Fourth Session, 41st Parliament

(2019) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Monday, November 18, 2019

Afternoon Sitting

Issue No. 290

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Routine Business

Introductions by Members

Tributes

B.C. Lee

S. Sullivan

Introductions by Members

Introduction and First Reading of Bills

Bill 42 — Fuel Price Transparency Act

Hon. B. Ralston

Bill M229 — Motor Vehicle Amendment Act, 2019

L. Throness

Statements (Standing Order 25B)

Dan’s Legacy Foundation

R. Singh

Multiculturalism

T. Wat

Indigenous disability awareness and role of BCANDS society

N. Simons

Shandhar Hut restaurant in Chilliwack

J. Martin

Swahili Vision International Association

A. Kang

Roy Sakaki

G. Kyllo

Oral Questions

RCMP budget and services

S. Bond

Hon. M. Farnworth

J. Johal

Labour dispute in Saanich school district

A. Olsen

Hon. R. Fleming

Government approach to teachers’ collective bargaining

A. Olsen

Hon. R. Fleming

Community benefits agreement project costs and bidding process

P. Milobar

Hon. C. Trevena

G. Kyllo

Proposed performance audit of community benefits agreement

J. Martin

Hon. C. Trevena

Hon. J. Horgan

Petitions

R. Glumac

B. Stewart

D. Clovechok

Orders of the Day

Second Reading of Bills

Bill 37 — Financial Institutions Amendment Act, 2019 (continued)

R. Sultan

M. Lee

S. Cadieux

S. Bond

Hon. C. James

Bill 38 — Climate Change Accountability Amendment Act, 2019

Hon. G. Heyman

R. Coleman

A. Weaver

S. Malcolmson

S. Gibson

A. Olsen

S. Chandra Herbert

P. Milobar

MONDAY, NOVEMBER 18, 2019

The House met at 1:35 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

R. Chouhan: It’s my pleasure to welcome some special guests today in this House.

We are very pleased to have with us the Speaker and Clerk of the Legislative

Assembly of the Australian Capital Territory, who are here for a day of

meetings with us and Clerks. Would the House please join me in welcoming the

Hon. Joy Burch, Speaker, and Mr. Tom Duncan, Clerk.

L. Throness: I’d like to welcome Gary Lillico to the House today. Gary is a school

bus driver from Agassiz in my riding. I’ll be talking more about him in a

moment. Would the House please welcome him.

R. Sultan: I would like to introduce the House to the world’s ranking expert on

American baseball scores, who also served as head of the West Vancouver

teachers union and, subsequently, head of the B.C. Principals and

Vice-Principals Association. He is now a full-time grandfather. Please

welcome Kit Krieger.

Hon. B. Ralston: I’d like to introduce members of the Canadian Manufacturers and

Exporters Association who are here today to celebrate manufacturers week:

Andrew Wynn-Williams, divisional vice-president of B.C. for Canadian

Manufacturers and Exporters; Kosi Stobbs, director of Specific Mechanical

Systems; Joshua Bradshaw, president of Vital Manufacturing Inc.; Paul

Tiefensee, president of Formula Contractors; and Trevor Borland, VP of sales

and marketing for Pacific Bolt Manufacturing. Would the House please make

all of our guests welcome.

Hon. R. Fleming: I have a number of distinguished guests to invite, and I know the

House will want to make them most welcome.

All of us benefit in our constituencies, in terms of how well the

school system performs and serves kids and families, because of the

leadership provided by principals and vice-principals. Indeed, we’re

fortunate to have a number of them here representing the B.C. Principals and

Vice-Principals Association today. It’s my great pleasure, I think on the

eve of their 30th anniversary — sorry, it’s more than 30 years now; time

flies — to introduce this group from the association.

First of all, president David DeRosa is here, from Trail, and board

members Brett Johnson, Darren Danyluk and Tom Aerts. Tom Aerts is from

Reynolds Secondary School. I point that out to the Premier, who’s an alumna.

Executive director Kevin Reimer is here, as well; director of

communications, Sandra Murphy; director of finance, Carol Powell; directors

of member support services, Don Boyd, Ellen Roberts and baseball

statistician, Kit Krieger; and directors of professional learning and

development, Jessica Antosz and Elizabeth Bell. Finally, executive assistant

Sharon North is here.

I would ask all members of the House to make our friends from the B.C.

Principals and Vice-Principals Association most welcome.

J. Thornthwaite: I’d also like to personally welcome Elizabeth Bell — she’s Liz Bell to

me — the director of professional learning and development with the B.C.

Principals and Vice-Principals Association. She’s more well known in the

North Shore, and particularly in North Van, as being principal for two

schools in my riding, both Argyle and Windsor, and a favourite principal of

two of my three children as well. A lovely individual, a great teacher and a

great principal. Somebody that if she’s involved with the director of

professional learning and development, then the principals are in good

hands.

I’d like to especially welcome Liz Bell.

T. Shypitka: First of all, we’ve got two people in the House I’d like to welcome:

Gary Milligan, the vice-president of Thermal Environmental Comfort

Association, and Martin Luymes, vice-president of government and

stakeholders relations, the Heating, Refrigeration and Air Conditioning

Institute of Canada. They are here in association with the Canadian

Institute of Plumbing and Heating. Would the House please welcome

them.

Hon. S. Simpson: As members will know, November is Indigenous Disability Awareness

Month. I’m really pleased that today Neil Belanger is with us. Neil is the

chief executive officer for the B.C. Aboriginal Network on Disability

Society.

[1:40 p.m.]

The society, BCANDS — their mission is advancing the unique disability

and health priorities of Indigenous persons through collaboration,

consultation and the delivery of comprehensive client services. They’ve been

doing that for almost 30 years here, and they certainly have an

international recognition for the work they do, being the only organization

of their type in this country.

Neil has been providing leadership for that organization for about ten

years. Please make Neil welcome.

J. Sims: It’s my pleasure to introduce an individual I met soon after the

teaching profession in B.C. became unionized. He came out to visit Nanaimo,

my teaching place at that time, and we got to know each other. We didn’t

always agree on many things, but one thing we do agree on is our passion for

public education. Please help me welcome to this House the past president of

the BCTF, Kit Krieger.

D. Clovechok: It gives me a great deal of pleasure today to introduce, in the

gallery, a friend and our principal from Invermere, Darren Danyluk, an

outstanding educator. He does a great job. I look forward to seeing him

later on.

B. Stewart: It’s with great pleasure I introduce a constituent who is in the

precinct today, Mr. Rick Schofield. Rick has recently been a part of the

Port Alice shutdown of Neucel, and he’s hoping to share some of his insights

about the wastewater treatment plant there today with the members here in

the precinct.

G. Kyllo: Joining us in the House today is a very close friend of mine, Francis

Laderoute, a former Sicamousian. He went to school with my daughters. He is

now a resident of Kamloops, a member of the Kamloops–North Thompson

constituency. Would the House please welcome Francis Laderoute to the

House.

T. Shypitka: I don’t want to welcome anybody to the Legislature as much as I want

to welcome somebody to the world. Over the holidays, my son Dustin had his

first child with his wife, Julie, making me a grandfather for the first

time.

Hudson Takashi Shypitka was born November 9, at 7 pounds 12 ounces. If

the House would like to see any pictures, I’ve got a whole bunch. Would you

please welcome him.

A. Kang: I have a group of very good friends from the Swahili Vision

International Association. They come from the land of

Hakuna-matata , which means “worry-free,” and as we know from the

movie The Lion King , they speak Swahili as well. They often wonder

why I can’t party with them until 1 a.m., because that’s what Africans do.

They wanted to come and see what I do here and what’s keeping me busy. Most

importantly, they want to see what we do here and to visit their

house.

I want to extend this welcome to them. With me today are Bagende

Amani, Jean-Claude Bakundukize and Jean-Claude Bigirimana, as well as Kuria

Kush laban, Jerome Mpyisi and Joash Gambarage, as well as Abdul Said and

Neema Mrita. Would the House please make them very welcome.

Tributes

B.C. LEE

S. Sullivan: I wanted to acknowledge the passing away of a person who many

people in this House know. B.C. Lee was an amazing, wonderful man. He

was born in Macao, raised in Taiwan, educated in the United States, in

New York, and he made a big mark on Vancouver.

He was a city councillor. I worked with him when I was mayor, and

he was a pure pleasure to work with. He was a really important

communicator to the Chinese community. He spoke three different dialects

of Chinese, and he was just in the middle of a blossoming acting career

when he was taken from us. I just wanted to acknowledge the wonderful

life and what a contribution he made to our community.

Introductions by Members

S. Furstenau: I was delighted to have lunch with the B.C. Principals and

Vice-Principals Association, but even more delighted to sit next to my

former principal when I was a teacher at Colquitz, Brett Johnson. Really

lovely to catch up with him and hear from him all about the issues still

going on in public schools today. Would the House please make Brett most

welcome.

[1:45 p.m.]

Introduction and

First Reading of Bills

BILL 42 — FUEL PRICE

TRANSPARENCY

ACT

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

Lieutenant-Governor: a bill intituled Fuel Price Transparency

Act.

Hon. B. Ralston: I move that the bill be introduced and read a first time

now.

I’m pleased to introduce Bill 42, the Fuel Price Transparency Act.

This bill is being tabled in response to the recent investigation by the

B.C. Utilities Commission. The BCUC found that there are considerable

markups on the price of gasoline, including a ten- to 13-per-litre

premium being charged to drivers that the industry refused to explain.

This premium results in British Columbians paying an extra $490 million

every year.

This legislation brings us greater transparency at the gas pumps

and sends a message to the oil and gas companies that the days of

setting their prices in secrecy are coming to an end. If passed, the act

will allow government to collect and publish information about the fuel

market in British Columbia. This information, once collected, will be

available to the public, including consumer and watchdog groups. The

intent is to improve both public confidence and competitiveness in the

fuel market.

This act is designed to give the province the information needed

to identify steps that could lead to lower and more predictable gasoline

prices for British Columbians. It’s time to pull back the curtain to get

some answers for British Columbians on how the price of gasoline is

set.

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 42, Fuel Price Transparency Act, introduced, read a first time

and ordered to be placed on orders of the day for second reading at the next

sitting of the House after today.

BILL M229 — MOTOR VEHICLE

AMENDMENT ACT,

L. Throness presented a bill intituled Motor Vehicle Amendment Act,

L. Throness: I move that a bill intituled Motor Vehicle Amendment Act, 2019, of

which notice has been given in my name on the order paper, be introduced

and now read a first time.

Transport Canada statistics show that between 1995 and 2004, over

25,000 collisions involving school buses resulted in five passenger

deaths and more than 3,400 injuries. The public policy response should

be what is required of every other vehicle in Canada, and that is

three-point seatbelts. But Transport Canada has only developed standards

for installation to be used on a voluntary basis by provinces, school

boards and private companies.

My constituent from Agassiz, Gary Lillico, himself a longtime

school bus driver, who joins us in the gallery today, brought this to my

attention when he visited me this summer about his Change.org petition

on this subject that he launched a year ago, now bearing 124,000

signatures.

Hon. members can watch a brief YouTube video called Inside a

School Bus Crash , which shows in dramatic fashion what happens

when a school bus rolls over. Within a second, dozens of children are

thrown from their seats into a mass of tangled bodies, piled up against

one wall of the bus. While the likelihood of such an accident is small,

what if this was your child or mine? I think it is time that B.C.

require seatbelts on school buses. Kids are used to wearing seatbelts,

and they’ll use them voluntarily.

Because it costs a lot to retrofit existing buses, my bill would

not require retrofits but only require that new buses be equipped. It

would give school boards and manufacturers time to prepare, by requiring

them only after September 2021.

I would encourage the government to call my bill for debate or

bring forward its own to ensure that hundreds of thousands of B.C.

children who ride buses to school every day in all kinds of weather, on

all kinds of roads and all kinds of terrain, are protected from all

kinds of hazards.

In closing, I’d like to thank Gary Lillico for bringing this

matter to my attention and to wish him and his petitioners well as they

continue to advocate for three-point seatbelts on school

buses.

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

Motion approved.

L. Throness: 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 M229, Motor Vehicle Amendment Act, 2019, 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.

[1:50 p.m.]

Statements

(Standing Order 25B)

DAN’S LEGACY FOUNDATION

R. Singh: Today I would like to speak about an organization which prides

itself in serving the vulnerable and the underprivileged.

For the past decade, Dan’s Legacy has worked tirelessly to help

young people living with mental health and addictions initially through

raising funds for other non-profit organizations and later by providing

its own services. Besides serving communities with vital programs like

counselling and em­power­ment, it also provides its

participants with housing and life skills training. Their mission is to

provide youth who have experienced trauma with effective counselling,

education and vocational and other support programming.

Dan’s Legacy was founded in 2006 in the memory of a kind and

giving boy named Dan, a boy who was highly sensitive to the needs of

others and well liked by people around him. As an older teen, like so

many other sexual abuse survivors, he began to self-medicate with hard

drugs to alleviate his childhood trauma. Ultimately, trying to recover

from his eventual substance abuse and barely 19, he relapsed and passed

on because of an overdose.

After his passing, his family started a foundation to help other

youth who found themselves pitted against the challenges of mental

health and addiction. Since then, Dan’s Legacy has helped hundreds of

youth around the Lower Mainland manage their mental health and recover

from substance abuse.

Dan’s Legacy is an organization that infuses hope in those who

knock on its doors. It infuses hope in families and communities around

them. It is one of the organizations that instils our faith in humanity

and fuels our confidence about the future.

I would like the House to join me in applauding Dan’s Legacy for

their determined service to the community and wish them strength for

decades to come.

MULTICULTURALISM

T. Wat: Today marks the beginning of Multiculturalism Week. It is a week

to celebrate the great diversity of cultures and backgrounds that have

helped build this province and this country.

British Columbia is home to 204 First Nations, Métis and urban

Indigenous communities and residents who trace their origins to more

than 200 countries’ origins. Many of my colleagues in this House,

including myself, come from immigrant families or immigrated to Canada

themselves. All of us represent a wide array of cultural communities

within our ridings.

I’m sure we can all agree that our love for the opportunities this

province has given to our families and wanting that for future

generations has inspired many to pursue public office. While it is

important to celebrate and take pride in our achievements, it is equally

important that we recognize and stand up to the recent rising sentiments

of racism and intolerance around the globe and even here at home. Let’s

ensure we work together to fight against these ideas built to divide our

province and nation and instead build a province that has opportunity

for everyone.

During this week, I encourage each and every one of you all to

take time to learn about the history of multiculturalism in British

Columbia and honour the vibrant heritage of our communities. Together, I

think we can find ways to protect the spirit of inclusion and tolerance

that build this province and continue to do so every day.

INDIGENOUS DISABILITY AWARENESS

AND ROLE OF BCANDS

SOCIETY

N. Simons: November is Indigenous Disability Awareness Month and was first

proclaimed in 2015 by the previous government. The purpose of this

proclamation is to increase awareness of the challenges facing

Indigenous people with disabilities, to encourage inclusivity in every

community, to remind policy-makers and leaders to be aware of some of

the unique barriers that face Indigenous people and, maybe most

importantly, to make sure that people with disabilities are aware of and

have access to the programs and services from which they might

benefit.

If this awareness leads to better well-being among people with

disabilities and their families and results in more citizens

participating fully in their communities, then this awareness is an

important starting point.

[1:55 p.m.]

Many Indigenous communities are rural and remote. The long

distances from services and programs and the relative lack of

infrastructure are compounded when you’re living with a disability or

caring for someone with one. Location isn’t always the only barrier to

accessing services. People living in urban centres can also be isolated

or disconnected from their usual support networks, or they might simply

be unaware of programs and services that exist in their

communities.

There’s an award-winning charitable society in British Columbia

that, since 1991, has been a key resource for Indigenous people in the

province. The B.C. Aboriginal Network on Disability Society, more

conveniently known as BCANDS, provides assistance on matters of health

care, financial information and resource support. In 2017, BCANDS

presented to the United Nations Committee on the Rights of Persons with

Disabilities in Geneva. Many of their recommendations were subsequently

recommended to Canada for action, including the recognition of this

month annually.

To help make B.C. a truly inclusive province, government is

public consultation is ongoing. We’re continuing to lead the way. BCANDS

has provided all members with pins to wear. So if you’re asked, you can

refer people to their website and get information that might be of

assistance to their constituents. If you’re an Indigenous person living

with a disability or an organization providing community services and

requiring information about programs and services, BCANDS will be able

to assist.

SHANDHAR HUT

RESTAURANT IN

CHILLIWACK

J. Martin: In each of our respective 87 ridings, there are those small

businesses that have received extraordinary recognition. I’m proud to

inform the House that the Shandhar Hut in Chilliwack has been voted the

best Indian cuisine in the entire province. This family-run business

beat the competition from every other city to walk away with first place

in the British Columbia Food Awards, 2019, launched by Creative Oceanic.

Manager Gordon Atti, his family and staff have achieved something truly

remarkable, and all of us in Chilliwack are so proud of the Shandhar

Hut.

This is not the first time this restaurant has been recognized for

exceptional food and service. Earlier this year the Shandhar Hut was

included in Yelp’s list of the top 100 places to eat in Canada. In

addition, they also walked away with the Dining Excellence Award at the

Chilliwack Chamber of Commerce 24th annual Business Excellence

Awards.

I’d like to encourage each and every one of my colleagues from

both sides of this House, any time you’re in the eastern Fraser Valley —

coming, going, doing anything else; you’re in the neighbourhood — make

an effort to check out the Shandhar Hut. You will not be

disappointed.

I used to be a radio copywriter, by the way.

I would ask the House to please join me in congratulating everyone

at the Shandhar Hut for providing such a special dining experience in

Chilliwack, especially to manager Gordon Atti, who was married last

week.

Congratulations, Gordon and Manpreet.

SWAHILI VISION

INTERNATIONAL

ASSOCIATION

A. Kang: Jambo to everyone here today.

I’m so proud to recognize the Swahili Vision International

Association, which works to bring together communities that span across

a 31-million-square-kilometre continent and a population of 1.2 billion

through a common language and culture. The Swahili Vision International

Association em­powers and unifies all individuals interested in

Swahili heritage through the Swahili language, cultures, arts, functions

and music programs.

Swahili is the mother tongue of the Waswahili people on the East

African coast. It is the official and national language of both Kenya

and Tanzania. Other countries where Swahili is widely spoken include

Rwanda, Burundi, Democratic Republic of the Congo, Uganda and many

more.

Cultural heritage is a shared bond and one’s belonging to a

community. It represents one’s historical identity. The Swahili Vision

promotes the Swahili culture and art, because the organization believes

art and culture are an essential part of the development and can provide

the inspiration, tools and capacity needed to unify people.

I had the pleasure of attending the Swahili Community Day on June

22, 2019. Since then, I’ve worked closely with the leaders of the

Swahili Vision International Association to serve all individuals

interested in Swahili heritage; to uplift Swahili artists, poets and

musicians; to provide and promote power for women empowerment; and to

foster youth engagement.

[2:00 p.m.]

Asante sana . Thank you to Swahili Vision for all that you

do.

At the Swahili Exhibition in September, the leaders of the Swahili

Vision International Association bestowed me with the honour of a

Swahili name, Upendo, which means love.

That’s exactly what I will do: continue working with the Swahili

Vision International Association to spread love and unity. So umoja

ni nguvu — unity and strength.

Thank you, brothers and sisters.

ROY SAKAKI

G. Kyllo: Today I want to recognize an outstanding individual who has

touched the lives of so many people in my riding. His name is Roy

Sakaki. But around Salmon Arm, he is often known as Mr.

Hockey.

Roy is one of the most community-minded individuals you will ever

meet, and he has used his passion for hockey to invest in the lives of

so many young people through his involvement with the Salmon Arm Minor

Hockey Association.

Roy started playing hockey as a young kid, and he fell in love

with the sport. He played all through his adolescent years and through

his successful career as a teacher and later principal. Roy continues to

be actively involved in hockey, both as a player and a coach. Roy has

been called the heart of hockey in Salmon Arm. He is known by everyone

and recognized for his commitment to sharing his passion for hockey with

those around him and dedicating his time to bring the joy of the sport

to a new generation.

For his immense contributions to the sport and our community, Roy

has recently been nominated as a Hockey Canada ambassador. When the news

was announced, Hockey Canada sent a team to Salmon Arm to film a short

video. Always modest, when they asked Roy about his Mr. Hockey nickname,

he instead tried to turn the attention over to the parents and the

volunteers who help to keep the Salmon Arm Minor Hockey Association

running so successfully. That’s just the kind of guy he is.

I want to take this opportunity to show Roy a little more

recognition and attention for all of the amazing work that he does for

our community.

Thank you, Roy, for your tireless service and for all that you’ve

done to contribute toward Salmon Arm and hockey in British

Columbia.

Oral Questions

RCMP BUDGET AND SERVICES

S. Bond: This government imposed the employer health tax on employers

across British Columbia, and that, of course, includes the RCMP. We now

know that the RCMP is facing a $10.7 million hole in its budget.

According to an internal memo from RCMP deputy commissioner Jennifer

Strachan, cuts are coming to provincial policing.

To the Minister of Public Safety, can he tell members of this

House, and British Columbians, exactly which communities and programs

will be impacted?

Hon. M. Farnworth: I thank the member for her question. The RCMP, as the member well

knows, has a budget, just like every other government ministry, and they

work within that budget. They are facing pressures, and they are

addressing those pressures.

Interjections.

Hon. M. Farnworth: The member asked a serious question, and I’m trying to answer. If

you’d like to heckle…. Or would you rather hear the answer?

Interjections.

Mr. Speaker: Members.

Hon. M. Farnworth: The pressures amount to 2½ percent of the overall provincial

policing budget. The RCMP have communicated that they are facing those

pressures, and we’re working with them to identify those areas of cost

savings — which take place every year, as the member will well know from

when she sat on this side of the House — to ensure they don’t impact on

priority areas of public safety. Things such as non-essential travel,

for example, are under review, just as they should be and just as every

ministry does this time of year.

Mr. Speaker: The member for Prince George–Valemount on a

supplemental.

S. Bond: Well, to be clear, this government actually im­posed a tax

that added millions of dollars of additional cost to the RCMP. It makes

it very difficult for the RCMP to work within their budget when the very

government that provides it is adding additional tax burden.

[2:05 p.m.]

Let’s be clear. The reporter who broke the story said that she is

being told by front-line officers that cuts are impacting

investigations. According to the Vancouver Sun , front-line

officers have told Postmedia they are concerned that cuts will impact

ongoing and future investigations.

Again to the minister, how is the RCMP supposed to manage a

significant deficit, much of which was downloaded by this government

through the employer health tax, without impacting service levels,

including critical investigations?

So to the minister, where, specifically, will the RCMP find $10.7

million in reductions?

Hon. M. Farnworth: Well, the RCMP’s public service budget — provincial budget for the

provincial service — is around $450 million. They’re having to deal with

a cost pressure of around 2½ percent. They approached us, saying that

they have these cost pressures. It’s their expectation that they will be

able to deal with those cost pressures by dealing with areas within

their expenditure that do not impact on investigations, that do not

impact on their priority areas, that deal with areas where they can make

savings.

That’s what we’re working with them on. That’s what happened

literally every year when you sat on this side of the House, and that is

going to continue to make sure that services are protected.

J. Johal: Here is what we know. The internal memo says that cuts are coming

to the budget. That includes the Integrated Homicide Investigation Team,

or IHIT, and the anti-gang Combined Forces Special Enforcement Unit, or

CFSEU. My understanding is that CFSEU is now grappling with a $2.5

million budget shortfall.

I remind this House and this minister that these CFSEU members

regularly work with sources handling very sensitive cases. This requires

time and travel. These officers are our front line in dealing with

organized crime in this province. Both units are critical to targeting

gangs and are head­quartered in Surrey.

RCMP constable Richard Wright told the media that they don’t know

how much is being cut in Surrey. What we do know is that $2.5 million is

being cut from CFSEU.

What other programs are being cut that this minister is not

telling us about?

Hon. M. Farnworth: I can tell the member, as I told the previous member, that the

issues of dealing with the pressures in the RCMP budget are being dealt

with by dealing with the discretionary spending within the RCMP. They

are not being dealt with by what the member is talking about.

While we’re on the subject of resources, hon. spender, we have put

in an additional….

Interjections.

Hon. M. Farnworth: A slip of the tongue. I am so anxious to tell the members opposite

about the spending that has been taking place, the spending that has

seen an additional $30 million to deal with gangs and guns that this

government has put in place.

I also want to talk about…. You know, I’m listening to the

member’s question over there. Then I’m looking at the member down over

there who sat in my office and talked to me about how they had a

shortage of RCMP officers in his community of Kelowna West and that for

ten years, when I met with the mayor of Kelowna West, nothing had been

done.

Well, I was happy to tell that member that — you know what? — we

put additional resources into his community. For the first time in ten

years, there are additional boots on the ground. I see him

applauding.

I’m sure there will be follow-up questions, and I’d be happy to

put even more information on the table. But I’ll tell the member this.

The pressures that are being dealt with by the RCMP are not coming out

of IHIT, and they’re not coming out of those key policing priorities

around public safety.

Mr. Speaker: The member for Richmond-Queensborough on a

supplemental.

J. Johal: The member talked about guns and gangs. Of course, I would agree

it’s very important. But part of policing is also overtime and travel.

It’s integral to investigations, especially with the size of our

province. Cutbacks on travel over time can impact a case. Continuity

matters, particularly in communities like Surrey, which is one of the

fastest growing in this province and, of course, in this country. They

need more policing resources, not less.

[2:10 p.m.]

Now, after breaking this story, veteran journalist Kim Bolan is

now saying: “I have since heard from more front-line officers that

investigations, including some targeting gangs and organized crime, have

been impacted.”

So $10.7 million is being cut. Which other programs and

communities are being impacted?

Hon. M. Farnworth: I’ll repeat again for the hon. member that the cost pressures that

the RCMP is facing are being dealt with by dealing with such things as

non-essential travel and non-essential items that do not detract from

the ability to do investigations.

I’d also like to remind the member, when he talks about the

community he’s talking about, that policing is also a municipal

responsibility. Some communities have had requests for the RCMP to deal

with investigations, and some communities have said: “We don’t want to

hire any more police.” He may want to go and look at some of those

communities.

I also want to talk to him and let him know about some of the

other work that has been taking place.

Interjection.

Hon. M. Farnworth: Ah, someone from the Interior. He’s sitting next to the member for

Nechako Lakes, who, again, was another individual very concerned about

the level of policing in his community — in this case, Vanderhoof — and

who met with me a number of times about the need for more policing

resources on the ground in those communities. You know what? We met with

the mayor and the council at the UBCM last year, in 2018. Guess what we

were able to do. We were able to put those resources into his community,

to put additional police on the ground.

I can also tell that member that additional resources have been

put in other parts of the province. We’ve managed to put together three

teams of four members each to serve in key core areas, including

southeastern British Columbia, including up in Terrace, in the member

from Terrace’s riding over there. I don’t see him complaining about

that.

There are also an additional 30 members from a new detachment, our

new troop coming out of Regina, that will be posted to rural British

Columbia. This government has been making record investments in policing

and will continue to do so.

LABOUR DISPUTE IN

SAANICH SCHOOL

DISTRICT

A. Olsen: This weekend many people in my riding were relieved to see the

labour disruption in the Saanich schools finally resolved. While the

community voiced support and even stood in solidarity with the support

staff, thousands of students and their families were impacted for three

weeks by the disruption. I’m concerned for the students who lost 15 days

of education, the teachers and support staff whose personal budgets have

taken a significant hit and the families who had to find a way to take

care of the children who should have been in school. I’ve heard dozens

of stories highlighting the tragic consequences of this labour

disruption.

At the same time, because the schools were closed for three weeks,

the province saved millions of dollars. My constituents have been asking

questions of me about this. During the teachers strike of 2014, the B.C.

government of the day offered parents of each school student under the

age of 13 $40 a day to help offset the cost of child care. My

constituents remember that.

My question is to the Minister of Education. Is he prepared to

offer families in my riding the same support for child care as his

predecessor did? And how will he ensure that the savings are going to be

accounted for and reallocated back into Saanich schools to directly

benefit the students who have been affected?

Hon. R. Fleming: Thank you to the member for the question. I think I can speak on

behalf of everyone in the House and everyone in the member’s

constituency when we say that we are pleased that a deal has been

reached between the union and the school district and that students

today are back in the classroom, where they rightfully

belong.

I know that this has been a very difficult time for Saanich

students and their families. The agreement that was reached, however, is

a good one, and we’re pleased about that. It will help address decades

of wage inequities in Saanich with neighbouring school

districts.

I think I want to take this opportunity to thank both parties for

working together to reach a fair agreement. I’m also grateful to CUPE

B.C. and CUPE National for their assistance throughout this

process.

[2:15 p.m.]

Let’s make no mistake. This agreement will give significant wage

increases to positions that were underfunded for years. Educational

assistants, I’m pleased to report, will be receiving a 13 percent wage

increase to address those historic inequities. My understanding is also

that the union wanted clarity on how they could benefit from the

provincial job evaluation process. They have been given that under the

new collective agreement. This was all achieved under the

mandate.

We worked with the school district throughout the weekend — once

we knew that the ratification vote had been successful — and prior, to

take steps to make sure that we could reopen schools today. That’s the

focus right now. Everyone is focused, in the district, on getting

schools up and running and making sure that students have the supports

they need in their classrooms.

Once that is done, we will be taking a closer look at the savings

and all of those questions. The school district has already released

information suggesting how they will adjust timetables to make up for

some of the lost instruction time. We’ll be looking forward to the

district’s answers when they have looked at that issue more

carefully.

Thank you to the member, again, for the question.

Mr. Speaker: The member for Saanich North and the Islands on a

supplemental.

GOVERNMENT APPROACH TO

TEACHERS’ COLLECTIVE

BARGAINING

A. Olsen: The costs that were incurred came out of the budget over the past

three weeks, and it substantially impacted the families in my riding. In

talking to business owners, they’re feeling it as well.

While this disruption to public education in my district has been

resolved, it’s just one district. The B.C. Teachers Federation is still

without a contract. That situation has been deteriorating since June.

They’ve been bargaining for over 70 days, and recently the mediator’s

recommendations were rejected.

No doubt, our system is the envy of many jurisdictions. However,

over the past three weeks, I’ve taken the opportunity to speak to people

from all the stakeholder groups: administrators, teachers, support

staff, parent advisory com­mittees, parents, grandparents and

students. They all share a similar concern: the erosion of the quality

of public education.

There is stress in our classrooms. British Columbians are

concerned that public education is not the priority for this government.

Furthermore, my colleagues and I are deeply concerned that the

negotiating mandate established by this government means we are not

investing in public education as we should — like it is the cornerstone

of a progressive society.

Everyone knows the B.C. Liberals’ approach to this file only led

to more conflict and showed a lack of respect for teachers and our

system. That shouldn’t be the bar we compare ourselves to.

My question is for the Minister of Education. His government has

maintained a very similar negotiating mandate to his predecessor — a

mandate that this government, when in opposition, was deeply critical

of. Mr. Minister, please help us understand how your government expects

this will achieve a different outcome.

Hon. R. Fleming: I thank the member for the question, if only because it’s an

opportunity to clarify some of the misconceptions that he

raises.

As government, our mandate with public servants is in no way like

the previous government’s. It is the most generous negotiating mandate

in a generation. We have achieved success with 250,000….

Interjections.

Mr. Speaker: Members. Members, the Minister of Education has the floor. Thank

you.

Hon. R. Fleming: So 70 percent of public servants have concluded agreements with

our government.

Let me just pivot to the second part of the member’s question

around education funding. We have a record that we’re proud of and that

is in stark contrast to the previous government sitting across the way.

We have added an additional $1 billion in operating funds to classrooms

and kids and communities in British Columbia in two short years as

government. I challenge the member to find a jurisdiction in Canada that

has invested 17.1 percent more in the school system, as we have done

here in British Columbia.

Funding for special needs students is up 23 percent in our two

years as government. I know that the member was at the First Nations

leadership group, and we talked about education issues. I’m proud to say

that funding for Indigenous students is up 27 percent since we formed

government. And 4,000 more teaching positions, 1,000 more educational

assistants.

What it means in the Saanich school district is that we have the

smallest class sizes that we have ever seen in the Saanich school

district: 18 kids, on average, in kindergarten and 20 kids in primary

schools.

Small class sizes, more resources and special needs funding up 23

percent in his district…. The money that is increased in his district is

millions of dollars of new investment to make sure that Saanich kids are

successful in our school system.

[2:20 p.m.]

COMMUNITY BENEFITS AGREEMENT

PROJECT COSTS AND BIDDING

PROCESS

P. Milobar: The Premier’s union-only benefits agreement discriminates against

85 percent of B.C.’s construction workers and is a bad deal for

taxpayers on top of that. The Premier’s hiring restrictions, red tape

and bureaucracy are driving away bidders and leading to skyrocketing

costs. In fact, those skyrocketing costs are coming even before the

shovels are in the ground.

The question to the Minister of Transportation is this. How many

contractors are refusing to bid on highway projects because of the

Premier’s friends-and-insiders scheme?

Hon. C. Trevena: It always gives me great pleasure and great pride to talk about

the community benefits agreement. It is a way that our government is

investing in the people of British Columbia, not just in our

infrastructure but in training the next generation of skilled

tradespeople. Through the community benefits agreement, we’re investing

in local economies. We’re hiring local people first.

Wherever we have a community benefits agreement project going on,

whether it’s the Pattullo Bridge or one of the projects on Highway 1, we

are investing in local people, in hiring Indigenous people, in hiring

women and giving them good training, complete apprenticeship training,

so that we can tackle that skills shortage that the opposition, when

they were in government, left hanging.

Mr. Speaker: The member for Kamloops–North Thompson on a

supplemental.

P. Milobar: The simple fact is that companies are simply not bidding, though,

on these projects because of the headaches. It’s headaches that are

created because they don’t want to belong to one of the Premier’s

handpicked 19 unions that only he has been able to approve.

The Illecillewaet four-laning project received only five bidders —

just five. The Kicking Horse Canyon had only four on a project that

would ordinarily have 15 to 20 bidders. Here’s the news flash for the

government. Fewer bids actually means costs go up. This is only the

beginning.

Again, how is the minister addressing the lack of bidders, and

will she scrap the Premier’s failed friends-and-insiders

scheme?

Hon. C. Trevena: As I mentioned, the community benefits agreement is truly an

investment in British Columbians. When we are building major

infrastructure — whether it’s Pattullo or Broadway or Kicking Horse or

Illecillewaet, any of these projects — we want to make sure that we are

investing in people so that they have a launch pad for a lifelong trades

career. This is about investing in British Columbians.

I know that the opposition doesn’t trust British Columbians. I

know that the opposition doesn’t really understand that there is a

massive skills shortage, that we are in a hot construction market, that

this side of the House is investing $20 billion in infrastructure, a

record amount of money going to that.

We know that we can continue building on the skills of the people

in British Columbia and on the people of British Columbia by investing

through the community benefits agreement.

G. Kyllo: The budget of the Illecillewaet project has increased by 143

percent, and the Kicking Horse Canyon highway expansion is up 33

percent. I have a May 21 Illecillewaet four-laning project debrief

completed by one of the companies that pursued the project. It confirms:

“Ultimately, the CBA required the contractor to work in an unfavourable

working condition with too many labour uncertainties, so we elected to

withdraw our bid. The CBA killed the project’s competition.”

With CBAs driving up costs of these two projects by over $200

million, will the minister tell British Columbians the true cost of her

discriminatory, union-only payback policy?

[2:25 p.m.]

Hon. C. Trevena: Given the number of projects that the opposition built when they

were in government that were wildly over budget, you’d think that they’d

have a bit of shame. But they certainly have short memories.

In 2009, B.C. Place roof and renovations, estimated cost: $365

million. The final project cost was $540 million, 41 percent over

budget. The Vancouver Convention Centre, estimated at $565 million —

final cost, $900 million, 59 percent over budget. And the Hydro

northwest transmission line, estimated at $404 million, finally came in

at $736 million, 82 percent over budget.

I will stand by community benefits agreements. I will stand by our

government’s policy because we’re investing in the people of British

Columbia.

Mr. Speaker: The member for Shuswap on a supplemental.

G. Kyllo: I think it’s high time that the minister…

Interjections.

Mr. Speaker: Members.

G. Kyllo: …took responsibility for projects that are actually happening on

the Trans-Canada Highway now. These very important highway

infrastructure projects improve safety through the ridings, in my

riding, my home of Shuswap. For the minister to continue to talk about

previous projects that have nothing to do with safety improvements on

Highway 1 is deplorable.

Now, the minister has nothing to show for all her hoopla about

these NDP friends-and-insiders union deals except more red tape and

higher costs. For a year and a half, contractors haven’t been able to

get answers to basic questions about things like how worker seniority is

determined or who is responsible for safety and training.

To the minister, here’s a basic question. As the employer, does

the Crown corporation accept liabilities on the jobsite?

Hon. C. Trevena: I think that the opposition…. Well, we know that the opposition is

fundamentally opposed to investing in the people of British Columbia.

They’re fundamentally opposed to making sure that when we build

projects, we’re building skilled trades.

We know that the opposition, who are quite happy to heckle and not

listen to any answers and have been throughout the whole of question

period, are completely unaware, it seems, that we are also in a very hot

construction market and that we are seeing projects right across the

province where we are looking for people to bid on them.

Interjections.

Mr. Speaker: Members.

Hon. C. Trevena: We are very pleased about the way that our community benefits

projects are moving ahead. We are very pleased with the way that B.C.

Infrastructure Benefits, the Crown corporation, is working, is reaching

out to contractors, is talking with contractors, is making sure that

everybody who wants to bid on these projects understands the projects.

We will continue to move ahead with community benefits agreements on

projects around this province.

PROPOSED PERFORMANCE AUDIT OF

COMMUNITY BENEFITS

AGREEMENT

J. Martin: There’s very little mystery left in why no companies are bidding.

This discrimination from this government on public infrastructure is

costly. More important, it’s wrong. It is plain wrong. An ounce of

scrutiny reveals that all of the supposed benefits can be accomplished

without exclusively using these handpicked unions. As an example, 81.5

percent of construction apprentices….

Interjections.

Mr. Speaker: Members.

J. Martin: So 81.5 percent of construction apprentices are not sponsored by

any union whatsoever.

Now, the minister should scrap this fiasco. It was a bad idea from

the get-go. I can see that’s not going to happen.

How about if the minister does the right thing and allows a full,

independent performance audit?

Hon. C. Trevena: What the member also fails to comment on is the completion rate

for apprentices. This is what we’re doing. We’re ensuring that

apprentices who start training are able to complete their

training.

[2:30 p.m.]

The opposition, when they were in government, both did training….

But we did not see the high-quality completion rates created by systems

such as community benefits agreements. They….

Interjections.

Mr. Speaker: Members.

Hon. C. Trevena: Construction trade unions have a high success record in training

apprentices, getting them to complete their trades. The building trades,

who we are working with…

Interjections.

Mr. Speaker: Members.

Hon. C. Trevena: …have the highest completion rate on average, and projects that

are using labour agreements see good results. The opposition used them

on hydro projects. We’re using them. We continue to use them, and we’ll

be proud to continue to use them through our mandate.

J. Martin: Well, I thank the minister for whatever that was.

The NDP project labour agreements contain more details about the

hot-meal buffet arrangements than the specifics for putting apprentices

to work or any other supposed benefit. For instance, there are no clear

targets for hiring women or Indigenous workers — no clear targets

whatsoever. It’s been a complete failure.

Let’s try this one more time. Will the minister do the right thing

and commit to a full and independent performance audit?

Hon. J. Horgan: It’s good to be back in the Legislature. I think we’re all well

rested. Some of us not well researched. But at least we’re well rested

on this side of the House.

I don’t doubt for a minute the sincerity of the able barbecuer

from Chilliwack when he brings these questions up. But I’ll take him on

a bit of a history lesson. I know that an icon for many on that side of

the House was the great W.A.C. Bennett, who used — as everyone on this

side of the House knows — community benefits agreements to build public

projects, because there’s more than just an outcome. There’s more than

just an outcome when you’re spending public resources.

You want to build capacity within communities. You want to make

sure that the next generation of workers — all of those young people

that, hopefully, will be replacing many on that side of the House at the

next running of the polls — are skilled and focused on the challenges

that we need in this very hot economy.

The Minister of Transportation made this pretty clear. I don’t

know what the people on that side of the House are doing when they go

home, but they see construction cranes wherever they look. They see

people working wherever they look. The lowest unemployment rate in

Canada…

Interjections.

Mr. Speaker: Members.

Hon. J. Horgan: …is right here in British Columbia. Tens of thousands of new jobs

— tens of thousands of new jobs — created by this government while the

people on that side of the House try to figure out what their point is

for being here in the first place.

[End of question period.]

Petitions

R. Glumac: I rise in the House today to present a petition signed by 1,100 people

to require that elected local government officials be disqualified from

office upon conviction of a serious criminal offence and be required to take

a paid leave of absence from office upon Crown approval of charges until the

court process is complete.

B. Stewart: I rise today to present a petition on behalf of the denturists of

British Columbia requesting a review and a change of the current and

proposed denturist regulations.

D. Clovechok: It’s my pleasure to present, to the FLNRORD Minister, a petition

signed by 946 constituents from the Golden area. The petition reads: “We,

the undersigned, respectfully submit our demand that the provincial

government stop the approval of licence applications under the Water

Sustainability Act for the bottling of water and commercial sales of

groundwater aquifers.”

Orders of the Day

Hon. M. Farnworth: I call second reading, Bill 37, Financial Institutions Amendment

Act.

[2:35 p.m.]

[R. Chouhan in the chair.]

Second Reading of Bills

BILL 37 — FINANCIAL INSTITUTIONS

AMENDMENT ACT, 2019

(continued)

R. Sultan: I’m pleased to continue my participation in second reading debate

on Bill 37, intituled the Financial Institutions Amendment Act, 2019,

amending the Financial Institutions Act of 1996.

As I’d previously indicated, my remarks are focused on how Bill

37, which encompasses many categories of financial institutions,

particularly impacts British Columbia’s credit union sector. There are

almost 50 of these cooperative deposit-taking and lending institutions.

Altogether, their assets in British Columbia add up to about $85

billion.

Credit unions are a uniquely important institution in this corner

of our country. To illustrate that point, almost one-third of all credit

union employees in Canada will be found right here in British Columbia.

The comparable geographic distribution of employment in chartered banks

is quite different. We have about 10 percent of that employment base

here in British Columbia.

Credit unions come in all sizes. Vancity, which is about our

largest, has $23 billion in assets, while Vancouver Firefighters Credit

Union, our smallest, has only $17 million in assets. They are major

players in the British Columbia residential mortgage market, extending

about one mortgage in five in this province, by some estimates. They are

also significant players in the small business lending sector, perhaps

extending about one-third of all small business loans in British

Columbia. That these institutions are important to the fluidity,

operation and competitiveness of our lending industry in British

Columbia is the point I wish to make.

I previously mentioned BlueShore Financial, the credit union

leader in my own community and the second-largest private sector

employer on the North Shore, after Seaspan. Several days ago, I spent an

informative afternoon with BlueShore’s CEO, Chris Catliff; with the

director of governance and legislative affairs, Anna Hardy; and also

with Ryan Burgess, the manager of technology infrastructure. They

reminded me of hours already spent in consultation with government

officials in refining this new statute, Bill 37, and they complimented

both the previous government and this government for the draft which has

emerged — but not 100 percent.

Credit unions strongly recommend the removal of the words “at all

times” from

section 67, on liquidity. They believe that the continued

inclusion of these three small words, “at all times,” would be

inconsistent with other jurisdictions and is deeply problematic in a

liquidity event, because it would force credit unions to break this

proposed new law to access their liquidity, currently held at Central 1.

Central 1 is the credit union industry’s central bank, just like the

Bank of Canada is the chartered banks’ central bank. You might say the

lender of last resort.

[2:40 p.m.]

The words “liquidity event” refer to those infrequent occasions

when depositors — fearful, perhaps, of financial disruption or worse —

descend upon a bank, perhaps many or even all of the banks, demanding

their money back. If the bank has all of its assets tied up in

longer-term mortgages, this can be an embarrassment, so they resort to

other lenders or their central bank to provide all of the cash which

depositors are demanding, and more. When the panic subsides, the money

invariably returns back home again since keeping it under the mattress

isn’t very secure.

That’s a classic liquidity event. So anything in Bill 37 which

will impede or even make illegal the response of a credit union to a

liquidity event is not, to say the least, very helpful.

Credit unions also borrow money from other institutions. These

three little words in Bill 37 could result in a credit union’s borrowing

facilities being rescinded if they access their statutory deposits first

in a liquidity event, just as an example.

Finally, these three little words, I was told, would strongly

disincentivize credit unions from holding liquidity collectively, which

is a practice that they have successfully pursued for well over 30

years.

It is my understanding that my colleague from Surrey South will be

making an amending motion and explaining the reasons for this small but

critically important modification of language proposed for Bill 37.

Therefore, it would not be appropriate for me to go further into the

subject here, except to note the fundamental importance of liquidity

management during periods of fright, stress and uncertainty, which might

trigger a so-called run on the bank.

Let me comment further on the overall importance of the credit

union sector in our provincial economy because it is important. With

some envy, I must admit that…. In the United States, one cannot fail to

be impressed by the depth, the variety and the hustle of credit-granting

institutions, large and small, in comparison with the more concentrated

and, no doubt, more disciplined financial sector we enjoy here in

Canada.

We tend to be paragons of caution and accurate bookkeeping,

whereas south of the border they seem more inclined to smart risk-taking

and are willing to tolerate a degree of financial wreckage along the

way. A very different philosophy. Perhaps, on balance, the

innovativeness of Canadian commercial enterprise itself, the customers,

comes off second best, as a consequence. I believe such speculations,

even if warranted, would be less valid in British Columbia due to our

rather large, robust and diversified B.C. credit union

sector.

I previously emphasized that Bill 37 was to be commended since it

aimed to strengthen the smaller, less giant, secondary financial

institutions in our province, as represented by credit unions. The bill

aspires to accomplish this in part through legislating better management

practice — for example, by requiring routine risk analysis of

operations, which is merely good practice, after all, and by encouraging

well capitalized growth.

Why are such strategies particularly important at this time? Well,

one reason is that competition, particularly from the chartered banks,

grows ever more intense, the search for profitable niches in financial

services grows ever more difficult, and the need to spend more and more

on continually evolving technology shows no signs of slowing

down.

If we are to have the depth and diversity among British Columbia

financial institutions which are ingredients of a successful economy,

then the credit union system needs all the support and regulatory

certainty the government can provide but within, I hasten to add, a

level playing field’s avoidance of government subsidy and minimum

taxpayer risk. That raises another strategic public policy

issue.

Let me begin with deposit insurance. A new Financial Services

Authority, FSA, replaced the prior FICOM in the legislation enacted last

spring, partially in response to deficiencies identified by the

Legislature’s own Auditor General in the prior FICOM.

[2:45 p.m.]

Under FICOM, credit union deposits were guaranteed by deposit

insurance fully backed by the provincial government. In prior days, a

helpful FICOM even offered advertising mockups to its credit union

clients, broadcasting: “All deposits 100 percent guaranteed by your

government.” About the time I complained, the ads seemed to quietly

disappear.

So what’s wrong with the government offering a 100 percent

guarantee of credit union deposits, you might ask? Well, one could

envisage, under the right circumstances — and, assuredly, there are a

lot of shady people out there, searching for the right circumstances — a

credit union coming under the control of dubious people who deposit

significant funds, borrow money to the max, allow the institution to

fail and request reimbursement from the taxpayer. Ouch. That could be

painful. Not that I’ve ever heard this happening. So it is theoretical,

I concede.

We should also concede that deposits 100 percent backed by

government, such as we offer to provincial credit unions, could

conceivably encourage abuse. And it is a higher degree of taxpayer

backup than chartered banks enjoy. Moralizing economists have a label

for this: moral hazard. You can look it up.

Deposit insurance, whether 100 percent or not, cannot be blamed

for other forms of malfeasance. Here I draw on some of my own personal

experience. Banks and credit unions are just like conveyor belts: money

coming in, money going out, take in the funds, set aside a certain

portion for reserves and lend out the balance. If you want to make shaky

loans to your friends, you don’t have to see the institution fail, even

though perhaps it should. You recycle a portion of your wobbly loans

back into the institution as deposits or even capital, keeping the

institution onside with required ratios, and simply carry on. As flaky

as this sounds, I’ve actually seen it happen.

The upshot of such tales from the front lines is to emphasize that

the management, regulation and inspection — not to say the ethics — of

lending institutions is tricky and demanding. It is helpful to regard

banking as a form of special calling, a licence to print money, you

might say. So be careful who you license.

Another strategic risk arises when British Columbia credit unions

adopt an interprovincial strategy and venture over the mountains into

Alberta and beyond. As they do so, they begin to more and more resemble

chartered banks, which operate in all provinces without restriction.

Under the BNA Act, banking is a federal responsibility.

At what point would B.C. credit unions spreading their wings en

route to the Big Apple find a federal regulator knocking at the door?

Good question. If a credit union habituated to the friendlier, more

intimate and certainly less complex world of provincial regulation

becomes tangled up in Canadian banking regulation, the outcome could be

an unhappy surprise.

In an ironic parallel, Canadian chartered banks themselves find

themselves encumbered by what can only be described as humungous

American rules and regulation, triggered by their active involvement in

the American marketplace. Therefore, they may not shed a tear if pesky

provincial credit unions run afoul themselves in a parallel fashion of

federal Canadian regulation. As I have said to credit union officials

from time to time, be careful what you wish for.

From a British Columbia public policy prospective, as government,

if I were in government, I would not be pleased if main-line, B.C.-bred

financial institutions, such as credit unions, suddenly find themselves

beholden to somebody who takes their orders from Ottawa. I wouldn’t like

that.

[2:50 p.m.]

When does a credit union become a bank, you may ask? Well, one

answer is if it walks like a duck, quacks like a duck and looks like a

duck, it’s probably a duck. But that’s pretty superficial. Credit unions

are, in fact, subject to unique governance and capital roles, which are

very non-bank in nature.

One other key point. It seems that the biggest problem of

financial institution regulation in B.C. in the past has not been the

inadequacy of our laws and regulations. It has been the inadequacy of

the staff doing the regulating. A case can be made that too often, our

regulatory staff has been outgunned in numbers, in budgets, in

capabilities and in compensation. The strongest law and legislation and

regulation in the world will not be capable if the staff administering

it is not capable.

As I said, the issue was previously identified at FICOM by the

Auditor General. Whether the new FSA is successful in addressing the

issue, it’s probably too early to say.

I will close with a side glance at the macro picture and cautions

regarding the future health and solvency of banking operations in our

province. Recently McKinsey — you know them, a consulting company which

prospers by predicting problems — has suggested that the world is in the

late economic cycle stage. I must agree with that. This is worrisome.

Half of the world’s banks are ill-prepared for a downturn, according to

McKinsey. They say many of the world banks are ill-prepared because

their returns on equity — their profitability, in other words — haven’t

been keeping pace with costs. McKinsey urges financial organizations to

bulk up through mergers to try and deal with this situation.

McKinsey makes a second important point. Upstarts and new

competitors are spending more than conventional banks and other

institutions of the past on innovation and are targeting lucrative bank

markets. This is clearly true. The decade since the last financial bump

in 2008 has seen a wave of innovation in financial services. New

competitors ranging from tiny fintech start-ups to technology giants

like Apple, Google, Amazon and Ping An in China are setting out to steal

traditional financial services customers around the world.

From a resources point of view, McKinsey has estimated that banks

typically allocate only 35 percent of their IT, information technology,

budgets to innovation, while fintechs spend more than 70 percent. As an

aside, BlueShore, which I mentioned previously, inform me that they

spend about 75 percent of their infrastructure investment in IT, so

they’re certainly working to try to keep up.

Unquestionably, the payments ecosystem is changing fast. We

witnessed what one observer called “the slow death of cash and the fast

rise of digital payments transforming how consumers, businesses,

governments, and even criminals move money.”

One forecast has annual global non-cash transactions passing the

trillion-dollar mark in a few short years, propelled by increased use of

digital wallets, more small vendors accepting credit cards and the

explosive growth of mobile commerce facilitated by our addiction to

hand-held electronic devices. Throw in regulatory factors lowering

barriers to entry, and one can make the case that the environment itself

is facilitating the newer firms setting out to steal market share from

the older firms, including credit unions. But there are surely

counterbalances, and I would suggest that millennials probably struggle

to develop a close, personal banking relationship with their

iPhones.

[2:55 p.m.]

These are all regulatory issues for the future. We must trust that

measures embodied in Bill 37 will provide adequate regulatory and backup

levers if and when needed.

Perhaps the most basic question of all is this: does government

really understand the sector? Around the world, the financial sector has

no alternative but to work together with government, and it’s a two-way

street, frankly. Therefore, government must be their friend and not

their enemy, a cadre meriting trust, not suspicion.

In this regard, I must register my strong regret over this

government’s abrupt, without notice, pulling the rug out from under

international banking in Vancouver and other communities in B.C.,

cancelling years of effort to cultivate the international banking

sector, particularly from Asia.

If British Columbia is serious about its intention to cultivate

deeper ties to that vast Asian marketplace — and a marketplace, which

yesterday, as a matter of fact, one very sophisticated observer

suggested could even surpass New York as a financial hub, the largest

financial hub in the world, and it’s a possibility that we could all

imagine in Shanghai — then surely, being positioned on the Pacific Rim

as we are, and given our many ties to Asia in all respects, this is

surely British Columbia’s unique opportunity. Then financial

institutions, including financial institutions from abroad, must be

welcomed here and play a key role in facilitating that international

mechanism.

Returning to McKinsey’s fussing about the possibility of a serious

downturn, it seems to me that if we do get one, FSA must be prepared to

support B.C.’s credit unions, especially the smaller ones. Prudence

suggests FSA should have contingency plans in place which can assure

that the full fabric of British Columbia financial institutions, from

the largest to the smallest, provincial as well as federal, credit union

and non–credit union alike, will survive and prosper. With strong

administration, Bill 37, as proposed by this government — with some

amendments, which will be discussed in further detail — should help a

great deal.

With those cheerful caveats, I will announce that I plan to

support this important bill.

M. Lee: I am also pleased to rise today to continue the discussion of Bill

37, the Financial Institutions Amendment Act, 2019. This bill builds

upon the previous legislation this government introduced in the spring,

which established the Financial Services Authority, FSA, as the

successor regulatory organization to the Financial Institutions

Commission, FICOM.

Because the proposed legislation seeks to significantly expand and

modernize the powers of the now Financial Services Authority, it is

important that we make sure that the interests and the privacy of

British Columbians are looked after. I shall say that privacy is an

issue that I’ll come back to in a moment.

Of particular note in this bill are the provisions which provide

the financial regulator with the authority to issue enforceable rules

and to have enhanced investigation powers. We certainly will have

questions about how these powers will look in practice when we get to

the committee stage.

While we are supportive of making sure that our financial

regulator is keeping pace with other jurisdictions on these matters, we

must ensure that in every change that is made and every power that is

expanded for this new authority, we are looking out for the best

interests of British Columbians. After all, a primary focus must be to

protect the consumer financial services in British Columbia in each of

our communities.

[3:00 p.m.]

Of course, with the rising advancement of technology, fintech and

other instruments and applications, as a prov­ince, we need to

support a nimble, forward-thinking financial regulator. We appreciate

that this bill continues to make adjustments to the regulatory framework

to support that. In making these changes, we need to make sure that the

regulator balances the interests of the sector it oversees and maintains

the goal of preserving the integrity of the financial institutions in

the interest of consumer protection.

At the committee stage on this bill, we will review some of these

proposed changes in greater detail, but I’d like to highlight a few of

these areas at this second reading stage. One of those areas will be

questions around the accountability of the FSA when it comes to

decision-making, particularly because of the considerable expansion of

its powers through this bill. As we have seen with the superintendent of

real estate, there are limited options for appeals of rules and

decisions.

As a legislature, we need to find the right balance between the

powers of our new FSA and those regulations. The

im­por­tance of regulations of credit unions…. They’re

important because they provide, as a province here, 100 percent deposit

insurance coverage to credit unions, as the member for West

Vancouver–Capilano just referred to. In so doing, it’s about protecting

the taxpayers as well, because the consequences for not properly

regulating credit unions are significant for both the industry and for

the consumer.

We’ll be looking at, specifically, the kinds of controls over

credit unions which require consent of the authority for certain

prescribed types of transactions under

section 25 of the bill. We’ll

want to review under what circumstances and what review the

superintendent will do on financial affairs. What will the

superintendent do with the report for market conduct, risk management

practices and corporate governance to be filed by extraprovincial

corporations, for example? Will those reports be evaluated in accordance

with B.C. standards? Particularly, in terms of the implications of not

meeting those requirements, will they not be able to operate in B.C.?

What’s the intention of that new power?

Of course, in terms of the resources that are necessary for the

FSA to perform its additional oversight functions and enforcement roles,

we’ll want to ensure that this government has put the dedicated

resources necessary to ensure that that is the case. As the member for

West Vancouver–Capilano indicated earlier, it’s one thing to have the

strongest laws and regulations in the land, in this country, but it

would be wholly inadequate if there are not sufficient staff with

expertise to provide the right level of oversight for their functions

and expanded enforcement roles.

Certainly, in terms of looking at the level of consultation, there

has been, as the Minister of Finance had alluded to in her second

reading speech, a certain amount of consultation to date. But in the

spring of 2018, there was a further consultation paper that was issued

by this government. We would like to know the details of the comments

that have been received to that paper. We need to ensure, in terms of

hearing the opinions and feedback of professionals in the industry, that

that is certainly a vital part of crafting this legislation and includes

the numerous stakeholders — credit unions, the insurance sector, banking

organizations and others.

It’s also important that we ensure that this information, the

feedback that’s been received, be released to the public and be made

available to all those taking

part in this legislative process. As we

head to committee stage on this bill, we would like to see this

government fully disclose that feedback from these stakeholders so that

we can have greater clarity around the purposes of the key provisions of

this legislation, the intention of this government and what, if any,

impact assessments have been conducted for these provisions.

I understand that there’s contemplation of further consultation to

take place between the passing of this bill and the regulations that are

set out in the bill itself. We’d like to understand what the process for

that will be and what questions and further consultation there will be

and the scope of that consultation.

[3:05 p.m.]

I mentioned privacy at the outset of my comments, and I’d like to

come back to that. As we heard from the Minister of Finance in her

second reading speech, there has been tabled in this House an amendment

section 51 of this bill. This bill, which was presented in this House

only a week or two ago, had a significant override of the Freedom of

Information and Protection of Privacy Act, a significant override that

the commissioner for information and privacy of this province had

concerns about, as we learned. We haven’t seen the actual text of his

concerns, but what the Minister of Finance provided to this House is an

amendment, which is on the order paper, which strikes the

override.

When we’re talking about the Freedom of Information and Protection

of Privacy Act, we have seen at another juncture…. When we looked at

Bill 35, the Miscellaneous Statutes Amendment Act, the members for

Kelowna-Mission and Kelowna West brought forward to this House

amendments to that bill, because in a similar way, the Office of the

Information and Privacy Commissioner provided feedback by letter, in

writing — simple, straightforward, clear amendments — setting out his

concerns about legislation that was ultimately passed in this

House.

The government failed to consider his amendments that we were

tabling in this House. Yet this government is now at least adhering at

this juncture for this bill — pulling back what was an

overstep.

It raises the question as to how this government is working with

that office. It’s an independent office. The views and the role of that

office are very important to consider by all members of this House. I

would say that in light of the way that this government is working, it’s

picking and choosing between what advice it is taking from that office,

and that’s highly troublesome.

I’m very concerned to see the behaviour of this government, when

it ignores the advice under Bill 35 in terms of something as critical as

the temporary storage of personal information offshore. In this case, it

hears the commissioner; in that case, it did not. I think that that’s

something British Columbians ought to be very concerned about in terms

of how this government is conducting its legislative process. Certainly,

we will still go back in committee to ask the Minister of Finance why in

that case it did not hear the advice, but in this case it

has.

I will say that there are other requirements under this act which

set out the requirement for codes of market conduct under

section 14 of

the bill. We will want to have discussion at committee stage in terms of

the standards that will be imposed by the authority on credit unions for

these types of codes and why the authority does not have a similar power

to insist on a similar code for insurance companies. What will be the

requirements for disclosure of any departures from those

codes?

Similarly, in terms of the

section 22 of the bill, there are new

mandate requirements for risk management committees, which are

important, certainly, to ensure the better governance and concerns

around risk for credit unions. We’ll be wanting to hear from this

government what standards are expected for setting out those mandates,

what composition of those committees would be required, and particularly

in terms of the kinds of expertise of individuals who would serve on

that committee.

We understand and recognize the importance of providing a

regulatory environment that works for B.C.-based credit unions. It’s so

important. They serve a role in terms of local communities across our

province. In doing so, we need to have rules that work for credit

unions.

[3:10 p.m.]

There are continued competitive pressures from banks — the

technological advancements that credit unions are needing to compete

with and, certainly, that they are doing internally to meet those

challenges. It’s a dynamic financial environment in which credit unions

operate.

We’ll want to see, of course, that in the course of ensuring

consistency with other jurisdictions…. I know that the members from

Surrey South will have some certain amendments regarding liquidity

requirements. As we look at the requirements that are different under

this act being imposed on credit unions — different from other

jurisdictions — certainly, liquidity is important. But we need to ensure

that the new requirements continue to provide a workable regulatory

environment for B.C.-based credit unions.

I would say that in terms of looking at the insurance sector

itself, there are some requirements here that provide for the

authorization, for example, of restricted insurance agent licences. It’s

a new

section to be added under

section 31 of the bill. We’ll want to

have a discussion about whether that is a similar requirement to those

in Alberta, Manitoba and Saskatchewan, and what the scope of the licence

is that will be issued and what the potential impact of these

requirements will be on new entrants into the insurance market in B.C.

in areas of house or even automobile insurance.

If we look at the requirements of the credit unions, as I

mentioned…. Of course, with small local credit unions, regulations can’t

necessarily be seen only with the lens of one-size-fits-all. We need to

ensure that there is a scope for recognizing that credit unions have

different footings in their communities, and how they would operate

under this new regulatory environment needs to be carefully

considered.

With that, I look forward to the further discussion of this bill

and understanding the importance of the regulatory framework that we are

putting in place for this new Financial Services Authority.

S. Cadieux: I’m pleased to take my place and continue the discussion on Bill

For context, the objectives, I believe, of the legislation and the

amendments are to maintain stability and confidence in B.C.’s financial

systems by reducing the risk of failures and providing consumer

protections. The how is by reducing unnecessary red tape and regulation,

by fostering good governance, by providing early detection and

intervention if issues should arise and, also, by reflecting a mix of

international standards and the size, scope and complexity of the

institutions that we see here in British Columbia’s financial

system.

The bill builds upon previous legislation introduced in the spring

which established the Financial Services Authority, FSA, as a successor,

a regulatory organization, to the Financial Institutions Commission,

FICOM.

Now, while we are supportive of updating our financial regulator….

I understand that the credit union sector is certainly largely

supportive of the changes and that many of the changes address the

issues they’ve been advocating about for some time. It is important, of

course, that we keep pace with other jurisdictions on these matters. We

must ensure that with every change that is made and every power

expanded, we’re looking out for the best interests of British

Columbians.

Our primary focus must be to protect the consumer of financial

services in British Columbia. When we know that 40 percent,

approximately, of British Columbians belong to a credit union, that’s a

big proportion of the population. It’s a lot of money invested — a lot

of money to the individuals who have saved hard to invest that money

with their financial institutions but also a lot of money that, while in

the hands of cooperative credit unions, is used to the benefit of local

communities.

We support, of course, a nimble and forward-thinking financial

regulator and appreciate that this bill sets out to assure that this is

a reality in British Columbia. However, in any changes that are made, we

need to make sure that the regulator balances the interests of the

sector it oversees and maintains the goal of preserving the integrity of

financial institutions in the interest of consumer

protection.

I’m looking forward to committee stage, of course, where we will

dig into these aspects in much greater detail.

[3:15 p.m.]

Additionally, as we head into committee, we’ll still have

questions about the accountability of the Financial Services Authority

when it comes to decision-making — in particular, because of the

significant expansion of powers through the act. We’ve seen, with the

superintendent of real estate, that there are limited options for the

appeals of rules and decisions. We had much discussion through the

spring on the concerns around oversight and authority and the

opportunity for appeal and are still seeking clarity in that

regard.

Part of looking out for British Columbians is making sure that

their voices are clearly heard. We know that the process of crafting

this legislation was thorough, and government did carry out

consultations with numerous stakeholders, including the credit union

sector, the insurance sector, banking organizations and individuals.

Government has said that during those consultations, the changes made in

these bills received relatively favourable feedback. However, we have

not seen the information gathered in the consultations.

We are concerned about why the information isn’t being made

available, as it was in the previous consultation in 2015. This presents

a concern — or, rather, an example of why there is concern — about

transparency and how the Financial Services Authority will handle

consultation and feedback going forward. Government is setting the wrong

tone by not releasing that consultation, by not reporting out on it,

like was done after the 2015 consultation. Clearly, we would expect that

the government would want to set that example for the regulator that

they are providing additional powers to.

Hearing the opinions and feedback of professionals in the industry

is a vital part of crafting legislation. The information should be

released to the public and made available to all of those taking

part in

the legislative process, which, of course, includes those of us asked to

critique and look for those issues that might still be cause for concern

in this process.

Heading into committee stage, we certainly are hopeful that the

government will fully disclose the feedback that it received in regard

to stakeholder consultation in advance of this legislation. I know that

the minister did receive correspondence from the credit unions relating

section 9 of this bill or

section 67 of the Financial Institutions

Act. I understand that there have been additional discussions around

those concerns.

The original concern, of course, is the one that I have as well,

and that is with the “at all times” wording in that section. My argument

would be that it’s somewhat superfluous to the

section and bad drafting.

The reason I say that is that “at all times” doesn’t work in an urgent

liquidity situation.

Credit unions, in a situation where there’s an urgent need for

liquidity, would likely have to draw on that mandatory liquidity pool at

Central 1. That’s the intent of the pool held at Central 1. But with the

wording “at all times” in the legislation, doing so could put credit

unions in contravention of the act and of other requirements with other

debt covenants that they hold.

There are a number of other options that could have been borrowed

from other provinces. In fact, Alberta, Manitoba, New Brunswick,

Newfoundland, Nova Scotia, Ontario, Prince Edward Island, Quebec and

Saskatchewan all have examples of wording around liquidity for credit

unions which could have been used. Not one of those includes the term

“at all times.” So we have signalled our intent to move a motion to

amend this

section to address this issue, and we will deal with that in

committee.

Two other real issues that aren’t covered in this legislation are

(1) the limiting of corporate deposits to fund the balance sheet and

(2) the need for Central 1 to have a lender-of-last-resort credit backstop

with the Bank of Canada.

Corporate deposits are large and lumpy and the first to be

withdrawn in the event of any issue that’s facing the institution. It is

possible that some credit unions may have overfunded their balance sheet

— or may in the future — meaning their loans, through corporate

deposits, which tend to be short term and mobile. But given that the

institutions are typically lending long through mortgages and long-term

relationships with small businesses, this is a bit of a risk.

[3:20 p.m.]

This is generally why banks or financial institutions go belly up,

because an event creates uncertainty, which creates a deposit run on the

bank. Capital is wiped out, and the credit union becomes insolvent,

which triggers the deposit insurance. Some type of move to restrict the

percentage of corporate deposits on a credit union may be necessary, and

this legislation is silent on that risk.

An additional note certainly regarding disclosure that I want to

touch on, as my colleague from Vancouver-Langara just did, is the

concern around

section 51 changes in this bill regarding the protection

of confidential information. We understand that there were concerns by

the Office of the Information and Privacy Commissioner that have led to

a proposed amendment on the order paper from the minister. Certainly, we

think it’s important that we discuss the detail of that in some detail

in committee.

I’m pleased that the minister has taken pause and is removing this

section. But of course, the change itself also raises some questions

that we will inquire about.

Finally, just a rough review of the legislation, overall. The bill

does not address, I don’t believe, a number of concerns expressed after

Bill 26 was introduced last spring. Specifically, how is the financial

authority restricted from applying a one-size-fits-all mentality to

regulation?

The reality is that the credit union sector is made up of a large

number of institutions. They vary greatly in size and complexity. With

that come significant risk differentials for those different-sized

credit unions and different profiles. Applying the rules, as has

typically been done, to the credit union system without some allowance

for the differentials is, potentially, a concern.

Section 9 is a very broad

section relating to capital, with no

definitive guidelines. Again, through that, I will want to ask the

minister how this

section would be applied to, say, a Vancity credit

union versus a Kootenay credit union.

Overregulation, as we know, costs money, ultimately, to that

end-consumer or end-user of a product. It results, then, in poorer

customer service or customer experience, and it can make smaller credit

unions much more uncompetitive with the larger credit unions or banks

that have the resources required to manage higher compliance and

regulatory burdens much more effectively.

There’s nothing here about the governance of the financial

authority. In Bill 26, there was very little clarity about governance,

as discussed in the discussions in the spring. Those concerns were

raised, however, with very little clarity on what that governance was

going to look like.

The reality is that the credit unions, especially the larger

credit unions, are highly complicated businesses. Not just anyone can or

should be a director of a financial authority that regulates those

organizations. Certainly, there are real differences between credit

unions and banks and their operations. Certainly, each industry

regulated, whether that be insurance, mortgages, real estate, banks or

credit unions, needs to have capable, knowledgeable subject-matter

experts representing each sector at the governance level. We’re

concerned that may not be the case, as it is not clear how that

expertise or expectation will be ensured.

Where is the dispute mechanism or avenue for resolution when the

financial authority makes a ruling about a credit union? If the credit

union is in disagreement, is there a mechanism for them to appeal, or

does that financial authority have absolute power in these

cases?

Section 43 gives very broad but vague rule-making authority to the

financial authority. Our question, certainly, is going to be: what is

the dispute resolution process for the credit unions or insurance or

trust companies if they don’t agree with what they’re doing or how those

rules are being applied to their business? It does appear, at first

blush, that the only mechanism is that the rules have to get public

consent and be agreed to by the ministry.

[3:25 p.m.]

While that is something of a check and balance, there is the

reality that there are going to be situations that arise where there are

rulings around individual credit unions or issues with those credit

unions. How are those rules going to be applied to their business, and

what does happen if there’s a dispute on a case-specific

circumstance?

As my learned colleague from West Van noted earlier, credit unions

are uniquely important, in British Columbia especially. They come in all

sizes. Vancity, our largest, has $23 billion in assets; Vancouver

Firefighters, the smallest, around $17 million in assets. Collectively,

we are talking about a sector with an asset size of about $85 billion,

and certainly, having the right protections and systems in place to

oversee that system is important for the consumer and for our broader

financial well-being as a province. So I echo my colleague’s comments

that prudence matters.

The Financial Services Authority does need to have contingency

plans in place that fit all of the financial institutions it oversees,

and one size definitely will not fit all. All the more reason that we

should be focused on ensuring that the right mix of skill sets are

present in that governance at the FSA. With strong financial

administrators, Bill 37 should, and hopefully will, be a good

tool.

We will look forward to delving into more detail with the minister

at committee, but in general, we are supportive of Bill 37.

S. Bond: We appreciate the opportunity to make a few last comments on

behalf of the members of the opposition. I appreciate the comments of my

co-critic who has laid out pretty much our road map for how we will

pursue getting answers to some of these questions during committee

stage.

It is also a great opportunity for us to send good wishes to our

colleague the member for Surrey–White Rock. I can assure you that

because of her experience and the fantastic work that she has done in

this sector, in particular, I’m assuming she’s probably glued to the

television at some point. Probably not. But we know that she’ll be

providing us with feedback if we don’t entertain a rigorous series of

questions about what is a very important sector. We certainly want to

send special greetings from the co-critic and I, who happen to be

Scorpio sisters along with her. We’re wishing her a great day

today.

Also, as the member for Surrey South pointed out, we’re very lucky

to be working with our colleagues from Vancouver-Langara and West

Vancouver–Capilano who spoke today, who have spent a great deal of time

analyzing the legislation. It is not a simple piece of legislation. It’s

complex, and we always appreciate the input and the insight that they

bring to these debates.

I think one of the key messages that we need to send today is that

this bill is actually a culmination of a lot of hard work. It didn’t

start yesterday. In fact, it started as far back as 2014-2015, where

there were significant discussions and ongoing engagement with the

credit union sector. B.C.’s credit unions provided representatives from

a wide variety of credit unions across British Columbia to provide

feedback and to be engaged in that process. So as you can imagine, it is

very much on their radar screen. They want to be sure that they continue

to have a sense of engagement, involvement and participation in this

process.

It’s taken lots of time and effort on their parts, and I think

that, certainly, my co-critic and I want to recognize their involvement

and engagement, not only with the government but with the opposition

members of the Legislature. It’s important that all of us understand,

listen to their issues and bring them here to the

Legislature.

Just to cast our minds back for a moment or two, phase 1 of the

consultation actually started in September of 2015. I know that there

was a great deal of feedback provided to the government of the day. In

fact, as has been noted by several of my colleagues, there was a

comprehensive set of responses provided to the government. In fact,

during that consultation process, the results and the input were

actually released publicly.

[3:30 p.m.]

It was actually an opportunity for other people to take a look at

what the feedback was so that we could understand how an eventual piece

of legislation might arrive in this House and so that we could see it

matched the sense of priority that had been placed on a variety of

issues.

That consultation took place. In 2017, consultation continued, and

we’re grateful that it did. There was a lot of preliminary work done, a

lot of time and effort spent, and a second phase of consultation was

undertaken.

I should say that in all of the information that my co-critic and

I have reviewed…. There was a great deal of effort by credit unions to

participate both in phase 1 and in phase 2. They reinvigorated that

process, once again saying: “Let’s come back to the table and make sure

that when that legislation arises in the House, when it arrives there,

it meets the test of those things that have been important to our

sector.”

We certainly want to say thank you to the credit union sector. I

think they’ve provided a great deal of value and an important

perspective on legislation that’s in front of this House today. We need

to keep listening and be prepared to respond to that.

[J. Isaacs in the chair.]

I think it’s important to also note that…. This is an area where,

perhaps, the phrase “nemine contradicente” comes into play. No

one here would disagree with the important role that credit unions play

in British Columbia and in the British Columbia economy. In fact, the

credit union sector has pointed out that in the work that the

governments, both past and current, have done, they have placed value on

the role of the credit union.

I think the minister should see that as a compliment as well.

Certainly, the credit union sector has said they recognize that in this

legislation and in the work that’s been done leading up to it, there has

been an inherent sense of agreement about the value and importance of

credit unions. I know that my colleagues have referenced it as

well.

There is good reason for us to stop and reflect on the benefit

that credit unions provide in British Columbia. They’re certainly not

one-size-fits-all. They’re very different. There are almost 50 different

credit unions operating in British Columbia. If you stop to think about

it, these organizations serve a total of almost two million members. In

fact, they contribute $1.9 billion to the provincial GDP.

One thing we want to be sure about is…. That’s one of the reasons

why we’re going to go through a series of questions during committee

stage. We want to get this right. We don’t want to place barriers or

inadvertently impact the good work that’s done by credit unions across

the province.

When you talk about jobs, for example — let’s take a look for a

moment — credit unions directly and indirectly employ more than 16,000

British Columbians. Not only do we see a significant financial benefit.

We also see people who get to work in their communities in meaningful

ways in credit unions.

The largest credit union, as has been noted, is Vancity. It has

more than $22 billion in consolidated assets and — listen to this number

— more than 500,000 members. Then we can see the difference, as my

colleague referenced, with, for example, the smallest, which is the

Vancouver Firefighters Credit Union. It has 1,500 members.

In 2017, credit unions in British Columbia distributed $27.6

million back to their communities through donations, sponsorships,

scholarships and more.

I wanted to take a moment to, certainly, reflect on my own

personal experience in our community. I can’t begin to tell you the

difference that credit unions have made in the community and region that

I live in. I’m sure that every single member that has a credit union in

their community will say exactly the same thing. They are

difference-makers. They have deep roots in our communities, and they

make a significant difference.

When we’re thinking about the value proposition…. Of course we

want to talk about how the legislation impacts British Columbia’s credit

unions’ ability to conduct their business. I think it’s also important

to pause and reflect on how they give back in communities like mine and

of other members that are sitting in this House today.

As noted earlier, I think it’s important to recognize that…. It’s

fair to say that the sector is generally pleased with this legislation.

It’s important for us to recognize that. There are important bills that

come into the House where there is genuine agreement about the need for

the legislation and the vast majority of what’s contained in

it.

[3:35 p.m.]

You’ve heard from my colleagues who have spoken before me that

there are several areas of concern. Our job as the opposition is to

bring those areas to the Legislature to have a discussion with the

minister and with the government in the hopes that the best piece of

legislation that we can craft together is what the ultimate outcome

is.

We’ve had conversations with the credit unions. I know the

minister has received input as recently as just a couple of weeks ago

from the sector, bringing forward what we think are reasonable and

thoughtful suggestions for amendments, for changes. It’s not about

scrapping the bill and starting over again. It’s not about the

opposition simply saying: “Well, we’re not in favour of the bill.” In

fact, nothing could be further from the truth. I think there is a

legitimate place in this Legislature for the minister and the government

to hear those concerns on a real-time basis and to be willing to step up

and make those changes.

You’ve heard two of the areas of specific concern. Let me start

with liquidity, to begin with.

The minister is an experienced legislator. In fact, I can remember

being on the other side of the House and being taken to task many times

by this minister, making sure we got the legislation right and bringing

gaps or perceived deficiencies to our attention. Now the roles are

reversed. I know the minister is aware that there are several areas of

perceived gaps from the credit union perspective — again, in the context

of them being, from an overall perspective, very pleased with what has

happened to date.

One of the significant pieces when we talk about liquidity is —

two words; well, three, I guess: “at all times.” When we look at one of

the concerns that has been expressed to us…. Certainly, when we look at

the chart, British Columbia is choosing to use language that is

different than other jurisdictions in the country. It doesn’t take a lot

of homework. You just need to put together a chart and look at language

from across the country. It stands out that British Columbia is choosing

to use the words “at all times.”

There are potential consequences to the use of that language. It

is especially concerning — and it will not work, from our perspective —

at times when there is an urgent liquidity event. You’ve heard it

described by my much more learned colleague from West Van–Capilano.

There’s suddenly going to be a run on the bank, a run on resources. We

need to take a moment and think about whether or not it is acceptable to

expect that credit unions will have to draw on the mandatory liquidity

pool to shore up, basically.

I don’t think that’s a significant adjustment to this piece of

legislation. It will be interesting to hear from the minister why it is

not timely at this point to actually fix that challenge.

When we think about the 2018 submission…. The system itself, the

credit union system, advocated on this subject, as the use of funds

would precipitate (

a) a breach of legislation — no one in the credit

union sector wants to be breaking the law, I can assure you, so they

were concerned about that — secondly, resulting in the cancellation of

lending covenants and, thirdly, uncertain regulatory consequences. The

sector argued that these reasons render the practical intent of the

mandatory liquidity pool to be void.

I think it’s important…. As we understand it, the minister isn’t

necessarily opposed to making those changes but, apparently, just not

making them now. Well, I can assure you…. If we’re in the Legislature of

British Columbia, our job is to put together the best, most effective

practical legislation we can. I would urge the minister to actually

consider….

If that amendment is being considered, even in the short term or

longer term, we should be having that discussion now. To wait and assume

that we have to come back to the Legislature to fix a piece of

legislation doesn’t make sense. In fact, when you think about it, this

is an issue that the sector, I think, is speaking very eloquently

about.

[3:40 p.m.]

To put it simply…. I know that my colleague has tabled an

amendment, but let’s look at it in a nutshell. Let me quote: “Credit

unions strongly recommend the removal of ‘at all times’ from

section 67,

on liquidity.” The continued inclusion of this language is inconsistent

with other jurisdictions, and having reviewed a chart looking at all the

jurisdictions across the country, that is correct.

We’re going to stand out once again, and, from my perspective, not

for a necessarily good reason. It is deeply problematic in a liquidity

event, because, as we’ve said — every member who stood to speak about

this has said — it forces credit unions to break the law to access their

liquidity, which is currently held at Central 1. It may also result in

the credit union’s credit facilities being rescinded if they access

their statutory deposits first, and it strongly disincents credit unions

to continue to hold liquidity collectively — a system that has worked

well for more than 30 years.

I know that we will be very interested in trying to understand why

the minister is insisting that “at all times” be included in the

legislation. In fact, there’s still time to actually deal with that with

an amendment that we will table. Perhaps the minister would like to

consider tabling one herself. Not to put too fine a point on it, but

let’s be clear. Should credit unions — and it’s important to repeat this

— be required to access funds, liquidity funds? In the event of an

emergency, it would result in breaking the law. I think we need to fix

the legislation. I can’t think of many good reasons that we can’t do it

as we work through it.

There are a number of other issues that have been raised with the

minister. In fact, a letter was sent, which, of course, the opposition

was copied on. There are concerns about regulatory uncertainty, making

sure that there is ongoing discussion and consultation. So it’s very

important to recognize that this is an issue that is fixable. It is

advisable, from our perspective, and it, frankly, should take

place.

The issue related to the liquidity piece was actually raised

previously in the system’s response to the consultation paper that was

issued by the Ministry of Finance, and that was in April of 2018. In

fact, on page 16, it is specifically noted there.

From our perspective, the minister has an opportunity to listen

again. I’m certainly not implying that she hasn’t been listening. In

fact, as I said, the sector finds the legislation generally acceptable

and feels quite encouraged by it, but there are some tweaks that could

be made. Without those tweaks, there is the potential for consequences,

either unintended or intended, that would have a significant impact for

credit unions in British Columbia.

The other item that was raised by my colleague was the issue of

privacy and the Privacy Commissioner. This isn’t the first time that

there seems to be a willingness to ask, or perhaps a reminder that an

ask needs to be made of the Privacy Commissioner, when we’re talking

about the collection of data and personal information. But when the

information comes back, there seems to be a reluctance to adopt

it.

Once again, not that we want to look back in history, but I can

assure you that time after time after time, members on the government

side, when they were on this side of the benches, talked about the

importance of the protection of privacy and the importance of collecting

that information.

We are concerned. We will look forward to…. We understand that a

potential resolution or some sort of suggestion to deal with a

difference of opinion or approach, on behalf of the Privacy

Commissioner, will be discussed. We’re not aware of what that is, but it

is our job to raise concerns about that. That’s exactly what my

colleagues and I have done.

[3:45 p.m.]

We look at some of the other questions that certainly will be

important for the minister and her team to respond to — once again, the

issue of rule-making authority. The legislation enhances significantly

the regulator’s ability to make and enforce rules. When you think about

that, if there isn’t clarity around how that’s interpreted, there can be

a significant challenge.

From an industry perspective, what assurance does the industry

have that these rules will be enforced fairly? Will there be feedback,

and will it be meaningfully considered and implemented? If appropriate,

is there a willingness to change those guidelines and look at how they

work? And most critically, from many people’s perspective, is: is there

an appeal mechanism? We need answers to those questions. If the industry

is dissatisfied with how the superintendent has interpreted a rule, is

there a place for appeal, a place to take that discussion?

Candidly, we’ve had this discussion before in this chamber and in

committee, when it came to the superintendent of real estate in British

Columbia. There was a series of regulations and rules in place. It’s the

interpretation that causes challenges. I know we spent a lot of time

during the estimates process talking to the minister about how the

superintendent looked at those regulations and implemented them and how

the

interpretation took place.

There was a great deal of concern in the real estate sector. We

don’t want to see that repeated in the credit union sector. We want to

be sure that we have a good sense of what the rule-making authority is.

What is the role of the sector as it gets to respond?

Deposit insurance. The credit union system recommended splitting

the boards of the deposit insurer and the regulator. It’s recommended

international best practice, in this case, in most other jurisdictions,

including federally. So we’re going to want to have some conversation

about those kinds of things.

Again, significant to the sector is certainly the issue of capital

and liquidity. B.C. credit unions are the only financial institutions in

the country that are constrained by a capital penalty on commercial

business lending that is greater than 30 percent of their overall loan

portfolio. When you think about that, this means they can’t lend to

small businesses that desperately need access to capital. I can tell you

that probably every member in this Legislature has had visits from

people who are looking to access capital and having no luck whatsoever

in getting it.

It also means that credit unions cannot…. Nor can they lend to

developers who are working to increase housing stock. Well, let me tell

you. We’ve heard a lot about the government’s housing plan, their

30-point plan. Well, here is a barrier. These organizations cannot lend

to developers who are working to increase housing stock in the middle of

what is considered a housing crisis.

Again, that is the kind of thoughtful, important input that’s been

provided to the minister and to my colleagues.

One of the things I very much appreciate about my colleague from

West Van–Capilano…. He provided us with a

summary of what Bill 37 does

for credit unions. It’s a very long list. As he pointed out, it’s a

really…. This is “quite a long do list,” both for the credit union and

its regulator. If you look at the substantive inclusion of changes and

work…. He calls it “this 11-point checklist.” I won’t go on to say how

he described it because only he can do it justice.

The fact of the matter is that there is a significant to-do list

here, an 11-point checklist that we’re certainly going to be looking at

and holding the government accountable for. How do we help the credit

unions facilitate the 11-point checklist that the member has

provided?

In the briefing that we received…. Once again, we always

appreciate the briefings that the minister and her staff pro­vide

for us. It’s an important part of the work that we do on the opposition.

We absolutely understand that after a decade you probably need to take a

look at the legislation. We also understand that changes are likely

necessary when you look at keeping up in the modern world that we live

in.

Our job and that of the minister is to make sure that the

regulator balances the interests of the sector that it oversees but

maintains the goal of preserving the integrity of financial institutions

in the interest of consumer protection. We’ll certainly look forward to

committee stage on this bill, where we can look at those aspects in

greater detail.

[3:50 p.m.]

Again, is it important? Absolutely, it is, because credit unions,

as I pointed out earlier, are significant contributors to our province,

when you think about $1.9 billion to the provincial GDP, 16,000 direct

and indirect jobs. We don’t want to overburden credit unions with

regulation and compliance, especially for smaller credit unions. These

are not necessarily massive organizations in British Columbia. Every

time we give them an 11-point checklist, you can assure yourself that

there are going to be challenges.

The Vancouver Firefighters Credit Union, as we pointed out, has

1,500 members, quite in contrast to a credit union that has 500,000

members. So we need to make sure that the minister and the government

consider proportionality in light of the proposed changes. That’s

essential as we look at the legislation, going forward.

I think you can tell from our comments that, generally speaking,

both the sector and the opposition see a great deal of merit in the

bill, based on work and consultation that’s taken place literally over a

significant number of years. We think that the credit union sector

itself has been a significant contributor to the creation of the

legislation, and what they’re asking for now is an opportunity to make

sure that we get it right — not somewhere down the road by bringing the

bill back to the House for amendments. Let’s get it right

now.

Let’s make sure that we take into consideration those thoughtful

recommendations that have been made. We’re certainly going to be looking

for clarity around the issue of the protection of privacy. The

discussions that have been ongoing with the Privacy Commissioner….

Probably our most significant concern is related to liquidity and that

little, tiny phrase that can make a huge difference at all

times.

With that, I want to thank the minister for the opportunity to

speak, for the opportunity to be briefed by her staff. I look forward to

having a constructive discussion during committee stage and, hopefully,

the chance to see government in action, working across the aisle, to

actually fix what we think could be fixed at this session of parliament

to make the bill more reflective of where the credit union sector would

like to be.

Thank you for the opportunity to speak today.

Deputy Speaker: Seeing no further speakers, the minister shall close

debate.

Hon. C. James: Thank you to all the speakers on Bill 37. I appreciate, as always,

the discussion that occurs at both second reading and committee stage

and the opportunity to be able to have a good discussion on something

that truly has actually crossed over governments. This was a discussion,

as I mentioned in second reading, as other members have mentioned. This

was a process that began previously, under the previous government, and

continued on with the current government.

For those who believe there are rare opportunities for us to

continue to have information and action cross over…. Just because one

government did it doesn’t necessarily mean it was a bad thing. Just

because the other guys took it on doesn’t mean it was a bad thing. I

think this is a perfect example. I know it will be shocking to some

members in the House, but I think this is a perfect example where there

was good consultation done, good discussion, and a document and a piece

of legislation has come forward from that.

I think there are a couple of pieces where there certainly is

unanimity across the Legislature. One, of course, would be our support

for the credit union sector. I think it’s very clear that there is great

support for the credit union sector in this Legislature and great

support for the incredible work they do in communities — often the only

financial institution in a community, often the organization that is

there providing support to Little League, to the community

organizations, to volunteer days. Often many credit unions and

communities will do volunteer days where all of their members go out and

do volunteer work in the communities. The personal touch that people

have seen….

Credit unions were always the financial institution of my family’s

choice. So as we grew up, we, of course, became credit union members as

well. My kids became credit union members — and my grandkids now. My

granddaughter now has her first debit card from a credit

union.

[3:55 p.m.]

I think it really shows the kind of support and loyalty there is

to the credit union sector, certainly a strong sector in British

Columbia. If you take a look at our province compared to other

provinces, the co-op sector, the credit union sector as well, is a very

strong part of the culture of our province. I certainly see that as a

commonality across the aisles.

I think the other piece that I heard strong support for was a

regulatory framework that works, recognizing that there’s an importance

of having a regulatory framework that will meet the modern challenges.

Things have changed. Things can’t stay static when you look at the pace

of change, particularly in the financial sector. So having a strong

regulatory framework that works, I think, is important.

Certainly, two issues that the member raised…. I know there’ll be

other questions as we go through this, but I know we’ll have a good

discussion around the liquidity. There are differences of opinion on

that issue, and that’s certainly what has to be, as the member would

know well, taken into account when you take a look at a consultation and

bringing forward legislation. I’m sure we’ll have a good discussion on

that issue.

The privacy issue that the member raised. In fact, before the

Legislature rose, I did table an amendment. It is on the order paper, so

it is available for all members. It’s been there for a couple of weeks,

just so people are aware that that’s there. That was, again, after good

discussion and good direction around why we were moving in this

direction. Then, as the legislation was coming in, again, another

comment from the Privacy Commissioner. I think, again, we’ll have a good

opportunity.

I look forward to committee stage. With that, I move second

reading of Bill 37.

Motion approved.

Hon. C. James: I move that the bill be referred to a Committee of the Whole House

to be considered at the next sitting of the House after

today.

Bill 37, Financial Institutions Amendment Act, 2019, read a second

time and referred to a Committee of the Whole House for