Fifth Session, 41st Parliament

(2020) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Tuesday, July 14, 2020

Afternoon Sitting

Issue No. 340

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Routine Business

Tabling Documents

Report pursuant to the COVID-19 Related Measures Act regarding

Order-in-Council 391/2020

Schedule of Estimates

Hon. M. Farnworth

Orders of the Day

Second Reading of Bills

Bill 14 — Municipal Affairs and Housing Statutes

Amendment Act (No. 2), 2020 (continued)

T. Stone

M. de Jong

A. Olsen

J. Isaacs

J. Thornthwaite

J. Sims

B. Stewart

L. Throness

T. Wat

R. Coleman

Hon. S. Robinson

Bill 20 — Motor Vehicle Amendment Act (No. 2),

Hon. D. Eby

M. Lee

J. Johal

Hon. D. Eby

Bill 21 — Wills, Estates and Succession Amendment

Act, 2020

Hon. D. Eby

M. Lee

Hon. D. Eby

Committee of the Whole House

Bill 2 — Motor Vehicle Amendment Act,

M. Hunt

Hon. M. Farnworth

Hon. C. Trevena

Report and Third Reading of Bills

Bill 2 — Motor Vehicle Amendment Act,

Committee of the Whole House

Bill 13 — Miscellaneous Statutes Amendment Act,

M. Lee

Hon. D. Eby

TUESDAY, JULY 14, 2020

The House met at 1:34 p.m.

[Mr. Speaker in the chair.]

Routine Business

Tabling Documents

Mr. Speaker: Members, I have the honour to present a report regarding a regulation

made under the COVID-19 Related Measures Act.

[1:35 p.m.]

Schedule of Estimates

Hon. M. Farnworth: I want to table the

schedule for the Committee of Supply budget

estimates for Thursday, July 16 and Friday, July 17.

Orders of the Day

Hon. M. Farnworth: I call continued second reading debate on Bill 14, Ministry of Housing

statutes amendment act.

[R. Chouhan in the chair.]

Second Reading of Bills

BILL 14 — MUNICIPAL AFFAIRS AND

HOUSING STATUTES

AMENDMENT ACT (N o . 2),

(continued)

T. Stone: I do appreciate the opportunity to continue my remarks on Bill 14.

I will say, at this point, that I am the designated speaker for the

official opposition on this particular piece of legislation.

I ended, just before the noonhour, listing off the names of real

people that are experiencing real financial distress and anxiety as a

result of soaring strata insurance costs. I think that’s important for

us to always remember — that there are real people involved here. These

are hard-working men and women. These are retirees. These are all kinds

of different British Columbians in communities across this province who

have been impacted.

I talked about Paul in Chilliwack, Bob and Susan in Kelowna, Jack

in Coquitlam and Wendy in Delta. I talked about the financial stress

that’s been faced by Chris in Chilliwack, Marilyn in Richmond, Leanne in

Penticton and Monica in Vancouver.

There are a couple more that I wanted to enter in for the record,

and then I’ll move through the different sections of this bill. I want

to acknowledge a note that I received from Joseph in Surrey. He had this

to say: “The condo owners in our building had to pay a special levy of

almost $2,000 above our regular strata fees. A majority of the owners in

our complex are in their 70s, 80s and 90s. We just can’t afford this.”

That’s, again, a note from Joseph in Surrey.

Jacqueline in Kelowna. She sent us a note, a pretty detailed

email, including copies of her insurance premium statements from last

year and previous years and the most recent one that she received. This

is a very well-maintained condo in Kelowna. It’s about 20 years old.

They’ve had no significant insurance claims of record in those 20

years.

Jacqueline and her husband have lived in this building since 2005.

Their premiums have gone up from $58,000 and change to $326,000 — an

outrageous increase in the strata insurance premiums that they have to

pay. Their sewer backup and water damage deductible went from 10 to 50.

Flood went up to 50 from five. And on and on it goes. They simply can’t

afford these added costs.

The last example that I’ll read into the record is one from my own

community in Kamloops. Again, a relatively new building. We’re talking a

building of less than five years old. No major claims. No claims at all.

Certainly, nothing that would provide a rational explanation for the

increase in their costs. They have seen their annual premium go up from

$26,000 to $113,000. The water damage deductible has gone up from $5,000

to — get this — $250,000. Likewise, for floods and sewer backup

deductibles.

Their condo strata housing complex has opted to address this in

two ways. Every unit owner is being hit with $100-per-month increases in

their strata fees — so 1,200 bucks for a 12-month period — as well as a

one-time $1,200 hit in the form of a special assessment. So Peter and

his neighbours are looking at, this year, an additional $2,400 of cost

that they weren’t planning on that has just hit them in the side of the

head like a 2-by-4. People cannot afford these increases.

[1:40 p.m.]

Now, we in the opposition have been quite alive to this issue. The

first media reports of there being issues in British Columbia’s strata

insurance market actually came out a year ago. In July of 2019 there

were news reports of strata complexes, strata corporations and strata

owners receiving renewals, insurance renewals, with huge increases, as I

have talked about. That’s a year ago. It certainly appeared to

accelerate and further intensify through this last winter and into

We decided, as an opposition…. Part of the role of a responsible

opposition is to actually put some ideas on the table from time to time,

to suggest some solutions, to urge the government to take specific

actions to address challenges that we see facing British Columbians. So

we did exactly that. We’ve done that at a series of steps along the

way.

We introduced a private member’s bill in February of this year

that contained a number of proposed solutions, a number of actions. The

government didn’t call that bill for debate. They didn’t call that bill

for debate, but we proposed a bill that, certainly modest in its

contents, was intended to provide some initial steps that the government

could take, recognizing the challenges that were unfolding in front of

so many British Columbians.

We called upon the government, in addition to those measures in

that private member’s bill, to create a water damage prevention program.

Again, I read into the record before 12 noon today that one of the key

findings of the B.C. finance authority report that looked at what is

going on in the strata insurance market in British Columbia…. One of the

key findings that they came back with, which, frankly, I don’t think has

surprised anyone who lives in a townhome or a condo, was that over half

of all of the claims that are hitting strata units and strata

corporations relate to water damage, most of which is preventable with

appropriate maintenance and upgrades being made.

So we thought, “Let’s be thoughtful here. Let’s propose some

legislative changes, some legislative actions, and let’s suggest a water

damage prevention program,” again to help homeowners and strata

corporations invest in the maintenance and upgrades to prevent water

damage events from happening in the first place.

The types of upgrades that we’re talking about here that could be

funded through this kind of a grant program would involve things like

installing automatic water shutoff valves, hard-wired water leak

detection systems, steel-braided hoses, low-flow toilets, laundry and

washroom floor drains, recessed sprinkler heads and protective sprinkler

guards, just to name a few. But this stuff costs money.

When we put this idea out there, we suggested that the government

could fashion this water damage prevention program. They could fashion

it or model it on the HAFI program that exists, the Home Adaptations for

Independence program, which we’re very proud of in the opposition. We

created it when we were in government. That program is all about

ensuring that people have the financial wherewithal to make investments

in mobility-related upgrades so they can remain in their homes longer

and do so with as high a quality of life as possible.

That program provides between $5 million to $10 million of

one-time funding per year. Those kinds of dollars would go a long ways

to assisting folks who live in condos and townhomes to be able to afford

the kinds of upgrades that are needed to prevent water damage events

from happening in the first place. But again, the government has driven

right past that idea.

We hear today about a $12½ billion projected deficit here in

British Columbia. We hear about all of the things that the government is

proud of doing in stepping up to support British Columbians in need.

They trumpet their investments roundly, right across the

board.

[1:45 p.m.]

Here we have half of the population of Metro Vancouver and

one-third of the population of British Columbia suffering under the

weight of unexpected, unrealistic, high additional insurance costs, and

the government is missing in action. The government wouldn’t even

embrace a simple suggestion like a water damage prevention

program.

We thought…. Again, we pride ourselves in the opposition of being

resourceful. We pride ourselves on being collaborative. We pride

ourselves on bringing forward solutions. We thought we would try again,

so we wrote a letter to the Premier. It was dated June 16. We sent the

letter to the Premier with a number of commonsense, practical,

achievable steps that could be embraced very quickly by the government,

that would begin to provide some relief to British Columbians facing

this significant challenge.

We called for the implementation of a temporary tax holiday on the

4.4 percent insurance premium tax that’s applicable on strata property.

Let’s leave those dollars in the pockets of townhome and condo owners.

Let’s leave those dollars in the pockets of people who live in strata

housing across British Columbia.

That 4.4 percent insurance premium tax, by the way, is applied on

about $300 million of estimated revenue that comes in from strata

insurance premiums. That’s according to the B.C. Financial Services

Authority report. Just providing a temporary tax holiday on that piece

would leave potentially upwards of $13 million in the pockets of people

who live in strata units and strata corporations. No interest on the

government’s

part in that idea.

We suggested that we extend, on a temporary basis, the property

tax deferment program. Everyone is aware of this program at the present

time. You can defer your property taxes or a portion of your property

taxes if you’re over 55 or if you are a surviving spouse or if you are a

person with a disability. A very, very successful program that we’ve had

in British Columbia for a number of years. Why not extend that program

to provide some relief for people on their property taxes? Again, no

interest in the government in that idea.

We proposed a wide range of additional changes to the Strata

Property Act, the regulations, involving every­thing from the

contingency fund to how depreciation reports are handled to requiring

some level of mandatory education and training for strata councils,

mandating certain types of supports that need to be there from the

Ministry of Municipal Affairs to the strata corporation world. A whole

bunch of ideas. Most of that has been passed by, by the

government.

We suggested that perhaps it was time to, again, do another review

of the B.C. building code and look at implementing new requirements

focused on the prevention and the severity of water damage events. No

mention of the building code in any review whatsoever in the

government’s program to this point.

Quite importantly, and I really want to underscore this point, we

also called for a requirement to be put in place for the B.C. Financial

Services Authority to make public the data and the information that it’s

gathering from insurance companies to better understand the current

climate of rapidly rising strata insurance. Imagine that. Some

transparency. Now, let’s let British Columbians see what the

calculations are, what the numbers are that go into the calculations

that, supposedly, according to the insurance industry, are driving the

costs of insurance into the stratosphere. But no commitment from the

government in their action plan to enhance transparency of that data and

that information to ensure better accountability. No commitment from

government to do that.

We held a town hall as well, a virtual town hall — the opposition

leader and I did — a few weeks ago. We had hundreds of people online

with us. This was a non-partisan event. It was promoted by a number of

the different condominium owners associations and, certainly, folks that

have approached us, as an opposition, with concerns that are specific to

them.

[1:50 p.m.]

We held a really good discussion. We did a lot of listening. Many

of the stories that I read into the record earlier reflect the feedback

that we received in that town hall.

The most disappointing piece at this point, I think, would be

this. As I said earlier, there were signs that this strata insurance

crisis was building a year ago. We brought forward some ideas for

government’s consideration in February. We then followed those up with a

series of more ideas. We’ve put some ideas on the table that would

actually provide relief for British Columbians. For the most part, with

only a few exceptions, the government has opted not to embrace any of

this.

I mean, where is the sense of urgency? I heard it again today from

the Minister of Housing, as she stands in the House here — in

introducing this bill, in second reading. She talks about how it’s so

important to get on with actions that are going to help people with

these added costs. Yet there’s nothing in this bill that actually does

that.

She talks about how critical it is to understand that these are

just first steps — that there’s more work to do, there’s more

consultation to do, there’s more engagement to do. Well, we’ve known

about this problem and government has known about this problem for a

year. People need the help now, not months and years from

now.

The Finance Minister, back in February — I believe in responding

to the private member’s bill that I had introduced in this House — was

really pressed on: do you really understand the urgency of the

situation, and if so, when can condo and townhome owners expect some

action? When can they expect a plan? When can they expect some

relief?

The Finance Minister’s response was: “I hope in the next month

we’ll be able to have some ideas, but again, it’s going to be determined

by conversations we have with the industry and with strata owners.”

Well, fair enough. That was five months ago. I am absolutely alive to

the fact that we’re still in the middle of a pandemic, but the

operations of government continue. It’s taken five months from that

comment to get to the point where the government has finally brought

forward some ideas.

This should’ve been done sooner. The government should’ve brought

forward an action plan much sooner than the last couple of weeks. As I

said, it’s not like this issue just happened, has just popped up over

the last couple of weeks. The government’s known about it. It’s been

building. The government has waited this long to actually take some

action, and the action that they’re taking isn’t actually going to make

much difference for those folks who are most impacted.

There are a few items in the NDP’s plan that may make a difference

from a long-term perspective — the requirement for proof of insurance on

an information certificate, contribution requirements to a contingency

fund, requirement for a strata corporation to inform owners and tenants

of any material change in insurance coverage, a cap on an owner’s

liability for events or claims that happened in their units where

there’s no negligence involved and a few other things. Fair enough.

Those are, perhaps, worthy points of discussion and areas to look at

changing for the mid- to long term.

Again, the fundamental question with this piece of

legis­lation is: how is this going to make life any better? What

in this bill is actually going to make life better for British

Columbians? The answer is that there’s not much. What the government has

come up with provides no financial relief for thousands of British

Columbians hit hard. There’s nothing in this bill that will keep money

in the pockets of condo and townhome owners.

There’s no water damage prevention program. Even the Finance

Minister, back in February, had this to say about the importance of

preventative maintenance. She said: “What can we do on the prevention

end and how can we work with the industry and strata owners to make sure

we come up with a solution that’s really going to work?” Well, the water

damage program was an attempt to suggest something that was fairly

practical that would address that. We offered a whole bunch of

ideas.

[1:55 p.m.]

There are a few items that we are particularly concerned about and

that we will be canvassing in committee stage on this bill. The first

involves the deferral of depreciation reports. The NDP, the government,

keeps saying that this is to close a loophole that exists in the

legislation. The reality is that all they’re doing through this

amendment, through this bill, is moving the ability to defer

depreciation reports into regulation. The ability to do so will still be

there in

section 12(a).

It does beg the question: what will those regulations look like?

Will the ability to defer a depreciation report apply to all stratas?

Will it apply only to certain types of stratas — again, recognizing that

a duplex is very different than a condo unit, which is very different

than a bare land strata? Will it take into account the size of the

overall strata complex, the type of structure that it is, the location

of it, the age of it, the claims history of a building? We don’t know.

None of those details are included in this bill. They’ll come

later.

The government says that it’s willing to change the current

requirement for full replacement cost coverage. On the surface of it,

that might make sense under certain circumstances. But again, what would

those circumstances be? Is the government suggesting that a new minimum

replacement value would be 50 percent of the cost of the building or 80

percent of the cost of the building? We don’t know.

The challenge here is that there are strata corporations all over

the province that are making some pretty important decisions around

special assessments, one-time assessments, increases in monthly strata

fees and whether they continue to try to shop around for a better policy

that might be out there that has been elusive to this point. How many

more sleepless nights? We don’t know, because those details aren’t

included.

Contingency reserve funds.

Section 6 of this bill enables stratas

to access contingency reserve funds to obtain and maintain insurance if

that item “…has not been put forward for approval in the budget or at an

annual or special general meeting….” Again, fair enough.

But it’s been quite amusing — that is probably a good word — to

watch the Housing Minister on the one hand talk about how important it

is for preventative maintenance to take place. How important it is for

strata corporations to be investing in upgrades and so forth. Make sure

that they’ve got the contingency reserves that they need. And then to

come along and say: “Hey, but go ahead and use your contingency reserve

fund to pay for your current year’s insurance requirements.” As if it’s

like this is a money tree that’s just going to regenerate automatically

by itself every single year.

What do you do in year two when you have drained your contingency

reserve fund the previous year? We have asked that question to the

Housing Minister. No answer. I know the reason is because she doesn’t

have a good answer to that. It’s not a panacea to just encourage strata

corporations to go and raid their contingency reserve fund. That might

buy you one month or one year.

As I said earlier, the government took a year to get to this

point. It was cold comfort for strata owners to read in the government

news release, when they announced this bill, that a whole bunch of the

sections of the bill actually won’t come into force on the day that this

bill receives — should it receive — royal assent. There’s a whole bunch

in this bill that is dependent on further consultation and engagement.

What does the government have to consult and engage on? What do they

need to do here?

There’s a whole bunch more work apparently coming. And 14 of the

16 sections in this bill are dependent on the development of regulations

at a later date or on consultations that the government plans on doing —

which, again, could take months or, potentially, years. People just

don’t have that kind of time.

[2:00 p.m.]

This bill is not a solution to the problem at hand. This is an

empty bill. I said in this House a few days ago that, again, you don’t

have to take my word for it. The Minister of Finance had this to say

back in March: “Bringing forward a bill that does nothing to address the

pressures that are being faced does not make a good solution.” I

couldn’t agree with her more. Only she and her colleagues have brought a

bill to the floor of this Legislature that does exactly that.

It doesn’t provide any relief for British Columbians. It doesn’t

purport to solve the challenges that people are facing. It holds out

this promise of further engagement and consultation, which is going to

take months and months more to do just to kick the can down the field.

That is absolutely not good enough.

I will end on this note. We are very proud, as an opposition, that

we brought forward a private member’s bill. We brought forward a whole

bunch of ideas in letters to the Premier. We’ve been advocating as

strongly as we possibly can, with the resources we have as an

opposition, to hopefully light a fire under the government’s butt on

this one. Unfortunately, we are where we are, with a really empty

bill.

But I can assure you, Mr. Speaker, and I can assure British

Columbians out there who have been impacted, that we’re not done, in the

opposition, in terms of bringing forward solutions and ideas. We’re

going to continue to fight for you. We’re going to continue to do

everything we can to urge the government to take action that’s actually

going to make a difference — that’s actually going to provide relief.

You can take that and count on it, because to not do so would otherwise

let down, as the government currently is doing, a heck of a lot of

British Columbians who really need some help.

With that, I conclude my remarks in second reading on Bill

M. de Jong: We have heard in great detail from my colleague, the member for

Kamloops–South Thompson, on the nature of the problem we are confronted

by. It is widespread. It is dramatic. It is significant in terms of the

numbers of families that it is impacting, and it is significant in terms

of the magnitude of the impact it is having on those families. We have

heard, again compliments of my colleague from Kamloops South, about the

history of how this problem has begun to reveal itself.

It is important, I believe, for the assembly to acknowledge that

this is not a problem that has presented itself in the last few weeks.

The evidence that this issue would require the attention of government,

of regulators, began to reveal itself a year ago. Certainly, by the fall

of last year, it was becoming abundantly clear that there were

challenges afoot.

We are confronted, as a society, by the actions of a sector of our

economy, in this case the insurance sector, that would see the premium

costs associated with the product that they not only offer but that

statutes, generated by this assembly, require be in place…. For hundreds

of thousands of families, we are seeing the premium costs associated

with that product increase anywhere between 50 percent and 500

percent.

[2:05 p.m.]

If that were happening anywhere else in our economic life, there

would be outrage. I cannot, for the life of me, understand the lack of

attention, the lack of priority, that this has been given by the

government thus far. To be sure, there has been another issue that has

attracted the attention of government but surely not to the exclusion of

all others.

The magnitude of the problem is this. We are told that there are

upwards of about 700,000 strata titles registered in British Columbia —

700,000. Many of them include families — more than one person. It is

undoubtedly true that people can own more than one, but to suggest that

one million families are impacted by this challenge is not, I would

suggest, to exaggerate. One million of 4½ million people in British

Columbia impacted by what is taking place in the insurance sector. And

what is taking place? Well, massive, massive premium

increases.

You know, I have to say I hear from those who are trying to

explain this, those from the insurance sector who have tried to minimize

the impact of this by saying: “Yes, there are some outlying examples,

but on balance, it is an average of 50 to 60 percent.” Fifty to 60

percent is unacceptable. I hope they hear me say that loud and clear. At

a time when inflation hovers around 1 or 2 percent, for someone to come

along and say an insurance premium of $80,000 or $100,000 is going up

50, 60 percent, let alone 300, 400, 500 percent, is

unacceptable.

I hope this industry is under no illusions about where reasonable,

thinking legislators — I hope on both sides of the House — stand on that

matter. It is unacceptable. To foist those kinds of increases on people

in a single year…. And in this year, of all times, when hundreds of

thousands of families are out of work, when people are concerned about

their future, uncertainty reigns.

The industry says to a group of people who live in a neighbourhood

— 100 families: “By the way, the insurance premium that last year you

paid $80,000 for has gone up to $540,000.” It is egregious. It is

unreasonable. It is indefensible. It is at times like this that we rely

upon the government to step in and take corrective actions and provide

some safeguards. Regrettably, we have seen precious little of that. I am

hopeful that that will change, and we are beginning the discussion

today.

You know, it occurred to me that it is one thing for a sector of

the economy — the insurance industry, in this case — to say to people:

“Well, you know, we’ve done some analysis. Your premiums have to go up.”

But imagine the reaction of a family or a strata council in Langley,

Kamloops, Abbotsford, the Kootenays, Prince George and the Lower

Mainland who are confronted by a bill from their friendly insurance

broker that says: “On the one hand, your premium is going up 300

percent. Oh, and by the way, I have to direct your attention to page 2,

because not only is your premium going up 300, 400 or 500 percent, that

deductible that used to exist at $20,000 for you last year is now going

up to $250,000.”

We heard specific examples from the member from Kamloops South

about that. I advanced examples of that several days ago in this chamber

— $250,000. I do not profess to be an expert on any real estate market,

least of all ones around Metro, what the price of a condo today in Metro

Vancouver is worth, but I can tell you this. In my hometown, $250,000

would exceed the value of many, maybe even most of the condos that

people inhabit.

[2:10 p.m.]

So your premium is quadrupling, and your deductible is going up

more than that. To add insult to injury, the same broker says to that

group of families that are represented by that strata corporation: “Oh

yes, but we have a product for you called deductible insurance, and

we’ll sell you that.” That is…. Well, despite the protections afforded

by this chamber, I’m going to use the words “inexcusable” and

“indefensible,” but I can think of stronger language.

We must act, and we must act now. In fact, we should have acted….

The government needed to act sooner than this. As we heard a few moments

ago, this is not an anticipatory discussion. We’re not talking about a

challenge, a problem, a crisis that is about to reveal itself in a

matter of months. This is a crisis for families that exists

today.

Today as we debate this bill, there are strata corporations…. That

is a fancy word for groups of people and families that live in a

building, neighbourhoods, who are sitting down and making a decision.

It’s happening in Kamloops. It’s happening in Langley. It’s happening in

Abbotsford. It’s happening in Metro Vancouver. It’s happening right

across British Columbia.

Families are sitting down and having to make a decision about

whether to sign on to an insurance policy that is going to generate

increases to their strata fees that in many cases may drive some of

those families out of their buildings because they won’t be able to

afford the monthly fees and the monthly fee increases that will be

required to pay those dramatically, indefensibly increased insurance

rates.

As they used to say in legal circles, time is of the essence. In

fact, it is long past time for action, but here we are.

Again, as we have heard from the opposition critic and designated

speaker, we had expected more from the government, and we had expected

more sooner from the government. We are disappointed that they have

chosen not to act and chosen not to act both as quickly and as

imaginatively as we think appropriate.

They have tabled Bill 14. There has been much wringing of the

hands. I must say that it is striking to see the difference that

manifests itself on the part of members who are now ministers who, 2½ to

three years ago, professed great powers on the part of government to

take steps when confronted by injustice. I use that word here as it

relates to what is happening to people and families with respect to

insurance premiums.

A great wringing of the hands from the minister, who says: “This

is the private sector, and there’s not really anything that we can do

about that. We must, after all, ensure that the private sector insurance

industry is in a position to generate healthy returns for their

corporate clientele and for their shareholders.”

It’s novel. It’s interesting. It’s fascinating commentary to hear

from members of the NDP government, but I’m afraid it is also camouflage

for the fact that the government either doesn’t know what to do or, if

it has an inkling of what to do, doesn’t want to do it and doesn’t want

to do it in a timely way. If it is the latter, then I am at a loss to

explain why.

We have before us Bill 14, which purports to do a number of

things. In its early provisions, it contemplates changes to the amount

of money that can be transferred to a contingency reserve — and this is

a theme that exists throughout the bill — yet it provides no inkling of

what those changes to the present percentages of 5 and 25 percent might

be.

[2:15 p.m.]

Surely, it has occurred to the government that those families

sitting down at tables today, this week and next week need to have that

information in order to make informed choices about how to plan for

their future and pay for the insurance that they are obliged to

have.

There are provisions in this bill that require better disclosure

of insurance coverages to owners and purchasers. I don’t think that the

government should anticipate much in the way of opposition from this

side of the House to those provisions. Won’t get much argument from us

there.

What they will get is our concern that increasingly, without

proper and appropriate response from government, the disclosed

information that owners will receive from strata corporations is that

they no longer have insurance on their buildings, because they couldn’t

afford it. So it will be a pretty hollow instrument if the disclosure

requirements are followed with information that says, “We don’t have

insurance. Notwithstanding what the state of the law is, we don’t have

insurance, because we weren’t able to afford a $200-, $300- or

$400-a-month strata fee increase,” which some of these premium increases

are driving.

There are sections in this bill that eliminate options around….

Well, they seem to eliminate options around the obtaining of

depreciation reports. But as my colleague pointed out, maybe not.

Because in the very same breath, the government in this, legislatively,

includes provisions that would allow that to be altered by regulation.

But again, no indication whatsoever of what the intention is there, with

respect to what those regulations might be.

Those provisions seem — around the mandatory nature of

depreciation reports — to be rooted in the belief, and this is something

the insurance sector has been advancing, that the existing provisions

have been used by strata corporations as a means by which they are

avoiding doing the maintenance on buildings that is required and,

therefore, increasing the risk of a claim.

Well, we haven’t seen any real evidence of that, but that seems to

be the story. But if that is, in part, the rationale for the inclusion

of the provision to eliminate what the minister keeps referring to as a

loophole, and it’s probably more accurately referred to as substituting

one for another, then I am at a loss to explain the presence of the very

next provision in the bill, which seems to be the most direct and

immediate response to the crisis we are confronted by today.

It seems to be a statutory recommendation by the government to

strata corporations, which goes like this. When the notion of creating a

contingency reserve fund was created and embedded in the statute, it was

designed to ensure that there would be money set aside to deal with the

expenses that will come up on a cyclical basis. Not every year. Not on

an annual basis, but every ten years — to make sure the roof is

replaced, expenses of that sort.

This provision says that that money must be there, and it must be

safeguarded. It cannot be used for annual operating expenses. Yet this

provision says, and, in fact, encourages strata councils to access those

moneys to pay for their insurance.

Well, as my colleague pointed out, talk about digging one hole to

fill the other. Because that may allow a strata corporation and the

families in that community to get past the obstacle they are confronted

by this week or next. But next year or the year after, when it’s time to

replace the roof, there won’t be any money. There won’t be any money

whatsoever. Guess what’s going to happen. The insurance company that has

been happy to collect $500,000 a year in insurance premiums is suddenly

going to come along and say: “Hey, you didn’t replace your roof. We’re

not going to insure you.”

[2:20 p.m.]

It is an irresponsible response to a situation that is

confronting…. It is the ultimate irresponsible stopgap

measure.

There are provisions in here that allow for less than full

replacement cost insurance to be purchased. I agree with my colleague

and, I guess, by implication, with the government that that is an idea

worth exploring.

Having done some modest investigative work…. The act is clear. It

requires coverage for full replacement costs. I am told that in 55

years, there has been one total loss claim, in the 55-year history of

strata title in British Columbia. So it would seem, on the basis of

that, that requiring full replacement cost coverage is a bit of

insurance overkill. Now, I’m sure the insurance companies are quite

happy to collect premiums on that basis, because they never have to pay

out that much.

I think the idea has merit and is worthy of exploration. But those

families gathered around the table need to know what the number is, as

my colleague from Kamloops–​South Thompson said. Is it going to be

80 percent? Is it going to be 50 percent? There are, I’m sure, rational

arguments to be made, but it is of no help to those families today, who

may sign on to an insurance premium cost only to discover, three weeks

or three months from now, that they dramatically overpaid. They bought a

product they were no longer required to buy. That’s not good enough.

That’s not good enough, confronted by what we’re confronted

by.

We have tried, in the opposition, as my colleague pointed out, to

provide some suggestions, written letters. My colleague tabled a private

member’s bill to try and signal the seriousness with which this issue

needs to be addressed.

I’m going to try, in the time available to me, to offer yet

another suggestion about what I think is required, which is a shift in

the model, a significant rethink. I realize the minister is a busy

person and, I’m sure, is tracking the debates, and her staff. I hope

they will consider what I’m about to offer, and consider it seriously,

and will be in a position to discuss it further when we get to the

committee stage of the bill.

I was sitting on my deck on my farm on Matsqui Prairie. I was

looking out across the fields, and I was thinking about this. I was

thinking back to a time before I was born, just after the Second World

War. I’m still surrounded by farms. There are more berry farms than

there were back then. It was mostly dairy farms — farmers, growers,

dairy farms — after the Second World War.

They wanted to borrow money to expand. It was a time when

expansion was on everyone’s mind. The population was growing. We needed

more dairy products. The big banks in Canada wouldn’t lend them the

money. They couldn’t get access to capital. So they took matters into

their own hands. The reason that British Columbia today is the centre of

the credit union movement in Canada is because the agrarian sector,

farmers, took the lead in pooling their resources and looking after one

another.

I think this is an idea that has merit, with respect to the

insurance crisis we are facing, the cost of insurance. There is an

opportunity here, with engagement from the government and the regulator,

the Financial Services Authority, to facilitate what is known in the

statutes as a captive insurance company.

[2:25 p.m.]

We’re one of the few provinces that actually contemplates such a

thing. The term I prefer is self-insurance, the ability for people to

get together and generate their own insurance coverage, at rates that

are affordable. Yes, it’s a big change. Yes, as I say this, the

insurance sector is going to dismiss it at the same time they are

appalled by it.

Just as those farmers did 70 years ago, when large financial

institutions turned their backs on them, today, when insurance carriers

headquartered in other parts of the world are saying, “Well, you’re too

risky. We don’t really want to be in your market,” then I say, as the

government of British Columbia, as the parliament, as the Legislative

Assembly of British Columbia, let’s give British Columbians an option.

Let’s give them the means. Let’s facilitate, through the regulator and

the legislation and transitional support, the means for the owners of

strata properties to look after themselves at rates that they can

afford.

I believe it’s possible. I don’t think it’s possible on the fly. I

think it requires a commitment from the government.

I’m hopeful that at the conclusion of second reading and through

the committee stage debate, we will receive some kind of a signal from

the minister and the government that they’re prepared to explore this,

that they are prepared to endorse quick work, expeditious work, by the

Financial Services Authority to develop a model.

I know this. Confronted by an industry that has adopted a

take-it-or-leave-it approach…. “Here are our rates. You can take it or

leave it.” Confronted by an industry that is saying, “You know, we don’t

really want to offer this product. We don’t like the risk profile. Those

are our rates, and it’s too bad for you if they’re going to increase 60,

70, 200, 300 or 400 percent….”

I say the proper response from us as a Legislative Assembly is to

say to the people and the families who are being adversely impacted: “We

are going to develop an option for you. We are going to develop a choice

that you can avail yourself of.”

I think there are some important ancillary benefits that would go

along with that. It occurs to me that a self-insured strata corporation

is going to be pretty guarded about the nature of the claims that it

accepts. To the extent that the insurance sector laments what they call

frivolous claims, I don’t think that’s going to happen.

I think a self-insured strata corporation is going to be that much

more motivated to ensure that the maintenance on their building is kept

up to date, because the money to address any shortfalls or any

deficiencies is not going to be coming from some insurance corporation

overseas. It’s going to be coming out of the pockets of the members who

are paying for the self-insurance. There will be a motivation on the

part of the families and the owners to ensure that the work is

done.

This is something that I believe is worth pursuing. As I say, I

hope the minister will accept the suggestion as one that is made

constructively and that we can further explore during the course of the

debates. What we have now is not acceptable. It is impacting on families

who are already confronted by all of the uncertainty that we are

familiar with around job security related to the impact of the worldwide

pandemic.

[2:30 p.m.]

On top of that, in the midst of that storm, the insurance industry

comes along and says to people: “Now your insurance rates are

quadrupling.” That translates into $200, $300, $400 a month, in terms of

additional strata fees, at a time when families can least afford

it.

It’s not just old buildings; it’s happening to newly constructed

buildings. There does not seem to be a rhyme or reason, despite, quite

frankly, the lame excuses and explanations we are hearing from the

insurance sector.

I will ask the minister about the failure to include in this bill

the mandatory disclosure of fees and commissions. I think that that time

has come as well. But as you can tell from my remarks, I will be very

interested in having the minister, as my colleagues will, filling in the

blanks now — not three months or six months from now, but now — on what

some of these numbers around mandatory coverage and contributions to

contingency reserve funds or access to contingency reserve funds will

be.

People need that information now because they’re making decisions

now that, in some cases — not all, but in some cases — will be

determinative as to whether or not they can keep the home that they are

living in. It’s an important issue impacting, as I say, close to a

million families in British Columbia. I’m hopeful that this assembly can

be part of a meaningful solution and that the steps the government will

take form a meaningful solution and not just window dressing.

Deputy Speaker: My apologies to the member from Saanich North, whose name was

unintentionally skipped. He was supposed to speak before the member for

Abbotsford West.

A. Olsen: Thank you for the opportunity to speak to Bill 14, the Municipal

Affairs and Housing Statutes Amendment Act. I actually appreciate the

opportunity to speak following the member for Abbotsford West. I don’t

believe that I will be coming with as much bluster, but I do appreciate

both the words that he shared about the challenges with this bill and,

as well, always appreciate when members provide ideas that can be

debated — for us to discuss.

[S. Gibson in the chair.]

I think that it’s important to acknowledge that we also, in the

B.C. Green caucus, have been hearing from British Columbians over the

past year about the substantive challenges that people are facing,

British Columbians are facing, as they’re hit with some of the largest

insurance rate increases that we’ve ever seen in the province. We’ve

been hearing these stories from strata councils who are unable to secure

insurance for their buildings, dramatic rate increases, ranging from 50

percent to 300 percent. You hear from owners that they were blindsided

by these increases. The costs for some are upwards of hundreds of

dollars, over $1,000 in some cases, on top of housing expenses that were

already unaffordable.

I think it’s important for us all in this chamber to come to grips

with the scale of the problem. Over 1.5 million British Columbians live

in a home that’s part of a strata. That’s one in three, 30 percent of

the people in our province, and they come from all walks of

life.

In response to this crisis, the government directed the B.C.

Financial Services Authority earlier this year to inquire into the

causes of the increase. The issue was the focus of a number of questions

from the official opposition earlier this spring. We’ve done a lot of

work on this issue. The member from Kamloops–South Thompson, as we heard

earlier, brought in a private member’s bill to really put this issue in

front of government as one that needs to be dealt with and addressed

with haste.

[2:35 p.m.]

Now we have this bill, Bill 14, before us to take what the

government is calling “First Steps to Address Rising Insurance Costs for

Strata Owners.” I expect, for the most part, Bill 14 won’t be met with

significant criticism for what it proposes to do. The changes appear

largely focused on ensuring more transparency for strata owners,

providing more clarity, support and direction for strata corporations

and better data collection and reporting for the sector. None of those

can be complained about.

There are questions that I’ll want to ask about the regulatory

power to allow certain stratas to not be required to get full insurance

coverage and the potential consequences of such a change. But for the

most part, the criticisms on this legislation will be for what it fails

to do.

We’ve heard from our colleagues. We’ve heard some of those

criticisms already in the second reading stage of the debate. I’m sure

that we’re going to be hearing a lot more and raising some more of those

concerns in the committee stage of this debate as well. I think it’s

fair to say that this is a very complicated issue with few, if any, easy

solutions and that there’s plenty of room to make the situation facing

one-third of our province potentially even worse.

The B.C. Financial Services Authority, in their interim report

issued on June 16, included in their list of causes minor claims due to

water damage, poor building maintenance, initial construction quality

issues, challenges with strata policies, high cost of replacement,

earthquakes and a market lacking adequate insurer liquidity. Add this to

the increasing costs associated with more severe weather events due to

climate change, and which is only just starting to be grappled with by

insurers, and the unique challenges we see due to B.C.’s overpriced

housing market, and you can see the enormity of the task ahead of all of

us legislators.

So while Bill 14 appears completely supportable, it is essential

that we are clear that this is not a strata owner’s or strata

corporation’s problem alone. For instance, Bill 14 will, in the

government’s own words “set out clear guidelines for what strata

corporations are required to insure to help strata councils make

informed decisions on their insurance policies.” Do we have any data

that suggests that the lack of guidelines has been a significant

contributing factor? Do we know how much impact we expect this will have

on the rates currently facing strata owners?

Or how about this change? “Change the minimum required

contributions made by strata unit owners and developers to a strata

corporation’s contingency reserve fund.” Will this have a measurable

impact on the rates facing British Columbians today? How about for the

next year’s expected increase? My point is that we must not let this

issue be so easily defined as an issue with strata owners and strata

management without the clear data to reinforce that.

We have seen just how devastating the lack of action by the

previous government was when it came to the housing market. The

deregulation and total free market approach has led to cascading

challenges across our province. As it turns out, the so-called free

market approach of the B.C. Liberals is not so free at all, is it? In

fact, the cost of their policy for British Columbians has been more than

most can handle.

I think it’s essential that we ask tough questions about all of

these potential challenges and that the government equip itself with the

data to inform further policy intervention, if so called for. These

questions include: has there been any deregulation in the construction

sector that has contributed to the construction quality issues that we

now face? Have governments been so keen to create housing supply in the

market that we failed to ensure that we have the regulatory regimes to

support the increasing number of stratas that we see? Has the lack of

updates to the Strata Act contributed to the problem?

In one publication I read, Troy Wotherspoon, the president of the

Insurance Brokers Association of B.C., points to “more than 30,000

strata corporations of almost infinite variety.” Has the Strata Act been

modernized to reflect this complexity? Or are British Columbians seeing

insurance rates out of line with other jurisdictions because this is an

attractive jurisdiction for multinational insurance companies to make a

profit — a profit on the backs of British Columbians? Bill 14 will

provide the answers to these questions. But if we don’t start asking

them now, we won’t fix the underlying problem.

[2:40 p.m.]

The other significant challenge in front of the government is what

Bill 14 is silent on: what support is coming for people who are facing

unaffordable increases to their insurance rates? Actually, it should be

pointed out…. This is something that has been pointed out, and I’ll

reiterate the point that was made by the member who spoke before me.

This is not something that is coming. This is something that is here. It

is already impacting British Columbians today and for the past

year.

While direct financial support may help pay the bills in front of

people today, that will simply amount to a cash subsidy to insurance

companies and risks building the higher rates going forward. We have to

be careful. It’s essential that government is developing policy that

will help address not just the long-term challenges with strata

insurance but the immediate affordability challenge facing people

today.

It is important to contextualize the challenge that we face. So

I’ll repeat a quote from Frank Chong, vice-president and deputy

superintendent of the B.C. Financial Services Authority. It was a quote

coming from the press release announcing the completion of their interim

report in the middle of last month. He said: “The underlying factors

contributing to B.C.’s unhealthy strata insurance market are complex and

do not present easy solutions. Everyone involved in the market has a

role to play to balance availability and affordability of insurance,

going forward.”

I certainly do look forward to their final report. I hope you get

some answers to the questions that I have posed in this second reading

debate and get a better sense of how Bill 14 fits into the broader

approach that this government is going to take on this legislation at

the committee stage. Thank you for this opportunity to speak to Bill

J. Isaacs: I am pleased to rise today to continue debate on Bill 14. We pass

so many bills in this House, and some bills have more impact on citizens

than others. But Bill 14 is a bill that I am compelled to speak to, as I

have heard from so many of my constituents that the rising cost of

insurance and premiums, deductibles, is having a negative financial

impact on them, and they are worried about what the future

holds.

I have heard from seniors like Jack, who has been a strata

resident for 11 years. He has managed a Coquitlam highrise for ten

years. Jack is a strata council member. He manages the budget,

contractors, cleaners and all aspects of operations. His building has

not had a strata fee increase in ten years. The strata building is

well-maintained and well-managed. Jack can see no reason why their

building should be subject to such a high premium increase and feels

that this insurance increase will “obliterate my hard work, curtail my

disposable income and lower the value of my unit.”

But it doesn’t end with Jack’s dedication and good management over

the last ten years. Jack wonders how he’s supposed to enjoy his

retirement. The maintenance fee will increase $115 a month, just due to

the insurance. Jack’s water damage deductible also went up tenfold, from

$15,000 to $150,000, making his suite also more expensive. Like most

seniors, Jack and many of his neighbours are on a fixed

income.

Jack wrote to me and asked for help. But Bill 14 and the

government’s response to the growing strata insurance crisis will not

provide immediate help for Jack or his neighbours. Over the last few

months, we’ve heard from many condo and townhome owners who have watched

their insurance premiums and deductibles skyrocket to the point where

they wonder if they can continue to pay the monthly fee increase. In

many cases, the monthly fees have increased by hundreds of dollars per

month.

Many seniors are wondering if they can remain in their homes. The

high cost of strata fees, insurance premiums and high deductibles is

causing a lot of anxiety.

[2:45 p.m.]

These kinds of increases would be a financial hardship for nearly

anyone, but so many strata residents are seniors who made the decision

to downsize from their family home, thinking that they could manage the

monthly costs and keep a little more money in their pocket for their

senior years.

I also heard from James, who lives in Coquitlam. James is also

worried about the seniors who live in his building. Their insurance

premium went up 170 percent. His strata corporation budgeted for

$75,000, but with the premium increase, it is now over $200,000. This

premium increase leaves a shortfall of over $127,000, which had to be

paid out of the contingency reserve fund. But that money in the

contingency reserve fund will not be there in the future, leaving owners

wondering what they will do for next year.

Not only is James facing incredibly higher premiums, the

deductible also went up from between $10,000 and $25,000 per claim to

$150,000 to $250,000 per claim.

The rising cost of insurance premiums and a shifting marketplace

of insurance providers was evident months ago, almost a year ago. There

has been time for government to evaluate what this means to condo and

townhome owners. There has been time for consultation within the

industry and with stakeholders. There has been time to provide some

solutions that would address the crisis.

This is not a partisan issue. This is an issue that affects over

one million families in the Lower Mainland. It affects their monthly

budget, and it affects their net worth. Coquitlam has many residential

towers, and the official community plan includes ten to 15 more towers

as we densify responsibly. So this cost and the rising costs of strata

fees have a huge impact on this market.

We’ve raised the concerns of strata owners in the House, and we’ve

been working hard to encourage government to address the situation. In

February, we introduced a private member’s bill that would’ve taken

steps to mitigate the growing problem. But the NDP refused to call it up

for debate.

We sent a letter to the Premier with numerous commonsense ideas

that could be implemented fairly quickly to provide relief. But we

received no reply. We hosted a strata townhall where we heard directly

from strata residents who shared their concerns and examples of just how

these significant increases in premiums and deductions were hitting them

personally.

We’ve been trying to convey, on behalf of our constituents, on

behalf of all strata owners, how serious this crisis is and that if some

substantial steps are not taken, and in a timely manner, we will see

people lose their homes.

The Minister of Housing would give no assurance for those who are

asking for action. In fact, the Minister of Housing introduced this

bill, completely overstating its substance, and claimed that this would

make life better for those struggling with strata insurance. But Bill 14

doesn’t address the major problems related to premiums and deductibles,

and it comes up short when strata owners are looking for immediate

relief.

Many strata owners, especially seniors, cannot wait until

government figures out what this is going to look like in the long term.

People are looking for and need immediate relief now. It’s frustrating

to see government put aside the concerns of strata owners. We should

have seen this addressed months ago. Government should have anticipated

the financial and negative impact these increases would have on strata

owners.

I mentioned earlier that Jack’s deductible for water damage went

up tenfold, from a $15,000 to $150,000 deductible. Water damage

deductibles account for 46 percent of total claimed costs since 2017 and

was 56 percent in 2018 alone. This is well known. It’s a well-known

concern that frequently affects strata buildings, yet this bill has no

water damage prevention program that would assist strata owners with

costly upgrades, upgrades that they will need in the long run.

Hopefully, they will be able to save money on future fees.

[2:50 p.m.]

We suggested in our letter to the Premier last month that a

temporary tax holiday on the insurance premium would be a reasonable

approach and leave a little bit more money in owners’ pockets. This is a

4.4 percent tax that the government collects on every insurance premium

paid. According to the FSA, strata insurance generates approximately

$300 million in premiums. The total revenue collected by the government

from the insurance premium tax is approximately $13.2 million annually.

Of course, this revenue to government increases as premiums continue to

skyrocket.

A tax holiday on the insurance premium would make a considerable

difference for condo owners. It would be a simple solution to make life

just a little bit easier for those who are struggling. Yet this

suggestion has been completely ignored. Instead of implementing real

solutions and providing some relief, government has taken what they

describe as first steps. These first steps simply won’t make much of a

difference to the current situation.

One step includes requiring stratas to inform owners immediately

regarding material changes to their insurance coverage and enables

government to prescribe a cap on an individual owner’s liability or an

insurance deductible if that claim originated in their unit, but not out

of negligence. These kinds of changes will be beneficial down the road,

but they certainly do not address the problems in the short term or in

the medium term.

Government needs to listen to what strata owners like Jack are

asking. They are asking for help now, not sometime down the road. In the

meantime, they don’t want to lose their homes or lose their quality of

life.

Another step is to remove the ability to defer a depreciation

report, which is noted in

section 4. They are claiming that the ability

to defer depreciation reports is a loophole. But they have simply moved

the ability to defer depreciation reports into the regulations. It is

still there under

section 12(a). It seems like they want to avoid

accountability. Once again, this change does nothing to help strata

councils and strata owners with the rising costs of premiums and

deductibles.

Ronald, who lives in Coquitlam, says their strata has hired

engineers every year. All of the depreciation reports are in and all are

in complete accordance with what is required. Then, overnight, somebody

says: “You’re not doing things right.” Well, Ronald was doing things

right. Despite his best efforts to do things right, his strata insurance

went up by $200,000.

What’s most curious is that the government has introduced a bill

to be debated and voted on and, at the same time, they’re going to have

further consultations on the proposed legislation that is before us

today. This is confusing and offers no real answers to strata owners who

wonder what their future strata fees may look like. There is no

indication when relief will come, and it clearly shows that the minister

has not listened to those who have been asking for help.

Well, I want to help Jack. I want to help James. I want to help

Ronald. I want to help all of the other strata owners who have reached

out and voiced their concerns. I hope that as we move to committee

stage, we can uncover how substantial — or not — this bill will be for

British Columbians. British Columbians will be facing excessive cost

increases for strata premiums and deductibles, and we look forward to

debating this legislation in greater detail.

J. Thornthwaite: I am very happy to speak on this bill, Bill 14, the Municipal

Affairs and Housing Statutes Amend­ment Act. I appreciate my

colleagues ahead of me with their thoughtful suggestions to help this

real financial crisis that is going on right now.

[2:55 p.m.]

I thought I’d give you a little bit of a personal note first. I

live in a strata. I don’t know how many people in this House actually

live in a strata. But how about this? On January 30, I got a letter from

my property management company. They said:

“Please be advised that the 2020 renewal for the strata corporation

insurance has increased the deductible significantly, most notably for

water damage and sewer backup, which on February 1, 2020, will both be

$100,000.” The letter was sent on January 30. “The deductible for water

damage from supply lines will be $250,000 on February 1.

“Please review the

summary of the coverages on the back of this

notice with your unit and ensure that you have enough insurance on your

own unit.”

On February 3, we got a notice.

“As the property manager has advised, there has been a dramatic

increase in the deductibles to the strata’s insurance policy for water

damage and damage caused by supply lines. In simple terms, this means

that owners face a greater risk of having to personally pay for damage

to their units or to the common property in the event of a claim related

to water damage or water supply lines. Because of this sudden change in

the deductible, you may not have enough insurance coverage under your

current homeowner’s policy.”

“Please take the attached certificate listing the strata’s

deductible to your insurance broker and have them review your insurance

policy so that you can ensure your policy gives you enough protection.

Please do so immediately, as these changes are effective February 1,

2020.”

That came on February 3, 2020.

Our property management company scrambled at the last minute to

renew our building insurance. They got it, but then all the owners had

to rush out and top up their insurance. I had to change brokers because

of it. I had the same broker since the first time I moved out of my

house. I’m not going to tell you how long that was. I mean my family

house. I was underinsured for a bit but then was fortunate to get the

$100,000 deductible from another agent.

Plus, four years ago my strata insurance was $412. This year it’s

$1,395. That’s a $983 difference, 240 percent in four years. That’s a

mortgage payment in many, many cases.

Plus, I live in a row townhouse. There is no one above me and no

one below me. Why is my insurance clumped into the same category as a

highrise, with condos that are all on top of each other? My building is

not old, and it’s not new. It’s just 12 years old, and I believe it has

been in good maintenance. If I could afford it, I’d probably move out of

a strata, if I could [audio interrupted] a bigger mortgage for a

house.

Out-of-control strata insurance fees will disincentivize anyone

from downsizing into a strata, which will not help the housing market

for those families who want to move into the houses that no one wants to

move out of. It won’t help housing affordability. People will need

bigger mortgages to pay for housing, versus the strata, because they

will now be afraid of buying into a strata. Now the stratas are not

necessarily more affordable. Maybe this will just keep people renting,

if they want to buy.

I am very, very concerned. Townhouses and row townhouses like mine

are all included in this, just like the same. Townhouses are essentially

an attached house. Many younger couples and downsizers rely on these

types of houses in their transition to a bigger house or downsizing

after the kids move out. In my complex, that’s exactly what we have. We

have downsizers, and we have people that are young couples starting

out.

That’s how the housing market goes. You move up or you move down,

depending on your needs. But with these strata insurance premiums that

are so high, this is going to put a blockage on people either not

getting into the market or not wanting to move on or into a house or

back into a strata from a house.

This strata insurance crisis is clearly not isolated to certain

types of housing or geography. I’m in North Vancouver. Other people on

the strata town hall that I attended were from all over B.C.

[3:00 p.m.]

The point is that the insurance companies are the responsibility

of the provincial government. What could they do to help strata owners?

The B.C. Liberal caucus has some ideas that they presented to

government, but Bill 14 is the government’s response.

We have watched, over the past few months, as strata insurance

premiums and deductibles have skyrocketed across the province, leaving

so many condo and townhome owners facing monthly fee increases of

sometimes multiple hundreds of dollars every month. On this side of the

House, we’ve been working hard to convince government to address the

situation.

As the member for Kamloops–South Thompson said earlier, we first

heard of this issue over a year ago. We introduced a private member’s

bill back in February that would have taken the steps to mitigate the

growing problem. The NDP refused to bring it to debate. We sent a letter

to the Premier with numerous commonsense ideas that could be quickly

implemented to provide relief. We got no reply. We even held a strata

town hall, where we heard directly from strata residents, like me, at

the centre of this crisis. The Minister of Housing would give no

assurances to those who asked for action. My colleagues have listed

many, many people’s situations in these debates that we’ve heard this

afternoon.

The Minister of Housing introduced this bill with great fanfare,

claiming that this was going to make life better for those struggling

with strata insurance. But is this bill actually going to make a

difference for more than one million British Columbians living in condos

and townhomes? I don’t think so. This bill will not address the major

problems that we are currently facing now. It’s a dismal disappointment

to those struggling with these rising strata insurance fees.

First and foremost, the legislation that the government has come

up with provides no financial relief for those who desperately need it.

There are no measures to keep money in the pockets of strata owners.

There is no water damage prevention program to assist strata owners with

costly upgrades — upgrades that they will need in the long run to,

hopefully, save money on future fees.

Instead of implementing real solutions and relief measures, they

have taken what they [inaudible recording] first steps. That won’t make

much difference to the current situation. These steps include requiring

stratas to inform owners immediately regarding material changes to their

insurance coverage and enabling government to prescribe a cap on an

individual owner’s liability for an insurance deductible if the claim

originated in their unit but was not out of negligence.

While these kinds of changes are needed as a piece of the wider

problem, they do not properly address the situation in the short and

medium term. It demonstrates that this government has been not listening

to British Columbians for a year. They need help now. They need to see

this House take steps that will make their lives easier right away — not

measures that will only start making a difference long after they

possibly have had to lose their homes.

Another change of note is

section 4 of this legislation, which

removes the ability to defer a depreciation report. The NDP are claiming

that the ability to defer depreciation reports is a loophole, in their

quest to avoid accountability for their lack of action on the crisis.

However, they have simply moved the ability to defer depreciation

reports into the regulations. It’s still there, in

section 12(a).

Further delaying action, the government has also said that they are

going to be launching further consultations on the proposed changes in

the legislation before us today — more consultation.

We heard from other members about the June 29 virtual round table

on strata crisis. We heard from people from Richmond, from Penticton,

from Williams Lake, from Coquitlam and from Ladner. But still they’ve

not come up with anything that provides financial relief for any of the

people that spoke of this on that strata round table — nothing to keep

money in the pockets of strata owners and no water damage prevention

program to assist strata owners with costly repairs. We offered ideas to

keep money in the pockets of strata owners, like a temporary tax holiday

on the insurance premium tax, an extension of the property tax deferment

program, on a temporary basis.

Not only has the NDP wasted months before taking action, they’re

apparently going to launch further consultations. Most of the changes in

this bill are by regulation and won’t be able to deliver immediate

relief. People don’t have the luxury of time.

[3:05 p.m.]

What did we suggest? Well, we introduced a private member’s

legislation, the Strata Property Amendment Act, 2020. We called on

government to implement the water damage prevention program. We wrote to

the Premier, seeking further action on the strata crisis, to implement

the temporary tax holiday on the 4.4 percent insurance premium tax

applicable on strata properties, to leave these dollars in the pockets

of strata owners. Yes, the government is making money on all of

this.

Extend, on a temporary basis, the property tax deferment program

to enable strata owners who have faced extraordinary additional expenses

related to soaring strata insurance costs to defer a portion of their

property taxes.

And to implement changes to the Strata Property Act and

regulations that ensure that annual contributions are made to the strata

corporation’s consolidated revenue fund at levels acceptable,

considering the building’s age, claims history and other unique

circumstances.

To require strata corporations to have a depreciation report

detailing necessary maintenance every year, and require a strata

corporation to inform owners and tenants of any material change in

insurance coverage, including an increase in any deductible, as soon as

possible.

Review the B.C. building code, and implement new requirements

focused on the prevention and severity of water damage

events.

There are other solutions that my colleagues have described, which

I will not go over now. The members for Kamloops–South Thompson,

Abbotsford West and Coquitlam–Burke Mountain had some great suggestions.

But suffice it to say, I, like my neighbours and the hundreds of

thousands of families who live in strata properties, see no help for

them.

As my colleague mentioned earlier, this is bad enough to happen

during a housing affordability crisis, particularly when this government

had promised to fix the affordability crisis in their campaign. But this

is during COVID. This is the worst impact on our economy and jobs since

the war.

We have seen with previous measures that this government has

presented promises that were simply empty — empty promises. How can this

government profess to care about housing affordability and at the same

time ignore this strata insurance crisis?

I am disappointed. We are all disappointed.

J. Sims: It’s a pleasure for me to rise today. Well, actually, I’m going to

sit and speak on the legislation before the House, which is the

Municipal Affairs and Housing Statutes Amendment Act.

You know, I’ve been listening to the debate a fair bit today, and

there are a couple of comments that I do want to make before I get into

my speech.

One of those is to do a huge shout-out to the people in

Surrey-Panorama here who have been doing an amazing job, just as the

rest of British Columbians have been, at social distancing and making

sure that during this time they are taking the proper precautions. It’s

because of them that we have the kind of moving into phase 3 that we

have been able to do and to get the economy going again.

I also want to do a special shout-out to my staff, both here at

the riding, in my constituency, as well as at the Legislature — staff

for all of us who help to support us in the work we do.

But today we’re talking about a very important issue that impacts

so many people in British Columbia, and that is strata insurance.

Listening to my colleagues, you would have thought that this just

happened out of the blue and that there wasn’t a long-term coming of

this day, so to speak.

For the strata owners — and I’ve talked to many of them who live

in my riding, both in townhouses and in condos — this is a huge

challenge. For some of them, they’re finding it difficult to buy

insurance, because they can’t find a provider. And for others, the costs

have gone up so, so much that it’s hurting them.

When I talk to them, they realize that this is not a simple issue.

They know that they’re facing challenges, but they tell me over and over

again that this is a complex issue. They also know that this is one of

the failures of the sort of private market approach.

[3:10 p.m.]

One thing we have to know is that government does not set

insurance rates for private insurance, which is what this is. This is

not ICBC, which is a regulated agency that provides insurance. This is

free enterprise. Nor do we have regulations in place at this time that

would get the government to determine the pricing for that

insurance.

There are some heartbreaking stories, and we’ve been hearing many

of them. But really, what is the solution? Yes, we could sit here and do

what my colleagues have been doing, which is just throw darts and

arrows, or we could say: “What is the real underlying issue here, and

how do we get to finding solutions that will be there long term for the

strata owners, for the managers who manage these stratas and for the

insurance companies as well?”

Because it is a private insurance issue, it is very, very complex.

I think everybody involved knows that this is a very complex issue. As a

matter of fact, even my colleagues in the opposition know that this is a

very, very complex issue. For those who either have had their insurance

denied or are finding that their insurance has gone way up, to know it’s

a complex issue is not enough. But because it is a complex issue, we

really do need to have a multifaceted approach.

This is where I am so proud of the work that has been done by the

Minister of Municipal Affairs and Housing. She has demonstrated how our

government works in collaboration. It’s not about flying in to fix

something that is out of our jurisdiction or our control at this moment,

but looking to see what are the different components, what are the real

causes behind the insurance having gone up so much and then making sure

that there are levers in place to ensure that we can stabilize this

industry and thus make sure that those who need insurance get insurance

and that the costs are not as outrageous as they are.

Now, my colleague from Kamloops–South Thompson has said it himself

on CKNW, and I actually went back and heard that clip, as well, where he

said there is no silver bullet. And yet, speaker after speaker that has

come on today from the opposition would imply that they have the silver

bullet.

Let me assure you that we agree. We agree with the Member for

Kamloops–South Thompson when he says there is no silver bullet, and so

do those representing the strata owners and the insurance industry. They

also agree with him that there is no silver bullet and that this has to

be a collaborative approach, and it has to be done in stages, which is

what the minister is doing.

Plus, this is not an issue that developed overnight. Often when I

listen to my colleagues from across the way and we’re talking about

challenges that British Columbians are facing, they speak as if for 16

long years they had nothing to do with the situations that have arisen

that they want a magical fix for. I know you’re going to be saying that

you were here, or that we’ve been in government for three years. Yes, we

have, and we’re proud of the work we’ve done so far. We have lots more

to do. But let me tell you: the damage that was done in a lot of

different areas…. It’s not an overnight fix. That’s what we’re trying to

do right now.

It also is a failure of an unregulated private market insurance

system. I know my colleagues across the way absolutely believe in the

free market. Yet, it’s strange, because they haven’t quite used the

words that we need public insurance for homeowners and for stratas, but

I would say that the message behind what they’re saying is almost that.

The B.C. Liberals, you know — and this is not news to any of my

colleagues across there — have always been, I would say, the

cheerleaders at the altar, so to speak, of the private

market.

[3:15 p.m.]

They’ve been calling for private insurance every time ICBC comes

up. We know that’s the dumpster fire they’ve created, and it’s a

dumpster fire that…. I’m very proud of the work that the Attorney

General is doing to try to get control over ICBC. Once again, we’ve seen

some significant changes, and we’re going to be seeing some more to make

auto insurance competitive and affordable. We can do that because it is

under our publicly regulated business. But even there, my colleagues

across the way, when they were government, were real cheerleaders for

private insurance, and here we have a private insurance system that has

led to strata owners being in the bind they are in.

So what is the solution? What is the solution the worshippers of

free enterprise are throwing out from across the way? They’re saying:

“Go in there, and do this, do this, and do that.” But what about looking

at the whole picture? As I said, this is very, very complex, and this is

a failure. That’s why this bill, in its complexity, challenging the very

complex problems we’re having, is there. It is there to make sure that

we are looking at making sure that the levers are in place for all who

are involved so that we can get a long-term fix.

Now, it’s very easy, when you’re in opposition, to try to score

points, to say, “Look at this government. They are not doing anything,”

and then forget there were actions that the opposition did when they

were in government that have led to some of this.

Let me tell you that even when we sat down with the different

partner groups…. I’m proud of the fact that we are a collaborative

government. We are not pretending that we have the solutions for

everything. We consult experts, we use data, we use science, and we use

people’s lived experiences to come up with solutions and to find a way

forward from people who know those sectors well. They will tell you that

there are no simple solutions.

We are committed, and our commitment is very, very strong — a very

hard-working minister. I know she has been on this night and day, so to

speak, with her very complex file but giving this a priority, because we

know that there are British Columbians who are hurting, through no fault

of their own.

There is a system that was in place that has gone awry, and it

needs to be brought back into some kind of a control, so to speak. We

have to find a solution. We have to find a solution because people are

hurting, and when people are hurting, that’s when it’s the role of

government to see how they can assist them.

Assisting them doesn’t mean coming up with these and just throwing

out ideas. It actually means finding solutions for the long term and for

the short term that will work for everyone. This legislation, and we

admit it, is the first step. We’re not going to stop trying to fix the

failure that the private insurance system has created.

It has created a problem. It is more acute here in British

Columbia, though I have to be honest — and I think my colleagues across

the way know this as well — that this is an issue right across the

country. It is compounded here because of the actions of the previous

government, with some relaxation of the rules and regulations they did

when they were government. As a result, we find ourselves with a double

whammy here, and it is hurting British Columbians.

Now, some of these issues could have been addressed by my

colleagues while they were in government. But instead, while they were

government, they made things worse. When in government, the B.C.

Liberals created a loophole that allowed strata boards to put off

regular maintenance. We’re not making this up. The source for this is

the Insurance Bureau of Canada presentation which I heard and received

in May of 2020 through Zoom.

[3:20 p.m.]

They also, the Liberals, killed the loan program that used to help

owners to fix their leaky condos. Two big actions by the previous

government that created some of the problems that have led to the

insurance situations we are facing today. They also allowed brokers —

and this is really important — to hide their commissions from condo

owners and enabled building managers to receive kickbacks for referring

clients to insurance providers.

If you’re going to criticize and ask the government to take

action, part of it should be to take responsibility that you played a

role in insurance being the way it is today in British Columbia. That’s

the double whammy I am talking about. You created this. Now you’re

saying we created this, but you’ll fix it overnight.

As my colleague across the way, once again, the member for

Kamloops–South Thompson, said…. I don’t often agree with him on many

things, but on this issue, I do agree with him. When he goes on CKNW and

says, “There is no magic bullet,” I agree on this issue.

We do have validators, people who have spoken up and are enjoying

the collaboration. You know what I find? Maybe this is part of my

teaching background as well. I find that people, when they are facing

problems and challenges, do want to be involved when we look for

solutions. Often the solutions lie with them because they have the

expertise in that area.

Listen to this one. This is from Chuck Byrne. He’s the executive

director of the Insurance Brokers Association of B.C. This is important

for me. As we all know, when we build a house, a foundation is very

important, just as when we learn something, learning the basics is very

important. What he says is that the government’s changes “will be

critical foundation pieces.”

That’s what this legislation is about. It’s the first step. It has

taken time because we have collaborated. It’s going to lay down a

foundation so we can address these very serious issues.

He goes on to say, on June 23: “These are the first steps

necessary to stabilize the strata insurance market in the

province.”

That’s not government MLAs or ministers saying that. Those are the

experts who are saying that. Yes, we need the foundational pieces. We

need the regulatory legislation in place so we can begin to stabilize

the strata insurance market in this province.

I also have a quote here from Tony, who’s the executive director

of the Condominium Home Owners Association of B.C. He is a spokesperson

and a representative for the Condominium Home Owners Association. What

he says is that transparency around reporting…. As I said previously,

the Liberals were able to build in all kinds of loopholes and to take

away reporting and requirements, but the transparency around reporting,

commissions, disclosure and the changes to enhance owner

responsibilities in strata corporations will all contribute to an

improving insurance market which will benefit strata owners.

He also goes on to say that it’s a great start. We admit it’s a

start. The minister says this is a beginning. This is the foundational

piece. It’s difficult to build a house without a foundation. That’s why

the foundational work has to be done first instead of sitting in the

opposition and throwing darts and arrows.

He goes on to say, and uses very strong language, which I want to

share with you: “I definitely want to resound a high level of support to

the government for introducing these amendments. The initiatives that

they have taken in this bill are going to have a positive effect for

consumers.”

[3:25 p.m.]

You can see that those are very strong words from an industry that

is struggling right now, both the owners, the stratas, as well as the

insurance companies who are looking at how we do this.

It was a bit rich, hearing my colleague from North Van talking

about the housing affordability crisis. I kept thinking…. I ran on that

issue as well as on getting a hospital here for Surrey. Affordable

housing? Yes. I’m proud of the work we’re doing in the area of

affordable housing with our 30-point plan and billions of dollars

invested to build more affordable housing, to build more rental units

and to get people off the streets and into housing.

There is no way I’m going to take any lectures from the opposition

on housing affordability when they did nothing. As a matter of fact,

they helped to encourage, through their lack of action, the housing

market getting out of control. Now professionals like our teachers, our

police officers, our nurses…. So many people that could once afford to

buy a house now do not qualify for a mortgage to buy a house.

Those are the kinds of challenges — the out-of-control housing

market — that were allowed to occur under the previous government. So it

is a bit rich now when they’re talking about housing affordability, as

if it’s something that they have invented.

I do want to now take a minute to say…. I’ve talked about it being

a complex issue. The B.C. Financial Services Authority has been very,

very clear too. There is no quick fix. What they have said is that we

all have a role to play. We all have a role to play.

We are willing — I think that’s what differentiates us on this

side of the House from the other side of the House — to sit with people.

We are willing to sit with those who are the experts, who have the

information, and together, collaboratively, find a way forward. That’s

who we are. We’re willing to do that because we know how important it is

to bring balance to the market — to bring balance to the market — and,

once again, no quick fixes.

We have to recognize there are dynamics driving these increases.

There are dynamics driving these increases, and they have been

compounded for years and years and years. This did not happen over the

last 12 months or the last 24 months or the last 36 months. This has

been going on for years. They are playing out in the private insurance

industry.

Government does not set insurance rates nor does government

regulate the pricing. That’s why this legislation is to give some levers

so that we can begin to look at some regulations around insurance and

the industry. This legislation will give more transparency, and

transparency is a good thing. It’s a good thing.

I can tell you that I was kind of taken aback when I heard about

some of the loopholes and some of the things that were happening. We

want to make sure that the strata insurance market and the strata

councils and owners have levers in order to be able to cope with the

current situation.

As the minister often says — and a very hard-working minister at

that — this is just the first step. This is the beginning of trying to

tackle a very complex problem for which there is no simple pill. In

Punjabi, there is a saying, miṭhī

gōlī , a sweet pill to fix everything.

There is no sweet pill that is going to fix and cure everything in this.

This is going to take hard work from everyone involved, and we're

committed to doing it.

The minister is going to continue to work with homeowners, with

the strata stakeholders, like the Condominium Home Owners Association,

and with the insurance industry. Every one of them has a role to play to

help us to find solutions. We are committed to finding those

solutions.

[3:30 p.m.]

Let me say that my heart breaks. My heart breaks for those

seniors. My heart breaks for the young couples and families, young

families, who are facing huge, huge increases in their insurance rates.

We have heard 40 percent across the board. But I, myself, have heard of

some who are facing much higher rates than that. It is a huge challenge

for them, and I know that they are struggling. I want them to know that

their government is working with all concerned to help find solutions

that will be a fix for the long term.

[R. Chouhan in the chair.]

B. Stewart: It’s a pleasure and an honour to stand today before you and the

public in regards to Bill 14. Having listened to some of the speakers

that preceded me, I think it’s clear that everybody recognizes that

there is an acute problem that came as a result of no necessarily

wrongdoing by former governments or people individually. I think what

we’ve been talking about is trying to find a solution here that will

lead to the issue about the economic pressures that are faced by strata

owners throughout British Columbia.

I think one of the things that was highlighted in June when the

B.C. Financial Services Authority concluded that “the strata insurance

market in B.C. is ‘unhealthy’” and not fulfilling the needs of British

Columbians…. It further stated that the strata insurance market fails to

meet the goals of sustainability, accountability and

availability.

We can sit here and not talk about solutions. I know that the

minister talks about the fact that this bill is a starting point, in

terms of the solutions. But there are a lot of things that the

government has taken on and a lot of promises. The thing about it is

issues. Let’s take affordable housing for a moment and talk about the

fact of the promise of 114,000 new affordable housing units. The

government has actually only delivered 2,400 of those. I don’t think

that that is quite what the intention was when that promise was

made.

I think that more importantly, when we talk about solutions, we

know that affordability is not government holding everybody’s hand and

carrying them along to a place where they’re giving them a house. The

bottom line that we’re faced with is we have undue delays and costs and

regulations that are causing difficulty and increased cost to

homeowners.

We’re talking today about the strata amendment act. Bill 14 refers

to the fact that we do have an affordability issue, and one of the ways

that we’ve been trying to resolve that is by being able to develop

cities that are more compact. We talk about the fact that they have

livability and all these things. But we won’t get it right if we

continue to suggest that the problem is with what we did as a government

and what you’re doing as a government. We need to come together and find

solutions. There are all sorts of reasons that we need to find solutions

to this.

Now, the member previously misspoke. The member for

Surrey-Panorama declared the fact that the leaky-condo crisis was

something of this previous government. That’s categorically incorrect.

It was started back in the late ’80s. It went on through the ’90s, when

their party was the government. In 2003, we came in and created the B.C.

Homeowners Protection Office, with interest-free loans. That’s how we

came to a solution. It’s a building code deficiency that was adopted in

an effort to build more affordable housing.

The situation is that Tony Gioventu, who is with the Condominium

Home Owners Association of B.C., stated categorically that British

Columbia’s problem with leaky condos was solved in a big part by the

former Minister of Housing and the creation of this particular office. I

think that the fact that…. We provided interest-free loans for nine

years, and those loans were to help people be able to afford the ability

to be able to repair condominiums. Some of the bills were staggering. It

was $5 billion in terms of repairs.

[3:35 p.m.]

We’re not talking about a repair job today, but the member for

Kamloops–South Thompson talked very clearly about the fact that one of

the issues that was identified by the Financial Services Authority in

its review is that there is an ongoing issue about water claims and the

damage. Having been a condominium owner myself, I know that there is a

hesitancy by the strata corporations to increase costs or dealing with —

whether it’s maintenance or deferrals — things like that.

I think that the situation is that this bill does attempt to

address some of those things. But I think that one of the things that

homeowners and stratas expect is…. They’re expecting relief from

skyrocketing strata fees. I’m going to talk about just a couple in my

riding. Somebody that is in jeopardy of losing their condominium and the

other people that are facing increases that, staggeringly, are up…. And

I’ll tell you the numbers in a minute here.

I think that we are not looking for more consultations. That’s

what the minister has kind of suggested that we’re…. This is a first

step. We’ve got to come to solutions. We have to take bold steps. We

cannot be sitting on the fence on this stuff. We’ve known about this

problem since last fall. It is not new news. We brought it up. It’s been

brought up in question period. The member for Kamloops–South Thompson

introduced private member’s bill M202, which was an attempt to get us

doing and moving towards the solutions.

How many more crises does British Columbia need before this

government will realize that consultations alone cannot solve the

problem? We need immediate action, in particular, as this crisis is

unfortunately disproportionately affecting seniors and people on fixed

incomes. And that is a platform of the government today. I know that

they said that in 2017 — that they were going to make certain that

affordability was protected.

What we have here today is a crisis. Not only the pandemic, but we

have the other crisis with these people, depending on where their

income’s coming from. But the fact that they’re either on fixed income

or low income…. They can’t afford these strata increases because of the

fact that their insurance premiums have gone up. It’s really beyond

offensive.

This is not how we should be treating seniors and peoples on fixed

income. We have been actively working to address the strata crisis for

months, from introducing the legislation I spoke of, to writing the

Premier to propose solutions for relief. You also heard that we held a

town hall with many different strata corporations and people that manage

these buildings to try to see what their ideas are. It isn’t always

about putting money. But there are some simple things that are being

proposed by ourselves.

I want to just read that letter that is from strata corporation

KAS 3058, commonly known in my community as the Cove. It outlines, in a

letter of May 28, 2020, to the owners, that they had budgeted in their

budget for this coming fiscal year a premium of about $368,000. If you

can believe this, the premium came in at a staggering $530,195 — a 44

percent increase. I guess the only thing that’s consistent about that is

that that’s consistent with the report by the B.C. Financial Services

Authority that outlined that.

I think that the other thing that is more offensive in that is

that the deductibles have increased to the point that it will be

impossible to even make a claim against the insurance company, unless we

have a major disaster. So we’ve got the premiums going up, the

deductibles going up. You’ve heard all of that. But I think that there’s

another requirement that each strata owner will have to have their own

$100,000 strata deductible policy, because the deductibles have gone so

high.

I think that that is very disheartening, when it comes to the

people that have invested in property that they either live in or they

hope to come to the Okanagan and spend some of the beautiful Okanagan

sunshine by vacationing in a home.

I want to read a letter from a lady that is a hardworking woman

who lives paycheque to paycheque just to pay for her basic living

expenses. She’s worked hard her entire life so that she was able to

purchase a home of her own. She says, in her letter to me dated July

13:

[3:40 p.m.]

“I’ve recently received a letter from the strata council in my

building outlining the new cost of our building insurance. Our insurance

is going from $77,000 last year to $310,000. That’s a 300 percent

increase. What happened? They didn’t have a claim.

“This is simply extortion from the insurance companies and

absolutely unacceptable. I’m a single, hard-working woman who lives

paycheque to paycheque just to pay for the basic living expenses. I

cannot afford the additional costs which will be added to my monthly

strata fees to cover the strata increase.

“I have worked hard my entire adult life, and because of this, I was

able to purchase a home of my own, an accomplishment I’m proud of.

However, I deeply fear I will have to sell my beautiful house because I

can no longer afford this ridiculous increase being forced on me. The

provincial government must step in and put a stop to this.

“Regards, Karin Shelton.”

Those are two of several, and I know that there are many others

that we have in our office. There are examples of many angry letters, as

I mentioned, in my constit office, received from multiple stratas, which

we have a lot of in Kelowna, and a growing number. I know that there are

many other parts of the province that have a much greater propensity to

having that. More than one million people across B.C. are at risk of

losing their homes or are in desperate need of relief.

Now, we’ve made suggestions. They’re modest, but the suggestions

that the member for Abbotsford South suggested was: what was the

catalyst for creating the credit union movement in British Columbia? It

was people that wanted to grow and expand their farming operations, and

the banks….

Having been a banker back in the ’70s, I know exactly how bankers

sometimes think, whether it’s crisis or whether they just don’t lend to

those people. I had the same challenge in starting my own business. The

banks were not there to help me. I ended up having to get the Farm

Credit Corp. to help out to start my business.

What we’re suggesting is a solution that could be at least looked

at, something like that, where the credit union movement, which is

British Columbia–based, could possibly be that opportunity. We also

suggested….

You know, today in the Finance Minister’s financial update, she

talked about some of the hits that the government is taking on deferred

or delayed taxation. There’s a 4.4 percent tax by the provincial

government on every insurance premium paid. This, I think, is modest,

but I still think that these are the types of things that the government

has within and been able to amend and put into this bill just to give

some relief, or have the Finance Minister do it.

So 2020 budget documents revealed that part of the NDP’s surplus

was propped up by millions of dollars in these insurance premium taxes.

As a result of the tax hike, the government stands to collect, actually,

a revenue windfall. I know that that’s not the story that we were

presented with today. But I think it’s outrageous that the NDP

government would benefit from this crisis that’s affecting millions of

British Columbians and won’t commit to helping them.

Many residents in Kelowna are deeply troubled by this government’s

half-baked speculation tax. You know that I’ve spoken on that many

times. It’s a tax that hurts affordability. It reduces supply, and it’s

a tax that saw housing starts go down, not up. The government has been

driving people out of their homes with one bad decision after

another.

They destroy seniors’ dreams of a retirement home in my beautiful

riding with their speculation tax. And now once again seniors are put

out of their condos and townhomes. What have our seniors done to deserve

this? The legislation in front of us today won’t provide any financial

relief to the people to keep a roof over their heads.

Neither did they take the suggestions of a water damage prevention

program to help strata owners invest in preventative maintenance via

necessary upgrades, a little bit like what we did when we had the

leaky-condo crisis. We provided loans to condominium homeowners to be

able to upgrade and fix these things. I think that that may be

appropriate, in light of the crisis that these people are facing. It’s

clear that the NDP have no idea how to make life more affordable but are

in fact making life more expensive.

[3:45 p.m.]

There are a couple of things that were mentioned in the report

from the B.C. Financial Services Authority. We’ve recommended changes to

the Strata Property Act, regulations that would ensure annual

contributions are made to the strata corporation’s consolidated revenue

fund at levels acceptable considering the building’s age, claims history

and other unique circumstances, that require corporations to have a

depreciation report detailing maintenance every year and that require a

strata corporation to inform owners and tenants of any material change

in insurance coverage, including an increase in deductible, as soon as

it is feasible. It only makes sense.

I mean, if you have a business and you’re a landlord, you have

scheduled maintenance. You know that your elevators will wear out, not

in the first ten years, not even maybe the first 20, but you do have to

budget for those types of things. You have to take into account the fact

that there are significant costs that do reoccur. The roof has to be

replaced and things like that.

I think that it’s important that some of these changes that we

talked about, such as mandatory education and training for the strata

council members, with particular emphasis on risk mitigation…. Too many

of the strata corporations see building maintenance as something that

can be deferred and deferred and deferred. They can’t think like that.

They need to take decisive action and make certain that they’re doing

the right things. Review the B.C. building code and implement new

requirements focused on the prevention and severity of water damage

events.

The B.C. Financial Services Authority also talked about the fact

that these insurance premiums, the increases that we’ve seen in Metro

Vancouver, at over 50 percent, and around the province at around 40

percent…. This number is likely much higher in some typical highrise

condo units. This is because the survey covered all strata units, not

just highrises but also low-risk bare land stratas and quadplexes. They

said 46 percent of the policies surveyed saw a premium increase of

greater than 30 percent. The report also says there’s no sign of relief

in sight.

What does that mean? It means that these people, if they raid

their deferral account or they do something that is not sustainable, are

going to end up losing their homes. That is not the way to get to

affordability.

It’s incumbent on the government, the minister, to act and to act

now. British Columbians are not getting ahead under this government.

This bill is doing nothing, but it’s a piece of empty

legislation.

L. Throness: It’s a pleasure to rise today to speak to Bill 14, which is the

Municipal Affairs and Housing Statutes Amendment Act. I’ve been

listening to the eloquence of my colleagues on our side of the House,

and it seems to me that we have the ideas and the capacity to fix this

crippling insurance problem. I don’t think that capacity exists on the

other side of the House, but Bill 14 is the government’s

answer.

I wanted to find out just how bad the situation was in my riding,

so we drove around and catalogued the strata units in my riding. There

are about 8,100 strata units in my riding. If an average of two people

live in each one, that means that about 40 percent of my voters live in

a strata unit. The impact on them will be huge.

Many of these condos are retirement suites, where seniors live on

fixed incomes. The impact on them, of course, is going to be

disproportionate, because they can’t protect themselves. They can’t

increase their earnings. They’re not in the labour force anymore. Nor

can they do anything to lower these costs. They are stuck.

I’m really quite astonished that the NDP has come forward with a

tepid bill as they have, and why so few NDP MLAs are speaking to this.

In the Lower Mainland, where these strata corporations are concentrated,

many of them are in NDP ridings. I’m surprised that so few NDP MLAs are

rising up to speak on behalf of their own constituents.

In one strata corporation in my riding in Harrison Hot Springs,

the annual premium will jump this year from $57,000 five times, to

$277,000. That’s in one year. It’s going to cost every resident $3,000

more per year. That’s just the premium.

The insurance deductible also jumped. In many cases, the

deductible is increasing to $100,000 per year or more. So if your toilet

breaks while you’re gone and it floods out your place and your

neighbour’s place as well, you could be left with any repair bill under

$100,000, which, of course, would be a financial disaster for any condo

owner.

[3:50 p.m.]

By degrees, we are moving toward de-insurance. We are moving

toward no insurance at all in effective terms, which really calls into

question the viability of strata corporations — period. Would you buy a

condo if you couldn’t effectively insure it except for more than

$100,000?

The amounts of money also spent on premiums are really enormous,

if you think that the average condo fee in Chilliwack is about $350 a

month. About 30 percent of that goes to pay insurance costs, as it does

in the strata corporation that I live in. Altogether, in my riding

alone, about $10 million a year is spent on insurance premiums. That

could double this year, in my riding only, at the very least.

If you extrapolate these assumptions to all 35,000 strata

corporations — 700,000 units, perhaps 900,000 units in B.C. — we’re

looking at well over $300 million a year that is being spent, and now

doubled, every year.

We’ve made a number of suggestions. We tabled a private member’s

bill. That was the member for Kamloops–South Thompson. We asked for a

water damage prevention program. We asked for a holiday on the insurance

premium tax. The government ignored all of it, when the government

should be prioritizing this issue. It should be seeking everywhere for

solutions, quickly, to this huge problem.

Let’s talk for a moment about the failure of the market. Some

large insurers have decided to leave the field of condo insurance

entirely, not to offer it at all. That leaves owners — and, ultimately,

renters, as costs are eventually passed on to them — at the mercy of

just a few insurance companies who now have free rein to charge whatever

they want to well over a million British Columbians.

They’re fleecing our people. Let’s face it. Their rate increases

are unconscionable. For the government not to be doing anything

substantive in the protection of these homeowners and renters is just as

unconscionable.

The few companies that remain in the business have decided to

insure less than they have before. They do this, as I said, by raising

deductibles, sometimes by multiple amounts, so that owners are

responsible for more of their own costs when disaster strikes. Then the

companies charge much more for what little insurance they do

provide.

Costs are going through the roof in these two different ways. It’s

a double whammy on homeowners and renters. Part of this is the fact that

there are huge global companies, like Lloyd’s of London that insure

around the world. There have been disasters around the world that we may

be paying for here in B.C., though they happened in some distant

country, as insurance companies try to recover from us what they can’t

recover from owners in those far countries.

People are going to suffer financial hardship over this. Some

people will actually have to walk away from their investment simply

because they won’t be able to pay their strata fees. That is a tragedy,

and it is a new housing crisis.

The NDP came into government with a pledge to lower the cost of

living and, in particular, housing costs for British Columbians. Since

they came to power, the NDP have raised taxes in general. We’re paying

more for everything from carbon taxes to ICBC premiums.

The insurance crisis will make housing and the cost of living even

less affordable. It’s also going to reduce housing prices and reduce the

equity of homeowners who need to sell. Their new elevated condo fees,

which in some cases will double every month, will have to be factored

into the selling prices, as buyers contemplate paying these new higher

fees.

Most condo owners won’t have to leave their condos. They’re just

going to have to dig deeper in their pockets and forgo all sorts of

other things, not just luxury items but basic things, in order to spend

that money on insurance. I do not call that making life more affordable.

This is a huge hit to affordability in B.C.

Let’s talk about what Bill 14 does. This matter really came to my

attention on February 7, when a strata owner came to me to inform me

about the gathering storm here, but the government knew this a year ago.

The NDP have had at least a year to tackle this problem. This spring

we’ve been bringing it up constantly in question period, and all we have

before us today is a pitifully weak response, which is Bill

I can’t help but think that this has something to do with the NDP

antipathy toward homeowners, which we’ve already seen in the speculation

tax and in other ways. They seem to think that every homeowner is rich.

So it’s okay to let them twist in the wind; they are those bad

capitalists.

These are not rich homeowners. They’re responsible. Yes, they’ve

scrimped and they’ve saved for years to put down a down payment and make

regular payments. But in most cases, they don’t own their land. Condos

are smaller in space. Often seniors live in them. They are a homeowner

of lower financial capacity, and they’re going to experience real

hardship. And in the midst of this disaster, the government comes back

with a tepid, half-hearted bill.

[3:55 p.m.]

What does the bill do? There are 16 sections in this pathetic

response to a major financial shock. There are only minor changes in the

bill that tinker around the margins of the issue. It provides no

immediate relief nor does it give owners any hope of relief in the

future. There are no real answers to solve the problem of market failure

that we see here.

For example, the bill requires more transparency: a strata

corporation will have to include a

summary of the strata corporation’s

insurance coverage in an information certificate. Well, great. But big

deal.

It will require that owners and tenants are informed of material

changes in insurance coverage, including when an insurer decides not to

renew a policy. I don’t oppose this, but it really skirts around the

issue.

The bill gives power to make regulations regarding depreciation

reports and makes it easier to vote for repairs by changing the voting

threshold for repairs from 75 percent to a simple majority. Making

repairs easier to approve is perfectly fine, but it’s fine window

dressing. There are many brand-new strata corporations that do not need

repairs which are caught up in this mess of escalating insurance

costs.

The bill gives the government power to make regulations describing

when a strata corporation’s insurance doesn’t have to be full

replacement value. I question this one, if it could leave owners high

and dry in the event of a major disaster. Now, as my colleagues have

pointed out, this might be a viable idea if it were well defined. We

want to avoid the occasion when someone might be surprised when there’s

a fire in their condo and insurance doesn’t replace it all. So we want

to watch for that, but it’s something we want to discuss.

The bill also prohibits the payment of referral fees in the sale

of insurance. That’s fine. When well over a million people are

confronted with costs that will change their lives — that even threatens

some with the loss of their homes and puts them on the street — this

government stonewalls in question period, repeats the mantra that

they’re studying the problem, there are no quick fixes, it’s happening

across the country, it’s somebody else’s fault, and so on. These are all

sorry excuses.

I think that if the government knew what to do, we would have seen

a concrete, viable answer in this bill, in Bill 14. I think the reason

that we don’t see an answer in this bill is because the government

simply has no idea what to do.

The bill does not attack the problem at its root. At its root, the

problem is one of market failure that the government has the power to

address but is unable or unwilling or simply unaware of what to

do.

So let’s talk for a moment about market failure. I have spoken to

a couple of insurance brokers in my city. They’ve explained that as a

strata building ages, more repairs need to be done. But raising strata

fees is unpopular, so some corporations don’t like to raise fees or

require repairs. Sometimes elected strata councils are made up of

homeowners who mean well, and they’re good people, but they don’t have a

background in property management and they’re not aware of what needs to

be done. Condo owners don’t like to raise fees because it makes it

harder to sell their place.

But as buildings age, things start to go wrong, particularly in

condos with multiple stories. When a water leak or a fire occurs in an

upper floor, the water will leak down and cause damage in every suite

along the way. If preventative maintenance work like replacing hoses or

installing water leak sensors is left undone, the costs are then thrown

onto the insurer. This is a significant issue — 56 percent of total

claims in 2018 were for water damage. That’s not fair to the

insurer.

Insurers were rightly sick of bearing costs that should have been

borne by strata corporations and their owners, addressing normal wear

and tear through preventative maintenance. These costs were rising as

the building stock in the Lower Mainland, in particular, ages. So some

companies stopped providing coverage entirely, leaving those who were

left to cover their own costs by raising their deductibles and

premiums.

The market is a wonderful and a powerful tool to bring prosperity

to our country. But the market needs to be regulated by the government

to make sure that it’s fair for everyone, that there’s a level playing

field and that normal costs cannot be externalized. Here we have a

classic market failure in which some companies were losing money because

they’re paying for things that could have been prevented as owners and

corporations shifted their costs onto them.

The final result is that some companies are able to charge

virtually anything they want. But one of this government’s answers is to

allow strata corporations to raid their contingency funds to pay

insurance costs. Contingency funds are the very funds that are supposed

to be used to do preventative maintenance to reduce insurance claims in

the future. This is an unbelievably shortsighted move and one which, of

course, we cannot support.

[4:00 p.m.]

Here I want to talk about another aspect of market failure, and

that is fraudulent claims. A few years ago, I was talking to an

insurance fraud investigator who worked for a private insurance company.

I asked him what percentage of homeowner claims would involve some kind

of fraud. He said that he felt it was 40 percent. That’s a lot of fraud,

and fraud is a classic market failure, and it’s a big, unnecessary

expense.

Well, what can we do? I think the government could do a number of

things to ensure a more orderly, functioning market that offers

competitive prices for insurance. It’s certainly not bad in the concept

of insurance, by degrees.

The member for Kamloops–South Thompson has put forward a number of

good ideas in his private member’s bill to require some kind of training

for strata council members so that they become more aware of what they

need to do to keep their corporations in good repair — to begin a water

damage prevention program, to provide financial incentives to do

preventative maintenance in strata buildings. That would be

fine.

We’ve suggested implementing a temporary tax holiday on the 4.4

percent insurance premium tax applicable on strata property, to leave

these dollars in the pockets of strata owners. We could extend, on a

temporary basis, the property tax deferment program to enable strata

owners who’ve faced extraordinary additional expenses related to soaring

strata insurance costs to defer a portion of their property

taxes.

We could implement changes to the Strata Property Act and

regulations that ensure that annual contributions are made to the strata

corporations consolidated revenue fund at levels acceptable considering

the building’s age, claims history and other unique

circumstances.

We could require a strata corporation to have a depreciation

report detailing necessary maintenance every year and require that

corporation to inform owners and tenants of any material change in

insuranc