, improving the

services people depend on and, of course, developing a sustainable,

strong economy that provides good, meaningful jobs to the people of

British Columbia.

With that, I will conclude my comments by saying that I fully

support Bill 2. With that, I will take my seat. Thanks for giving me the

opportunity.

P. Milobar: It gives me pleasure to rise today to speak to Bill 2. I wish it

was less of a tax-intensive bill, though, that I was rising to speak

to.

When I was listening to the Finance Minister speak to open up this

debate, I noticed that there was a reference to 21 different amendments

needing to be made. I lost track of how many statements started with:

“With this amendment, we will be increasing this tax.” “With this

amendment, we will be increasing this fee.” But it’s safe to say that

not once did I recognize or hear — and I could have missed it — a

statement saying: “With this amendment, we will be reducing and

lowering….” That, I think, is the fundamental problem with the overall

Bill 2 and the amount of amendments needed to be able to bring forward

the budget.

This is — let’s be very clear — a budget that has record levels of

taxation. We can talk about individual ministries and record levels of

this investment or that investment. Frankly, a lot of those already

allotted funds were in previous budgets. This is the three-year working

forward and previously announced spending priorities and spending

amounts within those ministries. But what we didn’t see in those

previous budgets were record levels of taxation, and that is very

clearly what this budget is.

[2:50 p.m.]

What this bill will bring forward, with their amendments, is a

cavalcade of tax increases across the board, touching almost every type

of tax and fee you can imagine as a citizen, all under the guise of the

marketing slogan of the NDP saying “making life affordable.” Only under

this government’s watch does a $5.5 billion record-level-setting tax

increase equate to making life affordable.

We’ve heard loud and clear from the business community. That’s not

us fabricating, on this side of the House, people’s concerns. People

have real-life concerns about their own individual businesses. It’s not

a calculation that’s difficult for somebody that is in business — to be

able to look at their payroll and figure out what this payroll tax cost

is going to be as an increase.

Every time we raise that we get laughed at by the other side.

They’re laughing at business people in our communities. They’re laughing

at employees in our communities that are legitimately worried about

their jobs, about their livelihoods and about their business operations,

with a very clear understanding that their costs are going to increase.

Instead of a Finance Minister acknowledging that, what we hear is that

somehow they are magically seeing costs reduce because there’s an extra

$5.5 billion of taxation. It doesn’t stand the test.

As we heard from the previous speaker, governments are elected to

make those priority choices. I have no problem with that, and I think

everyone fully expects that.

Let’s take everyone back, not to Bill 2. Let’s take everyone back,

all the way back to April of last year, ten months ago, when every one

of us was out on the election trail. In every election forum I went to,

I heard very clearly from the NDP candidate running in my riding that

not only was everything in the NDP platform fully costed against B.C.

Liberal numbers. It was deliverable under those numbers, and it was a

simple case that we were too mean-spirited to implement those measures

under our current financial playbook that we had.

Let’s go forward ten months. What have we seen in those ten

months? We’ve seen nothing but a string of broken promises. We’ve seen

$8 billion added to taxation, when you look at the last budget update

plus this budget. Now we have Bill 2, which has 21 different amendments

needed to try to raise and amend fees and charges and taxes on people,

all under the guise of making life affordable.

It seems the only promise the government kept was the marketing

slogan. They didn’t actually follow through on any one of their

promises. We’re hard-pressed to find any one of their promises in this

book that has actually been fully implemented with this

budget.

We heard a lot of great talk. We heard a lot of great talk about

housing, 114,000 units, during the election. That has now changed to

30,000 units and dropping. In fact, they’re double-counting a lot of

units that were already announced and being built by the previous

government and saying: “Well, if we top them up with an extra million

dollars, we get to count those extra 100 units.” Well, in the real

world, housing costs more than $1 million to build 100 units. I guess

once they crash the real estate market, perhaps not.

What we see right now with Bill 2 is a whole lot of amendments to

make life totally unaffordable for the average person in British

Columbia. The sad part about that is most people won’t actually start

seeing the full impact of these amendments until it’s too late, until

they’re already seeing their lifestyle impacted.

Seniors who have had the audacity to live in the same home for the

last 30, 40, 50 years, especially in Metro Vancouver, and have a huge

amount of equity built up are now being told: “You know what? Maybe you

should pay an extra $12,000 a year in tax because you had the audacity

to work hard, to save, to provide for your family, to live in the same

house for 30 or 40 years. Because all of your neighbours’ houses have

gone up in value, and yours has as well, we think, as the government,

you should pay us more money now than you have been paying. It doesn’t

seem right that you should be allowed to actually retire with your

retirement plan that you’ve dutifully budgeted for through your whole

working life.” That’s one of those amendments in here that gives me

great, great concern.

Then when you look at the other amendments that are needed to try

to fund things, it’s very interesting. Frankly, it was a little

disconcerting — not that the Green Party decided to vote lockstep with

the government. I think we all know they operate as one and the same, so

that’s not too surprising. What is surprising is…. The Green Party is

still in opposition. One would think that a Green Party who is in

opposition, whose whole base is built around protecting the environment,

would at least have spoken out about certain components of this budget

where you see a Ministry of Environment that is actually seeing a net

cut, a loss, in their operations.

[2:55 p.m.]

Yes, it looks very fancy. It looks like there’s $6 million being

added to the budget, but that $6 million is being added to the special

parks fund, which means increased sales of the B.C. Parks licence

plates, which means increased revenues from B.C. Parks.

When you actually look at the real numbers, they’ve cut B.C. Parks

by $9 million. Nine million has come out of B.C. Parks. I don’t hear

that in these amendments. I don’t hear that bandied about by the

government — that they’re proud that they have actually cut $9 million

out of B.C. Parks. I don’t hear them say that they’re very proud that

environmental protection is flat from last year, that they’re not

putting any new money into environmental protection. The environmental

assessment office is flat. No new money there.

One would have thought the Green Party would have at least read

the line items within the Ministry of Environment budget and not just

gone to the big number at the bottom and seen where the real numbers

were within that budget. It is about priorities, in terms of making sure

where the money gets moved around within a budget. That’s how you live

within your means. I can understand that things get moved around, but

it’s a little disconcerting that the Green Party didn’t look to see what

was going on within Environment.

Let’s look at environmental sustainability. True, that went up by

$1 million. Now let’s look at the climate action section. That went down

by $1 million. It’s very interesting that within the Ministry of

Environment’s budget, which was built and, we established in estimates

last year, was the exact same numbers that the B.C. Liberal government

had put into the Environment budgets….

The outcry from members opposite in the Green Party and in the NDP

about how underfunded the environment was for all these years under that

dastardly B.C. Liberal…. I think it was 16 years, was it? Was it 16

years? I’m just confirming how many years it was. Over the 16 years of

underfunding, supposedly…. Not a word. In fact, they’re praising this

Environment budget when it’s the exact same numbers as the B.C.

Liberals.

Actually, it’s not the exact same numbers. It’s a cut. In those

numbers, there’s $7 million in wages, a $7 million wage increase, which

means there’s actually a net drop in services. Other than the

conservation officers at $3 million…. I’ll be generous and say that the

$3 million for conservation is actually in the wages and salaries. That

means there’s still a $4 million cut to programming and services,

overall, within the Ministry of Environment. They have no new staff.

It’s the same amount of staff doing the same amount of work.

Let’s look at those priorities a little bit closer, shall we?

Climate action was a $1 million drop. You know what went up by $1

million, when you’re digging through all the lines in the budget? I’m a

bit of a numbers wonk, so I like doing that type of thing in my spare

time. You know what went up by $1 million at the same time that the

climate action was dropping by $1 million? The government communications

department.

There’s a good priority use of taxpayer funds. Let’s drop climate

action by $1 million, while our Green partners are propping us up in

government, and increase government spending on government

communications by the same amount of money. That is a bit of a flawed

priority, if you ask me as the Environment critic. I wish my Green

partners would have at least pointed this out.

Interjection.

P. Milobar: I get that a budget is a sum of many parts. You could still vote

for a budget. You could still vote for the bill amendments while

opposing certain parts — at least voice concern about certain parts. But

that’s not what we’ve heard with this.

That’s the problem with this bill amendment. All it does is add

mechanisms to raise taxes and to link more personal information, which,

again, I find interesting, given the backgrounds of members opposite —

insight into people’s dealings and civil liberties and those types of

initiatives. Yet we see a whole lot of amendments in here that are all

about linking people’s financial and personal and real estate

information all together in one big bundle. Why is that? Because then it

makes it easier to keep layering taxes on year after year after year, to

increase tax rates year after year after year, to actually add things

in.

Let’s look at why they would need to keep raising some taxes as

much as they are. I went into the Advanced Ed line items and started to

look around. There’s been a lot of talk about supporting university

students. The millennials out there need all the help they can get.

Certainly, there must have been good news in there, with all of the tax

hikes, for the students out there.

[3:00 p.m.]

Well, what we see, actually, is the student services programs have

actually been cut. They’ve been cut for universities by $2 million. What

does that pay for? It covers scholarships. It covers bursaries. It

covers loan forgiveness. I don’t understand why they need so many tax

increase amendments when they’re cutting services to university

students. We heard over and over and over again how they were going to

support and how they were going to make universities more affordable for

students.

That’s not what we’ve seen. No, we’ve seen a $2 million cut in

programs around scholarships, bursaries and loan forgiveness.

Then I go to education. That’s obviously been pretty topical in

the last few days, so I thought: “Well, let’s take a look at some of the

other line items in there.” Yes, there are some increases in some areas,

most of which had already been, as I said, announced in previous budgets

and have just been carried forward at the same dollar

figures.

I thought: “Well, let’s take another look.” There’s been a lot of

discussion around supporting K-to-12 education, the public library

system, early learning and literacy programs, a lot of focus in recent

days around that. So let’s look and see what priority this new

government has put, with their 21 taxation amendments to increase taxes

for everyone, on those types of services: the public library, early

learning and literacy, K-to-12 education supports.

You know what it says to me in the budget book? A $10 million cut.

A $10 million cut to public libraries in this budget document. That is

astounding to me when we’re talking about 21 amendments to do nothing

but raise taxes. They found a way to cut public libraries by $10

million. That is just incredible. Then, surely, with all of these

taxation amendments to increase people’s taxations and their cost of

living and their affordability….

We’ve heard a lot of talk about making sure that there’s a

reinvestment into the Mines Act — reinvestment into enforcement and

reinvestment into really holding industry’s feet to account and making

sure things are done to a high level. Well, if we look at the

environmental protection side of it within the Ministry of Environment,

that funding is actually flat. There is no new money out of these 21

amendments to raise people’s taxes.

If we look at the mines, there is a slight increase but only $1.5

million. If you think of how big this province is geographically and

think of how many minesites there are out there and how huge of a

problem we kept hearing from members opposite, for 16 years, I believe

it was…. They keep referencing 16 years, so I’ll go with

that.

They kept saying we need more money into mine oversight. They’ve

put in $1.5 million. That’s their priority. Out of 21 amendments that do

nothing but raise taxes on people, they could only find $1.5 million. I

think when they started looking at it, maybe it wasn’t as bad as they

actually thought it was.

Then we think: “Well, they’re partnering with the Green Party.

They’re kind of one and the same. Not in name but in action, they’re

certainly one and the same.” Let’s look at the innovative clean energy

fund. There must be some money being spent out of that, especially as

we’re trying to transfer off of a carbon economy, as we’ve heard so many

times. Heck, we’ve even heard that this government will be brought down

if they dare to promote LNG, not make sure that we’re transferring to

the new world economy….

Surely, the innovative clean energy fund…. With 21 taxation

amendments that do nothing but raise taxes for people and make their

lives more unaffordable, the innovative clean energy fund must have a

substantial lift in their funding. But you know what we find? No new

spending. None.

Again, not pointed out by the Greens at all, that I’ve heard. A

little disappointing. They could have still voted for the budget. One

would think they would do their job as true opposition, if they are

trying to be opposition and not government, and actually point out some

of these things that you would think would be concerning to them as a

Green Party, especially to their Green Party members. One would think

they assume they’re here fighting the good fight on behalf of the

environment.

We’ve heard a lot about supporting technology. In fact, I think

that the Finance Minister, in her speech around the amendment,

referenced technology, if I’m not mistaken, and how great and how much

growth we’re seeing in technology and how it’s a good way forward and

it’s spreading across the province.

I’m paraphrasing her words a little bit, I know, but that was the

general theme. And I agree. We’re seeing great tech growth. I’m from

Kamloops. We’ve seen growth in tech go from a few companies. Now we have

several hundred. We have close to 2,000 people working in tech. There

are a few other big announcements that we hope to see in the near

future.

[3:05 p.m.]

Tech definitely is growing. It’s a good way to expand and broaden

your economy, and I think everyone can agree with that. Certainly, with

21 amendments that do nothing but raise taxes, one would think that

there’s going to be a pretty good chunk of money in there for

technology, innovation and economic development around it, because that

is, after all, as the Green Party likes to say, the new

economy.

Well, unfortunately, there wasn’t anything for the innovative

clean energy fund to get us to the new economy, so I’ve got high hopes

for this tech innovation and economic development fund. Alas, when I

look at it, there’s a $9 million cut out of technology, innovation and

economic development. With that, we just heard a Finance Minister saying

how they’re supporting technology and innovation, how they’re trying to

expand technology and innovation. Yet they’re cutting $9 million from

its budget while raising taxes with 21 different amendments.

That doesn’t sound to me like a priority that’s in line with

what’s actually in the document. That sounds to me like a great

marketing ploy. Perhaps they’ve already hired some of those people in

their new communication department for that million dollars, and that’s

where they’re getting the speaking notes from.

To me, what that says is that the priorities are a little bit out

of whack. The public is getting sold a marketing piece which does not

come even close to aligning to what their platform — their platform,

their words, their costing — only ten months ago said was going to

happen if they became government.

Now, I know that they became government in a fairly unconventional

way in British Columbia, but they are the government. So one would think

that they would deliver on — or at least attempt to deliver on,

reasonably close to — their promises. Now, we know all the time that

when governments change, they get in and look at the books. They have to

maybe reprioritize their priorities. They have to reprioritize their

promises that they made within an election. That’s

understandable.

One would have thought, though, that that would have resulted in

either working in the same fiscal framework that they said they could

deliver their whole platform on and just explain to people, “Sorry. We

actually don’t have as much money as we thought, so we’re going to scale

things back and we’re going to add things in over the next couple of

years,” or that the government would say: “Sorry. The books aren’t quite

what we thought they were, so for us to implement our full platform,

we’re going to have to add an extra $8 billion worth of taxation in the

next eight months.”

No, that’s not what we have. What we have with these 21

amendments, which do nothing but raise taxes for people and make life

unaffordable for people, is 21 amendments that hike taxes by that $8

billion over the last eight months and still deliver nothing close to

what the promises in the platform were. Talk about an overpromise and an

underdelivery.

No wonder they don’t understand why the business tax is going to

hurt businesses, because if you ran a business that way, you wouldn’t be

in business for very long with that type of promise, with that type of

underdelivery. I would shudder to think what the Yelp reviews and other

on-line reviews would be of that type of promise-and-broken-promise

scenario.

Those are some of the things that, as I look through this book,

start to give me concern. As I say, it’s not so much that governments

aren’t and shouldn’t be reprioritizing where previous budgets had money

and previous governments had money. That’s totally understandable. But

it’s when it’s almost like a bait-and-switch….

It’s like: “Don’t look over here. Don’t look where all the real

cuts are coming, because we only want you to think about this stuff. But

all the stuff that we used to rail against not being funded enough — you

know what, folks? — we’re actually cutting dollars out of.”

MSP has come up quite a bit. There’s some verbiage in the

amendments around MSP. So let’s take a look at the MSP budget, shall we?

Miraculously, while we’re being told it’s being eliminated and,

miraculously, while we’re being told that everyone is going to have

these massive savings this year because it’s being cut in half, they’re

actually budgeting an extra $250 million of MSP premiums coming into the

budget. It’s going from about $4.5 billion to $4.8 billion.

In a time when they’re admonishing us for daring to question on

behalf of businesses and non-profits and school districts and

universities and municipalities about these increased costs they’re

going to face, and we hear back: “Oh MSP is getting cheaper….” When you

actually look at the number in the book, it went up by almost $300

million this year.

[3:10 p.m.]

I don’t understand how that is remotely a cheaper MSP program,

when it actually is budgeting to collect more revenue than it collected

last year. That is the problem.

When you look at these numbers…. When you consider the

non-profits, the school districts, the municipalities, the regional

districts and the universities, you think of the level and the calibre

that all of those institutions have, working in their finance

departments. To a person, to an organization, they have all said that

there will be a net increase in cost to their health care benefits when

this new employer health tax is in. That’s not even counting the

double-dip days that are coming for them. That’s just looking at it as a

true outward-looking budget.

The government only wants us to focus on the one year of that. I

notice that’s the only part of the budget where the government only

wants us to focus on one year. Every other announcement in this budget

is talking about a three-year program — a three-year this, a three-year

that. Yet for MSP, we’re only supposed to focus on this one year. That’s

the only year you need to worry about if you’re a business, as if the

future years magically don’t matter, as if your bank doesn’t care about

that. Well, they do.

The fact is that we have a government willing to stand up in this

House and, flat out, not just tell myself, or my colleagues who ask the

questions, that they don’t understand how this tax works, that they’re

misinterpreting it and that life will be cheaper for businesses and

organizations under this tax. They’re telling all the professional

accountants out there, all the public sector finance people out there,

that they don’t understand how to do a simple payroll calculation. That,

to me, is stunning — the arrogance, frankly, that it’s turned

into.

Business owners who, not on their own…. Many of them have gone to

their accountants. It is tax season, after all. Do you not think that a

business owner going in to talk to his or her accountant about a

year-end tax situation would be bringing up the payroll tax? Do you not

think that they would be wondering: “How is this going to impact my

business? How am I going to try to keep under a half-million-dollar

payroll, if I’m close to it? How am I going to manage it if it’s over?”

Of course they’re doing that.

I guess what the government is saying to us is that all the

partners at all the big accounting firms, all of the other accountants

from the small independent accounting firms, all of the government

finance people, who spend their working lives working in finance and

understanding how government budget policy impacts their individual

budgets, are all wrong. They’re all completely wrong.

This is going to be nothing but sunshine and roses for them, and

they’re going to be thanking everyone after the fact because life just

got so much cheaper for them. They’re not going to have to lay people

off. They’re not going to have to raise prices, if the government is

talking about potentially renegotiating contracts or making people

whole, if they work with the government. Yet somehow in the private

sector, there’s no actual impact to them.

They talk about this small business tax being cut, but the payroll

tax is going to chew into the bottom line for a company, which means

there’s less income to tax. This means that the cut, at the end of the

day, really means nothing. When people were happy to see a cut in the

corporate rate, they didn’t think it was going to be followed up with a

series of other taxes and fees like we see in these 21 amendments that

are going to do nothing but increase the cost to them, increase the cost

to their employees and increase the cost to life overall.

That, fundamentally, is the biggest problem with this. There seems

to be a lack of wanting to acknowledge, on the government’s part, that

there are very real-world concerns about this budget. It’s not coming

from your typical stakeholders.

One would think that the school trustees would have been jumping

for joy with the change in government, with the way the war on education

was, from the members opposite towards us, over the last several years.

But we even see the trustees association acknowledging that there’s a

very real cost. So perhaps maybe all of those elected trustees don’t

really understand how government works and how their own budgets work

within school districts. Perhaps all those municipalities with all those

elected councillors and mayors don’t really understand how budgets work

and how governmental downloading doesn’t affect them.

[3:15 p.m.]

I can tell you, as a former mayor for nine years, that every time

there’s a government decision, we instantly go to try to figure out:

what is the impact to us, or not? There was apparently no thought given

whatsoever to RCMP contracts.

Here’s a news flash for the government: the RCMP don’t pay MSP.

They don’t qualify for MSP. They’re under a federal health plan. For

every single RCMP member that is on a municipal police force — the vast

majority, in British Columbia, is on that payroll — they’re still going

to have to pay the administrative health tax to the federal system, and

they’re going to have to pay a payroll tax based on the payroll of the

RCMP that they have, which will see tons of money added to the

list.

Municipalities are scrambling, trying to figure this out. The

reason I’m tying the RCMP into this at this point is because at the

beginning I said that businesses are also talking to their accountants,

trying to figure out how to potentially keep their payroll under half a

million dollars.

There are a few things with that. If you’re somebody who has staff

that aren’t making in the $12-to-$14 range, you’re not making enough to

be paying MSP right now, as it is. But that business, if you have enough

employees, will trigger the tax. They’re looking at that, and they’re

considering that. It’s a very real implication. We see that on the

municipal side.

When municipalities in B.C. get close to 5,000, they actually

appeal their census to try to get under 5,000 because their policing

rate goes up substantially if their population goes over 5,000. If

municipalities are doing it around the number of people living in their

town — appealing that number so that they don’t have to pay added

policing costs on a federal census — don’t think businesses aren’t

trying to figure out how to keep under the half-million-dollar limit as

they see new wage increases coming, making sure that they could still

have a business and still provide for their own families, as well as all

of the employees’ families that earn a good living with them.

I could go on forever about Bill 2, but I see my light is on. With

that, I think I’ve made it fairly clear why there are more than 21

reasons to be opposed to these 21 amendments, which are going to do

nothing but add $5.5 billion to the tax burden of British Columbians.

That will certainly make life much more unaffordable for people in

British Columbia.

S. Gibson: What a privilege it is to be here in the people’s House today to

speak on Bill 2, the Budget Measures Implementation Act. It’s a pretty

technical bill. I would characterize it as ominous.

A little bit of the philosophical dimensions to government today.

I think if there’s anything that we have in common, whether it’s small

business or individuals, it’s that we don’t like surprises. As a matter

of fact, business thrives on consistency and security.

I had the privilege of owning a small manufacturing company, a

plastic fabricating company. I had a payroll of 13 employees. For those

of you who have never met a payroll — particularly, I’m addressing my

comments to the other side of the House — let me say that having a small

business is a challenge. But it’s worth it, because small business is

the heartbeat of our province.

When I hear my colleagues and others talk about some of the

ominous legislation that’s forthcoming, I suddenly realize why it is

that so many business people today fear this government. It’s a chilling

document. I want to acknowledge my colleague from Kamloops who spoke

just before me, and some of the items that he enumerated.

[3:20 p.m.]

Also, if I may talk to a sense of security, I believe that the

past 16 years of the B.C. Liberal government provided security to our

citizens. There was a sense of comfort. There was a sense of trust that

the government had their best interests in mind. Indeed, that’s why

electoral success was repeated a number of times. But today, as I talk

to my constituents, particularly business people, they’re alarmed. We’ll

talk a bit about that.

The phrase “tax-and-spend budget” has been used quite often, and I

think it has some currency. I want to particularly address my remarks to

the Third Party. I realize that the Greens and the government have an

alliance, but I can’t help but wonder if the Greens, if their leader,

are totally comfortable with the trajectory that’s being announced here

and being revealed in Bill 2. I might say that I have Green Party

supporters who live in the riding of Abbotsford-Mission, and they’re

sharing some of their concerns with me. So I’m sure they’re getting back

to the leader.

The budget alone introduces $5.5 billion of tax increases. Now, I

mentioned, earlier on, surprises. If I talked to folks in my riding of

Abbotsford-Mission who decided to vote with the government team, I

believe most of them would not have anticipated increased taxes of $8

billion, $5.5 billion of those in this budget alone. Nobody likes tax

increases. As a matter of fact, we do need to tax people to provide

services — the quality services that we all desire for our constituents

and our province — but this was alarming.

We have shared in this House, and I’ll be sharing next week, some

of our laments by our business people who say to me: “We can’t believe

this is happening. It’s such a shock.” This goes back to my comment that

business requires security. They don’t like surprises.

These taxes cover a wide variety of areas. Our government was

innovative with the carbon tax, revenue-neutral — controversial but very

well received internationally and nationally. But this government is

changing the paradigm, and families won’t see that money returning.

Rather, it’ll go into increased costs to families, small business men,

farmers — the backbone of our province.

Income tax is increasing by nearly $1 billion a year. Hard to

believe — $1 billion a year. We have such a buoyant economy left over

from the good administration of our government. Some of the statistics

I’m hearing from our government members are really representative of the

legacy of what we left behind. That’ll mean an extra $1,000 per

year.

I would like to share something a little bit personal. My wife is

a school teacher, teaches little first-graders in Abbotsford, has done

for many years and now has actually taken retirement. When our two

daughters were born, my wife decided to stay home with them to provide

care until they got in school, and then she went back to teaching. We

certainly appreciated her income for our family.

I can tell this House that when my wife was home with our two

daughters, it was tight for us financially. It was only on my paycheque.

So $1,000 a year would have hurt us. I’m suspecting this is going to

hurt a number of families.

[3:25 p.m.]

There’s the real estate speculation tax. I think it’s a misnomer.

I don’t know whether the word “speculation” was chosen intentionally,

but it certainly misrepresents the purpose of this tax. As a matter of

fact, I’m already getting correspondence, people contacting my office,

shocked with this — people that have a recreational home, planning to

move to it for retirement possibly. Is this going to increase the

inventory of homes in any way for people? No. It’s shameful, and it’s

just a shock and a surprise.

I could read from a letter I received from a local constituent,

absolutely amazed that this government would introduce such a tax out of

the blue. There was no announcement. There was no anticipation. I don’t

recall that this was mentioned in the election. Maybe I needed to pay

attention. I don’t believe that it was mentioned in the election. Or if

it was, it certainly wasn’t mentioned like this, in this

manner.

We’ve heard a lot about the new employer health tax. This is

innovative. I’ll give it that. It’s innovative, but it’s reaching right

into the pockets of small business, societies, organizations,

universities, colleges. This will be destructive, and it’s not offset by

the withdrawal of half the MSP initially, not at all. My colleagues have

already shared with this House, and I believe that the Minister of

Finance is suddenly realizing that, wow, this is something quite

disturbing.

I’m hoping that some of the members of the government caucus are

sharing the correspondence that they’re receiving, the same ones that

I’m receiving, with some of the decision-makers in government. I believe

that will be helpful.

I taught at a university in Abbotsford, Chilliwack and Mission. I

haven’t seen the figures yet, but we’ve heard, in this Legislature, of

the impact on Simon Fraser University, the Surrey campus. We’ve heard,

from one of our members, of the impact at Kwantlen. I suspect it will be

very similar to the University of the Fraser Valley. And this

information will come to the attention of our government.

This employer health tax is going to have a disturbing financial

impact. If there’s no money to be dedicated to that, I’m afraid this is

going to hurt significantly. Small businesses — some of them are

struggling right now. I think about that plastic fabricating company I

had the privilege of owning. Now, I’m not sure how much our payroll was

then and what it compares to now, but my suspicion is that this tax

would have been painful.

[L. Reid in the chair.]

Ironically, our government left a very healthy bottom line, so

these taxes come along as a shocker. Are they really

necessary?

Our government always believed in allowing people to do their best

for themselves. We had the lowest taxes for middle-income earners in the

country and the lowest unemployment rate, because we created an

environment. We didn’t look at government to be the panacea for people’s

problems. Allow people to do their best.

There’s a newspaper chain in the U.S. Their corporate slogan is:

“Give people light, and they’ll find their own way.” I like that. This

government does not embrace that philosophy. They want to be the light

to guide people, rather than allowing people to find their own

way.

We need to nurture business. This budget doesn’t nurture business.

A young business couple, maybe a young business person in my riding or

maybe the riding of colleagues here — are they going to be more

motivated to start a business now or less motivated with this budget? I

suspect it’s the latter.

[3:30 p.m.]

Governments need to plan; yes, it’s true. They need to plan ahead.

But may I say that this government is striking fear into the hearts of

small business people in this province. As someone who has worked in

business, worked for a large company and small companies over the years,

I’ve come to appreciate the passion people have for their business. That

passion needs to be nurtured and encouraged by government.

Let me say a couple of positive things, if I may. The B.C. film

industry is doing very well. The tax credits that this government and

our government supported are laudable. The book publishing tax credit,

which was an initiative of our government, was also extended. I’m

encouraged that this government continues the themes that we developed

in terms of the creative industries, film and books. That’s something to

be commented on.

Clearly, we’re waiting for all the details. We don’t quite know

how this will unfold, but Bill 2 kind of sets the stage for what I would

characterize as an ominous bill. I’m hoping that this government will

see the error of their ways and withdraw some of this very, very

disturbing taxation.

A. Weaver: It gives me great pleasure to rise and speak, join debates here at

second reading discussion of Bill 2, Budget Measures Implementation Act,

2018. As we’ve heard from members opposite and government, this bill is

being brought forward to enact some of the measures that government is

proposing to do.

I’ve heard a lot in the debate so far, discussions about the

budget in general. We must recall that in fact, this bill is only

dealing with a few aspects of what is actually contained in the budget.

The speculation tax, which we’ll clearly be debating at some point, is

not contained in the budget implementation act, but something that is

contained that I haven’t heard a lot about is changes to the school tax,

which we’ll discuss in a second.

Before I start, I think I’d like to give notice to members

opposite and to government that a press release was just issued by BCUC

announcing that, in fact, B.C. Hydro rates will go up 3 percent this

year, despite what the government claimed: that it was going to freeze

B.C. Hydro rates. Why that’s important is that it makes us wonder to

what extent this budget will be affected, in light of the debt that is

being put on to British Columbians, despite the fact that we were told

that rates were not going up.

The member for Surrey-Whalley and I did probe the Minister of

Energy, Mines and Petroleum Resources on this

topic, and we were assured that rates were not going to go up. In fact,

they are going up. So it does not bode well for instilling confidence

into the full suite of budget measure implementations that are being put

forward.

The most notable changes in the act that we’re seeing here today

are changes to the Income Tax Act, which I’ll come to — important

changes with respect to reporting — and changes to the Land Tax

Deferment Act and the Home Owner Grant Act. Again, much to do with

reporting, to ensure that characters out there are not getting away with

financial shenanigans in terms of claiming things like homeowner grants

or avoiding taxes that they should otherwise pay.

There are changes to the Motor Fuel Tax Act, which are allowing

Victoria regional transit to get an extra 2 cents per litre in gasoline.

What’s remarkable about this is that gas taxes like that are very good

for raising revenue for public transportation. The issue, of course, in

Victoria is that we are the capital of the electric vehicle. I suspect

that the government has over-budgeted its expected revenues from this as

the electrification of Victoria’s vehicular sector continues to

grow.

Changes to the property transfer tax are an important component of

the Budget Measures Implementation Act — in particular, the additional

levy being applied to properties over $3 million. I’ll come to that in a

second, because again, as with many of these things, there needs to be

careful analysis of the details. Of course, the Provincial Sales Tax Act

to levy a surcharge on vehicles over $125,000 — I will come to that

again in some detail.

[3:35 p.m.]

I’ll start by recognizing what I could not find embedded within

the budget implementation act itself, but it was mentioned directly by

the Finance Minister in her opening remarks. It’s a very important

change that’s being implemented for cruise ships in British Columbia. We

know right now that cruise ships in British Columbia are at an unfair

competitive disadvantage with cruise ships that come to Seattle. The

reason why is that cruise ships in British Columbia pay a carbon tax

when they use marine gas.

Now, marine gas is more frequently used today than the traditional

bunker fuels of yesteryear, which don’t have the carbon tax applied. The

reason why they’re not applied is that if you’re an international

carrier and you fly from one jurisdiction to another, international

reporting regulations do not require you to actually count those

emissions to your jurisdiction.

This may not seem like a big change, but it is an incredibly

important change. The cruise ships, the modern cruise ships, the cleaner

cruise ships using marine gas are no longer at a disadvantage if they

fill up in Victoria or British Columbia or Prince Rupert. So now they

can actually make, in their decisions as to where to go, a financial

windfall by not being penalized by coming to B.C. Thank you to the

minister, and thank you to the Finance Committee. We recommended

discussions about this — and the presentation that was made to us by the

steamship operators. This was an important addition. It won’t get the

attention I think it deserves, but it certainly will make a big deal in

terms of the cruise ship industry.

Coming to the Income Tax Act. What’s happening in that, which, I

think, generally, we can support — and this is embedded within sections

14 to 34 of the act — are important changes that parallel that which was

done federally with respect to clamping down on anti-avoidance. That is,

there are new

definitions and new rules that are being put in place to

ensure that the misuse or abuse of provisions in other acts, which the

income tax relies upon, will be subject to the same rules as embedded

here.

A lot of incidental changes here. A lot of this is actually not,

per se, a fundamental part of the government’s budget but rather

important work that needed to be done by the civil service, legislative

additions, in order to mirror or match legislations that have clearly

been brought in place federally.

Coming to the Land Tax Deferment Act, which is

section 88, we

notice in here that it provides for information-sharing and use of

information provided under the Income Tax Act, and back and forth. In

particular, there are changes to the Home Owner Grant Act to provide for

the same information-sharing. Why this is important is a couple of

things. It’s a welcome change, in my opinion. It’s a welcome change,

because it actually, again, has significant implications for tackling

tax avoidance through enabling information-sharing across multiple

jurisdictions.

For example, there could be people that are claiming that a home

is their principal residence and claiming the homeowner grant for the

purposes of either not paying — getting a grant — or deferring taxes, if

they’re a senior, and they wish to defer taxes against the property

until such time as they sell, as that property is sold. We now are

requiring that information be determined for tax purposes, whether

they’re a resident and, in fact, if they’re paying income taxes here

and, frankly, if they’re living here in British Columbia.

Coming to the Motor Fuel Tax Act — again, sections 42 to 50 of the

bill…. It’s a large bill, more than 40 pages of very dense language and

multiple sections that cross-reference each other — a very complex bill.

It’s a component that was asked for by the region where I live, here in

the capital region, to allow additional revenue sources for the regional

transit authority. I’m sure that they’ll be pleased.

This becomes effective April 1, 2018, when we get a

two-cent-per-litre addition here in Victoria, up from 3½ cents to 5.5

cents — again, for regional transit initiatives. My only hope is that we

ensure that such initiatives actually start to represent the future and

get us down towards bringing our communities in the West Shore and on

the Saanich Peninsula closer together with rapid forms of

transportation.

[3:40 p.m.]

The Property Transfer Tax Act. There are some very important

changes here. Some that are simple, just information-exchanging. For

example, currently, the anti-avoidance rule that is being fixed here

only applies to the foreign buyers tax. What’s happening is the

definition and the language that was only applied to the foreign buyers

tax, which is being increased to 20 percent, is now broader. It’s now

applying throughout the act to ensure that avoidance is being

captured.

There is also the important change that is a revenue generator

here, which is additional levies on the property transfer tax for homes

that exceed $3 million. Presently it’s $2 million — above $200,000 to $3

million. Now it’s going to be an additional 3 percent, to take it to 5

percent of the value of the home above $3 million.

Again, one of the things I have a problem with…. The property

transfer tax is a very regressive form of taxation, in general. It’s

essentially penalizing home ownership and moving up and down as you age.

As your family grows, you typically get larger houses. As your family

shrinks or you retire, you typically go smaller. We’re taxing all the

way along the line there. Again, this was being used….

The idea here, of course, is to put a clamp on upper-end homes.

But as with all of the government’s measures to deal with housing, I,

frankly, believe that they’ve missed the boat. What I mean by that is….

It appears to me that government is using our housing crisis as a source

of revenue to build supply, affordable housing, which is part of their

plan.

Why that’s problematic and why I believe that to be the case is….

If you look in the budget, budget revenues are expected to either remain

constant or actually grow from things like the property transfer tax,

the speculation tax, the foreign buyer tax. If these tools were actually

being designed to clamp down on the speculative market, you would

expect, for example, the speculation tax to go to zero. But it doesn’t.

It grows and then stays flat. This is troubling to me.

I think we’re missing the boat as to what the issue is. The issue,

we know, is offshore capital flowing into B.C. in a highly unregulated

manner, leading to speculation. Rather than dealing with the problem….

We’re in a crisis. Critical times deserve decisive measures, not tepid

responses like we see here — the property transfer tax, 5 percent above

$3 million. Again, why $3 million? Why not $2.2 million? Why $5 million?

It seems to me somewhat arbitrary. It seems to be a means, a way, of

actually grabbing cash.

In some sense, you could view it almost, along the lines, as a

form of an inheritance tax. People, as they get older and sell their

homes for their children, are going to have a…. It’s typically, if

you’re living in Point Grey…. You’re a foreign buyer, you’re a

multi-millionaire, or you’ve lived there all your life. You’re going to

sell your home and move out, as some people have spoken to me about.

This is viewed as a form of an inheritance tax.

This change took effect February 21, which was pretty rapid after

the budget. It’s in place now. A tax may have the effect of exerting

some downward pressure, but it’s actually not dealing with the problem

as I articulated it. It’s not dealing with the issue at hand, the issue

being offshore money flowing into our market.

We know about the laundering issue. We know about the link to the

drugs and the money coming in from the drug trade and the fentanyl

crisis into the real estate market. We’ve had excellent investigative

reporting in that regard. The government’s measures are not actually

targeting that. They’re targeting everyday homeowners as well as other

people.

Some of the members opposite have raised the issue of a

speculation tax. Now, as we’ve discussed, the budget in general…. I

understand and recognize that the actual measures of implementation here

about the speculation tax are not embodied and embedded in Bill 2.

Nevertheless, I think it’s important to put on record that I share some

of the concerns that opposition members have raised on the issue of a

speculation tax. To me, it’s actually not a speculation tax. It’s a form

of a vacancy tax, a provincial vacancy tax.

The concern I have, and the concern that has been expressed to me,

is multifold. I don’t think government has thought this through. I don’t

think government has thought what problem they’re trying to solve.

They’re looking at this issue of affordability, whether it be through —

what I just discussed — the property transfer tax changes or the

speculation tax. They’re viewing this as a means and a way of grabbing

revenue in order to build affordable housing or campus housing. I have

no problem grabbing revenue if you have an outcome from somewhere, but

we’re not dealing with the problem.

[3:45 p.m.]

Coming to the speculation tax. As mentioned multiple times by

members opposite, there are multiple problems with this. Many people,

for example, have a home on a ski hill which may be part of a rental

pool. Let’s suppose I have a condo at Sun Peaks that I actually use a

couple of weeks a year — I don’t, but if I did — but it’s in a rental

pool. Perhaps it’s zoned tourist commercial, which means you can’t

actually rent it for more than six months because of the individual

zoning. Perhaps it’s in a pool. Is that exempted or not? We don’t

know.

There are people who plan to retire out to B.C. They may have

bought a condo here to protect themselves from the market, maybe a

couple of years prior to them retiring. That condo may be vacant. It may

be vacant for a short term. Should they be taxed? Why is it that the

government is targeting fellow Canadians? Why is it not recognizing that

the problem is not people from Prince Edward Island or Saskatchewan? The

problem is offshore money, bypassing due process and normal channels,

flowing into our real estate sector.

Again, I have a lot of sympathy for the arguments raised opposite

on this, even though specifically, right now, we’ll have to wait until

we see legislation emerging because it’s not actually in Bill

Coming to some of the requirements, some might think this is

onerous — the level of information that this bill is actually asking be

provided as part of the Property Transfer Tax Act changes. They’re

things like the date of birth of the buyer, the buyer’s social insurance

number or individual tax number, the buyer’s citizenship and residency

status, the foreign country of citizenship if they’re not a Canadian or

a permanent resident. Clearly, these are new and additional pieces of

information that government is grabbing. We also know now that there’s

more sharing ability between income tax, property tax acts, etc., to

allow cross-checking and to target those avoiders.

Similarly, for corporations, we’re now requiring more information

in the transfer of properties. We could argue about the issues of

privacy. What has to be front and centre, of course, in all of this is

that we’re careful with the data that we’re collecting. I understand and

support government’s desire to crack down on people who are cheating the

system. However, we also have to recognize that we are collecting a lot

of very personal data on issues, and we have to be very careful how we

do that.

We know that one of the biggest ways that we’re seeing our

property escalate in value artificially is through offshore companies

buying British Columbia real estate. I’m not sure whether or not

partnerships are covered. That is one of the ways that people are

avoiding the foreign buyer tax. I’ll ask that when we get to committee

stage.

For corporations, they now must return…. I guess partnerships

should be included in that. They have to give information on the total

number of directors and the number of directors who are Canadian

citizens or permanent residents. Each of these directors now has to

provide their citizen status or permanent resident status information,

date of birth, social insurance number and, for people who are not

Canadian, similar information about where they’re from.

I just got some notes given to me here, notes about the B.C. Hydro

rate freeze that didn’t happen. We’ve just issued a press release. I

reserve that for other conversations and not here on Bill 2 right

now.

One of the things I do like, of course, is that the government is

targeting the beneficial owners of bare trusts. Now, as we all know,

this is another means that people have used to avoid, essentially, the

property transfer tax at its very fundamental level. Also, it’s a way of

hiding actual ownership. A property is purchased in a trust. The trust

is owned by a corporation or an individual. When you dispense of a

property, rather than selling the property, you sell ownership of the

trust. So there’s no transfer of title. In British Columbia, we still

tax transfer of title instead of transfer of beneficial ownership. That

bare trust loophole I raised three or four years ago here in the

Legislature. Still government hasn’t closed it.

I don’t understand why they haven’t closed it. They’re collecting

more information here. When I stood opposite, the now Attorney General

railed on the government of the day, day after day, about the need to

actually clamp down on the ability of people to hide and not pay the

property transfer tax. Here we have an opportunity to close that

loophole. And what does government do? It collects more data.

I assume we’re going to get a report from this at some point down

the road too. Or we’re going to send it to a committee to study it and

make a decision. Government didn’t need to do that. Government could

have made that decision now, which puts us, of course, in a

predicament.

[3:50 p.m.]

Obviously, we want to move forward. But we must think of the

collective when we determine whether we support or don’t support a

budget o