2010 Legislative Session: Second Session, 39th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the

Legislative Assembly

(hansard)

Wednesday, March 24, 2010

Afternoon Sitting

Volume 12, Number 3

CONTENTS

Page

Routine Business

Introductions by Members

Statements (Standing Order 25B)

Civic engagement in democracy

L. Reid

Paralympic Torch Relay in Maple Ridge–Pitt Meadows

M. Sather

Winter Lights Celebration award for Kamloops

T. Lake

Nowruz celebration and Cultural House of Mawlana

M. Elmore

B.C. volunteers

H. Bloy

Hari Sharma

R. Chouhan

Oral Questions

Home care fees

C. James

Hon. K. Falcon

S. Hammell

K. Corrigan

Royal Inland Hospital sterilization unit

A. Dix

Hon. K. Falcon

Success By 6 program

M. Karagianis

Hon. M. Polak

G. Coons

N. Macdonald

Dental program for low-income children

N. Simons

Hon. R. Coleman

Motions Without Notice

Referral of reports to committees and powers of Public Accounts Committee

Hon. M. de Jong

Orders of the Day

Committee of the Whole House

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

B. Ralston

Hon. C. Hansen

Reporting of Bills

Bill 2 — Budget Measures Implementation Act, 2010

Third Reading of Bills

Bill 2 — Budget Measures Implementation Act, 2010

Second Reading of Bills

Bill 4 — Miscellaneous Statutes Amendment Act, 2010

Hon. M. de Jong

L. Krog

M. Sather

Hon. M. de Jong

Bill 5 — Zero Net Deforestation Act

Hon. P. Bell

N. Macdonald

Hon. J. Yap

B. Routley

Hon. K. Krueger

M. Sather

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Labour

Hon. M. Coell

R. Chouhan

D. Routley

M. Elmore

K. Corrigan

B. Ralston

H. Bains

[ Page 3601 ]

WEDNESDAY, MARCH 24, 2010

The House met at 1:37 p.m.

[Mr. Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

R. Lee: It's with great pleasure that I introduce to the House today the winning students of the Democracy on Location contest, sponsored by the Speaker of the House and the Chief Electoral Officer.

Sophia Chen, Aleem Dhanji, Kate Gao and Javed Siddoo submitted the winning YouTube video, entitled Why Should Youth Care About Democracy? Their video promoted a youthful perspective on the importance of democracy in our society in celebration of the United Nations' annual International Day of Democracy.

They are grade 10 students from Burnaby North Secondary School in my riding. They are accompanied today by their social studies teacher, Mr. Dale Lintott, as well as Harry Neufeld, the Chief Electoral Officer. Will the House please make them feel very welcome.

M. Karagianis: Today we are joined in the gallery by a number of representatives from the community social services. They are the front-line workers and have been here talking about the impacts of funding cuts to their communities. I'd like to introduce them, please.

They do take up a good part of the gallery here: James Cavalluzzo, Stephanie Seaman, Cameron Gerard, Chelsea Vaneck, Cherie Dobbie, Chris Mikulasik, Demian Young, Dianne Black, Dorothy Bartsoff, Gale Engstrom, Joanne Dyck, Karen Wickham, Kiran Kang, Loanne Pickard, Pamela Pye, Pamela Schneider, Patsy Harmston, Roy Scafe, Vicky Dalton, Andrea Duncan, Melody Carleton, Donna Wright and Wesley Guiboche.

I'm sure members here may be familiar with them from their community. Please give them a good welcome.

Hon. I. Black: I have the honour of representing four municipalities in my riding, and the mayor of one of them joins us today. Joe Trasolini, the mayor of Port Moody, City of the Arts, joins us today, and I'd ask the House to join me in making him feel most welcome.

N. Simons: It gives me pleasure to welcome to the House today David and Mary-Lou Moore from Powell River, the Pearl of the Sunshine Coast.

[1340]

Hon. N. Yamamoto: In my riding I have the pleasure of having one of Canada's leading boarding schools, and this is Bodwell High School. They have grades 8 to 12 and university preparation there. Today we have 70 grade 11 students, accompanied by five adults. Because the group is so large, there's one-half watching us now, and the other half will come in later. Would the House please make them feel welcome.

D. Thorne: I, too, would like to welcome the mayor of Port Moody, Joe Trasolini, to the House. I had the honour of taking him for lunch today. We've been friends for a long time. He's here doing some Metro Vancouver business with the Municipal Finance Authority and some other assorted business. I think that because he's such a great mayor, we could welcome him a second time.

D. Horne: It's with pleasure today that a group of students from Scott Creek Middle School, a school in my riding — a grade 6 class led by Dave Devaney — is joining us here in the gallery. It doesn't appear that they're here yet, but when they do arrive, I hope the House will make them truly welcome.

M. Dalton: In the gallery we have Bill Brooks. Bill is with the Tim Horton Children's Foundation, and we had lunch together today. Tim Hortons is looking into starting up a camp in the north end of my riding, in the Mission area, for children from disadvantaged homes. This is something we're quite excited about. Tim Hortons is working together with government and First Nations and other partners to, hopefully, see this progress through.

L. Reid: We are joined today by my niece Michelle Ramsell and her husband, David. David has been recently posted to Esquimalt in Her Majesty's loyal service, and I would ask the House to please make them welcome.

Hon. J. Yap: Visiting from my riding today is Glen Arnsdorf and his family. Would the House please help me welcome Glen, Kathy, Alicia and Sarah to the Legislative Assembly public gallery for their visit to our House and to watch question period.

Statements

(Standing Order 25B)

CIVIC ENGAGEMENT IN DEMOCRACY

L. Reid: In the words of the Chief Electoral Officer, Mr. Harry Neufeld, "free and fair elections and an active civil society are critical measures of the strength and durability of British Columbia's democracy."

[ Page 3602 ]

Civic engagement involves more than citizens marking ballots every few years. Working to help a candidate get elected, volunteering for a political party, working at a voting place, being a political journalist, studying political science, expressing your views on public policy in various forums — all of these activities contribute to a healthy democracy.

Encouraging and educating today's youth about the value of civic engagement or the principles of democracy builds a stronger foundation for tomorrow. And this is fascinating, hon. Members. Voting in provincial elections of 18- to 24-year-olds has seen a dramatic decline over the past 30 years.

Not so long ago 75 percent of youth were voting in elections. However, in last year's provincial and general elections only 26 percent of eligible voters in that age group actually cast a ballot.

Studies across western democracies indicate that a non-voting generation of youth tends to be followed by another non-voting generation. Studies also indicate that voters who miss out as participants in their first three available elections will likely never vote in an election during their entire lives.

As fewer and fewer citizens engage and participate in civic life and the overall democratic process, concerns for the long-term legitimacy of governing institutions will grow. The end result of less civic engagement is less debate, the fibre that holds our democracy together.

Democracy doesn't take place just in this House but in every house, every classroom, every workplace, every day. Our Charter of Rights and Freedoms guarantees us democratic rights that facilitate this freedom, choice, equality, fairness and empowerment.

So hon. Members, every time you have an opportunity to encourage an 18-year-old to vote, I suggest that that is the price of freedom, and all of us have a responsibility to participate.

[1345]

PARALYMPIC TORCH RELAY

IN MAPLE RIDGE–PITT MEADOWS

M. Sather: It is my pleasure to rise in the House today to commend my constituency of Maple Ridge–Pitt Meadows for its enthusiastic display of Paralympic spirit.

On March 10 the Paralympic Torch Relay passed through Maple Ridge, with the main event being held in Memorial Peace Park. Ceremonies opened with the Kwantlen First Nation bringing the flame to light the torch and then performing a traditional song. Afterwards the 5,000 local residents who attended watched as the 32 torchbearers, like local Paralympian Jennifer McKenzie, carried the torch around the park in a celebration that featured live entertainment and that was aided by cooperative weather.

The enthusiasm of the crowd was palpable, with many cheers as the torchbearers proudly paraded by. That the community showed such spirit is not surprising. In fact, it is in keeping with Maple Ridge and Pitt Meadows' character of inclusion and acceptance.

There are several Paralympians who call Maple Ridge–Pitt Meadows home, and this past summer the community had the honour of hosting the 2009 B.C. Disability Games. With the community's full support, the games were a complete success. I was privileged to hang medals around the necks of winners at the award ceremonies. The spirit I saw there was much like what I had witnessed at the torch relay, leaving no wonder as to why Maple Ridge was designated an official celebration community.

I would like to extend kudos to the torchbearers, volunteers and citizens of Maple Ridge–Pitt Meadows for making such a memorable torch relay possible. Events like this show our Paralympians that their games matter just as much as the Olympics and serve to affirm our support of all athletes.

WINTER LIGHTS CELEBRATION AWARD

FOR KAMLOOPS

T. Lake: Canada's tournament capital has found yet another reason to retain its bragging rights. Kamloops is not only the reigning Communities in Bloom national champion, but a few weeks ago it was awarded first place in the Canada-wide Winter Lights Celebration. Kamloops was entered in the over-50,000 category, beating out cities like Brampton, Barrie, Kingston and, dare I say, Prince George.

It didn't matter that this was the first year that our glowing community entered the competition. The city, its residents and community groups have been welcoming tourists and visitors to Kamloops for generations.

During the months of November and December trained volunteer judges evaluated all of the participating communities on the program's five criteria: visual presentation, festive season celebrations, winter pleasures, goodwill programs, and tourism and promotion.

The judges were impressed by what Kamloops has to offer, as they visited spectacular Sun Peaks Resort, took

part in the light-up ceremonies at the Spirit Square on the North Shore and St. Andrews on the Square downtown, were taken on the seniors' twinkle tour and saw the historic 2141 steam train in all its seasonal glory.

With so many attractions in any season, Kamloops and the surrounding area are truly a year-round destination. Stops were also made at Memorial Arena, Christmas Amalgamated, Kamloops Food Bank, McArthur Island Sports Centre and the Tournament Capital Centre.

I want to thank Gay Pooler and Glenn Grant for co-chairing the Kamloops WinterLights Committee and presenting the city of Kamloops so well to the rest of the country.

[ Page 3603 ]

NOWRUZ CELEBRATION AND

CULTURAL HOUSE OF MAWLANA

M. Elmore: I rise today to recognize Persian New Year, or Nowruz in Persian. Nowruz translates as "new day" and is celebrated on March 21 by more than 300 million people worldwide. It marks the first day of spring and the beginning of the new year.

UNESCO recognizes March 21 as the International Day of Nowruz, a spring festival of Persian origin, and it's been celebrated for over 3,000 years in Iran, Iraq, India, Afghanistan and central Asia.

Last week I was fortunate to be able to celebrate Nowruz with friends from the Iranian, Asian and Afghan community at the Cultural House of Mawlana. The theme was to celebrate the start of the Persian New Year with friends, to come together as a multicultural community and celebrate our shared humanity. They also marked International Women's Day with very moving poetry and speeches.

We enjoyed traditional foods such as haftmeewa and jelabee, as well as poetry readings and performances on traditional instruments like the rabob, tabla and harmonium.

The Cultural House of Mawlana is run by members of the Afghan community in the Lower Mainland, and it's named after Mawlana, more often known as Maulana Muhammad Jalaluddin Rumi, or Rumi. Rumi is known in the west as one of the most prolific poets of all time. His poetry promotes the understanding of spiritual unity underlying all religious truths, and he happens to be one of my favourite poets.

The culture house is a very welcoming and hospitable place, and everyone there is working hard to promote Afghan culture in the Lower Mainland. They offer music lessons for youth on the traditional instruments. They teach history lessons about the rich cultural heritage of the region, calligraphy and also poetry lessons. They have a youth group as well as a website and a biweekly newsletter.

[1350]

The House of Mawlana is a gathering place for Afghan culture and the Afghan community, but it's also much more. It's a place for all communities and cultures to come together. On their behalf, I'd like to extend an invitation to all of you and British Columbians to pay a visit. Drop in on any Saturday for poetry readings and musical performances.

On behalf of my friends at the Cultural House of Mawlana, I'd like to wish everyone a very peaceful and prosperous Persian New Year. Happy Nowruz.

B.C. VOLUNTEERS

H. Bloy: Over the years we have recognized and awarded many exceptionally great people in our province. Without these great individuals and thousands and thousands of volunteers who make our communities the best place on earth to live, work and play….

So many of them are making their mark on our province and even the world, people like Peter Legge, 2008 recipient of the Order of British Columbia for his work of over 25 years with Variety Club for children; Senator Yonah Martin, a teacher for over 20 years before her appointment to the Senate of Canada. Senator Martin was honoured with the order of Korea for her work in British Columbia.

We can also thank people like Cy Saimoto, who was recent awarded the Order of Japan for his work in Canada. Cy has been a leader within the Japanese-Canadian community and is a longtime supporter of the Vancouver Japanese Language School.

Even our own member for Surrey-Tynehead has been awarded the order of India for his work that he has done here in Canada.

Now we have two Burnaby firefighters who will be awarded with the B.C. Community Achievement Award. Firefighters Jeff Clark and Miles Ritchie were the ones who brought the 2009 World Police and Fire Games to the Lower Mainland, but it wasn't only their work with the World Police and Fire Games. It's all the community work they do, from charitable fundraising to coaching amateur sports teams, which makes them very deserving of this award.

As an MLA, I'm really lucky as I get to say thank you to so many people who give so much to our communities around the province. I thank these individuals, and I want to thank the thousands and thousands of volunteers who make our communities the best place on earth.

HARI SHARMA

R. Chouhan: Today I rise to pay tribute to my dear friend Dr. Hari Sharma. After a long and courageous fight against cancer, he passed away on March 16, 2010.

Dr. Sharma was born on November 9, 1934, in India. He moved to the U.S. in 1963 and got his PhD in sociology from Cornell University. He taught briefly at UCLA before accepting a position at Simon Fraser University in Burnaby, where he stayed until he retired in 1999.

Hari, like many enlightened academics of the 1960s, was involved in the anti–Vietnam War movement in the U.S. and Canada. As a member of the faculty of Simon Fraser University, he became a champion of the academic rights of colleagues who were faced with the threat of dismissal for the support of the student-led movement at the university.

Hari was a founding member of the Georgia Straight collective, which publishes a weekly paper, the Georgia Straight .

I met Hari in 1975, when he recruited me and others to form the Indian People's Association in North America.

[ Page 3604 ]

Hari was the primary force in the formation of the British Columbia Organization to Fight Racism. He also played a leading role in the formation of the Canadian Farmworkers Union. He was involved in and supported many progressive causes in many countries.

Besides being an able political organizer and a gifted writer of short stories, Hari was also a great photographer. His photographs have been displayed in many exhibitions. He also proved himself to be an excellent director of political drama.

He is an inspiration to engagement in the struggle for a better world, a world without exploitation, without religious, caste, ethnic or gender oppression. I'm so grateful that I was able to hold his hand when he took his last breath.

Thank you, Hari, for everything you did for me and others.

Oral Questions

HOME CARE FEES

C. James: On February 1 the government implemented a new regulation that capped the monthly cost of home care for seniors at $300 per month. But then we learned that seniors like Guy Aubin are being forced to pay more.

[1355]

The 85-year-old pensioner from Lantzville is speaking out about his situation. He's being asked to pay $550 a month for his home care, a 26 percent increase, effective February 1. Can the Minister of Health explain: if he passed the regulation, if he made the change, why are seniors like Guy paying more for home care?

Hon. K. Falcon: Well, I don't have the information. I'd be happy to address that if the member could share it with me. What I can tell the member, generally speaking, is that 70 percent of home care is delivered at no cost to individuals. There is a cost associated with your income level. I would need to know what the individual's income level is before determining whether or not the amount being charged is appropriate or not.

Mr. Speaker: Leader of the Opposition has a supplemental.

C. James: I'd like to inform the minister that this was a regulation change in the minister's ministry that capped home care support at $300 a month for clients. It's $26,000 a year — what Guy is earning as a senior with old age pension. The regulation is very clear. As of February 1 seniors will only pay $300 a month as a cap for home care support.

My question again is to the minister. Can he explain why seniors — Guy is one example, but perhaps the minister could let us know if there are other examples — are being charged more than the regulation that has been passed by this government?

Hon. K. Falcon: I understand that Mr. Aubin is concerned because his contribution is increasing. I understand the contribution is increasing by about $4 per day, on average. I am led to understand from staff that Mr. Aubin's home support rate is increasing because his income has been increasing.

I should also recognize that we have dramatically increased the level of home supports. It might be interesting for the Leader of the Opposition to know that, actually, during the 1990s, sadly, we saw a cut in the number of home support clients, by 31 percent during 1994 and 2001.

Mr. Speaker: Leader of the Opposition has a further supplemental.

C. James: How many months has this minister been the Minister of Health? How long is it going to take this minister to get on top of his health care file?

This was a regulation passed by cabinet, and I'm guessing that the Minister of Health should have been paying attention, since it was coming from his ministry. This was a regulation change that took effect February 1 and that says very clearly that seniors will not be paying more than $300 a month for home care support.

Mr. Aubin is paying $550 — clearly a violation of the regulation. I'd like to ask the minister again: when is he going to get on top of this file, and when is he going to explain why the government passed a law that isn't being followed out there in health care?

Hon. K. Falcon: This year health authorities will spend $682 million on home support services. That is a 70 percent increase from 2001.

We hear the Leader of the Opposition loves to talk, loves to pretend that they had such a great record. Their great record was that they cut 31 percent of the people off of home support between 1994 and 2001.

That was your record in government. I will gladly put our record up against the record of the NDP, dismal and terrible as it was, any day of the week.

Interjections.

[1400]

Mr. Speaker: Just take your seat, Member.

The member for Surrey–Green Timbers.

S. Hammell: In response to Mr. Aubin's concerns about the rising cost of home care, the ministry suggested Mr. Aubin get on the wait-list for long-term care — a ludicrous and expensive suggestion, one that would

[ Page 3605 ]

cost our health care system even more and damage Mr. Aubin's quality of life.

Does the Minister of Health think that this is a solution to a problem that he has created?

Hon. K. Falcon: I'm going to address that in a moment. But you know, I think it is interesting. Actually, Mr. Speaker, in fairness, I thought that what they were going to be standing up and asking me is why the latest CIHI, Canadian Institute for Health Information, numbers show that B.C. has been rated number one in the country for reducing wait times for medical surgeries.

That's what I thought I was going to hear, because every day in this House we listen to the members opposite talk about just how terrible it is in British Columbia, how bad the situation is for elective surgical procedures, yet a report comes out and says that B.C. is number one. Nothing. Not a sound from the members opposite. I find that quite interesting.

With respect to Mr. Aubin, the situation is actually pretty straightforward. I'm happy to brief the member after if she'd like. The fact of the matter is it is income-tested. His income has gone up, and therefore, he does pay more. I acknowledge that.

Mr. Speaker: The member has a supplemental.

S. Hammell: We know that it is far less expensive when people who are able to live at home continue to live at home. But despite that fact, this government continues to erode home care support programs. Per-capita funding has fallen well below the national average since 2001, and the number of British Columbians receiving home care support has declined by nearly 25 percent.

Why would this government force seniors out of their homes into residential care when the less expensive alternative, home care, is a preferred option?

Hon. K. Falcon: This is an individual who had a front-row seat while they cut home care spaces by 31 percent. Front-row seat. It is incredible to me that if they are going to pick an individual to ask a question about this issue, they would pick a former cabinet minister that had a front-row seat while they cut spaces 31 percent.

We have increased funding by 70 percent — $682 million. We are housing and supporting more home support seniors than we ever have in the history of the province of British Columbia. That's our record.

K. Corrigan: This is very straightforward, and we're still waiting for an answer to the basic question. This minister and this government passed a regulation capping home care at $300 per month. Guy Aubin is being charged $550 a month. Why is this government violating its own regulation?

Hon. K. Falcon: Well, the members are mixing up two different issues. Mr. Aubin's income has increased. That's why his contribution is increasing.

[1405]

There was a mistake in the regulation. The word "qualified" was used inappropriately. That is being amended. I acknowledged that, and an individual did point that out to the ministry, but those are two separate issues.

It doesn't get away from the fact that when you were in government, you ranked ten out of all of the provinces in home care support, and today we are among the leading in the country in home care support.

Interjections.

Mr. Speaker: Members.

ROYAL INLAND HOSPITAL

STERILIZATION UNIT

A. Dix: It only took six questions for the minister to admit that he failed. He made a mistake, and Mr. Aubin is paying the price for it. So let's try and find an area of health care that maybe the minister knows something about, that he might have heard about — not regulations that he brought the cabinet, nothing like that.

As the minister will know, for the last six weeks at Royal Inland Hospital there have been cancelled and delayed surgeries as a result of problems with sterilization — serious concerns about sterilization. Two years ago the CEO of the Interior Health Authority acknowledged, admitted, that the sterilization unit was inadequate and needed retrofitting. In spite of this warning, he and his predecessor failed to act.

Two years later nothing has changed, circumstances are worse, and patients were put at risk. Can the minister explain? I know it's hard. It's a big ministry. Can the minister explain why no action was taken to ensure patient safety for two years before there was system collapse?

Hon. K. Falcon: The common theme that you hear in questions from the opposition is trying to find ways, scanning the entire system that serves over two million visits a year in our emergency departments, that in a population of just over four million serves tens of thousands of people in our acute care hospitals every single day…. What does the NDP do? They will try to find any situation to try and run down the system.

They always ignore independent reviews that suggest that we have the best system in the country. That's what the Conference Board of Canada said. The Canadian Institute for Health Information said that we had the number one results for reductions in wait times and surgical procedures. You never hear that from the NDP. All you'll hear from the NDP is trying to run down the system and the professionals in the system.

[ Page 3606 ]

The fact of the matter is that Royal Inland Hospital acted entirely appropriately by immediately halting elective procedures the moment they became aware that there were some problems with surgical instruments not meeting the standard of cleanliness. They've done an external review. The external review will make recommendations. They'll follow the recommendations. I have every confidence in the professionals at Royal Inland Hospital.

Mr. Speaker: Member has a supplemental.

A. Dix: I can't believe that a Minister of Health thinks that unclean surgical equipment is a minor issue and thinks a two-year warning isn't enough. It is completely unacceptable. How can he talk about wait times to the people of Kamloops when more than 1,000 patients, more than one in four patients, have waited more than a year for surgery in Kamloops?

He's talking to them in answer to this question about wait times? Why did they do nothing? Why did the empty-suit Minister of Health replaced by the other empty-suit Minister of Health do nothing while patients in Kamloops were put at risk?

Hon. K. Falcon: I appreciate the comments about my abilities and the former minister's abilities. I'll tell you this. I certainly don't want to have to get into discussing that member's record as the chief of staff to the NDP government in the late '90s. I'm happy to if the member would like, because I will put my record and the former minister's record up against his record any day of the week.

[1410]

Now, I understand that he has a problem with dates. I understand that the critic has a problem with dates.

Two years ago a health audit was undertaken with respect to surgical cleaning. That's what we do in our system, Mr. Health Critic. We actually do regular audits. It made recommendations. Those recommendations were implemented. When they identified a problem, they immediately acted on it, and they acted absolutely appropriately. There's an external review underway. When that review makes recommendations, they will be implemented.

I'm proud of the workers at Royal Inland and how they've managed this file. They have done a very good job on behalf of British Columbians.

SUCCESS BY 6 PROGRAM

M. Karagianis: Success By 6 was a creation of this government in 2003. Now not only is their funding being cut in half this year; the entire program is being cancelled in March 2011. The coordinators of this program have worked tirelessly for six years to build relationships across government — with business, with First Nations and the non-profit sector.

The cancellation of this program will have a devastating effect on organizations already stripped to the bone by this government's cuts. How can the Minister of Children and Families justify eliminating funding to an organization that supports so many front-line services to families?

Hon. M. Polak: Success By 6 has been a tremendous partnership with the government of British Columbia, with credit unions, and we're proud that since 2003 we have invested $27 million in Success By 6. In addition to the $2½ million that Success By 6 will receive in a grant this year, we'll also be, across government, spending almost a billion dollars in early childhood development, child care services, children and youth with special needs.

We will continue to work with Success By 6 as we look for opportunities to help them transition some of their programs in these difficult times. But there's no question that this is an area that we deem a priority, and we certainly invest more than the opposition ever did.

Mr. Speaker: The member has a supplemental.

M. Karagianis: So this minister admits that they're proud to have cut this program by 50 percent and that they are doing away with it by 2011? That's the kind of support that this minister offers to communities? The early childhood development provincial partnership has said that without the three partners in place — the United Way, the credit unions and, most importantly, the province of British Columbia — they will not be able to carry on, and Success By 6 will be dissolved along with 400 programs across this province that it serves.

After six years the program is strong. It is delivering innovative programs to communities, and now the B.C. Liberals will cancel it outright. It does not make any sense. This is another bad decision by a government that proves over and over again that it does not care about supporting families and communities.

I would ask the minister: will she stand today and reverse the decision and reinstate the funding for Success By 6?

Hon. M. Polak: Year upon year since 2003 this government has responded by supporting Success By 6 with grants. Year upon year upon year, grants that the opposition voted against every single time.

We will continue to be working with Success By 6 as they work with the $2.5 million grant we will provide this year in order to ensure that we help them to transition their programs and to look for opportunities to enhance community capacity-building across the province.

[1415]

[ Page 3607 ]

G. Coons: The minister's comments ring hollow, especially to the children that need the emotional, social, cognitive and physical skills that they need to enter school. The previous minister basically said that they want to build programming that's durable, to ensure they have the tools in the toolbox. But we know what this minister has taken out of the toolbox. She's taken out the screwdriver.

The cancellation of Success By 6 is a lot more than just one program. More than 400 programs are supported. This means no more literacy programs, no more books, no more support for first languages projects. The list goes on and on.

This cut is contrary to everything this government claims they stand for. Will the minister admit that this was a mistake and restore full funding for Success By 6 and the hundreds of programs it supports?

Hon. M. Polak: Really, the question about support for early childhood development and early childhood education is: when on earth is the opposition going to get on board and support programs like full-day kindergarten for five-year-olds? When are they going to support the $1.75 billion across government that we are going to spend and invest on literacy this year? When are they going to support programs like aboriginal Seeds of Empathy, Children First, Building Blocks, family resource programs, young parent and at-home visiting programs?

Consistently we bring forward strategies and investments that'll support our kids, support our families, and every time that opposition votes against it.

Interjections.

Mr. Speaker: Members.

The member has a supplemental.

G. Coons: You know, the minister keeps tightening the Phillips on this one to the most vulnerable. Success By 6 has made connections and built capacity in communities around the province and has become an indispensable resource for families in rural and, especially, aboriginal communities. On the central coast Success By 6 is the only organization providing early literacy program, because they don't have access to Children First or other early-years programs.

Will the minister admit this was a bad decision, reverse the cut and make sure those communities are not left out of front-line family services?

Hon. M. Polak: Since 2003 a $27 million investment in Success By 6. This year alone we'll spend across government a billion dollars in early childhood development, child care, and services for children and youth with special needs. Across government this year we'll spend $1.75 billion on literacy programs. The question is: why can this opposition never vote in favour of those investments?

N. Macdonald: Let's be clear. For six years this province has had the highest rate of child poverty in all of Canada. That is something that is completely shameful. So the record of this government on child poverty…

Interjections.

Mr. Speaker: Members.

N. Macdonald: …on child support — working with children in any way — is a complete failure. But there are a few initiatives that you could point to that would work, and Success By 6 is one.

This is a program, and I'll quote from the manager of Children First, Cranbrook — Gail Brown. This is what she says about Success By 6: "The benefits of this program on the health and development of young children in rural regions has been enormous." But she goes on to say that "the loss of funding from the government puts childhood programs back to being beggars" — and these are her words — "rather than bona fide partners."

The cuts are a mistake. Will the Minister of Children and Families admit the mistake and put back in place the funding that serves 240 communities in rural British Columbia? Will she do that today?

Hon. M. Polak: The programs around this province are numerous. Aboriginal Seeds of Empathy; Children First; Building Blocks; family resource programs; young parent and at-home visiting programs; parent-child Mother Goose programs; fetal alcohol syndrome programs; Ready, Set, Learn programs; and over 40 aboriginal early childhood development programs to boot.

[1420]

The record that this has produced is one that we can be proud of. Fewer children in care. We've tripled the number of aboriginal children being served in delegated agencies. We've increased the number of child protection social workers, and we've doubled the number of front-line mental health workers — unprecedented support for children and families, which that opposition consistently votes against.

Mr. Speaker: Member has a supplemental.

N. Macdonald: There's a mindlessness to this cut in particular, like many of the cuts that we've seen since this budget — a mindlessness to it.

In 2003 this is what the government said about the program: "For every dollar invested in early support services for children and their families, at least $2 is saved in later social costs. For children living in high-risk situations, this early intervention can result in far greater savings."

[ Page 3608 ]

It's not very often that PAB will produce something that I'll agree with, but there's a truth to that. By the government's own admission, this cut is shortsighted. It is going to cost the province in the long run.

Again to the minister: will she re-evaluate this far-reaching, shortsighted decision, recognize the value in the strong community partnerships formed with credit unions of B.C. and the United Way and give our communities back successful programs?

Hon. M. Polak: It would be easier to believe the member's concern for early childhood development if the member were supportive of a program like full-day kindergarten. It would be easier to believe the member's concern if the member was in support of a program like StrongStart B.C., which they voted against.

The fact of the matter is that as a result of our investment in children and families since 2001, there are fewer children in care, there are fewer children on welfare, and there are fewer children living in poverty than when that member opposite was in government.

Interjections.

Mr. Speaker: Members.

DENTAL PROGRAM FOR

LOW-INCOME CHILDREN

N. Simons: My question is to the minister responsible for the Healthy Kids dental program, which in the last budget was cut in half for children's visits to the dentist. Now, everybody in this room understands the importance of preventative care for children, except perhaps the members on the other side of this House. How can the minister justify cutting access to preventative dental care for the low-income children of this province?

Hon. R. Coleman: The member has it completely wrong, as usual. In cooperation with the B.C. Dental Association, we did a review of the programs relative to dentistry in B.C. A number of things became apparent that they asked us to look at.

One is that we had a program where we said we'd only spend $700 a year maximum for dental work for any person that was on social assistance in B.C. They asked if we would change that to $1,400 over two years so that if they had more procedures and need, they would be able to do it, and families would not avoid bringing in their children for the care they needed. We've done that.

They also asked us if we would increase, which we did…. We increased the amount of money for procedures that would be medically necessary procedures from $500 to $1,000, which is a substantial increase with regards to that. We talked to them about what the annual checkup for children would be, which they agreed would work at one year given the fact that it would be the same as other procedures and other jurisdictions across the country for people on social assistance.

Mr. Speaker: Member has a supplemental.

[1425]

N. Simons: Going from two visits to the dentist to one is a cut. Mr. Speaker, $3.1 million cut from the program is a cut. I challenge the minister to find any dentist who thinks it's a good idea that children in low-income families don't have access to preventative dental care.

I would further ask the minister: how is it possible that we as elective members here, as MLAs — our program allows our children to have two visits to a dentist every year, but children in low-income families don't have that same access? How can the minister justify that discrepancy?

Hon. R. Coleman: Let's be clear to the member. He mentioned low-income families. Low-income families in this province in many cases don't have any dental plan at all. People on social assistance do, plus they have a number of…. But during the time of the NDP….

Interjections.

Hon. R. Coleman: Relax. Relax. I think you've got to get your language straight over there before you ask a question. I'm happy to train you after question period on how to do that if you wish.

Interjections.

Mr. Speaker: Continue, Minister. Continue.

Hon. R. Coleman: You know, under the NDP, there wasn't universal screening on 16 different things for children at birth. There are under the B.C. Liberals because we believe in universal screening at birth.

We've improved the program so we can be there for the serious procedures that are available for children. We're going to manage it in conjunction with the relationship we have with the B.C. Dental Association.

[End of question period.]

K. Corrigan: I seek leave to make an introduction.

Mr. Speaker: Proceed.

Introductions by Members

K. Corrigan: I'm very pleased to see that we have in the gallery this afternoon a good friend and a former colleague of mine in the research department at CUPE,

[ Page 3609 ]

a brilliant researcher — Mr. Keith Reynolds. I hope you'll make him welcome.

Motions Without Notice

REFERRAL OF REPORTS TO COMMITTEES

AND POWERS OF

PUBLIC ACCOUNTS COMMITTEE

Hon. M. de Jong: Mr. Speaker, I have provided my friend, the Opposition House Leader, with a copy of a motion which, by leave, I move.

[1. That the reports of the Auditor General of British Columbia deposited with the Speaker of the Legislative Assembly during the second session of the thirty-ninth parliament be deemed referred to the Select Standing Committee on Public Accounts, with the exception of the report referred to in

section 22 of the Auditor General Act which is referred to the Select Standing Committee on Finance and Government Services; and in addition that the following reports of the Auditor General of British Columbia be referred to the Select Standing Committee on Public Accounts:

Report No. 5, 2008/09: Removing Private Land from Tree Farm Licences 6, 19 & 25: Protecting the Public Interest?

Report No. 7, 2008/09: Home and Community Care Services: Meeting Needs and Preparing for the Future

Report No. 10, 2008/09: A Major Renovation: Trades Training in British Columbia

Report No. 12, 2008/09: Planning for School Seismic Safety

Report No. 13, 2008/09: Public Sector Governance and How Are We Doing?

Report No. 14, 2008/09: Grant Administration of the BC Arts Council; 2010 Olympics and Paralympic Games

Report No. 15, 2008/09: Wireless Networking Security in Victoria Government Offices: Gaps in the Defensive Line

Report No. 16, 2008/09: Homelessness: Clear Focus Needed

Report No. 4, 2009/10: British Columbia Crown Corporations Executive Compensation Arrangements: A Work in Progress

Report No. 6, 2009/10: Making the Right Decisions: Information use by the boards of public sector organizations

2. That the Select Standing Committee on Public Accounts be the committee referred to in sections 2, 6, 7, 10, 13 and 14 of the Auditor General Act .

In addition to the powers previously conferred upon the Select Standing Committee on Public Accounts, the Committee be empowered:

(

a) to appoint of their number, one or more subcommittees and to refer to such subcommittees any of the matters referred to the Committee;

(

b) to sit during a period in which the House is adjourned, during the recess after prorogation until the next following Session and during any sitting of the House;

(

c) to adjourn from place to place as may be convenient; and

(

d) to retain personnel as required to assist the Committee,

and shall report to the House as soon as possible, or following any adjournment, or at the next following Session, as the case may be; to deposit the original of its reports with the Clerk of the Legislative Assembly during a period of adjournment and upon resumption of the sittings of the House, the Chair shall present all reports to the Legislative Assembly.]

This is the motion that charges the Public Accounts Committee to conduct its work. It refers the reports of the Auditor General deposited with the Speaker during the second session of the 39th parliament to be deemed referred. It then lists a series of additional reports referred to the Select Standing Committee on Public Accounts and provides that committee with the ordinary and usual sets of powers to conduct the usual and ordinary work.

I, by leave, move that motion.

Leave granted.

Motion approved.

Orders of the Day

Hon. M. de Jong: In Committee A, I call Committee of Supply. For the information of members, the estimates of the Ministry of Labour will be discussed. In this chamber, continued committee stage debate on Bill 2.

[1430]

Committee of the Whole House

BIll 2 — BUDGET MEASURES

IMPLEMENTATION ACT, 2010

(continued)

The House in Committee of the Whole (Section

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

The committee met at 2:31 p.m.

section 59.

B. Ralston: Perhaps I'll afford the minister an opportunity to introduce the staff that have joined him. Or perhaps he can wait until he begins his first answer.

Section 59 proposes an amendment to the Assessment Act which deals with port lands. The minister will know that certainly the issue of the taxation of port lands is an issue of some considerable financial interest for those affected municipalities.

The Metro Vancouver organization has a port cities committee. They recently — that's last year — struck a commission to examine fairness of port-related property taxes. For example, the mayor of North Vancouver — this a common theme — is expressing concern about the declining revenue that the municipalities receive from port-related property in their municipality.

This amendment appears to attempt to coordinate two separate acts, the Assessment Act and the Ports Property Tax Act. I'm wondering if the minister can explain the purpose of this amendment.

It does seem that by allowing a designation under this act as late as December 31 of a calendar year, this may

[ Page 3610 ]

have an impact upon the budgeting process for municipalities, because if the assessment of a property has changed that late in the calendar year, the budget cycle has already begun, usually, for the municipalities. It may, then, have an impact on their prospective revenue and, as a result, on the budget as a whole. For some cities this is a considerable source of revenue, and they've expressed that concern.

Can the minister, then, address the purpose of the amendment and its likely impact upon municipalities?

Hon. C. Hansen: The member asked if I would introduce the staff that are joining me, and I'm pleased to do that. Paul Flanagan is to my right, and to his right is Jeffrey Krasnick, and to my left is Chris Dawkins — all from the Ministry of Finance.

This

section 59 is really a technical amendment. Its intention is to make sure that we have a similar approach in both the property tax act and the Assessment Act. It is meant to simplify and clarify the specification of actual value for port lands and to ensure that there is consistency between the two acts.

B. Ralston: Can the minister explain the process by which port land will be designated in a manner that's consistent with the Ports Property Tax Act under this proposed amendment of the Assessment Act?

[1435]

Hon. C. Hansen: Now, I'm not entirely sure I got the member's question clear, but let me respond in this way and see if it addresses where he's coming from on this. In the case of both acts, this is done by regulation. It is done prior to December 31 in the year preceding. That brings the consistency for both of these statutes.

B. Ralston: I understand that previously the designation would be done by October 31. This enables this designation to be done as late as December 31. I'm wondering if the minister could address the potential impact upon revenue forecasting and planning at the municipal level, given that for some municipalities port-related revenue, taxation revenue, is a significant part of their budget.

Hon. C. Hansen: It is currently the practice for all other sectors — whether it be a large industrial property or a mall in a community, a commercial retail mall — that the assessment roll is closed by December 31. That is to allow for a cutoff by which those valuations would be established for the following year.

What this does is ensure for the port facilities that it is the same deadline as other sectors for the time at which the assessment roll would be closed off. This means, basically, that the port properties would be treated exactly the same as all other commercial, industrial and personal and private properties in a particular municipality.

B. Ralston: My note here of the amendment is that the

section that's being removed from the current

section 20.3 of the Assessment Act is subsection (5), which refers to: "Subject to subsection (6), in order to be effective for a taxation year, a regulation under subsection (3) (

a) must be in force on or before October 31 in the preceding year."

That's the change that I'm addressing. The designation prior to October 31 is being changed to December 31, and the questions of timing and planning on behalf of municipalities arise out of that change — at least as I understand it. I stand to be corrected in this very technical area, if the minister could explain that.

Hon. C. Hansen: The original provision to establish this on October 31 was really in recognition that if a port was designated under these provisions, then it allowed for that period between the end of October 31 to December 31 for the assessment authority to go in and do their valuations in time for the assessment rolls to be closed.

[1440]

The assessment authority is now of the opinion that that time is no longer required as the transition has been completed. Therefore, it is appropriate for us to harmonize these two legislations with the same date for the assessment rolls to be changed.

B. Ralston: Once the word "harmonized" starts to be used, I begin to become concerned, I suppose. I meant that only as, perhaps, a weak attempt at humour in this context.

Can the minister, then, explain the assessment process more broadly for port land, because essentially, this does not follow the normal process of market-based assessment that the B.C. Assessment Authority engages. Most people will be familiar with assessment of residential property where the assessment is based on sales in the immediate area.

Would the minister confirm that assessment of port property is simply a designated assessment? In other words, the value is assigned by statute and by regulation, and the taxes that are paid to municipalities are taxes paid in lieu rather than taxes directly raised by the municipality on the designated port land.

Hon. C. Hansen: The member is correct. Ports are evaluated in a different manner than other properties. Essentially, this is a rather simplistic way to describe it. I gather it is a lot more technical than this, but it is essentially established on an area basis — although I must confess that I would have to refer the member to the B.C. Assessment Authority if he wanted to get a more

[ Page 3611 ]

detailed description of exactly how that assessment process is done or the evaluation process is done.

Once that valuation has been established by the B.C. Assessment Authority, then it would increase by inflation in the years that followed.

B. Ralston: Can the minister confirm that by coordinating — if I can use that verb — the two processes under the two separate acts, the value will be the same? There will be no discrepancy between the two assigned values. Is that essentially the purpose, to ensure that there's one assigned or designated value for any individual property? Would that be the correct

interpretation?

Hon. C. Hansen: These amendments that are before us do not change the valuation. There is only one valuation that is done, and that is according to the Assessment Act, and what the ports act does is the designation of a property as a port. So in no way do the provisions of the ports act change what would be determined to be the valuation under the Assessment Act.

B. Ralston: The amendment also uses two terms. One is "designated," which the minister has just used, and the other is "eligible." I understand that eligible port land can then be designated under the act, and the value, for the purposes of taxation, can then be paid.

[1445]

Can the minister confirm that that is the distinction between the two terms? If that is explained, then can the minister advise if, indeed….? For example, in Metro Vancouver is there any port land that is not already designated?

Hon. C. Hansen: The distinction would be that eligible port land would be properties that could be considered to be designated as port lands. Once they are designated, they go from being eligible to in fact being a designated port land.

B. Ralston: Just to get a better sense of the issue and what the change may mean. For example, in Metro Vancouver is…? I understand there was a study — I believe it was completed several years ago — about the impact of industrial taxation on port land. The government made a policy decision, essentially, through this mechanism to cap taxation on port land, and the municipalities have had to bear the revenue consequences.

Can the minister advise if there's a pool of what is eligible port land that could be designated and therefore have an impact upon future municipal revenue?

Hon. C. Hansen: Just, I think, as a point of clarification for the benefit of the member. When he talks about the municipal cap, that municipal cap is provided for under the Ports Property Tax Act. The municipal cap is not contemplated in the Assessment Act itself. This amendment that we have before us is simply with regard to the Assessment Act, not the Ports Property Tax Act.

B. Ralston: Then given this amendment…? Is there contemplated as a result of this amendment that there will be further designations? What's the administrative action that's likely to flow should this amendment be passed?

Hon. C. Hansen: This amendment does not change in any way what may or may not be eligible port lands, and it also does not in any way change the designated port lands that currently exist.

[1450]

Section 59 approved.

section 60.

B. Ralston: This

section repeals certain sections and the

schedule to the Budget Measures Implementation Act of 2008. At that time it was certainly the express view of the minister that this was necessary to implement an alternate minimum tax for financial institutions.

This amendment amends the budget implementation act of 2008 and does away with all those sections. Can the minister explain why, after all the statements of his predecessor and some of the ballyhoo surrounding that, this decision has been made to eliminate those sections?

Hon. C. Hansen: I think there are really two reasons behind it. First of all, the federal government has a minimum corporate income tax act that is applicable to large financial institutions. The province benefits from that as our proportional share of corporate taxes that may be collected. So in fact, to have a provision on the provincial books would be a duplication of that.

Also, given the structure of the minimum capital tax provisions that we had in our Budget Measures Implementation Act, it was…. Because of the structure of the federal act, it would not trigger the provincial measures. Therefore, the bottom line is that the provincial measures were redundant, given the federal provisions, and we're removing it from the books.

B. Ralston: Perhaps the minister can then advise whether those provisions that he refers to as making these sections redundant were in force in 2008. It's my understanding that they were, but I stand to be corrected.

Certainly that was not the public position taken by the minister and the ministry. I'm quoting from a news release of the Ministry of Finance on February 19: "Tax measures include replacing the financial institutions capital tax with a minimum tax."

[ Page 3612 ]

There was certainly no qualification at that time. There was no reference to any federal legislation. There was no suggestion this was unnecessary or redundant. This was a news release issued on or shortly after the budget, and as the minister knows, news releases concerning tax measures are carefully scrutinized all the way up to the deputy minister level in order to give certainty to the public and those who might rely upon the representations of the minister.

Can the minister explain why that was the case in 2008 and now appears to be something that can be brushed aside as being unnecessary?

Hon. C. Hansen: Subsequent to 2008 there has been more work done in terms of what would trigger tax under the minimum tax act. Upon further examination of how the federal minimum tax act works and the implications of it, it is not necessarily that that minimum tax winds up getting triggered.

What does happen is that financial institutions ensure that they are structured in a way that avoids that tax from being triggered. By avoiding the federal minimum tax from being triggered, the same is true for the provincial one. Therefore, the provincial one would seem to be redundant, and therefore, we are repealing it.

L. Krog: I wonder if I might have leave to make an introduction.

Leave granted.

Introductions by Members

L. Krog: Joining us in the gallery today I notice my old friend Coun. Sue Powell from the city of Parksville. I'd ask the House to make her welcome.

[1455]

Debate Continued

B. Ralston: Of course I accept what the minister says about more work being done since 2008, but I suppose it is regrettable indeed, because the public pronouncements of the minister on this question…. The minister will know that this is a question that does attract some political interest across the spectrum, and public opinion is sometimes, frequently, engaged when it comes to the taxation of financial institutions.

That was certainly part of the rationale for the transition from the previous provisions of the Corporation Capital Tax Act as it applied to financial institutions — that an alternate minimum would be in place. I believe a figure of $100 million a year was given as an example of what might be raised by an alternate minimum.

It does seem, and I think the minister is indirectly conceding this, that perhaps a wrong impression was left with the public about (1) the effect of those changes and (2) the revenue that the suggested alternate minimum tax might raise. I'm wondering if the minister might comment on that.

Hon. C. Hansen: I think that both the minimum tax that we put in place provincially and the minimum tax that is in place federally are structured in a way to encourage financial institutions to undertake their business in a way that makes them taxable. They avoid the minimum tax by structuring their revenues in such a way that they will be taxable above what that minimum level will be.

The fact that there is that provision in place means that that is being accomplished. If you talk about how much tax would be collected or how much tax was intended to be collected by this minimum tax in place, the answer is zero, because it was recognizing that institutions would structure their behaviour to avoid that minimum tax being triggered.

That is true today. It will still be true after the passage of this legislation, because of the way the federal minimum tax is structured.

B. Ralston: Well, I don't want to belabour this point, but certainly, I was a direct participant in the debate and debated the proposed amendment sections here in the Legislature. The impression that the minister left was rather different from what the minister is stating more baldly today.

I don't expect the minister to apologize on behalf of his predecessor, but I think it's noteworthy for the record that any suggestion that the alternate minimum had any real effect on financial institutions and the tax that they might pay here in the province was completely academic and purely theoretical.

Perhaps it was designed as a political distraction from the real business, which was relieving financial institutions of the obligation to pay a corporate capital tax, a tax which had been in place for at least 35 years and not tampered with by the Social Credit government, by Premier Bill Bennett or any of the other predecessors to this government.

I appreciate that it may be asking too much for the minister to make that concession, but perhaps he'd be willing to consider it.

Hon. C. Hansen: I'd love to engage with the member on a debate as to whether the elimination of the corporate capital tax was the right thing to do. It was the right thing to do. It ensures that British Columbia can still be competitive. But that's not the subject of the amendment that's here before us, so we would probably have to find another forum for that debate.

Section 60 approved.

[ Page 3613 ]

section 61.

B. Ralston: This is an amendment proposed to the Carbon Tax Act. It appears to impact the sale of propane. Can the minister explain the purpose of the amendment?

[1500]

Hon. C. Hansen: The vendors of natural gas and propane are excluded from this requirement because natural gas and propane are outside the security scheme, and the tax is collected and remitted to government by retail dealers. That is what currently is the case.

What this does is actually simplify the administration of this tax by transferring the point of collection of the tax to the security scheme that is in place for other fuels. So this is going to be far simpler. It's going to save administration costs.

B. Ralston: Can the minister briefly explain the term of art that he used, "security scheme"?

Hon. C. Hansen: When a company either imports fuel into British Columbia or manufactures fuel in British Columbia, then under the security scheme what they will do is pay to the province the value of the taxes that would be required. They then distribute that fuel, and it is eventually sold at the retail level where they then collect from the customer the value of that tax to reimburse what they had transferred to government at the time of importation or manufacturing. So it's simply just a different stage in the chain where government actually collects those taxes.

Sections 61 to 63 inclusive approved.

section 64.

B. Ralston: This rewrites the definition of natural gas. Can the minister explain the purpose of the amendment?

Hon. C. Hansen: The intent of this amendment is to clarify the definition of natural gas as it pertains to acid gas and waste gas. We are aware that there are more implications on this change and more information that we're gathering. Therefore, there is also an amendment that I'm going to be tabling, when we get to the implementation date, to alter the implementation date of this particular section. But the intent is to clarify the definition of natural gas.

B. Ralston: My understanding of this may be imperfect. These would appear to be what are sometimes called processing emissions, I believe. As the minister will know, that is sometimes, again, the issue of debate and concern among members of the public about process emissions.

So is the purpose of the amendment, broadly speaking, to apply the tax to process emissions? The definition is being broadened to include acid gas and waste gas, which is not currently captured by the definition and therefore would not be subject to the tax. Is that a fair

summary of what's taking place, or at least the beginning of an understanding of the change?

[1505]

Hon. C. Hansen: The intent of the amendment as drafted was not to expand into processed gas. That is obviously something that governments, in cooperation with our other partners and neighbours in the Western Climate Initiative, are working on.

In terms of the implications of this amendment, it does have ramifications in terms of how processed gas would be treated. That is the reason why, while we are implementing this section, we are also going to delay the implementation date of it.

B. Ralston: The minister has mentioned now several times that he has an amendment about delay. I take it, then, that the purpose of the amendment, delaying implementation, would be a consultation of some type.

Can he explain — briefly, of course — who the consultation would be with, and would members of the public, for example, be involved in this process? I'm sure that while it wouldn't be a broad concern, there are certainly some public interest groups that might have an interest in the issue as it relates to natural gas emissions.

Hon. C. Hansen: The consultations, I think, have been quite extensive over the last number of years with regard to the climate change agenda and how various fossil fuels should be treated, including issues around the carbon tax and its implementation as well as cap-and-trade. Those consultations have been, to date, very extensive, and they will continue to be extensive.

B. Ralston: Just to go back to the definition that's being proposed. The definition is being, as I understand it, altered to include the words "natural gas…includes acid gas and waste gas that, as a part of processing, have been removed from other components of natural gas, but does not include refinery gas."

The words suggest that those components have been removed from one body of natural gas and are somehow distinct. Can the minister then explain why those terms were chosen and what's the meaning — or a brief description — of both acid gas and waste gas which appear to result, in the wording of the amendment, from processing?

Hon. C. Hansen: As I understand it, acid gas and waste gas are terms that are often used interchangeably

[ Page 3614 ]

for the same thing, but essentially they are hydrogen sulphate.

B. Ralston: Well, my knowledge of chemistry is probably weak. But is this another term that is sometimes used to describe sour gas? Certainly, if that's the case, then I'd ask the minister to confirm that because, as the minister will know, there's considerable public interest from time to time about sour gas emissions.

Hon. C. Hansen: I have to plead the same lack of skills on chemistry. It was a long time ago that I was in grade 10 chemistry class. To correct what I said earlier, it should be hydrogen sulphide and carbon dioxide — what constitutes acid gas and waste gas. It is not the same thing as sour gas.

[1510]

B. Ralston: Is it intended that sour gas would be captured by any of these

definitions, or is that something completely different?

Hon. C. Hansen: Again, I will apologize to the member. I got that last answer 180 degrees wrong. It is sour gas. So these are the terms that are also used for sour gas. Hydrogen sulphide and carbon dioxide is what that would constitute.

B. Ralston: Then given that it's sour gas, I think that obviously brings about a new level, at least for me, of public awareness of this issue. So is the intention of this amendment, when it comes into effect, to apply the tax to sour gas if it's possible to record or track those emissions?

Hon. C. Hansen: We do not intend to expand the tax base with these amendments.

B. Ralston: Then perhaps the minister can explain the purpose of the amendment. It's broadening the definition. It is in the Carbon Tax Act. Can the minister then explain the purpose of the amendment, if it's not intended to make the subject of the broader definition subject to the tax?

Hon. C. Hansen: The intention of the amendment is to ensure that we properly capture a definition for natural gas that constitutes what is intended to be taxed under the Carbon Tax Act. We recognize that we do have some more work to do in this particular area in working with the industry to fully understand exactly the implications of this, and that is why we are also going to delay the implementation of it — so that work can be done.

B. Ralston: Well, I thank the minister for that explanation. Can the minister then, given the necessity for the delay of implementation for further discussion with the industry, give at least a sense of the industry's concern about the effect of this amendment?

I'm wondering particularly what the revenue implications might be. Obviously, my sense would be that the industry would want to avoid further taxation if at all possible, and the government might wish to collect more tax, both in pursuit of its economic objectives and in pursuit of the climate change objectives that it professes from time to time.

Can the minister give a bit of a sense of the points of difference or at least, perhaps, the points that need to be clarified and that will be achieved by this delay of implementation?

Hon. C. Hansen: The intent of the Carbon Tax Act is to ensure that the carbon tax is properly applied to the burning of fossil fuels in British Columbia. It is not the intention of the Carbon Tax Act to tax process emissions. We are working on other initiatives, including cap-and-trade, to look at how we can best address the issues with regard to process emissions.

What the industry has expressed to us is that because of the wording of this amendment, it may in fact result in taxation on process emissions, which is not the intention. Therefore, that is why we will be delaying the implementation — so that we can properly work with the industry to ensure that the definition we use for natural gas is in fact what is intended, and that is to apply the tax to the burning of natural gas in British Columbia.

B. Ralston: Then the obvious question arises: if there's such uncertainty and the amendment appears to conflict with the government's legislative objectives, why introduce the amendment at all, I suppose?

Hon. C. Hansen: The amendment was tabled. I think that is when some of the new information came forward subsequent to the tabling of this legislation. Therefore, it was determined that the best way to deal with the uncertainties around it and the need for more information was to delay implementation so that additional work can be done.

[1515]

Section 64 approved.

section 65.

B. Ralston: This changes the tax rate for kerosene so that it has the same tax rate as jet fuel. The note in the budget on page 85 says: "The change removes a costly compliance burden." So could the minister explain what's meant by that?

Hon. C. Hansen: This change is simply to simplify and streamline the administration side of how this tax

[ Page 3615 ]

is applied. The tax rate for kerosene and the tax rate for jet fuel were very similar. For efficiency, it is standard practice for fuel manufacturers to produce jet fuel as a primary fuel and sell a small portion of it as kerosene for heating or lighting purposes.

This change actually impacts provincial revenue by less than $1,000 a year. But for that very small change of less than $1,000 a year, we result in considerable administrative simplification.

Section 65 approved.

section 66.

B. Ralston: This amendment refers back to the debate we had on

section 60, referring to the changes to the 2008 Budget Measures Implementation Act and the alternate minimum on financial institutions. I just wanted to confirm that this is related to the debate that we had in

section 60.

Hon. C. Hansen: Yes, it is a consequential amendment.

Section 66 approved on division.

section 67.

B. Ralston: These series of amendments initiate some changes in the Home Owner Grant Act, which make reference to northern and rural area homeowners and an additional financial benefit that they would be eligible to receive. At least I'm advised….

There may be rural members of my caucus who wish to enter the debate at this point. I'm not sure if we'll hear from them, but I've certainly given them that notice now.

There appears to be some lack of clarity as to the definition. I don't know whether that's a consequence of broadcast or reporting of these proposed amendments, but in order to minimize misunderstanding, perhaps the minister could just explain the purpose of this amendment and those areas of the province which homeowners who fall within those areas would be eligible for this benefit.

Hon. C. Hansen: I think the amendment, the new definition that's being proposed, is very clear. It is very explicit that it includes the areas of the province outside the boundaries of the greater Vancouver regional district, the capital regional district and the Fraser Valley regional district. Those are well-defined boundaries. What we are defining as a northern and rural area are those areas of the province outside of those boundaries.

B. Ralston: So can the minister then explain what a qualifying homeowner will be entitled to receive and why the government has chosen to take this step at this time?

Hon. C. Hansen: This is part of the revenue-neutral carbon tax initiatives, where all of the dollars that we collect under the carbon tax are returned through tax reductions or other measures to British Columbia families.

[1520]

The argument was made that the ability of some residents of the province to minimize their carbon footprint was less if they lived outside of the urban areas. This initiative, I think, is in recognition of the differences, generally speaking, that homeowners in these parts of the province face. The provision allows for an increase in the homeowner grant of up to $200 a year for eligible homeowners.

B. Ralston: With the Chair's indulgence, perhaps I can ask this question now. I think it technically arises in one of the series of amendments that relate to this section.

It appears that the intention is that properties that have taxes of less than $920 a year — or $945, I believe, in certain cases — would not be eligible for this grant. These would obviously tend to be ones that were occupied by those who earn less, and obviously, taxes would be lower on apartments and on condominiums.

Can the minister explain why that choice has been made?

Hon. C. Hansen: Currently under the homeowner grant provisions for seniors, there is a minimum property tax payable of $100. For other homeowners, there is a minimum property tax payable of $350. This increase in the homeowner benefit in those parts of the province…. Regardless of whether they're seniors or otherwise, those minimums do not change.

B. Ralston: Can the minister explain the rationale for that? This change really has no impact on those who are paying the least. Can the minister explain the policy reason for that?

Hon. C. Hansen: It is a benefit that actually flows, obviously, not to all residents of the province. It requires that it is somebody that owns their own home.

The member is correct. If the property is valued such that the taxes would be so low that they would be maxing out their benefit under the current provisions, then this increased benefit would not necessarily benefit them specifically.

But I think if the member looks at the other provisions that we have for the offsets for the revenue-neutral carbon tax, there is certainly something for everybody in British Columbia. They would benefit one way or another from that revenue neutrality. Even if they don't

[ Page 3616 ]

benefit from this particular provision, there are certainly other provisions in the carbon-neutral initiatives that would be of benefit for everyone.

B. Ralston: Obviously, in modelling and deriving an estimate of the cost of this particular change, the ministry will have calculated the number of properties that would benefit and similarly, or conversely, the number of properties that fall below the threshold. I'm wondering if the minister could, if it's available through the staff that are there, give some rough numbers of properties that might benefit and properties that would fall below the threshold and therefore not be eligible.

[1525]

Hon. C. Hansen: It is estimated that about 400,000 would benefit from this particular program. I don't have the exact number of how many would have property taxes low enough that they would not. I've got the number of how many would be eligible. I don't have a number available to me as to how many living in those areas would not be eligible because their property taxes were already quite low.

B. Ralston: I thank the minister for that answer. Could the minister then undertake to provide that at a later date? If staff can research that, if that could be provided in a written form, that would be helpful. I'd appreciate that. I don't know if it's possible to get an answer from someone who's watching these proceedings in one of the relevant offices. Perhaps that could be sent in as a note a bit later this afternoon.

Hon. C. Hansen: We will endeavour to see if that information is available.

B. Ralston: The minister referred to other benefits that would flow from compensation, if I can put it that way, or for the impact of the carbon tax, particularly in northern and rural communities.

I'm assuming, perhaps incorrectly — and the minister can correct me if I'm wrong — that he's referring to the low-income carbon tax credit. If that's what he's referring to, then please confirm that. If there's anything other than that that he's referring to, perhaps he could specifically provide that as well.

Hon. C. Hansen: I'd be pleased to provide it now. If you look at the low-income climate action tax credit that is in place, the reduction of 5 percent for the first two personal income tax rates, the provision of the northern and rural homeowner benefit, the reduction in the small business corporate tax rate are all examples of initiatives that are funded out of the carbon tax revenue.

Sections 67 to 74 inclusive approved.

section 75.

B. Ralston: We've now moved to a new series of amendments. These are revisions or amendments that are proposed to the Income Tax Act.

Section 75 extends the flow-through mining share tax credit.

Can the minister briefly describe the likely financial impact in terms of revenue forgone, if I can put it that way, on the provincial budget?

[1530]

Hon. C. Hansen: The forgone tax revenue to the province under this measure is estimated to be about $7 million a year.

B. Ralston: Can the minister give the composition of that $7 million in the sense of how many individuals it's estimated will be benefiting from that particular share tax credit?

Hon. C. Hansen: For the most recent tax year that we have information on — which, of course, is the 2008 tax year — the number of claims that were received as of January 31 of 2010 was 5,720.

B. Ralston: I'm aware that this is something that the mineral exploration association and the mining association advocate. Indeed, those of us on this side of the House have supported this measure as well.

It does seem to be a relatively small amount and a relatively small number of individuals. Is there any particular reason why that is the case? Is it that the takeup of the program is not that great, or are there other limitations that flow from this kind of a program that are maybe not apparent at first blush?

Hon. C. Hansen: I think, as the member knows, the exploration history in British Columbia over the last nine years has been a phenomenal success story. At one point I think we had seen the annual amount of money being spent on exploration up 13 times what we had seen as of about 2001. That may be off a little bit in the last year because of the economic climate. We know there is still tremendous interest in mineral exploration in British Columbia today.

The vast majority of the funding, most of the funding, for exploration is coming from corporations. This is a program that actually encourages individual investors to come forward and, quite frankly, take some very big risks in terms of whether or not they will ever see a return on their investment.

I think the fact that there are just short of 6,000 individuals preparing to put up their investment dollars for the risks associated with mineral exploration…. The fact that there are that many is, I think, impressive, and I think it is a very important part of raising the capital

[ Page 3617 ]

necessary for the huge success we've had on the exploration side of mining in British Columbia.

B. Ralston: I have to quarrel a bit with the minister's characterization of the expenditure and exploration. Certainly there was a significant decline last year, but that's obviously a result, to some extent at least, of the global financial climate.

Can the minister, then, explain the mechanism by which this works for an individual? Is the full amount of an individual's investment deducted from their taxable income, or is it only some portion of the investment that's made that's deducted from their taxable income?

[1535]

Hon. C. Hansen: The British Columbia mining flow-through share tax credit allows individuals who invest in flow-through shares to claim a non-refundable tax credit equal to 20 percent of their British Columbia flow-through mining expenditures. Any unused credit at the end of the tax year may be carried back three years or forward ten years.

The British Columbia flow-through mining expenditures are specific exploration expenses incurred after July 30, 2001, and renounced by the corporation issuing the flow-through shares in order to avoid it being double-counted.

B. Ralston: This

section extends this program to 2014, and indeed, that's the specific amendment in

section 1.1. There have been representations made by the Association for Mineral Exploration that this program be made permanent. The government has chosen to extend the program to 2014. Is there any particular reason why that course has been chosen — yet another extension rather than making the program permanent?

Hon. C. Hansen: It's my understanding — and perhaps the member knows this more firsthand than I do because he was a member of the Finance Committee with the prebudget consultations — that this three-year extension, rather than the annual extensions that have been previously done, was a measure that was specifically recommended to the Finance Committee by the mining association.

B. Ralston: The minister may have the better of me in terms of recollection, but my recollection was that was certainly a position advanced, but I think the preferred position was that the program be made permanent.

I appreciate that it's no longer an annual event, but can the minister explain: is there consideration being given to making the program permanent, and if not, why not?

Hon. C. Hansen: I think we do have some tax credit programs that are in fact permanent. We have others that are time-limited. I think it allows us to review these on an ongoing basis to determine whether, in fact, they're still working. Are they still generating the economic activity and the results that we want?

I think by establishing a three-year term, it does give the industry more certainty. It allows them to plan with more certainty over that time frame. It's certainly, from the industry's perspective, a significant improvement over the annual extensions that we were doing previously.

B. Ralston: The minister refers to the opportunity to review the program. Can the minister advise if there's been a recent…? That is, within the last, say, previous two fiscal years of the program. If so, what were the results of that review, and is the minister prepared to share that review publicly?

Hon. C. Hansen: It's not a formal review in the sense that there is a report that has been prepared each year on this. This is a subject that would come forward to the Minister of Finance in discussions with tax policy officials in the ministry, and that annual discussion would take place and the determination made as to whether or not the program should be extended for a further year.

This year we determined, given its success in past years, that we would extend it for the three years.

Section 75 approved.

section 76.

B. Ralston: This is a consequential amendment that flows from the previous amendment. It refers to the mining exploration tax credit. Can the minister explain the distinction between the mining flow-through share tax credit and the mining exploration tax credit?

[1540]

This amendment makes it clear that both credits can't be claimed for the same expenditure, but perhaps an explanation of the distinction between those two credits might be helpful.

Hon. C. Hansen: The mining exploration tax credit is a credit that can be claimed by the individual or the company that is actually undertaking the exploration activity. So the purpose of this amendment is simply to make it clear that the same expenditure cannot be claimed for a tax credit under both programs.

Section 76 approved.

section 77.

[ Page 3618 ]

B. Ralston: This

section begins a series of amendments to the film and television tax credit. Can the minister explain the amendments that have been proposed in

section 77?

Hon. C. Hansen: Currently the tax credit is limited to 48 percent of the total production costs. The federal program that is in place actually allows a tax credit for qualified labour to be up to 60 percent of the total production costs. We have made this change from 48 percent to 60 percent to ensure that, first of all, our program is consistent with the federal program and also to ensure that those productions that have a higher labour component of it can in fact reflect the benefit accordingly.

B. Ralston: One of the considerations — and I'm wondering if the minister will confirm this — is that the province of Ontario has recently changed its tax credits in the same industry. Can the minister advise whether this change is comparable to what's taking place in Ontario? And if it's not, why is it being advanced at this level?

Hon. C. Hansen: In terms of this ceiling on the percentage of production costs that could be claimed for qualified labour expenditures, Ontario did not make any changes with regard to their domestic productions. This applies to domestic productions. It's our understanding that Ontario currently has a ceiling that's at least 60 percent, if not higher.

B. Ralston: Is the minister, then, saying that this new position is directly comparable to Ontario — or that Ontario's is more advantageous to the industry, if I can put it that way?

Hon. C. Hansen: I can't say that it's exactly the same as what Ontario has, because I'm not exactly certain what their ceiling would be for the labour component. As I say, Ontario made some big changes to their tax credit structure earlier this year, but they did not make any changes to the tax credit structure for domestic productions.

B. Ralston: Well, my advice, and this may stand subject to correction by the minister's officials, is that Ontario increased their basic film and tax credit up to 40 percent of the first $240,000 of qualifying labour expenditure for first-time producers. So there was an incentive to new entrants on the domestic side in that form.

[1545]

In these amendments, is there anything comparable to that proposed change that Ontario has advanced?

Hon. C. Hansen: I should point out that our intention was not to match Ontario. Our intention was to find a film tax structure that worked for the industry in British Columbia, that actually encouraged the convergence.

As I said at the time we made the announcement, this was not about funding the film industry in British Columbia as we have known it. It's about supporting the film industry as it is becoming. We certainly looked carefully at the changes that Ontario had made on the foreign film side. We wanted to make sure that we picked a program that worked for British Columbia. It wasn't our intention that we were going to go out and match what Ontario did.

B. Ralston: I can well appreciate the caution that the minister is exercising in terms of automatically wishing to match the credits and the tax structure of a competing jurisdiction. Certainly, overall within Confederation, within the economic relations between provinces, that can be very destructive in the long run for the tax base of all the provinces.

[C. Trevena in the chair.]

But in this particular industry, given that the tax credit has really guided, in many ways, production decisions that are made, is the minister concerned by the position that he's taken — that this will lead to further erosion of the advantage of British Columbia and the flight of productions from British Columbia to Ontario, based on a more, or at least perceived more, favourable tax environment for these kinds of film productions?

Hon. C. Hansen: The decisions that are made as to where film production is done — digital effects, animation — are not made just because of tax credits. I think I'm correct in saying this, but not 100 percent certain, that the province in Canada that has had for a number of years the most generous tax credits for film production is Manitoba. So if it was all about tax credits, you would assume that's where all the film production has gone, and it has not.

I think that British Columbia can be proud of its film industry, its digital media industry. We have a very strong infrastructure here. We have incredibly talented crews and workers that work in this sector that I think are second to none. So I think when companies are looking for places to do their production, British Columbia ranks very, very high, regardless of the tax credit structure that's in place.

We believe that the tax credit structure that we have now adopted is one that supports the industry. It allows them to compete, to continue to have a competitive edge, and that competitive edge is made up of a whole bunch of factors, of which tax credits are only one.

B. Ralston: Well, I don't disagree with the minister in characterizing the B.C. industry. Certainly the labour

[ Page 3619 ]

tax credit, which is one of the principles of this form of tax credit, which requires the company that's seeking eligibility for this to actually hire people within the province, has led to the creation of a very vibrant industry here in British Columbia — very highly skilled crews and a close cooperation between the industry side and those who work in it.

I'm not suggesting, and I mean no disrespect to the Manitoba government or its citizens…. But the more direct competitive comparison is between British Columbia and Ontario, given the substantially existing base for the film industry there already. I suppose….

[1550]

Is the minister not concerned? I appreciate all the cautions about duelling reductions in tax revenue and implications for government revenue broadly, but nonetheless, is the minister not concerned that the position that B.C. is now taking might jeopardize the future of this industry here in British Columbia?

Hon. C. Hansen: The short answer is no. I think we have a very strong industry and will continue to have a very strong industry. The measures that Ontario adopted on their film tax credit program, I think, are beyond what is in the public interest. I will say that on the record.

I think that the magnitude of the film tax credits that Ontario is offering to the industry is extreme. They are exorbitant, and they will not produce, in my view, the economic benefit to justify them. I think that we want to encourage the industry, but it's not a case of saying that we are going to do that with taxpayers' money at all costs.

I think there are lots of industries in British Columbia that we would like to encourage, and quite frankly, there are lots of industries that would be creating many, many thousands of jobs if they had the kind of tax credit structure that we are offering to the film industry in this province today.

The bottom line is we have a strong industry. We've got good infrastructure. Even since we announced the changes that we did — and did not match Ontario — there is new investment that is being announced to be built in British Columbia. We've got new productions that are being announced for British Columbia. Clearly, these are companies that are looking for quality crews and quality infrastructure.

The tax credits help. But as I say, that is only one of the factors that make their determination as to where they want to film their films and do their digital and special effects work — and now integrate into the film industry the digital media industry, as well, which is becoming a big part of what the future of the film industry is all about.

B. Ralston: I appreciate the frank remarks of the Minister of Finance.

I suppose a member of the public might ask if there is a mechanism, either through dialogue or discussion at the interprovincial level, where these kinds of views are communicated? Not to suggest a combine to arbitrarily set tax rates across the country, but certainly, given the strength of the minister's views, I'm wondering if he's communicated those to his provincial colleague in Ontario, the Minister of Finance there, and had that discussion.

Hon. C. Hansen: Yes.

B. Ralston: I appreciate that the minister may not be in a position where he can share what might be a confidential conversation. I gather from the tone of the minister's remarks that the exchange might have been very blunt, but can the minister express the reaction of the Minister of Finance of Ontario to the position that he's taken here publicly today?

Hon. C. Hansen: First of all, I have a very, very good and cordial relationship with my colleagues, the other Ministers of Finance from across Canada, including the province of Ontario. We did have a very good and a frank discussion about film tax credits.

I think there is a recognition that we need to work together more so as provinces. Just as an example, when we finalized our decisions around the changes that we announced at the beginning of February, we ensured that we gave a heads-up to Ontario to make sure that they knew what we were doing and why we were doing it.

We certainly didn't want them to interpret our move as somehow ratcheting the levels up even further, that what we did was…. Ours are structured quite differently because ours are aimed specifically at qualified labour expenditures. Ontario has done a different tax credit rate, but it's based on all production costs.

[1555]

We wanted to make sure that they knew that we were not upping the ante on this race to who could have the most generous tax credits. Ontario can probably claim that today, and we're quite prepared to allow them to continue to claim that position, because we think we have lots of other strengths in British Columbia.

B. Ralston: I thank the minister for that answer.

As a question of, I suppose, national tax policy between provinces, is there a mechanism or an envisaged mechanism, beyond the regular meetings of Ministers of Finance at the provincial level nationally, to engage in these kinds of discussions in a way that might lead to the result that the minister suggests would be more desirable?

Hon. C. Hansen: It is an area that there's probably room for improvement on. Discussions around tax in-

[ Page 3620 ]

itiatives are by their very nature held within a very close circle. Even as we get down to budget time, initiatives and discussions and things that we're considering as tax measures are not discussed other than in a very tight circle of decision-makers. So it's very difficult for provinces to start to share that information across provincial boundaries with other jurisdictions.

But I think if we look at some of the initiatives going back to the early 1990s that led to the agreement on internal trade — where provinces agreed to not undermine each other's interests with things like subsidies and incentives to poach jobs from one province to the other, for example — there is certainly room for more discussion among Finance Ministers nationally to ensure that we build the Canadian economy and we do it in a way that ensures that the entire country is stronger as a result of tax measures and changes that we undertake.

B. Ralston: The minister has mentioned the avenue that the Ontario government took, which was a tax credit on the total cost of film production, as opposed to the B.C. approach, which is a labour tax credit which had its origin, dare I say it, in the 1990s. Can the minister explain why the government has chosen to follow the labour tax credit model, or continue to follow the labour tax credit model, as opposed to credits for the entire cost of film production?

Hon. C. Hansen: There are a couple of reasons. I guess what I cannot explain for the member is why Ontario chose to go away from a tax credit based on labour.

The tax credit on qualified labour expenditures is, first of all, consistent with how the federal government structures theirs. It also ensures that there is actually a much more direct benefit to the B.C. economy per se. If you look at total production cost, there's a lot of leakage in terms of where that benefit actually comes from. It could also include things like equipment purchases for a film that still have a residual value.

By focusing in on the labour tax credit, it's very definable, it's easy to administer, and it's consistent with the federal approach.

Section 77 approved.

section 78.

B. Ralston: This

section provides for an additional tax credit on digital animation and visual effects. Obviously, this is where increasingly the action is in this industry and where the growth is. Can the minister explain why this tax credit of 2.5 percent, as I understand it, was chosen?

Hon. C. Hansen: The rate that has been in effect now for a number of years is the 15 percent tax credit rate for digital animation and visual effects — DAVE credits, as it's referred to in the industry. I think that that tax credit program has been very successful in ensuring that we can retain and build a very dynamic digital animation and visual effects industry in British Columbia.

[1600]

This increase is modest, but I think it also reflects the fact that we wanted to take a measure that would allow us to continue to ensure that we're competitive with other jurisdictions. It doesn't match what Ontario does, but it does allow us to continue to support the industry in British Columbia.

Section 78 approved.

section 79.

B. Ralston: This

section provides for an additional 8 percent to the production services tax credit. Can the minister explain the rationale behind this proposed amendment?

Hon. C. Hansen: Yes. Actually, the explanation is the same as with regard to the previous section. It is recognizing that, yes, Ontario did increase their tax credits. We wanted to ensure that in the balance of all the benefits for British Columbia production, we didn't need to match Ontario in order to stay competitive. But we did need to make some movement in that tax credit. Hence, we increased it from 25 percent to 33 percent, which applies only to the qualified labour portion, as we mentioned earlier.

The Ontario tax credit, I believe, is at 30 percent, but it applies to all production costs. This was actually the one measure where we wanted to be clear when Ontario heard the move we were doing — that we were going to 33 percent — that it was still only on the qualified labour expenditures and not on total production cost, as was the change that was done in Ontario.

Sections 79 and 80 approved.

section 81.

B. Ralston: Can the minister explain the distinction between this

section and the previous

section 78, which both appear to be directed to digital animation and visual effects?

Hon. C. Hansen: There are two sections in the act. One applies to foreign productions, and the other applies to domestic productions. By amending both sections, we make sure that this modest increase in the credit applies to both domestic and foreign.

Section 81 approved.

[ Page 3621 ]

section 82.

B. Ralston: This

section initiates a series of amendments to the Land Tax Deferment Act. It broadens the eligibility for the possibility of deferring property tax. I'm wondering if the minister can explain what the program entails and why he's chosen to include it in the budget.

Hon. C. Hansen: We have had, for a number of years now, a property tax deferral program for seniors. Recently — I think as of just a couple of years ago — the age eligibility was reduced to 55 years. That program, I think, has been a very valuable option for some seniors. Not all who would qualify for it, needless to say, have exercised that option, but it is clearly an important option for some seniors.

We recognize that as families in British Columbia go through their challenges of raising families, there are cases from time to time where they're facing financial challenges. It may be, for example, that one of the breadwinners is between employment or perhaps in layoff for a period of time. The challenge there is that while they may need some financial relief, it's not like they can go to the bank and take out a second mortgage on their house, even if they have the equity in their house, because they may not have the income stream necessary to support a second mortgage in order to qualify for that second mortgage.

This is a mechanism that provides an option to those families so that if they face challenges like that, they could have the option of deferring their property tax for a few years in order to get through those challenging times. Again, as I say, it's just one additional option that families have at their disposal to meet their financial challenges.

B. Ralston: The minister will confirm that this has no impact on the tax revenue to municipalities, since the provincial government will provide the taxes that would be deferred.

[1605]

This measure has been criticized, as I'm sure the minister is aware, as simply encouraging families who may be in a precarious financial situation to take on more debt. This is not a program that contemplates forgiveness of the tax obligation. It merely defers it. It remains on the title of the property, and it has to be paid at some point, presumably at either a future sale or death of the property owner.

Is the minister not concerned that this may send a signal of encouraging those in a precarious financial situation to take on more debt and ultimately worsen their financial situation in the long run rather than dealing with financial problems, such as they can, at the time they arise?

Hon. C. Hansen: Actually, I think the opposite is true. If you find a family that is going through a challenging stretch…. If they own their own home and have equity in their home and yet can't afford to pay their property taxes or perhaps meet other household expenditures, the choice that they would have is to not go to the bank and take out a second mortgage, as I say. But their choice would be to sell their house.

In fact, a number of years ago I met with a constituent who was in exactly that position — between jobs — and their only opportunity was to sell their house and move into some less expensive accommodation. This is a measure that gives them a bit of breathing room in a circumstance like that, so I think it's actually one that supports families.

It is not something that I think would be utilized by a family year in and year out for 18 years. Obviously if they did that, they would erode their equity. But I think every young homeowner, every young family that I know…. If I take myself back 30 years, I could probably put myself in the same boat. Home ownership is something to aspire to.

I think that once you have that first home, the goal is to make sure you get it paid off. Sometimes that takes many decades. This is actually something that allows for a bit of a safety valve if they wind up in temporary difficulty. They get that little bit of additional support that may help tide them over until they're perhaps re-employed or their job is reinstated — they're back off layoff or whatever it may be — and then they can once again get back at paying down the mortgage on their home.

B. Ralston: Can the minister then advise how many years an eligible property owner would be permitted to defer property taxes?

Hon. C. Hansen: We have not at this point put a limit on that. As I said, when we announced this measure, I was quite explicit in indicating that we will look at that issue over time to determine whether or not we should in fact put a time limitation on it.

The limitations that are in place and will be there from the beginning are that the property owner must have a minimum of 15 percent equity in their home, and they would have to have children under the age of 18 that they would be responsible for.

It is an annual application, so every year that homeowner would have to reapply for another year of tax deferment, and they would have to meet those two requirements in order to qualify.

B. Ralston: What is the mechanism that the minister is thinking of to limit the number of years that the tax could be deferred? It would seem that now would be the time to perhaps consider that. Is the minister envisaging

[ Page 3622 ]

that this might be dealt with through regulation at some later stage, or is there some other avenue that's being sought?

Hon. C. Hansen: It's my understanding that if we were to put a time limitation on that, it would have to come back to the House.

[1610]

B. Ralston: Is there any study or, I suppose, sense of how big the takeup of this program might be? And is the minister waiting to get a sense of the takeup of the program before making a decision about placing a limit, if any, on the number of years it can be deferred?

Hon. C. Hansen: For the seniors program that's been around for some time, there are about 26,000 homeowners who are deferring property taxes. That's about 6 percent of the number that could be eligible if they choose to pursue this program. I didn't mention this earlier, but there are about 400,000 homeowner families that could be eligible for this new program.

We don't know the uptake rate, but if the same uptake rate was in place as is there for seniors, it would be about 24,000. There is not a similar program that we can look to, to give any certainty around that estimate. It is just that. It's an estimate at this point.

B. Ralston: The legislation or the amendments that are proposed will set an interest rate that the deferred taxes will attract. Can the minister advise the House what the proposed interest rate would be?

Hon. C. Hansen: The interest that would be applied would be prime. That is calculated semi-annually. Sorry, it is determined. Prime is set semi-annually based on what prime is at that time. I think the other thing that's important is that this interest is simple interest, not compounded interest that is applied. The current rate that would be applied if this program were in place would be 2.25 percent.

Sections 82 to 89 inclusive approved.

section 90.

B. Ralston: This is an amendment to the Ports Property Tax Act. That's a statute we discussed earlier, and I just wanted to confirm that

section 90 and

section 91 are consequential amendments related to

section 59 that we dealt with earlier.

Hon. C. Hansen: I would not characterize these as consequential, but there are, of course, consequential amendments we'll get to in this bill. I'll read the proposed amendment or the description of the amendment.

It's to require the designation of port property to be made on or before December 31 of the year preceding the taxation year for which the designation is to take effect. It specifies that if land in a municipality ceases to be occupied by a port and becomes occupied by the Crown and ceases to be designated, the rescission of the designation is effective as of the date the land ceased to be occupied by the port. So it is following up on the same amendments we had earlier.

Sections 90 and 91 approved.

section 92.

[1615]

B. Ralston: Sections 92 through 96 deal with forgoing property transfer tax for the amendment of a strata plan in certain circumstances. Can the minister briefly describe what the purpose of this group of amendments, 92 through 96, is for?

Hon. C. Hansen: These sections actually provide for two changes. The first is to allow for an exemption to the property transfer tax to correct conveyancing errors. The example that was given to me is if you were buying a strata unit and in the conveyancing you were actually given the wrong unit, we could allow for the property tax to be exempted while that gets corrected.

The other change is with regard to the Strata Property Act. Under the old Condominium Act there was a provision whereby if the strata council were to amend the strata plan in a way that the end result was that everyone had the same properties at the start of the amendment to the plan, that would not trigger a property transfer tax. What this amendment does is ensure that those same provisions that were in the condo act continue under the Strata Property Act.

Sections 92 to 96 inclusive approved.

section 97.

B. Ralston: This next group of proposed amendments,

section 97 through

section 101, deals with proposed amendments to the School Act as it applies to provincial industrial property tax owners. It proposes some revisions to that tax credit. Can the minister explain the changes proposed by these amendments and the rationale for making them at this time?

Hon. C. Hansen: This is part of the carbon tax recycling initiative to ensure that all of the dollars collected under the carbon tax are returned to individuals and corporations in the province. So it's a recognition that, yes, the carbon tax actually has an impact on some of our industrial property users in the province.

[ Page 3623 ]

But to ensure that there are still the incentives that the carbon tax is intended to drive, the carbon tax stays in place in its application as set out. Some of the revenues it collected can go back to the benefit of those organizations, but not by reducing the incentive for them to reduce their consumption of fossil fuels.

This is one way of ensuring that there is tax recycling, and it reduces the school tax in the case of industrial and light industrial property classes. That benefit was originally established at 50 percent of the tax payable. These amendments increase it to 60 percent, and it also introduces for the first time a property tax credit for school taxes for farmland equal to 50 percent of the tax responsibility.

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B. Ralston: My advice is that this increase from 50 percent to 60 percent will cost approximately $10 million. I'm wondering if the minister could explain how that's related to the carbon tax cost of these affected property owners. It would seem difficult to achieve that with any accuracy, but I'm wondering: what was the intellectual process or reasoning process that led to this figure?

Hon. C. Hansen: As we've indicated, the carbon tax is revenue-neutral. That does not mean it's revenue-neutral to every payer, whether that payer is a corporate payer or a private individual. If you want the carbon tax to motivate the changes that we expect to see, then you in fact don't want to have a one-for-one reimbursement of carbon tax.

This initiative is one that we feel helps to support our industrial and light industrial companies around the province. It's particularly of benefit in rural communities where many of the industrial firms have been going through some challenging times. This is one way to support them that in a way continues to ensure the change in behaviour that the carbon tax would incent is still in place.

B. Ralston: Well, I wasn't suggesting there needed to be a one-to-one ratio, but I was wondering whether there was any connection whatsoever other than, I suppose, a notional connection. Perhaps the minister can answer that.

As the minister will know, his colleague the Minister of Community and Rural Development has initiated a review of industrial property tax. There are a number of people appointed to that, and that particularly focuses on classes 4 and 5 of the assessment classifications.

Is the minister making a commitment or undertaking the prospect of reviewing this credit depending on what the results of that study may be in terms of its recommendations?

Hon. C. Hansen: The committee is looking specifically at municipal property taxes, and to the best of my knowledge, the scope of their review would not include school property taxes.

B. Ralston: Well, this tax is obviously one that affects industrial property owners. Essentially, the same properties would be paying those two taxes. Was there any particular reason for excluding it from the review?

Hon. C. Hansen: This is not excluded from the review. The review that was set up was for a totally different focus, and that was to focus on municipal property taxes. I'm not privy to their deliberations, but I'm sure that's what they're focusing in on.

B. Ralston: Well, what's called the school tax — I'm sure the minister will agree — is effectively a provincial tax on industrial property classes 4 and 5. Municipalities have authority to collect taxes from the same property. So it's coming from the same pocket and, I suppose, adds up to one payment from the affected property owner.

I appreciate that the minister may not have made this decision. But would he not agree that it would appear more logical and more thorough to look at both of those taxes at the same time?

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Hon. C. Hansen: In discussions that we have had with companies and industry organizations around the province over the years, the concern that has been raised has not been around the school tax on property. The concern has been around the municipal tax on property, and that is what the review committee is addressing.

Sections 97 to 101 inclusive approved.

section 102.

B. Ralston: This next series of proposed amendments, sections 102 through 106, deal with amendments to the Tobacco Tax Act. They appear to be relatively minor and technical, but perhaps the minister could briefly explain what the purpose of these amendments is.

Hon. C. Hansen: This first one,

section 102, is simply to clarify the obligation with regard to the wholesaler of cigars and how they need to calculate the tax that they need to remit to the province.

B. Ralston: Then equally, just for clarification and greater certainty, sections 103 to 104 appear to also make reference to the taxation of cigars — not something that…. Well, I know there are cigar fanciers, but it doesn't appear to have broad revenue implications. Would that be correct?

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Hon. C. Hansen: I think, as the member indicated at the outset, these are relatively minor and relatively technical. The primary purpose of these amendments is to first of all ensure that there is a definition of what a cigar is. There have certainly been variations on products that have come onto the market in recent years, and we want to make sure that the definition properly captures some of those new products but also to ensure that the taxable price is properly defined so that there is certainty and that the province is collecting the full amount of the tax that is applicable.

Sections 102 to 106 inclusive approved.

section 107.

B. Ralston: The end appears to be in sight here. This amendment proposes amendments to the Tourist Accommodation (Assessment Relief) Act. It appears to have impact on what are referred to as short-term overnight commercial accommodation properties. Can the minister explain the purpose of this amendment?

Hon. C. Hansen: This amendment in 107 is for clarification of

definitions of terms. What it accomplishes is ensuring that the legislation in fact reflects what has been the longstanding administrative practice.

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Sections 107 to 118 inclusive approved.

section 119.

Hon. C. Hansen: I move an amendment to

section 119, which is on the order paper in my name.

The Chair: The amendment reads:

[SECTION 119, by deleting item 12 and substituting the following as indicated:

On the amendment.

B. Ralston: Perhaps I can just clarify, then. I think I understand what these are about. These are the proposed delay in implementation of the measures that the minister and I spoke of earlier, particularly relating to the definition of natural gas. Is that correct?

Hon. C. Hansen: That is correct.

Amendment approved.

Section 119 as amended approved.

Title approved.

Hon. C. Hansen: I move that the committee rise and report the bill complete with amendment.

Motion approved on division.

The committee rose at 4:32 p.m.

The House resumed; Mr. Speaker in the chair.

Reporting of Bills

Bill 2 — budget measures

implementation act, 2010

Bill 2, Budget Measures Implementation Act, 2010, reported complete with amendment.

Mr. Speaker: When shall the bill be considered as reported?

Hon. C. Hansen: With leave, now.

Leave granted.

Third Reading of Bills

Bill 2 — budget measures

implementation act, 2010

Bill 2, Budget Measures Implementation Act, 2010, read a third time and passed on division.

Hon. M. de Jong: I call second reading of Bill 4, Miscellaneous Statutes Amendment Act, 2010.

Second Reading of Bills

Bill 4 — miscellaneous statutes

amendment act, 2010

Hon. M. de Jong: I move that Bill 4 be now read for a second time.

The bill amends a number of statutes, and as is the practice in this House, I'll briefly summarize what those amendments are, the majority of those substantive amendments.

[C. Trevena in the chair.]

Changes to the Coroners Act will give the chief coroner the discretion to forgo an inquest into a police in-custody death if that death is due to natural causes

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and could not be prevented, is not connected to the care or supervision of the police, or is the subject of a public inquiry. All in-custody deaths will be investigated by the coroner, and decisions not to hold an inquest will be made by the coroner on a case-by-case basis.

The chief coroner must report that decision to the Solicitor General, who could then still order an inquest if, in his or her opinion, the public interest has not been satisfied. That report must be made public.

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Amendments to the Child, Family and Community Service Act clarify that where parents have the financial ability, they remain responsible for contributing to the maintenance of their children when one of their children is cared for by a relative or someone with an established relationship to the child under the extended family program. A similar arrangement currently applies to children in other out-of-care placements and children in care.

Amendments to the Employment Standards Act transfer authority for third-party searches of employment standards branch records to the Employment Standards Act from the Financial Administration Act. The $35 fee that has been in place since 2003 remains the same for those searches.

Amendments to the Engineers and Geoscientists Act authorize the council of the Association of Professional Engineers and Geoscientists of British Columbia to set annual fees for members in a manner consistent with other professional governing bodies. The ability to set member fees at adequate levels will sustain the association's operations, strengthen fiscal reserves and allow it to carry out its mandate to protect the public interest.

The Health Authorities Act is amended to allow a regional health authority to locate a facility or deliver health services within the boundaries of another health authority upon approval by the Minister of Health Services on a case-by-case basis. Currently the act only allows a health authority to deliver services within its own geographic region.

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