Fifth Session, 41st Parliament

(2020) REPORT OF PROCEEDINGS

(HANSARD)

COMMITTEE OF SUPPLY,

SECTION A

Virtual Meeting

Thursday, July 23, 2020

Morning Meeting

Issue No. 13

ISSN 2563-3511

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Committee of Supply

Proceedings in

Section A

Estimates: Ministry of Jobs, Economic Development and

Competitiveness (continued)

J. Sturdy

Hon. M. Mungall

THURSDAY, JULY 23, 2020

The committee met at 9:38 a.m.

[R. Leonard in the chair.]

Committee of Supply

Proceedings in

Section A

ESTIMATES: MINISTRY OF

JOBS, ECONOMIC

DEVELOPMENT

AND COMPETITIVENESS

(continued)

On Vote 34: ministry operations, $93,116,000

(continued) .

The Chair: Good morning, everyone. I call the Committee of Supply,

Section A, to order.

I want to recognize that I am participating today from the

homeland of the

Lək̓ʷəŋin̓əŋ-speaking people,

today known as the Songhees and Esquimalt Nations. We extend our

appreciation to them for the opportunity to undertake the work

before us today.

We’re meeting today to continue consideration of the estimates

of the Ministry of Jobs, Economic Development and

Competitiveness.

J. Sturdy: To give a little bit of an orientation, I think what we’re going

to do today is focus on the service plan mandate and that sort of thing

— sort of general ministry issues — this morning and then, this

afternoon, roll into trade and finish up the day with small business,

just to give the minister a sense of the rollout of things

today.

[9:40 a.m.]

Hon. M. Mungall: Chair, may I ask the member a quick question?

The Chair: Yes.

Hon. M. Mungall: Thank you. Just in terms of timing, of course, this is the

opposition’s time. We were told that this ministry would wrap up its

estimates midday. I’m just wondering if the member anticipates us going

further, towards the end of the day. That way, I can just let staff

know, to ensure that they’re prepared.

J. Sturdy: Our

schedule shows that we have, I think, six hours or so today.

So we’re expecting to run till late afternoon or towards the end of the

day.

If I might, just to try and pick up where we left off last week,

there are a number of strategies, priorities or issues that have changed

from one service plan to the next, which is certainly understandable.

The minister described many of them still being in place but having been

reworded or realigned so that they remain in place. I did have a number

of questions about some of those.

One of them was a priority to align funding programs to scale up

businesses in key sectors where B.C. is globally competitive. I wonder

if that still remains as an objective for the ministry. Perhaps the

minister can help us understand how she defines competitiveness and what

the sectors are that she feels that British Columbia is globally

competitive in.

[9:45 a.m.]

Hon. M. Mungall: I think we canvassed this question a little bit on Friday, but I’m

always happy to review it.

What I heard from you, Member, is that there are two parts to this

question. Please clarify if I did not hear you correctly.

One was looking at how we will be supporting businesses to develop

their competitiveness and where that fits in the service plan. What

we’ve done is put it under goal 2, objective 2.1, focusing on working

with businesses to scale up, and that support work absolutely continues

in the ministry throughout a variety of different programs.

Then looking at…. Well, we have these programs for

competitiveness. What does that mean? What is competitiveness? What are

we trying to achieve? In the very short term I could say: for B.C.’s

industries, it’s making sure that they have an edge. They are able to

attract investors who are interested in doing business the way British

Columbians want to do business, and we do it better than other

jurisdictions that might be doing things similar to us.

For example, our CleanBC plan — and looking to make sure that we

have environmental sustainability woven through our regulatory system,

through programming — actually provides us a competitive edge in an era

where most jurisdictions and most investors are looking to change their

way of investing to envelop what’s called ESG, environmental, social and

governance, looking to make sure that their investments have that type

of ethical component to it.

It’s so that B.C. is able to deliver plans like CleanBC, that we

have strong environmental regulations, that we have strong worker and

labour regulations that protect workers’ health and safety, for example,

that we have good wages in most of our industries and that we actually

have stable governance. Now, some people watching question period might

wonder if that really is the case, but we do actually have stable, good

governance and fair and free elections in British Columbia.

For those types of items under the ESG banner, the better we do on

those, the more we’re able to attract investors who are wanting that ESG

component in their investment. I think it’s really important to note

that right now in the global marketplace — this is true even

post-pandemic — ESG is, actually, the fastest-growing form of investment

in the world. The last numbers that I have, off the top of my head, are

that it grew by $11 billion over the course of 2017, I think. I’d have

to double-check those numbers, but the point is that it’s growing quite

quickly.

Those are the types of things that we do to make British Columbia

competitive as a whole. But supporting business sectors directly, we

have competitiveness frameworks with sector road maps that focus on

ensuring that industries can earn their cost of capital. We have deep

engagements with major industries, emerging industries. I think LNG

Canada provides the best example there.

We have ongoing work with other sectors and large industry that

includes mining regulatory reform that we’re working on, forest sector

cost drivers and much more as well. Of course, we have to always keep in

mind the importance of competitiveness for small business as well,

whether they’re looking to do export — our export navigator program has

just been amazingly successful — or they’re looking to just enhance

their competitiveness within their own domestic jurisdiction.

[9:50 a.m.]

We have the Small Business Roundtable, and we work with them

regularly. I’d say we’ve been working with them very frequently

throughout the pandemic to make sure that even in this pandemic, we’re

doing what we can to help them stay afloat so that they can be

competitive going forward.

I hope that answers the member’s question.

Actually, Member…. Sorry. Before I let it go back to you, I’ll

just say that I think it’s also important to note that we do our best.

But we have to recognize that we might not be competitive for all

possible global investment. Some global investment is less concerned, or

not concerned at all, about ESG. Therefore, we might not be a desirable

place for them to invest. But I would argue that we’re not looking for

their dollars as much as we’re looking for other companies, the growing

number of companies, that are looking for an ESG investment.

J. Sturdy: What sectors does the minister feel that B.C. is currently

globally competitive in?

[9:55 a.m.]

Hon. M. Mungall: We were listing off several sectors of our economy that are

globally competitive, and then I decided that maybe we will go with the

list that we have before we start going too far down the road. British

Columbia is doing very well in the global marketplace on many, many

fronts.

I’ll just start off with the fact, though, that COVID-19 obviously

poses a wild card as the global economy continues to shift and respond

to the spread of the pandemic and what different jurisdictions are doing

to address the pandemic. But that being said, I’m going to point out

that mining, as an example, is very globally competitive. We are very

globally competitive in British Columbia.

Canada as a whole is ranked No. 2 in the world for mining activity

and mining investment, and British Columbia plays a large role in that.

As the member may know, we have a lot of mining exploration taking place

in British Columbia on any given day. That’s because a lot of investors

see a lot of opportunity that’s worth exploring here in B.C.

Many of our forest products, of course, are globally competitive.

This also depends on when markets are strong. We do better — everybody

does better — when markets are strong. The same goes for our minerals

from our mines. When commodity prices are high, B.C. does better in

terms of revenues to companies and to the province. But those commodity

prices are determined by things out of our control.

I’m looking mostly at what kind of investment we are able to

attract. In these sectors — in mining as well as many of our forest

products — we are able to attract a considerable amount of investment.

Another area where we’re globally competitive is food products. This can

range from anything from frozen blueberries, for example, to seafood —

of course, globally competitive, a highly desired product — and our

growing wine sector as well.

Manufactured goods. There’s a really interesting story here coming

out of COVID-19, where a lot of manufacturers have been switching to

producing PPE, personal protective equipment. We have one company that’s

producing face shields that are recyclable, so this is highly desirable,

and they are sought after for greater investment.

That’s an example of some of the success that we’re having in our

manufacturing sector. But I think of real note is a more emerging

sector, and that’s B.C.’s tech sector. We are highly competitive. The

investment in this sector grows exponentially every year. It’s quite

remarkable. In that, life sciences proves a very competitive sector for

British Columbia. I think everybody has been talking about AbCellera and

the work that they’re doing in partnership with a U.S.-based company —

the investment that’s been put into them to help to find a treatment for

COVID-19.

We have other companies, like Thrive, who’ve been developing

really great apps, user-friendly apps, for people to access during this

pandemic so that they can get up-to-date information. They’re being a

very highly sought-after company for expanding that type of

product.

[10:00 a.m.]

Traction on Demand is doing a similar type of work and, again,

growing exponentially year after year.

Our low-carbon tech development is something that the whole world

is watching and investing in, as we all look to reduce our impact on

climate change and reduce our GHGs. We’re doing some pretty amazing

stuff, world-leading stuff, here in British Columbia that’s attracting a

lot of investment.

With that, I feel like that gives the member a good list and a

good sense of where we are — really, on the leading edge around the

world. There’s more that could be said.

Again, tourism has been a very globally competitive industry for

British Columbia. With COVID-19, we’re going to be seeing some major

shifts, though, in tourism all around the world. Not just here in

British Columbia; all around the world. But no matter what ends up

happening, we still have our beautiful waterfalls. We still have our

beautiful wildlife. We still have our beautiful mountains. That is, at

the end of the day, what makes our tourism sector such a desirable and

successful sector to begin with.

I’ll end my response there and leave it to the member to continue

his questions.

J. Sturdy: The minister put forward a significant list, and it’s easy to say

that they’re globally competitive.

How does the ministry…? What metrics does the ministry use to

assess whether an industry is competitive or not? I think it would be

fair to say that many would argue that the forest sector in British

Columbia is increasingly uncompetitive, in a global sense, and other

sectors as well. So what metrics does the ministry use?

The minister did mention investment capital. I wonder if there are

some metrics available to describe the amount of capital invested in the

sectors that the minister has identified as competitive.

[10:05 a.m.]

Hon. M. Mungall: What I have here for the member’s question is…. He’s wondering

about the metrics that we used to determine competitiveness.

The metrics that we use are productivity, wages, ex­change

rates, taxation rates, workforce skills, permitting efficiency,

regulation, synergies — that’s the type of fit with what our resources

can deliver — and so on. So those would be the metrics that we use to

determine competitiveness.

A new one, as a result of the pandemic, is the rate of infection

with COVID-19. B.C. has a low rate of infection, which is very

intentional. We have been working very hard at that as a government, in

conjunction with the provincial health office and Dr. Bonnie Henry as

the lead there, to make sure that our infection rate is low, which means

that we can have greater operations throughout our province in terms of

reducing the impact of COVID-19 and what it has on the

economy.

Those go hand in hand. We can’t separate them. Maintaining a low

infection rate is very important to that overall competitiveness, and

it’s bearing out. We’re seeing that — a lot of interest from the

investment community in British Columbia as a result.

One item, because the member did question about the

competitiveness of our forestry sector…. No doubt about it. The forestry

sector is in transition. There’s a lot of change happening there for a

variety of different reasons. But we’re looking to adapt to those

changes, and that’s the critical component here.

For example, Japan. As it has been moving off nuclear reactors to

generate energy for its grid, they are looking at wood pellets — to

increase their wood pellets by 30 times the amount that they’re

currently using. This is a huge opportunity for British Columbia’s

forestry market. So we’re working with industry to deliver on that and

looking at how we need to develop a strong regulatory system that allows

for this market to grow and what type of skills training is going to be

needed to ensure that this market can grow for British Columbia, and of

course, the trade links that are going to be necessary to deliver for

that market.

[10:10 a.m.]

Another emerging area in the forestry sector that is predicted to

have considerable growth going into the future is mass timber. We want

to capitalize on that opportunity. Just an example of where the

knowledge about that growth is coming from is…. It’s not only from all

of the academic study. Anecdotally, Structurlam, which develops mass

timber…. You have to place your order a year in advance. They are sold

out a year in advance for orders. So we know that demand is growing for

mass timber.

There’s a new mass timber manufacturing operation being developed

as we speak in the beautiful community of South Slocan, which is on the

western side of the beautiful riding of Nelson-Creston. These, of

course, provide good job opportunities for British Columbians, and they

provide really great opportunities for value-added to our forestry

sector.

J. Sturdy: Based on the metrics that the minister des­cribed, the list

of metrics that the ministry is using, can the minister help us

understand how the forest sector, based on those metrics, is competitive

in a global sense? I don’t need a bunch of specific examples about

products.

I’m really interested in how we look at the industry and how we

ensure that the industry is competitive and what metrics the ministry….

Well, I understand the metrics the ministry has provided. But can you

demonstrate through those metrics that we are in fact competitive — or

increasingly or decreasingly competitive?

[10:15 a.m.]

Hon. M. Mungall: The member wanted to know how we are applying these metrics to the

forestry sector. I said this in my previous response. I know the member

is looking at this particular sector because it is in

transition.

The question is: how do we ensure that our forestry sector is able

to transition in a way that is going to be globally competitive and

continue to provide good, family-supporting jobs for British Columbians?

I know he cares about that. I care about that. I think all MLAs in the

House care deeply about that. This is a significant sector for British

Columbia.

What happened to our forestry sector last summer was that it went

through a rationalization. This resulted from a lack of fibre that was

coming out of the pine beetle crisis and how we were using the pine

beetle to continue with mills operating. That came to an end. There are

only so many of those trees.

[10:20 a.m.]

We knew that this was going to happen as early as 2012. Reports

were coming out around 2012. A very important report came out in 2015

telling the B.C. government of the day, which was not our government —

it was the member’s government — that they needed to deal with this

upcoming situation where there just wasn’t going to be enough fibre for

the amount of demand in terms of producing volume. Unfortunately, when

we became government three years ago, there wasn’t a plan for us to move

along. So we’ve been playing catch-up ever since.

Where we’ve gotten to in that catch-up is that we are looking to

add value to our forests, so to speak. Where there’s less volume in

production, we can produce more value. That’s where I say that the

forest sector is in transition, because we’re moving to that greater

value-added focus on our forestry sector. We want to make sure that in

doing that, the industry is able to balance their costs with market

pricing.

Just to give an example of some of the things I already did in

terms of the wood pellets and Japan’s interest in wood pellets to

electrify their grid, as a raw material for electric

production….

I don’t know if the member is aware, but we have the Forestry

Innovation Investment. It’s a Crown corp., and this Crown corp. is all

about exploring and developing markets for our forest products. One of

the things that it’s been exploring for British Columbia is

opportunities in Vietnam. There are opportunities for B.C. CCs in the

Vietnam furniture manufacturing segment, and we are identifying key

players in the supply chain, including importers, distributors and end

users, to introduce them to B.C. CCs.

That’s just one of the activities that the FII is undertaking to

market British Columbia wood products in other jurisdictions so that we

can maintain that global competitiveness. At the end of the day, what it

means mostly for people in B.C. is those good family-supporting jobs in

communities right across the province.

J. Sturdy: The minister, in her earlier answer, provided a list of metrics

which the ministry uses to determine or to assess competitiveness. In

her response, I did not hear a single one of those metrics referenced in

terms of demonstrating that the forest sector is competitive.

Could the minister use some of that list of metrics that she just

used to convince us that the forest sector remains

competitive?

[10:25 a.m.]

Hon. M. Mungall: What I’m hearing from the member is that he’s looking for a list

on one side of the ledger and, perhaps, some numbers on the other side

of the ledger. That’s not what I was describing. I was describing,

how­ever, how productivity, cost drivers and synergies, which are

some of the metrics that we use, actually play out in real

life.

When I was talking about what type of fibre we have in our

forests, I was talking about the productivity of our forests — what logs

are available and what is available in terms of the level of

productivity of our forests to actually turn those trees into wood

products.

I was talking about cost drivers when I talked about the

rationalization that occurred last summer. There were a lot of cost

drivers that were implementing that rationalization, permitting being

one of them, the way in which companies bid to access logs, and so

on.

I was also, notably, talking about synergies that happen in the

market — for example, Japan looking to increase its wood pellets as a

way to generate electricity and us being able to deliver on that. That’s

a synergy that’s taking place in the market.

[10:30 a.m.]

Innovation provides a really important synergy. When we’re talking

about shifting some of our manufacturing of wood products to PPE or to

mass timber and doing more of that value-added, that is also an

innovation that’s taking place — an innovation that is working with a

synergy that is happening because of COVID-19, for example, on the PPE

front and on the mass timber, and a desire to do more value-added and

have cost reductions in overall construction.

I feel like if the member is looking for a two-column ledger, we

don’t have that for him. What I can do is point to how, in real life,

those metrics are influencing the way in which our sectors are

competitive.

J. Sturdy: What I’m hearing from the minister, in terms of the forest sector

and cost drivers, is that the cost drivers — issues like stumpage,

issues like taxation, issues like permitting requirements and processes

— are globally competitive, and the minister can demonstrate that those

cost drivers are less than other jurisdictions, or at least competitive

with other jurisdictions.

I say this because it seems that some of the operators here in

British Columbia are not necessarily investing in British Columbia and

are in fact investing in other jurisdictions. These cost drivers and

productivity issues would seem to be…. The decision to invest in other

locations seems to be a function of those drivers.

[10:35 a.m. - 10:40 a.m.]

Hon. M. Mungall: To answer the member’s question, I think we really need to

understand what’s been going on in B.C.’s forests over the last five to

eight years. We need to really understand what’s been going on in B.C.

forests and that productivity component, which is the actual logs that

we’re able to get out of our forests.

There are a variety of factors that are governing that. I’ve

already mentioned what happened with the pine beetle era. Just to

elaborate a little bit on that. At the beginning of the pine beetle era,

a lot of our major companies in British Columbia built up their capacity

for milling to address the increased capacity of the fibre that they’re

able to pull out of the forests.

We all knew that that was temporary. We knew that we were going to

have to have some kind of plan following that pine beetle kill fibre.

Our government, as I said in an earlier answer, has been playing

catch-up because the previous government did not have a good plan, or

any plan, in place. So we’ve been playing catch-up to make sure that we

have a plan and that we’re delivering on that plan, because we knew, and

have always known, that that rationalization that occurred last summer

was well on its way.

From that rationalization, what we’re seeing is the

diversification, in terms of where companies are investing. I want to

say that when major B.C. companies have the capital to increase their

investment globally, that’s a good-news story for British Columbia. It’s

good to see our major companies doing well. What they’re going to be

able to do from B.C. forests is going to be different than what they’re

going to be able to do from other jurisdictions’ forests.

For example, we know that Canfor has made investments in Sweden.

That’s because they want, and they have the ability, to grow just their

straight value, basically coming from those 2-by-4s that are most

important for the housing market. The price for them is about two times

what it was last summer. So it’s a very good price. They’re chasing the

market for those 2-by-4s. To do that, based on what is available out of

our forests, based on competition laws, and so on, they’ll be making

those investments overseas.

So how do we make sure that they continue to invest in British

Columbia? How do we make sure that we’re supporting smaller companies

and their investments in British Columbia? That’s where that value-added

component comes in. That’s where I was saying that the forestry sector

is in transition.

We see more interest in that value-added and more opportunity for

investment in that value-added, and those dollars are coming to those

value-added opportunities. I mentioned Kalesnikoff in my own home riding

and their investment in mass timber as an example. I also note that

there are investment opportunities with First Nations as partners. Those

are proving very successful and a way forward, as well, for our forestry

sector.

I want to also take note that this isn’t just something that we

here in the beautiful Oak Room in the B.C. Legislature are talking about

right now and the member from his office is talking about right now.

Rather, COFI, the Council of Forest Industries — we all live in acronym

soup here — has recently done a really fantastic report called A

Path Forward , noting that the forestry sector is in transition.

They’ve delivered several recommendations for our government, and we’ve

actually been able to complete or are underway with more than half of

those recommendations.

[10:45 a.m.]

I think the broad industry is recognizing opportunities are

changing for our forestry sector. We need to reach out and to capitalize

on that. Our government is doing that. We also have bodies like our

Crown corp., FII. Again, that acronym soup, right? They are doing a lot

of that marketing and that market development for British Columbia on a

global scale.

J. Sturdy: Yeah, in that response, I certainly didn’t hear…. I think there are

some things that are important around value-add and trying to get more

dollars out of our products. But I didn’t hear the minister be able to

describe how we are competitive, how our taxation structure supports

investment, how our cost per metre is globally competitive.

Certainly, we’ve spent quite a bit of time on this. There will be

probably time through FLNRORD to explore this a little bit further. So I

did need to move on here.

One of the other objectives in the service plan was that they

implement a modernization related to the small business venture tax

credit program. I wonder if that has been completed, because it’s not in

the service plan anymore. If it is complete, what changes were made? How

will the ministry identify whether those changes have been

successful?

I’m sorry to add a number of questions here, but it’s important that

we try and cover some more ground. What are the actuals for this year,

for 2019-2020, and why were the performance targets revised

downwards?

[10:50 a.m. - 10:55 a.m.]

Hon. M. Mungall: What I’ll do…. I know that the member is interested in the small

business venture capital tax and what has all happened with it. Then

we’ll get down to the actuals, and I’ll explain the actuals there for

him.

The Small Business Venture Capital Act was reviewed between 2017

and 2018. It included extensive stakeholder consultations. From there,

Budget 2019 introduced several amendments in modernizing the act, and

therefore the tax, and bringing it up to date with current investment

practices.

The amendments were implemented in July 2019. They include…. For

the 2019 tax year and subsequent tax years, the annual tax credit limit

that an individual can claim for investments made after February 19,

2019, is increased to $120,000 from $60,000. So that doubled. The

maximum amount the eligible business corporations can raise through the

tax credit is increased to $10 million from $5 million — again, a

doubling.

A new activity called advanced commercialization was added as an

eligible business activity under the program. What this is…. It’s for

businesses using digital technology platforms or digital technology

tools to assist other businesses in acquiring or retaining customers

through online technologies. The activity is only available outside the

Metro Vancouver regional district and capital regional district to give

businesses outside the main tech clusters the additional support they

need to grow. Very good that we have this, in light of the COVID-19

pandemic and everybody moving to more online activity.

A new activity called scale-up activity is added as an eligible

business activity under the program. This is for businesses

transitioning from R and D to launching products. That will enable

businesses to raise funds to do marketing, brand-building and

customer-acquisition-related activities. Businesses can do scale

activities after two years in the tax credit program. Companies are

eligible for a reduction in the amount they are required to reimburse

the government if they exit the tax credit program after two years

instead of after three years.

They are able to do a share in transfers. That will be permitted

to a tax-free savings account. Sorry. What will be permitted is sharing

in transfers to a tax-free savings account, and equity purchases within

a TFSA are eligible for tax credits and investments in convertible

equity issued by an eligible business. The corporation can qualify for a

tax credit.

There are a lot of changes in that modernization, as you can see.

A lot of them are very beneficial for businesses, especially growing

those small businesses and allowing them to scale up.

In terms of the actuals that the member was asking, what I see

here in the service plan and what he’s referring to is that in

2018-2019, the total small business venture capital tax credit usage was

$106 million. But then you see a forecast for the 2019-20 year of $86

million. Then you see for targets for future years: $87 million, $88

million, $89 million. So I can see why the member is wanting to know why

we have a $20 million gap, essentially, between the forecast for last

fiscal and the actuals from two fiscals ago.

Well, what happened in 2018-19 is we saw…. It was a significant

investment year, and a lot of companies were eligible for these tax

credits. However, this is not in line with what we’ve seen in years

previous to that. Normally, we see it at the $85 million to $90 million

range. So that’s why our forecasting and our targeting stays within that

range, because we want to make sure we’re being conservative and not

kind of switching things around because we had one exceptional year. So

that’s why he’ll see those differences — and then, basically, a similar

situation for the rural small business venture capital tax credit as

well.

I hope that answers the member’s question.

[11:00 a.m.]

J. Sturdy: Thanks to the minister for that answer, although the service plan

does say: “Targets for performance measure 1.1b have been revised

downward to reflect recent investment trends and actual tax credit

usage.” So

whereas the 1.1a tends to be relatively stable, other than

the ’18-19 exception, it’s clear that the rural small business venture

tax credit program has not been as successful, because those targets

have been significantly revised downwards.

Can the minister, perhaps, explain why the rural component is

under this type of pressure?

Hon. M. Mungall: I just wanted to double-check with staff. I did say to the member

that what’s happening with the rural small business venture capital tax

credit is similar to the total small business venture capital tax credit

usage. So comparing, in this table, 1.1a and 1.1b. I just wanted to

double-check with staff that I did have that correct, and I

do.

What occurred over the course of a couple of years…. It would have

been 2017-2018 and 2018-2019, those two fiscal years. We did see a

couple of businesses do some very significant investments where they

were eligible for these credits. For 2019-2020 and going forward, what

we wanted to do was to bring those forecasts back on the initial

trajectory. It was recognizing, again, that we had very positive years,

but they were due to some very distinct investments at the time. So we

just wanted to bring those trajectories back to where we originally

estimated they would be.

J. Sturdy: Another one of the objectives and strategies of the service plan was

to “implement a plan responding to the recommendations of the Small

Business Task Force.” Has government produced such a plan? And are there

aspects of the plan where implementation is the responsibility of this

ministry?

[11:05 a.m.]

Hon. M. Mungall: The implementing of the recommendations from the Small Business

Task Force…. I’m not going to lose this opportunity. Being a new

minister, I didn’t get a chance to say this on the record previously,

when the report first came out, but I really want to thank the people

who were involved in that report.

It’s really important that we look at how we can better support

small businesses and do that regularly as a government. We know that

small businesses are 98 percent of the job creators in our province. So

we have to make sure that we have a good regime to support small

businesses as they grow.

In terms of the member’s question, though — do we have an

implementation plan for this task force report and for their

recommendations? — the answer, shortly, is yes. I’m not going to end it

there, though, because I know the member’s going to want to know what we

are we doing to implement those recommendations.

So the status of the recommendations. Of the 73 recommendations,

41 of them are currently either being completed, are ongoing or seeing

progress. Some of the highlights that I’ll include here for the member’s

information are that we’re helping businesses recruit and retain talent

by making housing more affordable, through the 30-point plan, and

investing in child care. We’ve seen this even more so with COVID — how

important child care as well as affordable housing are. We can’t dismiss

how important that was for businesses and job creators.

The export navigator program was moved out of the pilot phase and

expanded to offer specialized support for businesses owned by Indigenous

peoples, women and youth. I have personally seen the success of that in

many of the small businesses in my community who are able to access the

export navigator program. It has been fantastic for their ability to

grow their business. On that note, I’ll just let everybody know that

Lillie and Cohoe Hats is part of the export navigator program —

beautiful hats. Go online. You can buy yours today.

Modernized procurement approaches help businesses of all sizes,

including Indigenous-owned businesses, access new opportunities, provide

benefits to people and solve everyday problems faster and more

effectively through innovative solutions, partnerships and technology.

We extended the net-zero regulation requirement to 2022, exploring

opportunities to further enhance awareness of government programs and

services across the province through partnerships with organizations

such as Small Business B.C., chambers of commerce and Community

Futures.

[11:10 a.m.]

I’ll just take a moment right there to give a shout-out to all of

those organizations for the excellent work that they’ve been doing over

the COVID-19 pandemic. Following on this recommendation, we were going

to be doing that type of work, but we’ve ramped it up considerably as a

result of the COVID-19 pandemic.

It’s just been really inspirational, truly, to watch these

organizations support small business and our ability as government to

support them in doing so. They’ve been amazing. Everybody that’s working

there has just been amazing for the small business sector.

Providing support for the B.C. Chamber of Commerce — #TradeTalks

Forum, an educational and networking event held in November. The theme

was “Scaling Up: Time to Export,” and the forum was attended by business

and youth participants in addition to consular officials from 29

countries. Very successful event.

We’re exploring opportunities to create a strategy to enhance

career development opportunities for secondary school and post-secondary

students by better supporting students in preparing for and successfully

transitioning to post-secondary education, the workplace and careers. So

making sure that once people are out of their education and training

development, they’re able to transition well into those careers that

small businesses provide.

And continuing to invest in transportation infrastructure and

improving Internet connectivity in rural and remote areas.

Member, I know that this is your time for questions. So I’m not

going to go on and on and on about that last point, being a rural MLA.

You’re a rural MLA. You know how important these are to our rural small

businesses, and we can go on about it. But it’s your time for

questions.

I will leave it at that and give it back to the member.

J. Sturdy: To the minister, is it possible to get a copy of the

implementation plan, if there is such a thing? Has she provided us with

a progress report of 41 of the 73 recommendations, and how do we better

understand that progress report? Is there a possibility of getting

access to that? I’m happy to get that in written form.

Perhaps we could identify which one of those recommendations are

within the scope of responsibility exclusively of this ministry as

opposed to…. I take it this minister is not responsible for housing and

transportation. So I’m just trying to understand better the goals, the

objectives, of the ministry. I’m happy to take that in writing at a

later time.

Moving on here, one of the other goals was to align immigration

policies and programs to provincial priorities and needs. I wonder if

the minister could help us understand what the provincial priorities

are, what the community needs are and how those are assessed.

[11:15 a.m.]

Hon. M. Mungall: I’m terribly sorry to the member. I just want to make sure that I

get the right information. I only was able to jot down half of his

questions, and I think that I might be missing something. If he can just

repeat that question.

J. Sturdy: One of the goals in the service plan is to align immigration

policies and programs to provincial priorities and community needs. What

are those provincial priorities, and how are community needs

assessed?

Hon. M. Mungall: Gotcha. Thank you.

[11:20 a.m.]

In terms of what is the overarching provincial priority, in very

broad terms, we want to make sure that we’re growing the standard of

living for all British Columbians as well as for newcomers. We want to

make sure that people have good opportunities, that they’re able to put

food on the table and that, at the end of the day, they have good,

family-supporting jobs. All of these are very important.

One of the questions, though, from the member, was how we align

our immigration program with that provincial priority, and he wants to

know how we’re assessing that alignment. This is a bit of an analysis of

the labour market. We work with Advanced Education, Skills and Training

on the labour market analysis in making sure that we have opportunities

for British Columbians. Where there are more opportunities than

available British Columbians, basically, we have gaps in our labour

market. We want to be able to fill those gaps with immigration, and

that’s why we have the provincial nominee program.

Just as an example, say that we have a large cohort training in

digital marketing, but we have more jobs — this is all hypothetical — in

digital marketing than we do in terms of the number of people we’re

graduating from digital marketing programs. At that point, we would then

look at opening up provincial nominee program spaces for people with

digital marketing skills and being able to match them to the jobs that

are available in B.C. for those skills.

First and foremost, we want to make sure that those jobs are going

to British Columbians, and then we look at the opportunities for

immigration. I hope that answers the member’s question.

J. Sturdy: Thanks to the minister for that answer.

With regard to the labour market gaps or shortages, the ministry

published some forecasts for the ten years in terms of what those gaps

will be. Has that been updated or any changes made as a result of COVID?

Has there been any reconsideration of any of those numbers?

Hon. M. Mungall: My staff advises me that the ministry doing that analysis is

actually not ours. It’s Advanced Education, Skills and Training. So I’d

have to direct the member to that ministry to get the details on any

updated forecasting due to the pandemic.

[11:25 a.m.]

J. Sturdy: The minister referenced the PNP program. I understand that a

number of changes have been made to PNP recently. I say that because the

local Whistler Chamber of Commerce has been lamenting those

changes.

Could the minister please describe any changes that have been made

to PNP over the last number of years and also, perhaps in written form,

provide us with the number of successful PNP applicants, year by year,

over the last five years? We don’t have to have that piece right now; I

know it might not be easily available. Understanding the changes that

have taken place to the PNP program in the last number of years would be

a locally important issue to my riding.

Hon. M. Mungall: The changes we’ve done to PNP. What I’m going to suggest for the

member — I know that time is not an abundance of what we have today — is

that we provide a briefing for him from my ministry. I know he said that

this is important to his riding. So I’m happy to provide a briefing for

him as well as the list of changes that we’ve done — in writing, as he

requested. We’ll make sure that we can set up a briefing with

him.

One of the things he can take back home for now: because of

COVID-19, we’ve been looking at some of the lower-skilled jobs, with the

high unemployment in youth and in other people who might not have high

skills earlier in their careers, making sure that they have

opportunities for those jobs first and foremost. Those are, perhaps,

some of the changes that his chamber of commerce has noticed as a result

of the pandemic — that we are trying to match British Columbians with

the job openings that might be coming back online as our restart opens

the economy back up.

We’ll get a briefing for him, absolutely.

J. Sturdy: Thank you. I’d look forward to that. I do understand that these

changes took place last year or the year before, so this is not as a

result of COVID, but I would certainly understand that

initiative.

With regard to carrying on with the entrepreneur and immigration

regional pilot, it was launched in March 2019, with the goal of seeing

successful applicants moving to and establishing new businesses and

supporting sustainable economic development in smaller centres around

British Columbia. Could the minister please tell us how many

participants there were in that program, what communities, or the range

of communities, they located in and whether this program still exists or

will be carrying forward — and, perhaps, the cost for the

program?

[11:30 a.m.]

Hon. M. Mungall: The PNP entrepreneur immigration regional pilot was launched in

2019. There are 66 communities, and all the details of the priorities

for those communities and so on is on WelcomeBC, online.

Suffice it to say, though, it’s a longer-term program. Once

entrepreneurs have established and they’ve proven the success of their

business and the viability of their business, then we’re able to

nominate them under the provincial nominee program. So it is a

multi-year program.

It is still running. But I’m sure the member is concerned with

what it is running like under COVID-19. It has had to be interrupted,

because it involves site visits. As a result of COVID-19, that

interruption took place. But it still exists. It’s still moving

along.

In terms of the overall cost, I would have to get him that

particular line item. But it is part of the…. The way we recognize it

right now is as part of the overall cost with the provincial nominee

program, which the member may know is a cost-recovered

program.

J. Sturdy: Within that appropriation — under small business, jobs and

workforce — there was about a half-million-dollar cut in that program,

or in that section.

[11:35 a.m.]

Could the minister describe what programs were cut or reduced to

reflect that reduction in the budget?

Hon. M. Mungall: That budget-item cut that he is noting is part of a larger

reduction in ministry expenses. So that is simply that division’s share

of the overall ministry reduction.

J. Sturdy: How was that half-million-dollar cut reflected in programming

reductions? What was cut?

Hon. M. Mungall: There were no program cuts. Rather, we’re seeing reduced spending

on the administrative side of the ministry. So things like no new

chairs, no new desks, those types of items. We’ve been able to do cost

recovery in that way.

J. Sturdy: Under objective 1.3, with regard to regulatory requirements and

the goal being a net-zero increase, actuals in 2019 looked like 166,727,

and actuals published in March were 167,635. So what’s that —

900-some-odd regulations increase year over year?

As part of the previous service plan, there was a stated intention

to “work on a framework to understand and aggregate the cumulative

impact of government policy decisions on businesses and the economy.”

That has disappeared from the service plan. Has this work been

abandoned? Does the minister think that it is no longer important to

look at the aggregate, the cumulative impact on government policy

decisions as a result of these regulations or regulatory

requirements?

[11:40 a.m.]

Hon. M. Mungall: The increase in regulation that the member is speaking of reflects

some of the regulatory changes that we’ve had to make due to CleanBC and

due to our commitment for reconciliation through the UNDRIP act that we

put forward back in the fall. It also includes the work that’s coming

from bringing outside entities back into government. Their regulatory

function will increase our overall regulations.

I do want to point out that the commitment that the former

government and this government have lived up to is that there’s a

net-zero increase compared to the 2004 base, and that is definitely

still the case.

In terms of whether I and this government think that doing an

analysis of the cumulative regulations and regulatory process is

important…. I’m just going to highlight page 24 of the document, our

economic plan from 2019 to 2020, A Framework for Improving British

Columbians’ Standard of Living . I know they have this

document.

If you look at page 24, item 6: “Require identification of

economic impacts when new government policy or programs come to cabinet

for decision.” We implemented this in 2018. No other government has had

that type of analysis on our regulatory system. Not only do we think

it’s important, but we think it’s important enough to do that regulatory

analysis every time a new government policy or program comes to

cabinet.

J. Sturdy: Is there, then, developed a framework to do this work, as it was

stated in the previous service plan that there would be work on a

framework to understand and aggregate cumulative impact? Is that

available to us?

[11:45 a.m.]

Hon. M. Mungall: The framework that we use for cabinet decision-making is

confidential under cabinet confidentiality. But there is a

framework.

Most notable is the framework that we use to annually review all

of our regulations. This is an obligation that we have to do. Then we

release a report every year. That report is called Better

Regulations for British Columbians . We released the 2019-20

analysis in June. I’m happy to get a copy for the member if he doesn’t

have one. In that report, it explains the framework on our methodology

for conducting this type of review.

J. Sturdy: Thanks to the minister for that. I’m not familiar with that

document. So I’ll be interested in tracking it down.

The minister did mention, as one of the reasons for the increase

in regulation over the course of the last year or so, that UNDRIP

created additional regulatory requirements. Can the minister please

provide us some examples of that, and what impact UNDRIP would have on

regulatory requirements going forward?

Hon. M. Mungall: The regulations that were part of the Declaration on the Rights of

Indigenous Peoples Act…. It’s a total of 13, but of course, as we know,

that act required us to review other legislation. We will be doing so,

and regulations may increase. They may decrease as a result of that

review.

The count by ministry, though, if the member is interested, is

available publicly online, and we’d be happy to send him that

information as well, if he’s looking for a ministry-by-ministry

count.

J. Sturdy: Sorry, I don’t think I caught that. With regard to UNDRIP

increasing regulatory requirements, could the minister provide some

examples of that?

Hon. M. Mungall: For detail of the 13 regulations that are associated with the

DRIPA act, I’m going to have to direct the member to the Ministry of

Indigenous Relations and Reconciliation. They are responsible for those

regulations — and to provide any detail. My ministry just does the

overall count, and that’s all I can provide for him.

J. Sturdy: Item No. 3.1 says that the ministry will “continue to develop a

genuine progress indicator.” This has been in the service plan for a

number of years.

[11:50 a.m.]

Can the minister tell us the status of that work? When would we

expect to see the results of it? Whether the minister or the ministry is

in the lead on this work, and what’s the general direction?

Hon. M. Mungall: The general process indicator is a commitment from the CASA

agreement. What it is, is another way to track the well-being of a

society. GDP is often used. This is an alternate form of system, but it

doesn’t replace the specific and detailed reporting for economy, society

and environment. Instead, it would and does present an integrated and

accessible perspective on how these areas are interconnected.

Other than that, Citizens’ Services provides the lead on actually

doing those types of measurements around the GPI. If there is any

further detail that the member wishes to get on GPI, I would direct him

to Citizens’ Services.

J. Sturdy: The ministry’s name changed this year. Trade and technology were

dropped from the name. Can the minister help us understand why trade and

technology don’t have the same priorities that they have had in the

past?

Hon. M. Mungall: We canvassed this last Friday, actually. I responded to the member

that trade and technology are extremely important to this government and

remain a key focus of this ministry.

Rather, the name change reflects a broader view of economic

development that is inclusive of all sectors, including trade and

technology. The need to focus on competitiveness I think is highlighted

even more because of the pandemic, but the name change happened prior to

the pandemic.

The reason is that we wanted to really highlight this government’s

priority of working with all of B.C.’s economic sectors to make sure

that all of them are competitive in that global marketplace. That

includes, for example, the cannabis sector. That includes technology.

That includes our export-and-import trade industries. That includes all

of them. There’s nothing subversive here. It’s, rather, wanting to be

more inclusive.

The Chair: Member, if this can be your last question of the

morning.

[11:55 a.m.]

J. Sturdy: Thank you, Chair.

For fiscal ’19-20, the budget for the ministry was

$97 mil­lion, and for this fiscal, it’s $93 million. Can the

minister describe to us how she’s implementing what I would describe as

a relatively significant reduction in the budget and how it manifests

itself in service delivery?

Hon. M. Mungall: I thank the member for highlighting a change in our budget. This

is something that when I was in opposition for eight years, I did on a

regular basis, wondering where those cuts were taking place. Year after

year, I got answers on how programs to people were being cut. It was

very disappointing to see that people were not getting the services they

needed from their government.

That is not the case with our government here. Rather, we’re

seeing a cut in administrative spending. We have cut, significantly,

non-essential travel. That’s no surprise with COVID-19. But we were

planning to do that anyway. We have cut back on some of the

non-essential contracts that we have. Like I said earlier to the member,

people are making do with the office furniture that they’ve had for

quite some time. So we’ve cut back on those types of administrative

costs.

We looked around our ministry, when it came time to do some

savings, because we had to do that with revenues down to the province in

this fiscal year, and to make sure that we were still delivering a

balanced budget with a surplus. We still needed to make sure that we

were delivering programs. We had to find other ways where we could find

cost savings. We did that. Programs are being delivered for British

Columbians. Had it not been for the pandemic and our willingness to

continue to step up for British Columbians, we would have been able to

deliver a balanced budget with this budget.

With that, I note the hour, and I move that the committee rise and

report progress on the estimates of the Ministry of Jobs, Economic

Development and Competi­tiveness.

Motion approved.

The Chair: This committee now stands adjourned.

The committee adjourned at 11:58 a.m.

Copyright © 2020 Legislative Assembly of British Columbia

The Report of Proceedings (Hansard) and webcasts of

committee proceedings are available at www.leg.bc.ca .

For inquiries contact:

Hansard Services

612 Government Street

Victoria, BC V8V 1X4

Telephone: 250-387-3681

Email: hansardservices@leg.bc.ca

Published by Hansard Services under the authority

of the Speaker of the Legislative Assembly of British Columbia.