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British Columbia — Debates (Hansard)

Fourth Session, 38th Parliament o FFicial rePort o F Debates of the Legis Lative a ssemb Ly (hansarD) the honourable bill bari So FF, SPeaker iSSn 0709-1281 Thursday, November 27, 2008 Morning Sitting Volume 36, Number 4

Pro Vince o F britiS h colu Mbia (entered c onfederation July 20, 1871) lieutenant -Go Vernor h is h onour the h onourable Steven l. Point, obc Fourth Session, 38th Parliament SPeaker o F the leGiS latiVe a SSeMbl Y h onourable bill barisoff eXecutiVe council Premier and President of the executive c ouncil ......................................................................................................h on. Gordon c ampbell Minister of State for intergovernmental r elations ...........................................................................................................h on.

Joan Mcintyre Deputy Premier and Minister of education and Minister r esponsible for early l earning and l iteracy ..................h on. Shirley bond Minister of a boriginal r elations and r econciliation .................................................................................................. h on. Michael de Jong Minister of a dvanced e ducation and l abour Market Development ............................................................................. h on.

Murray c oell Minister of a griculture and l ands ..........................................................................................................................................h on. Stan h agen a ttorney General and Minister r esponsible for Multiculturalism .......................................................................... h on.

Wally o ppal, Qc Minister of c hildren and Family Development ..........................................................................................................h on. t om c hristensen Minister of State for c hildcare ................................................................................................................................................. h on. l inda r eid Minister of c ommunity Development .............................................................................................................................h on. blair l ekstrom Minister of energy, Mines and Petroleum r esources ..................................................................................................h on. r ichard n eufeld Minister of State for Mining ................................................................................................................................................ h on.

Gordon h ogg Minister of environment .......................................................................................................................................................h on. barry Penner Minister of Finance and Minister r esponsible for the o lympics .................................................................................. h on. c olin h ansen Minister of Forests and r ange ....................................................................................................................................................... h on.

Pat bell Minister of h ealth Services ................................................................................................................................................h on. George a bbott Minister of h ealthy l iving and Sport .....................................................................................................................................h on.

Mary Polak Minister of h ousing and Social Development .................................................................................................................h on. r ich c oleman Minister of l abour and citizens' Services ................................................................................................................................ h on. iain black Minister of Public Safety and Solicitor General .........................................................................................................h on.

John van Dongen Minister of Small business and r evenue and Minister r esponsible for r egulatory r eform ................................... h on. k evin k rueger Minister of technology, trade and economic Development and Minister responsible for the asia-Pacific initiative ...........h on. ida c hong Minister of t ourism, c ulture and the a rts ...........................................................................................................................h on. bill bennett Minister of t ransportation and infrastructure ...................................................................................................................h on. k evin Falcon leGiS latiVe a SSeMbl Y l eader of the official o pposition ...................................................................................................................................................c arole James Deputy Speaker ..............................................................................................................................................................................Sindi h awkins Deputy Speaker .....................................................................................................................................................................k atherine Whittred a ssistant Deputy Speaker ...............................................................................................................................................................Sue h ammell Deputy c hair, c ommittee of the Whole .......................................................................................................................................... h arry bloy c lerk of the l egislative a ssembly...................................................................................................................e.

George MacMinn, obc, Q c c lerk a ssistant ..................................................................................................................................................................................r obert Vaive c lerk a ssistant and l aw c lerk................................................................................................................................................. ian D. izard, Qc c lerk a ssistant and c lerk of c ommittees ................................................................................................................................. craig h.

James c lerk a ssistant and c ommittee c lerk .................................................................................................................................... k ate r yan-l loyd Sergeant-at-a rms ........................................................................................................................................................................................Vacant Director, h ansard Services ............................................................................................................................................................Jo-a nne k ern l egislative l ibrarian ............................................................................................................................................................................

Jane t aylor l egislative c omptroller ....................................................................................................................................................................... Dan a rbic

alP habetical liS t o F MeMberS a bbott, h on. George (l) ........................................................................ Shuswap a ustin, r obin (nDP) ................................................................................ Skeena bains, h arry (nDP) ....................................................................Surrey-n ewton barisoff, h on. bill (l) ............................................Penticton–o kanagan Valley bell, h on.

Pat (l) ...............................................................Prince George n orth bennett, h on. bill (l) ...................................................................e ast k ootenay black, h on. iain (l) ......................................................Port Moody–Westwood bloy, h arry (l) ....................................................................................burquitlam bond, h on. Shirley (l) ....................................Prince George–Mount r obson brar, Jagrup (nDP) .....................................................Surrey–Panorama r idge c ampbell, h on.

Gordon (l) .........................................Vancouver–Point Grey c antelon, r on (l) ................................................................n anaimo-Parksville c hong, h on. ida (l) ..................................................... o ak bay–Gordon h ead c houhan, r aj (nDP) ........................................................... burnaby-e dmonds c hristensen, h on. t om (l) ..................................................o kanagan-Vernon c hudnovsky, Dave (nDP) ........................................... Vancouver-kensington c oell, h on.

Murray (l) ....................................Saanich n orth and the islands c oleman, h on. r ich (l) ............................................Fort l angley–a ldergrove c onroy, katrine (nDP) ...........................................West kootenay–b oundary c oons, Gary (nDP) .........................................................................n orth c oast c ubberley, David (nDP) ..............................................................Saanich South de Jong, h on.

Michael (l) ................................... a bbotsford–Mount l ehman Dix, a drian (nDP) ............................................................Vancouver-kingsway e vans, c orky (nDP) ..................................................................n elson-creston Falcon, h on. k evin (l) ..........................................................Surrey-c loverdale Farnworth, Mike (nDP) ............................. Port c oquitlam–b urke Mountain Fleming, r ob (nDP) ................................................................

Victoria-h illside Fraser, Scott (nDP) ...............................................................a lberni-Qualicum Gentner, Guy (nDP) .........................................................................Delta n orth h agen, h on. Stan (l) .................................................................... c omox Valley h ammell, Sue (nDP) .................................................... Surrey–Green t imbers h ansen, h on. c olin (l) .................................................. Vancouver-Quilchena h awes, r andy (l) ............................................................

Maple r idge–Mission h awkins, Sindi (l) ..................................................................k elowna-Mission h ayer, Dave S. (l) .................................................................... Surrey-t ynehead h erbert, Spencer (nDP) ..................................................... Vancouver-burrard h ogg, h on. Gordon (l) ......................................................

Surrey–White r ock h organ, John (nDP) .......................................................Malahat–Juan de Fuca h orning, a l (l) .............................................................k elowna–l ake c ountry ilich, o lga (l) .......................................................................... r ichmond c entre James, c arole (nDP) .........................................................Victoria–b eacon h ill Jarvis, Daniel (l) .................................................... n orth Vancouver–Seymour k aragianis, Maurine (nDP) ............................................e squimalt-Metchosin k rog, l eonard (nDP) ........................................................................... n anaimo k rueger, h on. k evin (l) .....................................k amloops–n orth Thompson kwan, Jenny Wai ching (nDP) ...........................

Vancouver–Mount Pleasant l ali, h arry (nDP) ........................................................................... Y ale-lillooet l ee, r ichard t . (l) .......................................................................burnaby n orth l ekstrom, h on. blair (l) ....................................................... Peace r iver South l es, John (l) ............................................................................c hilliwack-Sumas Macdonald, n orm (nDP) ....................................c olumbia r iver–r evelstoke McGinn, Jenn (nDP) .........................................................

Vancouver-Fairview Mcintyre, h on. Joan (l) ........................................ West Vancouver–Garibaldi Mack ay, Dennis (l) ....................................................... bulkley Valley–Stikine n eufeld, h on. r ichard (l) ....................................................Peace r iver n orth n uraney, John (l) .............................................................. burnaby-Willingdon o ppal, h on. Wally, Qc (l) ........................................... Vancouver-Fraserview Penner, hon. barry (l) .............................................................c hilliwack-k ent Polak, h on.

Mary (l) ...............................................................................l angley Puchmayr, c huck (nDP) .......................................................n ew Westminster r alston, bruce (nDP) ................................................................

Surrey-Whalley r eid, h on. l inda (l) ...................................................................r ichmond e ast r ichmond, c laude (l) .........................................................................k amloops r oddick, Valerie (l) ..........................................................................Delta South r outley, Doug (nDP) ......................................................c owichan-l adysmith r ustad, John (l) .......................................................... Prince George–omineca Sather, Michael (nDP) .........................................

Maple r idge–Pitt Meadows Simons, n icholas (nDP) ................................... Powell r iver–Sunshine c oast Simpson, bob (nDP) ...................................................................c ariboo n orth Simpson, Shane (nDP) .....................................................Vancouver-hastings Sultan, r alph (l) ..................................................... West Vancouver–capilano t aylor, c arole (l) .................................................................

Vancouver-l angara Thorne, Diane (nDP) .................................................c oquitlam-Maillardville Thorpe, r ick (l) .................................................................. o kanagan-Westside t revena, c laire (nDP) .................................................................... n orth island van Dongen, h on.

John (l) ............................................a bbotsford-c layburn Whittred, k atherine (l) ........................................ n orth Vancouver–l onsdale Wyse, c harlie (nDP) ...................................................................c ariboo South Y ap, John (l) .......................................................................r ichmond-Steveston liS t o F MeMberS bY riD in G a bbotsford-c layburn .................................................... h on. John van Dongen a bbotsford–Mount l ehman ...........................................h on.

Michael de Jong a lberni-Qualicum ............................................................................. Scott Fraser bulkley Valley–Stikine ...............................................................Dennis Mack ay burnaby n orth .............................................................................. r ichard t . l ee burnaby-e dmonds ..........................................................................r aj c houhan burnaby-Willingdon .....................................................................

John n uraney burquitlam .......................................................................................... h arry bloy c ariboo n orth ................................................................................ bob Simpson c ariboo South................................................................................. c harlie Wyse c hilliwack-k ent.....................................................................h on. barry Penner c hilliwack-Sumas ..................................................................................

John l es c olumbia r iver–r evelstoke .................................................. n orm Macdonald c omox Valley............................................................................h on. Stan h agen c oquitlam-Maillardville............................................................... Diane Thorne c owichan-l adysmith ...................................................................

Doug r outley Delta n orth ......................................................................................Guy Gentner Delta South..................................................................................Valerie r oddick e ast k ootenay .......................................................................... h on. bill bennett e squimalt-Metchosin .........................................................Maurine k aragianis Fort l angley–a ldergrove ...................................................h on. r ich c oleman k amloops ................................................................................c laude r ichmond k amloops–n orth Thompson ............................................ h on. k evin k rueger k elowna–l ake c ountry ................................................................... a l h orning k elowna-Mission .........................................................................Sindi h awkins l angley.......................................................................................h on.

Mary Polak Malahat–Juan de Fuca ....................................................................John h organ Maple r idge–Mission ....................................................................r andy h awes Maple r idge–Pitt Meadows ........................................................Michael Sather n anaimo ......................................................................................... l eonard k rog n anaimo-Parksville ...................................................................... r on c antelon n elson-creston ................................................................................ c orky evans n ew Westminster .................................................................... c huck Puchmayr n orth c oast.......................................................................................

Gary c oons n orth island .................................................................................. c laire t revena n orth Vancouver–l onsdale ............................................... k atherine Whittred n orth Vancouver–Seymour ...........................................................

Daniel Jarvis o ak bay–Gordon h ead ............................................................ h on. ida c hong o kanagan-Vernon ..........................................................h on. t om c hristensen o kanagan-Westside .........................................................................r ick Thorpe Peace r iver n orth ........................................................... h on. r ichard n eufeld Peace r iver South ...............................................................h on. blair l ekstrom Penticton–o kanagan Valley................................................... h on. bill barisoff Port c oquitlam–b urke Mountain ...........................................Mike Farnworth Port Moody–Westwood .............................................................h on. iain black Powell r iver–Sunshine c oast ................................................. n icholas Simons Prince George n orth .......................................................................h on.

Pat bell Prince George–Mount r obson ............................................h on. Shirley bond Prince George–omineca ................................................................. John r ustad r ichmond c entre ................................................................................. o lga ilich r ichmond e ast ..........................................................................h on. l inda r eid r ichmond-Steveston ..............................................................................John Y ap Saanich n orth and the islands ........................................... h on.

Murray c oell Saanich South ........................................................................... David c ubberley Shuswap ...............................................................................h on.

George a bbott Skeena .............................................................................................. r obin a ustin Surrey-c loverdale .................................................................h on. k evin Falcon Surrey–Green t imbers ..................................................................Sue h ammell Surrey-n ewton ................................................................................. h arry b ains Surrey–Panorama r idge ...................................................................Jagrup brar Surrey-t ynehead ...........................................................................

Dave S. h ayer Surrey-Whalley.............................................................................. bruce r alston Surrey–White r ock ............................................................. h on. Gordon h ogg Vancouver-burrard ....................................................................Spencer h erbert Vancouver-Fairview .......................................................................Jenn McGinn Vancouver-Fraserview ...................................................h on.

Wally o ppal, Qc Vancouver-hastings ....................................................................Shane Simpson Vancouver-kensington ........................................................David c hudnovsky Vancouver-kingsway..........................................................................a drian Dix Vancouver-l angara ........................................................................ c arole t aylor Vancouver–Mount Pleasant ......................................... Jenny Wai ching kwan Vancouver–Point Grey .................................................h on.

Gordon c ampbell Vancouver-Quilchena ..........................................................h on. c olin h ansen Victoria–b eacon h ill .......................................................................c arole James Victoria-h illside ..............................................................................r ob Fleming West kootenay–b oundary ........................................................ k atrine c onroy West Vancouver–capilano ............................................................. r alph Sultan West Vancouver–Garibaldi ................................................h on.

Joan Mcintyre Y ale-lillooet ......................................................................................... h arry l ali Party Standings: l iberal 45; n ew Democratic 34

CONTENTS Thursday, november 27, 2008 Morning Sitting Routine Proceedings Page introductions by Members ................................................................................................................................................... 13357 t abling Documents ............................................................................................................................................................... 13357 office of the a uditor General, report n o. 11, 2008-2009, Public Participation: Principles and Best Practices for British Columbia c ommittee of the Whole h ouse .......................................................................................................................................... 13357 e conomic incentive and Stabilization Statutes amendment a ct, 2008 (bill 45) b. r alston h on. c. h ansen h on.

W . oppal

13357 thurSD a Y , noVeMber 27, 2008 The h ouse met at 10:02 a.m. [Mr. Speaker in the chair.] Prayers. Introductions by Members Hon. P . Bell: i ask for your tolerance.

This introduction may go on for a little longer than some of the introductions, but it will not go anywhere near as long as the life of l orne Swannell, who is joining us here today. t oday i want to celebrate the life and times of l orne Swannell, b.c .'s oldest living forester, and celebrate his 100 years. l orne has been alive for as long as the Forest Service has existed and is a true icon in the industry. h e started as a ranger in 1936 and retired as chief forester in 1972. h is distinguished career with the b.c.

Forest Service was interrupted only once, by World War ii, an inconve- nience, at best, when he spent five years in europe with the 2nd Survey regiment in the royal c anadian a rmy. l orne is a lifelong resident of british c olumbia.

During his time in the Forest Service he has witnessed many achievements in the province's forest history. h e was also one of the first foresters to do reforestation work on West Thurlow island, which is near c ampbell r iver, the site of the province's first active reforestation. l orne has long been an advocate for the sustainability of the forest industry. in 2001 he received the t ree of l ife pin from the c anadian institute of Forestry, which rec- ognizes individuals who have made superior, dedicated or particularly effective contributions to sustainable for- est management. l orne and his late wife Grace, who he was married to for 55 years, were generous benefactors to many different charities, including the l oon l ake r esearch and e ducation centre at ubc 's faculty of forestry, Pearson college and the Queen alexandra Foundation. [1005] both he and Grace were great music lovers, and their passion for music inspired l orne to give the gift of a perpetual scholarship for undergraduate piano students at uVic in the memory of Grace. h is designation as registered professional forester n o. 6 has now been retired and now makes him the oldest living forester in british c olumbia. in honour of his dedication and service to b.c.'s industry, i'd like to announce the creation of a $1,500 bursary to the unbc faculty of forestry in his name, in the hope that forestry students will be inspired and encouraged by l orne's generosity and long and illustrious career. a t 100 years of age, l orne still owns his own home, with his devoted caregivers, and continues his outings to the symphony, the opera, the ballet and, of course, the events of the many charities he has been involved in. i'd like to congratulate Mr.

Swannell on achieving his 100th birthday and thank him for his many contributions to the forest service and the province. l orne, may you enjoy many more years of good health, friendship and happiness. The people of british c olumbia thank you. [a pplause.] Joining Mr. Swannell in the gallery are Don and Margaret Mills, who have been neighbours for the past 20 years; David evans, a neighbour for the past 40 years; barry and l inda c urran, who are chiropractors and friends for the past 14 years; a lexe bric, a personal assistant for the last four years. a nd i see that joining Mr.

Swannell are two more recent chief foresters: our current chief forester Jim Snetsinger and his predecessor larry Pedersen. Would the h ouse make all of those folks very welcome as well. Tabling Documents Mr. Speaker: h on. Members, i have the honour to present the a uditor General's report n o. 11, 2008-2009, Public Participation: Principles and Best Practices for British Columbia. Orders of the Day Hon. M. de Jong: i call committee stage debate on bill 45. Committee of the Whole House econo Mic incenti Ve an D Stabili Zation Statute S a Men DMent act , 2008 The h ouse in c ommittee of the Whole (Section

b) on bill 45; k. Whittred in the chair. The committee met at 10:09 a.m. Sections 1 to 4 inclusive approved. on

section 5. [1010] B. Ralston: These amendments are based on the l and t ax Deferment a ct. i'm wondering if the present procedure under the l and t ax Deferment a ct could be briefly explained and whether, procedurally or administratively with these amendments, there will be any deviation from the procedure that has been followed in that act. Hon. C. Hansen: This is a new program which is actually distinct from the existing program that is in place for homeowners age 55 and older. So it is still ad- ministered by the same officials in the same fashion, but

british c olumbia Debates13358 t hursday, n ovember 27, 2008 some of the provisions, requirements, prerequisites are different between the two programs. B. Ralston: in proposed section (2.1) it refers to filing an application in accordance with

section 12 of the l and t ax Deferment a ct. in that

section it refers to

section 5 of the same act. is there any change in the application procedure in order to facilitate the enactment of these new sections, or is it the same? Hon. C. Hansen: The process is the same. B. Ralston: in proposed section (2.1) there is a series of subclauses, beginning with (a), and it describes eligible property that "includes a building used for residential purposes as the owner's principal residence." is it con- templated that properties such as farms, which have other uses, if they include a building for residential purposes, would be eligible for this deferment? Hon. C.

Hansen: The new program will have the same applicability as the existing program for those 55 and older. i do not have the information at my disposal as to what extent it would cover ancillary buildings. but the intent for both programs, the existing program and this new program, is that it would cover the principal residence to the extent that it would cover other ancillary buildings on a farm. i don't have that information. i will endeavour to get it to the member, but i don't have it with me in the chamber. B.

Ralston: Well, understandably, those who own farms might be interested, so i look forward to receiving that information. in proposed clause (

b) it describes the owner, and in the l and t ax Deferment a ct there's a definition of "owner." i want to confirm that that's the same definition of "owner" that's set out in the l and t ax Deferment a ct. Hon. C. Hansen: Y es, the definition is the same under both programs. B. Ralston: in subsection (

d) the owner is required to make a declaration, and i'm reading: "the owner declares that the owner is, at the time of the application, facing financial hardship related to economic conditions." one of the inquiries that members on our side, and i expect members on the government side, have received is from municipalities. Will they be required to make that determination, or is it simply a declaration that the provincial government will assess in deciding eligibility for the program or not? [1015] Hon. C.

Hansen: This is simply a declaration by the applicant who's applying for the property tax deferral, and we are not going to engage in a process where we go through and try to second-guess whether or not that applicant is facing hardship. We are taking the applicant at their word that they are facing financial challenges and that that's the reason for the application. B. Ralston: Thank you, Minister, for that response.

Then — just so that it's, i think, crystal-clear to municipalities that may be making this inquiry — they will not be having to make any inquiries of a prospective applicant. it will simply be a declaration, and the application will be processed. Hon. C. Hansen: Y es, that is correct. Municipalities will be kept whole in terms of their financial revenues. There will be no additional administrative burden placed on municipalities, and they will not be asked to do any work in terms of verifying whether there is or is not real financial hardship. B.

Ralston: a nd again, some other members on this side of the h ouse have received inquiries. There seems to be, perhaps, a little bit of confusion, which i'm sure can be cleared up. it's that the municipality will not be bearing any of the cost of this in the sense of if someone opts to take the deferment and is not able to pay their taxes that year, the provincial government will remit to the municipality that dollar amount of the taxes deferred, and the municipal finances will be untouched. Hon. C. Hansen: That is correct.

That is the way the existing program works for seniors, those over 55, and that's the way this additional new program will work as well. B. Ralston: in proposed subsection (e), "any other requirement prescribed by regulation," is that simply a catch-all phrase, or are there any regulations contem- plated upon passage and proclamation of this bill? Hon. C. Hansen: These are the same types of provisions that are in the existing program.

The only additional requirement that we are anticipating at this time that would be prescribed by regulation is a requirement that the homeowner must have fire insurance on the property. B. Ralston: in the l and t ax Deferment a ct, if the minister agrees to the application for deferment, under

section 7 there's a process for registering a charge in favour of the government, and it's given certain land title priorities. They're set out in some detail in

section 7. is it proposed that these agreements would be dealt with in that way in the sense of a registration of the agreement on title? Hon. C. Hansen: The answer is yes — that the charge in favour of the government be the same under this program as it is under the existing program.

british c olumbia Debatest hursday, n ovember 27, 2008 13359 B. Ralston: Proposed subsection (2.2) refers to manu- factured homes and uses the phrase "an owner of eligible property that is or that includes a manufactured home." My experience and, i'm sure, the experience of many other members is that manufactured homes typically in a manufactured home park sit on what is a rented pad, as it's called — the land that the home sits on. in that circumstance, would the owner of a manufactured home be eligible for this deferment? [1020] Hon. C. Hansen: This mirrors the provision that's in the existing plan.

This is for the deferment of property taxes, so it would only be applicable to owners of property on which there are property taxes being charged. B. Ralston: So as in the application of the previous act then, the circumstance that i described, the owner of the manufactured home would not be eligible for this deferment because they didn't own the property on which the home sits. is that correct? Hon. C.

Hansen: The owner of a manufactured home that's sitting on rented property would not be paying…. it would be the owner of the property that would be paying the property tax, not the owner of the mobile home that's sitting on the property. B. Ralston: u nder proposed subsection (7) there's a reference in the second phrase, "the owner is not required to qualify under the same subsection in this

section as the owner previously qualified under in order to be permitted a subsequent deferral…." c ould the minister explain that? i'm not certain that i understand the purpose of that subsection. Hon. C. Hansen: This clause is in place to allow for individuals who may qualify under this new program who are under the age of 55, and once they turn 55, they would be eligible to apply to the other program of property tax deferment for those aged 55 or older.

What this provision provides for is that we would not require the individual to pay back the property tax that has been deferred at the time they apply for the new program. if they want to transition from the one program to the new program, they will not be asked to pay back what they owe from the previous program before they can apply for the new program. They would still be subject to paying back the property tax once they sell the property or the property is disposed of, although the option, of course, is there to pay it back early should they choose to do so. B.

Ralston: in the land t ax Deferment a ct — i think it's in

section 8 — it refers there to methods by which the agreements are terminated. i think that's what the minister was referring to — at least one variant of that termination. c an the minister explain what's contemplated if there's no possibility of the owner, given their age, not transitioning to the older-than-55 deferment act? When will an owner be obliged to repay the deferment? Hon. C. Hansen: The provision is the same as it is under the current program.

That is, there is no obligation for the homeowner to repay the deferred taxes until such time as the property is disposed of or it is transferred to a new owner other than the spouse. B. Ralston: a nd the maximum deferral is the two taxation years and then repayment is…. u nless there's a sale, it can sit as a charge on the property virtually in- definitely. is that right? Hon. C. Hansen: That's correct. [1025] B. Ralston: The other method of…. in

section 8 of the l and t ax Deferment a ct, they refer to termination under sections 4 and 5. i believe

section 4 is sale, and perhaps in that

section 8 — termination under

section 5…. Perhaps the minister can explain how that works. i'm not clear from my review of

section 5 of the l and t ax Deferment a ct how that might work. Hon. C. Hansen: What

section 5 means is that in order to defer further taxes, the homeowner must still meet the eligibility requirements. in other words, there is an equity requirement in this new program of 15 percent. if the value of the equity in the house was to fall…. if, say, they were to apply and be eligible for the program in the first year, 2009, have those taxes deferred and then discover as they go into 2010 that they no longer have 10 percent equity in their property, then they would no longer be eligible.

Therefore, they could not apply for the second year — would not be eligible for the second year of deferment. h owever, if that circumstance were to occur — that for any reason they were no longer eligible — they would not have to pay back the first year of the deferment. So if they don't meet the eligibility requirements, they couldn't get a further deferment. but the requirement for them to repay what has been deferred at that time would still be only upon the disposal or transfer of the property. B. Ralston: i just want to confirm my understanding. So even if the eligibility requirement….

Suppose the property owner qualified for the two years of deferment and their eligibility changed, in the sense that they were no longer eligible after that point. on the change in their eligibility status, they wouldn't be called upon to repay at that point. They would simply wait for disposal or death or some other possibilities.

british c olumbia Debates13360 t hursday, n ovember 27, 2008 Hon. C. Hansen: That's correct. B. Ralston: The calculation of the 15 percent — who will make that determination? Hon. C. Hansen: That will be based on the assess- ment that is mailed out by the b.c. a ssessment authority in January of each year. So as the member knows, this January, as is provided for in other parts of this bill, the assessment notice that will go out will be the lower of the 2007 or the 2008 assessed value of the property.

So the requirement for the 15 percent equity will be based on 15 percent of the assessed value as mailed out by the assessment authority. B. Ralston: i understand how the 100 percent or the value on which the 15 percent will be calculated, but who will make the assessment of whether or not there's 15 percent equity? i appreciate that, administratively, this is something that perhaps has to be worked out, but how is it contemplated to make that calculation?

Do people have to produce a mortgage document or a statement from their financial institution as to what may be owing on any mortgage obligation or other debt against the property? [1030] Hon. C. Hansen: a gain, the process for this is going to be the same as the existing program, and the application that the homeowner will fill out to apply for this program will go to the Ministry of Small business and r evenue. a s part of the application, the homeowner is obliged to disclose any charges against the property at that time, and those will be verified by the ministry. B.

Ralston: Just a matter of, i suppose, understanding for the public who may be inclined to apply for this pro- gram. Sometimes it's required that you have to produce a state of title certificate. That involves a trip to the land registry and some fees. is that the sort of thing that's contemplated in order to qualify, or is the ministry proposing to accept simply a declaration by the home- owner as to what their equity in the property is? Hon. C.

Hansen: There are no charges that the home- owner would have to bear in applying for this program, and any verification of charges against the property would be completed by the Ministry of Small business and r evenue at no charge to the applicant.

Section 5 approved. on

section 6. B. Ralston: This

section talks about the interest rate which will be charged. The interest rate that's selected in (3.2) is the prime lending rate of the principal banker to the government. is there any particular reason why this rate was chosen? i know sometimes it's a debate in public policy. i know certainly students have made representa- tions that just such a rate should be the rate charged on government loans to students for their education. So i'm wondering why, in this particular case, the prime lending rate was selected. Hon. C.

Hansen: o ur objective in determining this rate was to arrive at a rate that was low enough that it would be reasonable for homeowners, and at the same time, we did not feel it was appropriate to build in a disincentive that would actually lead to property owners, once their financial circumstances recovered, to be incented not to repay the amounts owing. it was felt that setting the interest rate at prime was an appropriate level to ensure that homeowners could take advantage of the benefit of this, especially homeowners that could not otherwise get access to credit through other means because of their, perhaps, collapse of their household income. a t the same time, once their fortunes did recover, there would be enough of an incentive to encourage them to repay it in a timely fashion rather than waiting for the disposition of the property.

B. Ralston: i know that sometimes in the calculation of the effect of different statutory schemes the Ministry of Small business and r evenue and deregulation has calculated or attempted to calculate the cost of the regulatory burden to government. h as there been any attempt…? i appreciate it may be difficult, given it's un - clear as to how many people will take up this program. on an individual application, is there any sense of whether, given the prime rate of interest, that will offset the cost of the program to government? [1035] Hon. C.

Hansen: We have endeavoured, in designing this program, to keep it as administratively streamlined as possible and as easy as possible for the homeowner making the application. We do not anticipate that there will be significant administrative costs that can't be borne within the existing budgets of the Ministry of Small business and r evenue. i think the answer to the member's question is that, even though we're not charging a fee to the homeowner for processing these applications, we believe that the costs are minimal and that they can be absorbed. B.

Ralston: The application — just so that it's clear to the members of the public who may be watching this — would be made to the municipality in which the property was located? Hon. C. Hansen: l ike the existing program, the appli- cation forms could be processed through the municipality

british c olumbia Debatest hursday, n ovember 27, 2008 13361 or through the government agent office, in the case of properties outside of a particular municipality. B. Ralston: This section,

section 6, amends

section 8 of the l and t ax Deferment a ct, and the subsequent

section 7 amends

section 9 of the same act. The words of the proposed two sections are identical. c an the minister explain the difference between the two sections in the l and t ax Deferment a ct that necessitates an identical amendment to both? Hon. C. Hansen: The one

section actually provides for the calculation of interest should the repayment be, at the time of disposal or transfer, to someone other than the spouse. The other

section pertains to the calculation of interest that would be applicable should the home- owner choose to repay the deferred taxes prior to the disposal or transfer of the property. B. Ralston: in the latter case, if a citizen's financial situation changed and they wished to terminate the agreement — just, again, for the purposes of informing the public — who would they speak to? Would they go to the government agent or the municipality where they made the application to make those arrangements, or is there some other process that's required? Hon. C.

Hansen: Those arrangements to repay the deferred taxes would be made through the Ministry of Small business and r evenue. it would not require an administrative burden on the part of the municipalities. B. Ralston: a gain, just so it's clear — i think i know the answer to this — the owner of the principal residence would still be eligible each year, even though the taxes are being deferred, for the homeowner grant. So the total amount would be what they would have paid minus the homeowner grant. is that correct? Hon. C.

Hansen: The answer to that is yes, providing that the homeowner signs the appropriate declaration at the time that their tax notice comes up. [1040] B.

Ralston: c an the minister advise — just to give a sense of the proportion of this program — what it is an- ticipated that the likely individual deferred taxes per year per citizen would be? i'm thinking that, typically, property taxes might be somewhere in the range between $1,000 and $2,000 or $3,000 for most principal residences in the province. is that what's contemplated? h as the ministry had the opportunity to do any fine-tuning of that, in the sense of what the demand for this program might be? Hon. C.

Hansen: it really varies quite significantly from community to community around the province in terms of what the tax payable on a typical home might be. For example, on the list of sample municipalities that i have, on a home that's valued at $100,000, the taxes could vary from a low of $472 in one municipality to…. Well, the second-highest would be $1,100. There's an out- lier that would actually be at $2,360, which is obviously significantly higher than even the second-closest. by comparison, on a house that's valued at $500,000, it could vary anywhere from $4,000 up to $8,000.

So it does vary considerably around the province, but we anticipate that the vast majority of these applications will be in the $1,000-to-$3,000 range, as the member suggested. B. Ralston: The possibility exists…. i know in income tax, where there are private providers who will pay an immediate discounted amount of the amount you're to receive — typically 85 percent…. is the mechanism here…?

Does it have some safeguards built in so that someone can't or wouldn't be tempted to shop this proposed deferment cheque to someone like that and lose 15 percent or 20 percent to a payday loan operation or something like that? Hon. C. Hansen: This program would not lend itself to that, because once the homeowner applies and their application is accepted, the payment of their taxes goes directly from the provincial government to the munici- pality or the regional district that would be eligible to receive it. B. Ralston: The sole purpose is to pay the taxes.

There's no possibility for the homeowner to take that money in cash to themselves, then. Hon. C. Hansen: That's correct. Sections 6 and 7 approved. on

section 8. B. Ralston: in this section, it amends

section 18.2 of the l and t ax Deferment a ct, and i believe it's referring specifically to subsection (f), which refers back to subsec- tion 5.5(a), which talks about a total of the outstanding tax liability against the registered property, registered charges. There's a calculation that says that a deferral agreement must not be made. c an the minister explain the purpose of this particular amendment to paragraph (f)? [1045] Hon. C.

Hansen: This provision is simply to provide for the fact that the equity requirement under this new program is going to differ from the equity requirement under the program that currently exists for those aged 55 and older. The program for those 55 or older requires 25 percent equity. That's set in regulation. This simply

british c olumbia Debates13362 t hursday, n ovember 27, 2008 amends the authority for that regulation to provide for this new program. B. Ralston: in the present subsection (5)(b), it refers to "if the minister considers that (

i) the tax that is payable is inadequately secured, (ii) the amount deferred…is in- adequately secured…." a nd it continues: "…the minister may, despite the agreement by notice in writing…suspend further deferral of the tax or terminate the agreement." c an the minister give or have the staff advise? What might be circumstances where that would take place? r eferring to the previous program, is that something that's common? i wouldn't expect so. but can the minister just give an example of how that might work? Hon. C.

Hansen: a n example might be when, under the existing program, after many years of deferment…. o ne of the differences between the two programs is that under the program for those aged 55 or older, the deferment can go on for many years. There could be quite an accumulated tax deferment that would be there, and we would still require that there be the 25 percent equity. once a homeowner reached that 25 percent equity, they would no longer be eligible to continue with the deferment, and this provision actually requires that we give notification at that point.

The difference with the new program is…. because it's restricted only to two years, there would not be the accumulated tax deferral that we might see under the existing program. B. Ralston: i thank the minister for that answer, and i think i understand it.

Given that assessed values have risen fairly steadily in recent years, i wouldn't think that it has been a problem in butting up against the 25 percent minimum. is it contemplated that if assessment values decline, there might be more people in that circumstance, where their eligibility would end because the 25 percent of a lower assessed value would come into play? Hon. C.

Hansen: i think that's a question that many british c olumbians are asking themselves today in terms of what the assessed value of their properties might be in the future. but even though we've seen some softening of housing prices in british c olumbia, i don't hear anybody predicting or forecasting that there's going to be any kind of a huge decline in values of properties in british c olumbia as we've seen in parts of the united States. i think that the only case where this might become an issue, where they're pushing up against that threshold, would be somebody that has purchased their property very recently at a very high value and with very low equity in that property.

So we don't anticipate that the problems would be significant. [1050] We expect that most of the people applying for either of these programs would, in fact, be people that have been in their homes for some time and are looking for ways that they can lower their annual costs in order to allow them to stay in the homes that they've lived in for some time. B. Ralston: a s i was reading

section 5(5) of the l and t ax Deferment a ct, subsection (6) reminded me of a question i neglected to ask earlier. i take it that the requirement of c anadian citizenship or permanent resident in a case of joint tenancy is only required for one of the owners of the property in order to be eligible for the program? That appears to be the clear reading of subsection (6) there, and i assume that it's the same. is that right? Hon. C. Hansen: That's correct. Sections 8 and 9 approved. on

section 10. B. Ralston: We're now entering a new

section of amendments to the School a ct, where it's proposed to credit owners of properties in classes 4 and 5 with the equivalent of a 50 percent rebate of school taxes levied in a taxation year. in the past there has been much policy discussion — whether it's been from the c ompetition c ouncil, the b.c. business c ouncil, the Progress board or the u nion of b.c.

Municipalities — about the wisdom or not or the policy of how, particularly, class 4 properties — and in particular, those located in smaller centres in british c olumbia — might be taxed and what the implications are both for the municipality and for the ongoing business viability of the firm that may own and operate businesses on that property. This proposal appears to short-circuit some of that discussion. Much of the proposal has talked about, i think, a scheme somewhat like ontario, where there are…. interjections. The Chair: Members. B.

Ralston: Many of the proposals — or some of the proposals, at least — looked at what exists in ontario, where there's some provincial role in setting ratios between categories of assessment and an overarching appeal mechanism. in bringing forward this legislation, has the govern- ment simply deferred that discussion? or is there any intention to integrate this proposal, which appears to have been put together fairly quickly, with those discussions? or is it simply the only program that the government contemplates bringing forward to deal with

british c olumbia Debatest hursday, n ovember 27, 2008 13363 those concerns, which were hotly debated, i think, in 2006 and 2007? Hon. C.

Hansen: i think that some of the work that was done by the c ompetition c ouncil pointed out a real challenge that a lot of industrial and light industrial property owners are faced with. i think some of the difference in tax rates between commercial properties and non-commercial properties — between the various classes of properties — is something that is an impediment to economic growth in many parts of the province. it certainly adds to the challenge and the cost burden that many of these firms are facing. We have had discussions with the ubcM and others on this.

We will continue to engage in that dialogue, as to how we can ensure that our tax rates — not only at the provincial level but at all levels — are in fact competitive with other jurisdictions and that british c olumbia con- tinues to be an attractive place for companies to invest and to grow. [1055] This measure is not intended to be a long-term fix to that solution. it is intended as a measure that is within the province's policy framework that allows us to address some of the challenges that companies are facing in the near term but certainly does not preclude other actions that we may be looking at in the longer term.

B. Ralston: Was there consultation or discussion with the u nion of b.c. Municipalities and their staff, at least at the staff level, about how this might be implemented — or not? Hon. C. Hansen: This measure does not have any significant financial impact on municipalities. in fact, the only impact would be that they would have to change some of their forms and notification that would go out along with the tax notices. For that we are providing $1,000 to each municipality, just to recognize that there are some very small processing charges for them as they change these particular forms. B.

Ralston: c an the minister advise the number of properties that will be eligible for this rebate? Hon. C. Hansen: There are 340 class 4 plants in british c olumbia on the 2008 assessment roll, and there are also 8,900 gas and petroleum sites in class 4. The total class 4 net taxable value for school purposes on the 2008 roll was approximately $5.7 billion. B. Ralston: Does the minister have similar numbers for class 5? Hon. C. Hansen: For class 5. it's an industrial class that includes what is left of the industrial property following the creation of the major industrial class 4 property class in the late 1980s.

There are approximately 25,700 parcels, either wholly or partially in class 5, on the 2008 roll. a bout 15 percent of the total assessment value of class 5 is in the oil- and gas-gathering pipelines. The total class 5 net taxable value for school purposes was approximately $9 billion. B. Ralston: h as the ministry made a calculation of what it would cost if every property in class 4 and 5 took advantage of this program? There would be no reason not to, i would think. Hon. C.

Hansen: W e know that all of these properties will receive this benefit because it is automatic. it is not something that they would have to apply for. The total cost we anticipate to be about $50 million a year — about $20 million applicable to class 4 properties and about $30 million applicable to class 5. B. Ralston: i don't know if the minister is able or willing to share the data that's just been spoken of in

summary fashion. of the 340 plants or industrial properties in class 4, is the minister able to advise how many of these are ongoing industrial operations, or are they simply properties where a mill may have been operating and has since been closed? i take it, because it applies to property, that there's no ineligibility if it's not an ongoing business enterprise. it remains an eligible property, i take it. [1100] Hon. C. Hansen: We don't have data in terms of how many of these properties are operating today or not. The principle we are looking at is this.

We want to ensure that properties that are perhaps not working today could become commercially viable sooner as a result of this measure and that properties that are working today can remain viable longer than they might otherwise do so. There is a provision in the assessment process that if an industrial property is inactive for a certain period of time, that would be reflected in a lower assessment. So a property that has ceased operations some time ago would actually receive a lower assessment and, therefore, a lower tax burden as well. [h. b loy in the chair.] B.

Ralston: Just looking at the material that's on the b.c. a ssessment a uthority website, there are a number of methods by which assessed value is calculated, particularly for class 4 and class 5 properties. but given that some of these sites may no longer have an active business operation on them, what would be the effective date for an assessment that would contemplate the physical change that had taken place? in the sense that if the business enterprise is closed down, the plant has

british c olumbia Debates13364 t hursday, n ovember 27, 2008 packed up, and there's nothing left but the bare land and maybe a few utility outlets, what would be the effective date for that to be reflected in the assessed value that might eligible for this rebate? Hon. C. Hansen: We don't have that information at our disposal. i think what this particular

section of bill 45 is about is a tax credit on school taxes. it doesn't really impact at all how the assessments are done. but i'm sure that the Minister of Small business and r evenue, in his responsibility for the assessment process, would be pleased to set up a briefing for you with officials from the assessment authority to properly answer the question. B.

Ralston: i'm always keen to get technical briefings, i suppose. but these amendments do contemplate and refer specifically to class 4 property class and class 5 property class under the a ssessment a ct and refer to the 2009 and subsequent taxation years. it says "…entitled to a credit equal to 50% of the school taxes levied in the taxation year…." So the question of how the school taxes might be calculated based on the assessed value of the property is, i think, germane to the discussion. is it possible, at some point later in the proceedings today, to get that answer? Hon. C.

Hansen: a s we get into later sections of this act…. i know that the Minister of Small business and r evenue is responsible for certain sections, and he will be here at that point, with his staff. h e has advised me that he'd be pleased to entertain that question at that time. B. Ralston: The tax deferral measures on residential property that we just spoke of moments ago are designed to end after two years. This

section as i read it, unless i'm misreading it, is permanent. is that the intention of the minister that these changes become a permanent feature of the tax landscape of british c olumbia? [1105] Hon. C. Hansen: This measure that's being introduced is ongoing. of course, just as this measure is being intro- duced and approval is being asked for by the l egislature, it's subject to future decisions by this chamber as well. B.

Ralston: Some of the broader discussion about business taxes and particularly in classes 4 and 5 that i mentioned earlier, whether it's the business c ouncil advocating for a business-to-residential property tax ratio…. is it contemplated that at some point those con- cerns might be met with legislation that would change the nature of this legislation? i appreciate that that's a bit speculative, but the minister did say that the ministry is certainly alive to those issues. Hon. C. Hansen: i think the member is correct: it is speculative. i would not be in a position to answer that today. B.

Ralston: o ther than the reduction in tax revenue of some $50 million, is there a calculation about the ongoing impact of this measure? i think the figure was given of $50 million this year. is there any modelling of the impact of the tax in future years, particularly in the typical three-year cycle? Hon. C. Hansen: in the coming fiscal year, the '09- 10 year, we're anticipating $50 million, as the member indicated. in the subsequent fiscal year we're anticipating $52 million. So we are anticipating that there would be a very slight annual growth rate for this. Sections 10 to 12 inclusive approved.

The Chair: We'll recess for one minute. The committee recessed from 11:08 a.m. to 11:09 a.m. [h. b loy in the chair.] on

section 13. B. Ralston: This

section contemplates amendments to the c ourt order enforcement a ct and adding a new section, 71.3. i'm wondering if the minister could briefly explain the purpose of this proposed new subsection, and then i have some subsequent questions. Hon. W . Oppal: The general purpose for this legisla- tion and the reason why it's being enacted now is that, first, the government has been considering for some time the adoption of this legislation, recommended by the british c olumbia l aw institute. it proposed a new civil enforcement judgments act.

So the legislation included provisions for protecting rrSPs. of course, the present financial circumstances mean that it may be timely to do this now. [1110] B. Ralston: a s i understand the present legislative landscape, there are products provided by insurance companies that provide the same protection from creditors, and those programs are well established. There are a number of life insurance companies and other insurance companies that provide those kinds of products, and those are methods by which retirement savings are not exigible in any enforcement proceedings.

So i'm wondering why it was felt necessary to change the legislation, given the existence of products that are produced by, certainly, one branch of the financial services industry, as opposed to this one.

british c olumbia Debatest hursday, n ovember 27, 2008 13365 Hon. W . Oppal: i think it's clearly in the public interest during these difficult financial times we now live in that steps ought to be taken to protect c anadians, protect citizens of our province, from any seizure of contributions that they make for their savings. i know it's well understood that most of our citizens do not have either government pensions or corporate pensions and contribute to rrSPs. This legislation would offer protection from creditors, from seizure of those assets that people save for their retirement years.

So it's our view that this is good law. it's a sound law, and it's clearly in the public interest to offer this protection. B. Ralston: Perhaps the minister is not accepting my point, at least obliquely. My point is that other parts of the financial service industry — life insurance — offer products that enable one to protect retirement savings in a different type of product, but it's classified legally as an insurance product. it's therefore not exigible in an enforcement proceeding and serves this effect just as well.

That protection exists if people choose to buy those products. i'm wondering what the motivation is, beyond what's said here, for offering this to protect rrSPs when another product is available. Hon. W . Oppal: i think the short answer to that is it would be unfair to protect some and not others. a s the member has quite properly pointed out, some of these plans are already protected, but in our view it would be unfair to offer that protection to some plans and not have that protection available to others. B.

Ralston: Given that this matter is within provincial jurisdiction, can the minister advise: how many other provinces offer similar legislation protecting rrSPs from court enforcement? Hon. W . Oppal: Manitoba, Saskatchewan, and n ewfoundland and l abrador have passed similar legis- lation, and the federal government has as well. B. Ralston: is this an ongoing debate that operates at the national level, at the staff level? a nd is there any explanation why, for example, ontario doesn't have such legislation — given that it's the biggest province, with ten million people? Hon. W .

Oppal: i'm unable to speculate as to why ontario hasn't enacted similar legislation. B. Ralston: in subsection 3, there are a number of excep- tions or exemptions. i'm looking at subsection 3(a). c an the minister explain 3(a), which reads: "to property contributed to a registered plan after or within 12 months before the date on which the debt being enforced came due." [1115] Hon. W . Oppal: There are four exceptions under

section 13, and they really are based on the principles of fairness. For instance, subsection (

a) deals with a circumstance that if the property contributed to a plan within 12 months of the debt becoming due or after the debt is due, it can be seized. This really prevents a person from anticipating a debt and hiding their assets. Similarly, if property is paid out of a registered plan, it can be seized. a gain the rationale for that is self-explanatory, since it's already paid out.

The third exception is the exception for the family maintenance enforcement program. a gain the reasons for that exception are obvious, and it is that while this legislation encourages people to save for their retirement years, the obligation to support one's children under the FMeP must take precedence over one's retirement obli- gations or objectives.

Support payments are based on a person's salary and ability to pay and, therefore, are presumptively reasonable under the family maintenance enforcement program. a s a member who is a member of the bar well knows, the FMeP payments are always made payable commensurate to whatever one's income is. The fourth exception again is based on the principles of equity and fairness.

That is that those creditors who have commenced an action prior to the announcement of n ovember 1 of the government's intent to protect rrSPs will be permitted to complete a seizure. in other words, it will not assist those people who have already commenced an action. B.

Ralston: Well, i thank the minister for imputing to me legal knowledge. a s the minister well knows, legal training does not necessarily imply a specific legal knowledge, and i certainly don't have any great familiar- ity with the act he refers to. h owever, i do have a couple of questions arising in the question of subsection (a). is it meant to be retroactive to 12 months from the date of this legislation, assuming it's passed and proclaimed, or is there a different start date for the 12 months that's referred to there? Hon. W .

Oppal: Y es, it does it have a retroactive effect in that if the property contributed to a plan within 12 months of the debt becoming due and owing, or after the debt is due and owing, it can be seized, and that will be one of the exceptions under the legislation. B. Ralston: Similarly, with subsection (d), it refers to an enforcement process initiated. The minister referred to an action commenced. i'm wondering if there's a dif- ference there. "enforcement process initiated" suggests to me something a bit broader than "an action com- menced." Perhaps the minister could just clarify that.

british c olumbia Debates13366 t hursday, n ovember 27, 2008 Hon. W . Oppal: That's a legitimate concern raised by the member opposite. The reason for that exception is that creditors may have relied upon the old law in good faith and may have incurred costs of the enforce- ment against rrSPs, again in good faith. This transition provision ensures fairness to creditors who began their enforcement proceedings against rr SPs under the old law. So that's the reason why the exception is put in this section. [1120] B.

Ralston: Just to give an example, if a judgment had been taken, and certain steps had been taken to enforce that judgment against the plan before the date here, then that would continue without any impact of this law, should and when it is passed. is that correct? Hon. W . Oppal: There may be a situation where a creditor has incurred costs of enforcement, such as the costs incurred in the writ process, as opposed to the even- tual securing of a judgment.

So that's the purpose of it. it expands the area of remedies for a creditor, where the creditor has relied on the old law, and it would be unfair, therefore, to deprive the creditor of his or her rightful remedies under the old law prior to this law coming into effect as of the cut-off date of november 1. B.

Ralston: h as there been any calculation of what the financial impact might be to the government, where if the government is a creditor and they're pursuing in- dividual citizens, the effect of this amendment might be to bar a recovery of legitimate debts owing to the gov- ernment and where it was contemplated that they would be recovered from the rrSP? a re there any studies on that? Hon. W . Oppal: The short answer is no. it would be difficult, if not impossible, to calculate the costs at this stage, prior to any seizures taking place. B.

Ralston: in subsection (4) there are some further exceptions to, or clarification of, subsection (3)(

b) about transfer of property from one registered plan to another. c an the minister explain those? There are some refer - ences to plan holder's spouse and common-law partner, and they're defined in 248 of the federal act. So can the minister just clarify what those exceptions are? Hon. W . Oppal: This really deals with transfers, and it really clarifies a position wherein a person may trans- fer their investments from one plan to another — for instance, from an rrSP to an rriF . or another example is if the property in the plan passes to their spouse on death, then the creditor cannot seize the money.

See, under the law, a transfer is viewed at law as a withdrawal from one plan and then a deposit in another. The amendment will really clarify that a withdrawal from a plan for the purposes of depositing from one plan to another does not make that money subject to seizure. So really, this is some added protection for the holders of these plans so that they are not caught by any transfers that may be made in good faith and for legitimate purposes. B.

Ralston: The minister has used the word "with- drawal." i just want to be clear here. i'm looking at subsection (4), and it says: "For the purposes of subsec- tion (3) (b), (

a) a transfer of property from a registered plan of the planholder" — and then — "(

i) to another registered plan of the planholder…." [1125] is that the situation that the minister has described, where the holder of the rrSP — for example, upon at- taining age 69 — is obliged by law to transfer that to what's called an rriF? is that the

section that's contemplated? because the minister has used the word "withdrawal" in the

section that says "transfer," so i just wanted to be clear that we're talking about the same thing. Hon. W . Oppal: The member's correct, that the word "transfer" is used in the act, but transfer really…. Withdrawal is a transfer for the purposes of the act. B. Ralston: i thank the minister for that. i did refer to "contemplates." if the plan holder dies, then it's a transfer to the plan holder's spouse or common-law partner as de- fined in

section 248 of the federal act. Just for the purposes of clarity for those who may be reading or watching, can the minister just explain under

section 248 the definition of spouse and the definition of common-law partner? Hon. W . Oppal: Well, there is generally a well-under- stood definition of a common-law union, common-law partner. u nder the provincial law, it's considered to be two years. My answer to that is: i am assuming that

section 248 of the federal act would have a similar provision as to what constitutes a common-law relationship or a common-law partner for the purposes of the act. B. Ralston: Does the term "common-law partner" as defined in

section 248 of the federal act contemplate same-sex partners? Hon. W . Oppal: i'm really unable to answer that question with certainty except to say that under our marriage laws and the

interpretations given to same-sex marriage by the courts, there is no reason why this legis- lation would not apply to same-sex relationships and/or marriages. B. Ralston: is there any particular reason why the

section of the federal act was chosen as opposed to a provincially based definition?

british c olumbia Debatest hursday, n ovember 27, 2008 13367 Hon. W . Oppal: When we're dealing with registered retirement savings plans, we are in effect dealing with federal legislation. So where possible, we try to define and marry our

definitions so as to coincide with what the fed- eral legislations would say under those circumstances. [1130] B. Ralston: Then if i might…. Subsection 4(

b) refers to an enforcement process and deems the property for the pur- poses of that enforcement "to be a debt due to the planholder for or with respect to the salary or wages of the planholder". o rdinarily , in my understanding of federal bankruptcy law , wages have a certain priority , and certain law applies in the event of a personal bankruptcy. is this

section here designed to reflect the priorities that occur in a bankruptcy proceeding? Hon. W . Oppal: What this subsection (

b) does is it clarifies that if money is paid out of a registered plan, it is to be treated as wages or salary, which will protect 70 percent or more of the money being paid out. B. Ralston: r eally, then, what this legislation is accom- plishing — if i can summarize what the minister has just said — is that that residual 30 percent is now protected from any enforcement process, so 100 percent is, in effect, exempt from the c ourt order enforcement a ct. Hon. G. Hogg: Mr. c hair, i seek leave to make an introduction. The Chair: Proceed. Introductions by Members Hon. G.

Hogg: We are joined today by a number of students from e arl Marriott Senior Secondary School in South Surrey–White r ock, with their teacher Mr. Gill. They're here to learn about all the wonderful things we're doing and how we do them. Would the h ouse please make them feel most welcome. Debate Continued Hon. W . Oppal: Well, 100 percent of the amount is protected until the money is paid out. When the money is paid out, then it assumes a different character in that it's subject to the normal laws. B. Ralston: if i might just pursue that, then.

The act protects the transfer from the rrSP to the rriF , but the process at that point, as i understand the federal legis- lative scheme, requires a certain amount of the money that's in the rriF to be paid out over the remaining years of the owner of the rriF . Does the money that's paid out at that point then become exigible — subject to enforce- ment — or is it continued with an exempt status? Hon. W . Oppal: The money paid out from a rriF will be treated as wages or salary. B. Ralston: in that case, 70 percent of that is exempt, and 30 percent is exigible. is that what's being said, then? Hon. W .

Oppal: Y es. [1135] B. Ralston: if i might have one moment here. The re- maining subsections (5) and (6). i take it that those are simply, if i can put it, rhetorical flourishes of the draftsman, just to protect against unforeseen statutory exigencies? Hon. W . Oppal: The answer is yes.

Section 13 approved. B. Ralston: Shall we recess briefly, Mr. c hair? This is under amendments to the Financial institutions a ct. The Chair: We will recess for a few minutes. The committee recessed from 11:36 a.m. to 11:37 a.m. [h. b loy in the chair.] on

section 14. B. Ralston:

Section 14 amends

section 201 of the Financial institutions a ct, and that's by repealing subsection 3(b). What subsection (3) reads is, "The commission must not delegate," and then goes to: "(

b) a power or duty under

Part 9." Then what is proposed are certain exceptions to that, other than the power of duty under sections 275, 277, 277.1 and 277.2. c an the minister explain the motivation for this pro- posed amendment? Hon. C.

Hansen: The purpose of this provision is to allow for quicker action, basically, if there was any reason to believe that a particular credit union may be facing any difficulties. i want to start by emphasizing that we have a first-class credit union system in british c olumbia. o ur credit unions are very strong, as is the rest of our banking system in c anada — something that i think we as canadians can be proud of.

The fact that we are putting in place some changes to the regulatory oversight is in no way a reflection on any current concerns that we may have about the stability of the credit union system. but just given the volatility of financial markets that we see around the world, we are anxious to make sure that, should any concerns arise, we are in a position to respond very quickly to this. The current provision is that Fico M itself must meet and order that a credit union be put under supervision

british c olumbia Debates13368 t hursday, n ovember 27, 2008 or under administration. h owever, we realize that things can actually change very quickly in the environment that we're in today. This actually allows for the powers that Fico M would hold to be delegated to the super - intendent so that the superintendent could move much more expeditiously in certain circumstances. B. Ralston: The references in this subsection, as i've just read…. it begins with

section 275. i think these sections are fairly straightforward when one reads through them, but just for clarity, why were these…? i think i understand from the minister's general tone why they were chosen, but…. [1140]

Section 275. Why was that chosen to be something that could be delegated to the superintendent and that didn't have to be dealt with by the commission board itself? Hon. C. Hansen: in the case of

section 275, that actually is the power that F ico M holds to put a credit union under supervision or, as the member will note from a subsequent amendment in one of the later sections, to amend that to allow them to put a credit union directly under administration without going through the stages of, first, supervision and then administration. So what the effect of this change in this

section is, is to allow that power to be delegated to the superintendent so that he could act more quickly should that circumstance be required. B. Ralston: The announcement that was made in advance of the legislation referred to simply lifting the $100,000 limit on the guarantee of credit union deposits and making that unlimited.

These powers weren't, at least, announced. a re these the result of discussion between the ministry and credit u nion c entral of british c olumbia — or credit u nion 1, i believe it calls itself now — or are they initiatives that the Ministry of Finance took on its own? i'm wondering what the genesis of this legislative change is. Hon. C. Hansen: Y es, there were consultations with c entral 1 credit u nion as well as with Fico M itself prior to these changes. This actually….

What it does is bring us more in line with provisions that are provided in the bank a ct as it pertains to banks in c anada, and it also brings us in line with provisions that are in place in a lberta and other provinces that also have unlimited deposit insurance. B. Ralston: in the past, i believe, some of the decisions of Fico M, the Financial institutions commission, in em- barking on supervision of credit unions have been subject to judicial review.

Does this reduce or eliminate the pos- sibility of judicial review of the decisions of Fico M, given that if they're delegated they become closer to pure admin- istrative decisions rather than quasi-judicial decisions? Hon. C. Hansen: bill 45 does not change that in any way from what was in place previously, but there is the opportunity for decisions to go to a judicial review. i guess the one nuance here is that there is also an oppor- tunity to take an issue to the Financial Services t ribunal before taking it to judicial review. B. Ralston: c an the minister then just point me to the

section or subsection that contemplates the reference to the tribunal? [1145] Hon. C. Hansen: Those provisions in

section 242 of the Financial institutions a ct. B. Ralston: l ooking at

section 14, the proposed amendment of

section 201, subsection (

b) would appear to simply give the power to the commission to confirm an order of the superintendent. So in

summary, then, is the purpose of this amendment to broaden the powers of the superintendent to act on his or her own and then have the safeguard of the commission confirming, or not, that action within 21 days? Hon. C. Hansen: Y es.

Section 14 approved. on

section 15. B. Ralston: o bviously, this is the subject of the an- nouncement that the Premier made. i think it's point 1 on o ctober 22. o ther than making credit union de- posits unlimited, are there any other implications to the government in terms of financial liability that arise from this? i don't imagine there are any, but i simply wanted to confirm that. Hon. C. Hansen: n o.

Section 15 approved. on

section 16. B. Ralston: This proposes the repeal of

section 275(

b) of the Financial institutions a ct. The present

section reads: "The credit union does not have adequate liquidity or capital in accordance with

section 67." There's a sub- stituted section, which is a little bit more lengthy. c an the minister explain the policy rationale for proposing this amendment? Hon. C. Hansen: u nder the current rules, where the credit union does not have…. W ell, it basically provides for intervention should the credit union not have adequate liquidity or capital. That is often very difficult to prove,

british c olumbia Debatest hursday, n ovember 27, 2008 13369 so it is felt that the current rules don't really give, i guess, the certainty that we would need. by expanding the specific

definitions in the areas in which there can be intervention, it allows for the FicoM and/or the superintendent to intervene, perhaps earlier and in a more timely fashion than might otherwise be provided under the existing provisions. B. Ralston: i appreciate and share the comments of the Minister of Finance about the financial stability of the credit union system and that the public has every reason to have complete confidence in the financial sta- bility of the system.

This amendment speaks of supervision. a s i recall from my days in the credit union movement, there are from time to time one or two credit unions that may have been in supervision over the last decade. c an the minister confirm that, and is there any likeli- hood that given these amendments there would be more fall into supervision of the financial services commis- sion, or not? [1150] Hon. C.

Hansen: i think, as the member indicated, it really does speak to the strength of our credit union system in the province. if you go back and look at the '05-06 year, there were four credit unions that were under supervision at some point during that year. in '06-07, five. in '07-08, there were two. We do not anticipate that this change in this particu- lar

section will result in any additional credit unions put into supervision. This is simply a measure that will allow for more timely intervention and avoid what could otherwise be the possibility of delays in timely interven- tion should that ever present itself in the future. B.

Ralston: This proposed amendment clearly ex- pands the powers for the superintendent to intervene. is the authority to make those inquiries presumed in the sections or do the enforcement powers or investigative powers of the superintendent enable this amendment to be contained within the current powers that the super - intendent has to investigate individual credit unions? Hon. C. Hansen: There's nothing in here that would change the powers that the superintendent would have.

What this does is really enables for more timely inter - vention and the circumstances under which the Fico M itself or the superintendent would be able to intervene.

Section 16 approved. on

section 17. B. Ralston: This proposed section, proposed to repeal a subsection of

section 277 of the Financial institutions a ct, which i think at present reads: "the credit union to dispose of all or part of its assets and liabilities to an- other credit union…." The only change appears to be "substantially all." h as that been a difficulty in the past that requires this amendment, or is this simply drafters tidying up? Hon. C.

Hansen: t o answer part of the member's question, we're not aware of any particular circumstance up until now that has presented this, but this is certainly a change in these provisions to ensure that it doesn't be- come a problem in the future. i think i can probably do best justice to this by reading the reason for this amend- ment as staff have prepared for me. it says: "a limit on disposing of any asset is too broad and conflicts with the administrator's power in

section 278, particularly the power to preserve, maintain, realize, dispose of and add to the property of a credit union.

The proposed amendments replace the limit on the disposing of all or part of the assets or liabilities with a more appropriate limit on disposing of all or substantially all of the assets or liabilities." For example, if an administrator is in place, it could potentially be interpreted that he couldn't even perhaps dispose of a surplus desk if that was part of the assets. i think that what this does is make it clear that this, in fact, only applies to substantially all and really not some of the minor assets that it may be entirely appropriate to dispose of while an administrator has responsibility. [1155] B.

Ralston: So this amendment, then, is brought more out of an abundance of caution. There are no court

interpretations of this

section or anything like that that's necessitated an amendment. Hon. C. Hansen: n ot that we are aware of. n oting the hour, i move that the committee rise, re- port progress and ask leave to sit again. Motion approved. The committee rose at 11:56 a.m. The h ouse resumed; Mr. Speaker in the chair. c ommittee of the Whole (Section b), having reported progress, was granted leave to sit again. h on. J. Mcintyre moved adjournment of the house. Motion approved. Mr. Speaker: This h ouse stands adjourned until 1:30 this afternoon. The h ouse adjourned at 11:57 a.m.

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Document details

Collection	British Columbia — Debates (Hansard)
Citation	H1127am 04
Type	hansard
Volume / chapter	H1127am 04
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	56d7cdda3743096a4868f44a39529563abc78f06

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