Second Session, 42nd Parliament

(2021) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Thursday, April 29, 2021

Afternoon Sitting

Issue No. 63

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Routine Business

Ministerial Statements

Thomas Berger

Hon. J. Horgan

M. de Jong

A. Olsen

Orders of the Day

Second Reading of Bills

Bill 5 — InBC Investment Corp. Act

Hon. R. Kahlon

T. Stone

B. Bailey

L. Doerkson

A. Mercier

B. Stewart

H. Yao

K. Kirkpatrick

D. Coulter

R. Merrifield

S. Chant

THURSDAY, APRIL 29, 2021

The House met at 1:33 p.m.

[Mr. Speaker in the chair.]

Routine Business

Ministerial Statements

THOMAS BERGER

Hon. J. Horgan: It is with deep sadness that I advise the House that yesterday,

after a brief battle with cancer, Tom Berger, the former member for

Vancouver-Burrard, former justice of the Supreme Court, passed away.

Thomas Berger believed in justice. That meant he needed to battle

injustice, and he found over the course of his lifetime, Members, plenty

of it.

He will be remembered most for his advocacy for land claims, not

just here in British Columbia but across Canada. Mr. Berger was counsel

for the Nisg̱a’a Elders in the landmark case of Calder v.

Attorney-General of British Columbia in 1973. That historic

case led to a Supreme Court ruling that, for the first time,

acknowledged the existence of Aboriginal title to land in

Canada.

As commissioner to the Mackenzie Valley pipeline inquiry, he

insisted on hearing from everyone. He ensured that resources were not

the only way to access the commission. That was when we had intervener

funding for among the first times in Canada so that money would not

determine who was heard on that absolutely landmark inquiry into the

land in the north.

Of course, the inquiry resulted in highlighting the unresolved

land claims in that territory. It also noted the peril of a pipeline to

the food source of Indigenous peoples in the north and their very

survival depending on those food sources remaining intact. It was an

unprecedented public consultation and a process that helped to highlight

what was at stake for Indigenous peoples, not just in the north but,

indeed, across the country.

[1:35 p.m.]

The eloquence of Mr. Berger’s prose made the report a bestseller.

I have a copy of it in my library at home, dog-eared and always a

reminder of the work that was done by those who came before us to this

place. He introduced us all to the complexities of Indigenous peoples

and the challenges that they faced in a nation that was colonized 160,

170-odd years ago.

His insistence on treating land claims seriously, and the

environment as a component part of that, transformed how we look at

resource development in Canada to this day. And for that, we all owe him

a debt of thanks. His public statements about rights and title during

the constitutional debates here in Canada, back in the 1970s and 1980s,

led to the inclusion of Aboriginal and treaty rights in the amended

constitution of 1982.

He was reprimanded by the Canadian Judicial Council at that time

for his advocacy, which led to his immediate resignation from the

Supreme Court of B.C. so he could carry on his work seeking injustice

and finding ways to correct it.

As a lawyer, a judge and a commissioner, he helped countless

ordinary people in their struggles against powerful interests — not just

here in British Columbia but across Canada. He changed life in this

province and in this country for the better.

When he graduated from the University of British Columbia law

school in 1956, Aboriginal law was not on the curriculum. It wasn’t even

discussed. And when we think now back on his career and his life, Tom

Berger made an indelible mark on legal issues in Canada, on Indigenous

rights in Canada and how we look at each other and how we conduct our

business — not just in legislatures, not just in courtrooms but in

lunchrooms and other places around the country.

As a labour lawyer, he fought injunctions against those that were

jailed for their activism — I’d look kindly to the Speaker; I don’t

believe he represented you, but you know of what I speak — and he

defended striking Ironworkers who were facing hostile judges in court

just after the Second Narrows Bridge had collapsed, killing 18

Ironworkers. Berger called for a labour relations board to handle such

disputes to take them out of the courts. And of course, when an NDP

government was elected in 1972, that’s exactly what they did. They

created a Labour Relations Board.

Tom Berger was a troubleshooter. He headed three royal commissions

in this country and, of course, was the deputy chair for a review of the

World Bank back in his early days as a lawyer when he left the bench. He

was a special counsel to the Attorney General of British Columbia in an

inquiry into the sexual abuse at the Jericho Hill School for the Deaf,

which led to recommendations for compensation which were adopted by the

government of the day.

Four years ago I had the honour, as Premier, with my colleague the

Minister of Environment, to call on Justice Berger to help us grapple

with the challenges of the Trans Mountain pipeline. We welcomed his sage

legal advice and also his insights into the consequences of rights and

title through the corridor. Regrettably, our case at the Supreme Court

was unsuccessful, but we learned as a community and as a province and as

a people the value of listening to those who have blazed a trail, a

proud trail, as Tom Berger had.

His life was accomplished, of course, because he started so young.

He was first elected to the House of Commons at age 29. Elected to this

Legislature at age 33. He’d become the Leader of the Opposition at age

36, and by age 38, had been appointed to the Supreme Court of British

Columbia. All of his achievements were highlighted by the investiture

into the Order of Canada and the Order of British Columbia.

He was a wonderful writer, as well. I made reference to his

landmark commission on the Mackenzie Valley pipeline, and I commend it

to those who have not had an opportunity to read it — and other works

that he’s written. There’s a passage that I want to read to you, as I

conclude my remarks about a great British Columbian and a great

Canadian. Tom once wrote the following: “I’ve never become jaded. Weary,

dispirited, furious, frustrated…but I’ve never lost…faith in the law. I

was animated by a belief — and now it is a profound belief — that the

law as enforced in the courts can move us incrementally towards a just

society.”

Tom Berger spent a lifetime moving us all towards a just society.

For that, all of us owe him a great debt of gratitude. His kindness and

generosity will be long remembered by those who had the good fortune of

coming upon him in their lifetime. I think of the generations to come

who will be affected by the decisions, the rulings and the words that

Tom Berger left, not just in legislatures, not just in courtrooms but in

the common thinking of British Columbians and Canadians to this very

day.

[1:40 p.m.]

Rights and title exist in Canada largely because Tom Berger

started us down that track. And countless others, Indigenous and

non-Indigenous, have worked tirelessly to bring forward justice in that

regard. All of us in this place, in 2019, brought forward unanimously

the UN declaration on the rights of Indigenous Peoples. I know that was

a very proud day for Tom, when he looked at the fruits of his lifetime

being realized here by diverse people focused on the just society that

he’d worked so hard for.

I want to, on behalf of all of us, extend our heartfelt

condolences to his family and to his friends, and to acknowledge that

Canada has lost a giant.

M. de Jong: The Premier has offered very poignant and very appropriate words

acknowledging a great British Columbian and a great Canadian.

When I learned this morning of the passing of Tho­mas

Berger, I must confess that my mind immediately turned to the exchange

we had, just a few weeks ago in this chamber, about another former

colleague, Ian Waddell. I had heard Ian describe — tell me and write

about — the formative, life-altering moment that his experience with the

Berger commission, the Mackenzie Valley Pipeline Inquiry, had had on

him. I wondered: is it an exaggeration to suggest or say that the work

undertaken by Mr. Thomas Berger — as he then was — was life-altering for

the country?

I don’t think so. In a life, as we have heard from the Premier,

that was chock-full of momentous moments, achievements and turning

points in the constitutional evolution of our country, that most

certainly was one. We have heard about his role in filing the original

statement of claim in the equally significant — dare I say momentous —

Calder case. Though he was on the bench by the time the judicial victory

was secured for his previous clients, I am very reliably advised that he

was prouder still of the treaty that ultimately emerged in the wake of

the litigation he had helped to initiate — that treaty in the

mid-1990s.

I never served with him in this chamber, and for the Government

House Leader and me, there aren’t many former MLAs we can say that

about. In truth, his time in this place and the federal parliament was

relatively short, though it occurred in a very busy decade of his life.

But if it was short, it was not uneventful.

A little-known fact: the young labour lawyer, before entering the

chamber, acting for a former public servant, had sued the then Premier

W.A.C. Bennett for defamation. That case went to the Supreme Court of

Canada, where Thomas Berger and his client ultimately prevailed. To have

Premier W.A.C. Bennett retreat and remain silent on the matter

thereafter…. No small feat, considering the nature of his character. If

Wacky Bennett had the last political word in 1969 in the election that

followed, contested against then Leader of the Opposition Berger, then,

as is always the case in politics, it was a time-limited

victory.

[1:45 p.m.]

In truth, he, Thomas Berger, may not have been built for partisan

electoral politics. With apologies to all of those who sit here with me,

he may have been too thoughtful, too gentle, too studious for the rough

and tumble of the vocation we presently call our own.

There’s an anecdote about his time with the commission in

Yellowknife. A group of lawyers, including Ian Waddell, were sitting

around arguing about whether the commission and government had the power

to do certain things, the lawyers offering their own opinions on that

matter, Thomas Berger offering his own, saying: “No, I think the

government, in this case, can go a little further than you’re

suggesting. I believe in the late 19th century the matter was settled

legally.” Then he paused, thought for a moment and concluded: “I think

the case was reported in the All England reports of 1892” —

Appeal.”

He was, as the Premier has suggested, a man committed to notions

of the rule of law and took justifiable pride in the role he played to

evolve that. The measure of the man is perhaps revealed in this passage

that I have taken from our colleague’s book, describing something

Justice Berger said about the hearings that he was conducting into that

pipeline: “I want the people who live in the north, who make the north

their home, to tell me in their own language and in their own way what

Ian writes that he wanted the people living in the communities to

“speak in their own language, in their own way and not be subject to

harassment or cross-examination” — a man who cared deeply about the

human condition and throughout his remarkable life made an incredible

contribution to improving the human condition across our

society.

To his family, who shared him with us as a society for these

almost 90 years, all of our condolences. Thank you from a grateful

province and a grateful nation.

A. Olsen: It’s difficult to stand after the member for Abbotsford West’s and

the Premier’s remarks and be able to offer anything new or anything

remarkable. I’ve been in this House for not very long, certainly not as

long as they have. However, I think the perspective that I can bring to

this today is one of gratitude for the work of a powerful and incredible

man and incredible advocate that helped my families and our families and

our relatives, not only in British Columbia but across the country, to

be able to recognize the rights and the title that have existed and

continue to exist here. It was only chambers like the one that I have

the honour of standing in today that had chosen to ignore

them.

It was the work of many of our legislative ancestors but also

people, such as Justice Thomas Berger and many others, who decided that

they were going to act with courage and defend those rights and that

title and probably — not probably, definitely — go against the grain of

where society was at. That is the mark of a true leader.

[1:50 p.m.]

It’s with that that we recognize today, and we stand, and I have

the honour of saying these few words on behalf of the Third Party, for

Mr. Justice Thomas Berger and his passing. To think that all of that

history could have passed and did pass…. When I was elected to this

place in 2017, Mr. Berger was called upon by us still to assist the

province to help navigate a very difficult and tricky situation. So it’s

with that that I don’t want to hazard repeating what has already been

said.

As well, I think it’s important to recognize with humility that

the work that we have ahead of us needs to reflect the courage of people

like the late Mr. Berger. May his flame that he brought to the work that

he did throughout his career inspire us to stand up and courageously

advocate for those who are disadvantaged in our society, those who our

society and the rules of governance and systems that have been in place

have marginalized and to speak as powerfully for them as the example

that we have in celebrating the life of Mr. Berger.

With that, I want to raise my hands in gratitude for the trail

that he has blazed, the space that he’s created for us to have new and

different conversations in chambers such as this one. May his example

inspire us to be courageous and bold in our work and note that what

might be uncomfortable and might be difficult today, future generations

will look back and thank us just as we are thanking him for creating the

example that he has been to us.

With that, I’d like to thank the Premier for his wonderful

comments and the member for Abbotsford West for his comments, as well,

and certainly, the B.C. Green caucus and the Third Party share the

sentiments that have been brought forward here today.

HÍSW̱ḴE SIÁM. Thank you.

Orders of the Day

Hon. L. Beare: I call second reading of Bill 5.

Second Reading of Bills

BILL 5 — I n BC INVESTMENT CORP.

ACT

Hon. R. Kahlon: I move that Bill 5 be read a second time now.

[N. Letnick in the chair.]

I’m delighted to be introducing this important piece of

legislation that will help promising B.C. companies scale up and grow

jobs and investments here in British Columbia. This bill fulfils a key

commitment in my mandate letter from the Premier as well as a commitment

in the recent throne speech and Budget 2021 by establishing a new

strategic investment fund for British Columbia.

This new Crown corporation will be named InBC Investment Corp., or

simply InBC, and will be an important part of our province’s economic

recovery in the months and years ahead. InBC currently exists as a

Business Corporations Act company. The bill you have before you today,

Mr. Speaker, transforms InBC into a statutory Crown corporation. This

legislation sets out some of the key structures and features of the

corporation, including the mandate and the independence of the

investment decision-making.

Before I speak about the legislation, however, I want to spend a

few moments explaining why InBC was established in the first place and

why it matters. Currently our government has several programs to support

investment in small and medium-sized businesses in B.C., including the

venture capital tax credit program and the employee share ownership

program. But InBC, the strategic investment fund, builds on this by

supporting small and medium-sized businesses with a new source of

patient investment capital. That capital will be invested in accordance

with a triple-bottom-line mandate, which I’ll speak about a bit more,

and in more detail, shortly.

[1:55 p.m.]

InBC will take this support for small and medium-sized businesses

to the next level through proactive investments in high-potential B.C.

business. By investing alongside other sources of capital, both public

and private, InBC will support the creation and development of new

markets, drive economic growth across the province and partner with

private sector to address pressing social, economic and environmental

challenges.

What does the bill before you achieve? Specifically, it sets out

InBC’s mandate, which is to achieve financial returns and to advance

certain social, economic and environmental policy priorities. It

expressly states that the chief investment officer will have sole

authority to make investment decisions within the scope of the policy

framework set by government.

It enshrines the important transparency and accountability

measures, including an annual reporting requirement, an external review

to be conducted every five years. Finally, it sets out the structure of

the board of directors and its role as well as the option for the board

to create a body called an advisory forum.

While this is not a complete list of everything the legislation

does, the points I have just outlined represent some of the bill’s main

policy positions. I will now speak about each of these in

turn.

InBC has a unique mandate. It is a strategic investment fund with

a triple-bottom-line mandate. It will be doing what is known as impact

investing. This means that investments must aim and achieve a financial

return. However, that is not the end of the story. Its investments must

also support social, economic and environmental policy ob­jectives

of the government. In other words, across the portfolio, InBC

investments must aim to make money but also move the dial on key

priorities, like building a more innovative, low-carbon economy; growth

and investment across the province; and achieving reconciliation with

Indigenous People.

The idea here is that the value of the investment is no longer

just about financial returns. It’s also about the money making positive

impacts across British Columbia. This mandate has set out, in

section 4

of the legislation, the purposes clause and will also include a chief

investment officer in their work as they decide which B.C. companies to

invest in.

Another central feature of this legislation is the independence of

investment decision-making. I want to read this

section out because of

how important it is.

Section 18(1) states: “No person other than the

chief investment officer or an external fund manager retained by the

corporation may make an investment decision.”

The legislation goes on to clarify that in making investment

decisions, the chief investment officer cannot be directed by anyone,

including the government, a minister, the board or a director, the CEO

or any other public officer. Put another way, no one can direct this

chief investment officer or influence them when they’re making

investment decisions. The bill prohibits it. Only the chief investment

officer can make those investment decisions.

For example, if someone sitting on the InBC board of directors

came across a good investment opportunity and they wanted the chief

investment officer to consider it, that director cannot call them up and

ask them to look at it. That company needs to apply for the investment

via the InBC website just like any other company and go through the

regular application process. There will be only one process for

applicants, and they will all need to go through the front door. This

provision in the legislation reinforces that.

The statutory independence is an important safeguard. Not only

will it help protect the chief investment officer from any actual or

perceived interference, but in doing so, it will give InBC more

credibility in the marketplace amongst players that will hopefully seek

to co-invest alongside it. It will give InBC more credibility amongst

companies that will potentially be seeking its investment, and it will

give InBC more credibility with B.C. citizens and taxpayers who are

funding its activities.

InBC is a public strategic investment fund and will be investing

taxpayer dollars. For that reason, it is incredibly important that it

has the highest standards of transparency and accountability to the

public. I will touch on a couple of those measures.

Section 23 of the legislation contains an annual reporting

requirement. Specifically, every fiscal year InBC will be required to

report to myself and the Minister of Finance on the performance of its

investments. As ministers, we can specify what form and manner we would

like the report to take, including any information that we would like it

to contain.

Section 23 also requires that I then lay the report before

the assembly and, promptly after doing so, make the report publicly

available.

[2:00 p.m.]

The transparency doesn’t end there, though. Above and beyond this

annual reporting requirement,

section 24 of the legislation requires

that every five years InBC must undergo an external review. This is

modelled on the legislation that supports the Scottish National

Investment Bank. Specifically, the legislation states that I’m required,

as minister, and after consulting with the Minister of Finance, to

appoint someone to review and report on the performance of InBC’s

investment over a certain period. The idea is that this person or

organization would be external to government, a third party. Once I

receive that external report, I am then required again to lay it before

this assembly and promptly, after doing so, make the report publicly

available.

In practice, these annual reports and external five-year-review

reports will be put on InBC’s website for anyone to read. These measures

are in addition to the typical transparency and accountability

mechanisms, such as publishing an annual service plan report and

submitting annual reports as required by the Budget Transparency and

Accountability Act.

Finally, I’d like to speak briefly about InBC’s governance

structure. InBC will have a nine-member board of directors. Seven of its

members will come from outside of government, while two will be senior

public servants. The legislation stipulates that these individuals will

be appointed by cabinet. However, the names of the board seats will be

put forward for nomination by the board to the ministers.

All the InBC board of directors will be recognized leaders in

their fields, chosen for their expertise and their ability to represent

a diverse range of perspectives and experience. The initial board will

also reflect the diversity of this province.

Section 11 sets out the duties and powers of the board of

directors, but at a high level, it will be responsible for managing the

affairs of InBC or supervising the management of those affairs.

Section

25 also empowers the board to strike an advisory forum, an optional body

that can give the board non-binding advice or populate board committees.

While the board is not required to strike an advisory forum, it’s

another tool to make available to them should they wish to supplement

their expertise or add extra horsepower.

In conclusion, there’s no doubt that the past year has been a

challenge for all British Columbians. As we emerge from this pandemic,

this government is committed to building a sustainable, innovative and

inclusive economy that works for all British Columbians by creating

family-supporting jobs in every corner of this province.

InBC Investment Corp. will help promising businesses scale up and

grow here in British Columbia, resulting in more jobs and investment

flowing into the province. By acting as a strong institutional investor

in the province and by crowding in other additional sources of capital,

InBC will anchor and grow more companies here in British

Columbia.

I hope that everyone here today joins me in support of Bill 5,

which will help our economy come back roaring by helping our

highest-potential companies and driving long-term economic growth across

the province. With that, hon. Speaker, I look forward to hearing many of

my colleagues’ and, of course, the hon. member from Kamloops’ comments.

I strongly encourage everyone to support this.

T. Stone: I appreciate the minister’s opening remarks and look forward to

the debate on this, when we get to the next stage. But I do want to

offer some comments here, as part of second reading.

This topic area is obviously close to my heart. I’m very, very

proud of the over 15 years that I spent in the tech sector, starting and

growing a tech company and going through all of those trials and

tribulations that come with starting and growing any business, but some

of which are pretty unique to the tech sector.

I’d like to also think that there was some added challenge in

doing it in Kamloops. In fact, back in the day, when we started our

business up in Kamloops, we were tech company No. 3. I’m proud to say

that there are more than 100 companies now in Kamloops. It’s still a

small ecosystem of companies, and I’ll talk about that more in a moment

in terms of the regional needs in the tech sector and how to best meet

those needs.

[2:05 p.m.]

I’m very proud of the work that we did, and I’m very proud of

where the industry is today in my hometown and certainly across British

Columbia. I mean, the latest numbers that I have suggest that there’s

well over 11,000 tech companies in British Columbia, plus or minus. This

sector now employs well over 120,000 people, again, in every corner of

this province. On top of those 120,000 jobs, there are about 60,000 jobs

that are tech people working in non-tech companies, although even

suggesting that a company is non-tech is akin to suggesting that that

company’s probably not going to be around for much longer. I mean,

technology is now pervasive. It’s a foundational requirement in pretty

much every business out there and every type of organization.

The potential for continued growth in this province, obviously, is

significant. When we look at what’s happening in life sciences, when we

look at what’s happening in clean energy, when we look at the gaming

sector and the Internet of things — and on and on the list goes — there

is no question that we are good at coming up with innovative ideas in

British Columbia. British Columbians are extremely creative and

innovative, and we have a darn good track record at taking those ideas

and starting companies and commercializing those ideas.

The three main challenges that tech companies face in British

Columbia — and, frankly, across the world, really — can be summed up

into three different areas. One, you need those good ideas. And we’ve

got a demonstrated track record of coming up with those good ideas. You

need to be able to attract talent. You need to have talented people that

are willing to work in these companies and help them scale, help them

grow, help them conquer the world. Lots of work still to do on that

point. We’ll talk about that in a moment. Thirdly, you do need to have

access to capital.

Some of my most sleepless nights were waiting for the term sheet

to come, you know, back in the early 2000s, over the fax machine. Dating

myself there. But waiting for that term sheet to come in from that next

venture capital firm that we’d been working with to inject that next

round of capital into our business. We went through multiple rounds of

investments. We did take advantage, and we’re very appreciative, of the

small business venture tax credit program, and we were an eligible

business corporation. That was instrumental to our ability to get off

the ground. So ideas, people, and money. Those are the three critical

ingredients very specifically needed in the tech sector in order to

grow.

I do appreciate the intent behind this piece of legislation. I do

appreciate the intent that I think is embedded within this Bill 5 and

the creation of this framework for InBC. I do have a range of concerns,

however, that I’m going to walk through today. I think, first and

foremost, that British Columbians should be pretty concerned — and

probably are concerned — that there’s a tremendous lack of detail, a

lack of clarity to this point, on so many facets of what InBC is going

to be all about or how it’s going to be structured, how it’s going to

work.

The board — probably the most important initial decision to get

right — and the entire process around which the board is going to be put

in place. The compensation of executives. It worries me greatly that we

likely have yet another Crown corporation that will have a need to

recruit a very senior and very expensive executive, particularly, the

chief investment officer. The other management positions will be

critical in support, I believe, of the efforts of the chief investment

officer. That’s not a position that you find easily out in the market,

and it’s a position that is quite expensive.

[2:10 p.m.]

There’s a bigger question here as to whether or not this is really

the strategy, or the approach, that makes the most sense in terms of

trying to help better facilitate small and medium-sized businesses

accessing the capital that they need to scale their businesses. Are we

going to spend $500,000 on the chief investment officer? Is that

position going to be a $1 million position? Is that position going to be

on par with the CEO of BCIMC, which is $3 million per year? We don’t

know. I do think that there are some legitimate questions around what

those details are going to look like.

The investment criteria. I mean, there’s certainly a tremendous

amount of lofty rhetoric and phrasing that the government talks about

often, and in this announcement, as well. We don’t know, in terms of the

investment criteria, really, truly, the who, when, where, how and what,

if any, strings will be attached to these investments.

When the government talks about anchoring companies in British

Columbia, is that code for there will be strings attached to the

investments that will be placed? If so, what do those strings look like?

How is that workable? I, for one, can say, as a former tech CEO, I would

not have wanted strings attached to my business when I did investment

rounds.

One of the worst things you can do in the tech space is to attach

strings to financing. One, it’s a great way to scare off subsequent

investment rounds for that business. And two, it’s quite easy for the

company, through subsequent investment rounds, to be potentially evasive

of those strings in the first place. That begs the question: why do it?

It becomes a deterrent. It becomes a red flag, another reason not to do

business in British Columbia, potentially.

What are the priority sectors for investment? What are the return

imperatives? How will these funds integrate with other funds that are

out there, private sector funds or funds like the Canadian Business

Growth Fund? Will placements be made beyond series A investment? Are we

talking about, potentially, series B or even series C? Are we talking

about laddered investments? Again, no details at this point.

I would be curious to know what data the minister and his ministry

have relied upon to justify the creation of the strategic investment

fund and to structure it in the way that they are — data on the scale-up

of the capital gap that we all know has existed.

I would point out — and I know the minister would know this too —

one of the odd side effects or consequences of the pandemic. There is a

heck of a lot of capital sloshing around, looking for a place to invest

right now — private sector capital. Record levels. Billions and billions

of dollars, a lot of which is looking for a place to invest here in

British Columbia as well.

Again, it begs the question: why this structure? Why do it this

way? Was this decision made in part or predicated in part on data that

the minister has that suggests that there’s been a flood of talent

leaving the province and that this is one way to try and ensure that

bleeding stops? Is there data that the minister has that helped

predicate the decision to structure it this way that looked at the

regional needs, not just the tech sector in the Lower Mainland, there in

Vancouver, but the needs across British Columbia?

These are all important, I think, and focused questions that we’ll

want to get to the bottom of in committee stage. It is a $500 million

investment fund that’s being established. It’s taxpayers who ultimately

assume the risk for this. So these are important questions to be

asking.

[2:15 p.m.]

I’m very concerned. I’m not in a place where I’m feeling all warm

and fuzzy about the independence that the minister talks about in terms

of the arm’s-length nature of this corporation.

I acknowledge the sections of the act that he’s pointed to. I

acknowledge the intentions that he has established. But as I’ve been

making calls and talking to all kinds of folks — CEOs of tech companies,

men and women that place hundreds of millions of dollars through their

venture capital funds, financial institutions — the common theme on this

that I’ve been told, in terms of how this is structured, is: if you’re

appointing the board and you’re requiring certain investments to

actually have to be considered and only made through the lens of the

policy priorities or the policy initiatives, policy objectives, of

government, you really don’t have true independence. Yet that’s how this

is being structured.

The service plan, which the minister referenced, pro­vides a

lot of the top-line messaging on some of this stuff, but again, the

detail is lacking. We want to see that detail. The appointment of the

directors and the independence of the investment decisions are probably

two of the most important pieces that represent critical success factors

for what the minister is attempting to do here with the creation of

InBC.

With respect to the appointment of directors…. Again, I think this

is one of the things that is absolutely critical and has to be right.

They have to get it right. I’m concerned, however, that there is, as

with many other facets of this proposed investment fund, a lack of

transparency around this.

Most typically, when a new Crown corporation is formed or when

there are changes being made to directors on Crown corporations, the

positions are posted on the board resourcing office website — in terms

of one more measure that government usually puts in place to foster some

arm’s-length aspect to the recruitment of directors. Ideally, you want

the best and the brightest to serve on those boards, and you want people

that have very relevant expertise in the area of focus for that

particular board. You see that posting on the board resourcing

website.

We understand that the directors are to be appointed for May. We

have scoured the board resourcing office website and don’t see a posting

for the directors of InBC, which leads me to, then, believe that the

government already knows who the people are that are going to be

appointed to the board. That, then, in my mind, calls into question the

rigour that has actually been employed to be truly independent in

sourcing those directors.

If all the government is going to end up doing here is appointing

men and women who are known entities to the government and known to be

strongly supportive of the policy priorities of the government and

supportive of the government, potentially, in other ways…. That

potentially represents the most significant risk to this entire

scheme.

We’ve got a number of questions that we will ask in committee

stage in relation to the recruitment and ap­pointment of boards

and the measures that the minister keeps talking about, or mentioned

several times in his comments, that need to be in place to make sure

that this government and future governments are not able to meddle in

the operations of InBC and, especially, not meddle in the investment

decisions that are taken by the corporation.

[2:20 p.m.]

I mentioned earlier, concern around strings attached to

investments. Again, this is an area that perhaps we’ll entirely clarify

in the committee stage. But in the absence of details, and just with

nothing more than the rhetoric attached or detailed in the news release

and the announcement that was made the other day by the Premier and the

minister, it sounds like there will be strings attached — in the form of

investments having to meet the test of fitting into the key policy

initiatives of government as well as tests or strings that may be

attached that relate to the requirement for businesses to remain in

British Columbia or to ensure that their head office is here or to

ensure that they’re anchored here.

We don’t really know what anchored means. I understand the

definition of anchor. I don’t understand the definition of anchor as it

pertains to what the government is doing through the creation of InBC. I

will say, again, in talking with lots of venture capital folks over the

last number of days and tech CEOs of small and large companies, even the

slightest hint of strings attached is a no-fly zone in most of these

folks’ mind.

The B.C. tech fund, which was created in 2016, into which $100

million was put, which has been actually leveraged quite incredibly over

the last four to five years…. It’s why that fund and the deployment of

those dollars does not have strings attached in the form of: “here’s

what government’s policy priority areas are. Make sure the investments

fit those. Here’s what must happen with respect to anchoring a business

in British Columbia.”

We do see hints of those kinds of strings. Tech CEOs and venture

capital folks say that’s a surefire way to have investors — well, tech

companies — take a pass on tapping into the investment fund in the first

place, but also having third-party venture capital funds, other private

funds, from wanting to come in and ladder their investments with that

company.

I also will say this. If the intention is to try and keep a

business here and help them grow here…. Again, at a high level, I don’t

think there’s anyone in this chamber that doesn’t agree with the

objective of trying to figure out how we can take all of those thousands

of start-ups that we see in British Columbia every year and help them

get to that 50-person size, that 150-person size and so

forth.

But if there are going to be strings attached to the investment

here, as it was put to me by a very well-known figure in the venture

capital world here in B.C., the fastest and easiest way around that

string is for the government’s position to be bought out in a subsequent

investment round. Maybe it’s a series B round, and it’s a much larger

investment at that point. The very first thing that’s going to happen is

that venture capital firm and the other partners are going to say: “Part

of our investment in your company is we’re going to buy out the position

of InBC and whatever fund it’s called at that time, and we’re packing up

and leaving.”

There are ways around this. There are a number of questions in

that area that I intend on canvassing in the committee stage. I also

want to just say that there’s a fundamental difference of approach here,

I think. I touched on it a bit in terms of how our former government

established the B.C. tech fund and that we then engaged Kensington

partners to manage that fund.

[2:25 p.m.]

They’ve been able to leverage those dollars very effectively. It’s

been done with absolutely no interference or influence or meddling of

government whatsoever. It’s helped dozens of B.C. companies scale up.

The approach being taken here is not that.

The approach being taken here is, through a Crown corporation with

a CEO and CIO and all this compensation, the assuming of risk very

directly by the taxpayers through the $500 million strategic investment

fund. The questionable lack of independence between the board and the

investment decisions being taken and government’s policy priorities…. I

just don’t think that the government really has — any government,

frankly, but this government in particular — the expertise to pull this

off. This is a $500 million risk to the taxpayers of British

Columbia.

I’m alarmed to learn that investments that might meet the

government’s key policy areas also don’t necessarily need to be

profitable. I’m alarmed to learn that the anticipated rate of return on

the overall portfolio of InBC is somewhere in the range of 5 percent.

That’s an astoundingly low rate of return, considering the risk that

B.C. taxpayers are to be taking with the $500 million to begin

with.

In the venture capital world, the anticipated rate of return on an

investment is in the sort of 12 percent to 25 percent range. Yes, there

are always some losers. There are always some big winners — at least,

you hope there are — and a bunch of companies in the middle. But a 5

percent anticipated rate of return with the amount of risk that’s

attached to this venture is a very, very small rate of

return.

The risk is detailed, actually quite extensively, in the service

plan for InBC. On page 6 of the service plan, it says: “Venture capital

is a high-risk asset class that does not afford guaranteed returns.

Expected timing and distribution of venture capital returns is difficult

to predict.” Absolutely correct.

It goes on further to say that InBC is not anticipated to be in a

position to place investments until the end of fiscal year 2021-2022,

which takes me to another issue, and that’s that the timing of any

potential impact from the deployment of this capital is at least a year

away. I would caution the minister on positioning this as an economic

recovery program, certainly not in the short term.

By the time a board is put in place and a chief investment officer

is hired, investment criteria is established and the overall functioning

of this operation is up and running, and then you begin the due

diligence of seeking and accepting and reviewing investment

opportunities and then doing the negotiations and all the due

diligence…. This stuff does not happen fast, so the deployment of

capital is a long ways off. That’s confirmed in the service

plan.

The service plan indicates a $4 million surplus in B.C. this year

and cumulative deficits of $16 million over the next three years. The

service plan does reference the fiscal agency loan that is the facility

that is being used to deploy the $500 million. On that point, the

service plan indicates that the timing and amounts of this debt are

“uncertain and difficult to predict at this time. The timing and amount

of debt drawn will have a significant impact on the future financial

results of InBC.” Again, highlighting the inherent risk that comes with

making investments in tech companies.

[2:30 p.m.]

[S. Chandra Herbert in the chair.]

On this point, as I said earlier, there is a tremendous amount of

capital, more than anyone has seen in a very, very long time, sloshing

around, looking for viable places to invest. It does beg the question,

if this is even as priority of an area as other areas are in terms of

what government can do best to assist small and mid-sized companies in

the tech space scale up.

In the 2020 B.C. Tech Report Card…. As the minister knows well,

B.C. Tech and KPMG put out an annual report card of tech executives

across the country. The B.C. subset was obviously of interest to me.

According to B.C. tech CEOs, the number one challenge that they’re

facing at the moment is not access to capital. It’s actually access to

talent. It’s access to supports around systems and education and those

kinds of things. That’s not to say that capital isn’t a significant

need, a significant challenge. But is it the number one challenge that’s

faced by the tech sector?

I mentioned the timing of investments. I’m also concerned, again,

that I don’t see…. The minister mentioned it, perhaps very briefly, in

his comments moments ago, but I certainly haven’t heard much about the

focus of InBC in terms of a cross-province focus. When you look at the

sectors that were referenced in the announcement, that are in the news

release, that are in the background documents and whatnot, it’s life

sciences, animation, gaming, sectors that are predominantly anchored in

Vancouver and, to a lesser extent, in Victoria.

These are not the tech companies that need help scaling in

Kamloops or Prince George or even, in many cases, Kelowna. In fact, the

main challenge in the Interior and the north when it comes to the tech

space is not scaling businesses. It’s actually helping those start-ups

in the really early stage. So I question where in this scheme called

InBC there is going to be a focus on ensuring that companies in the

Interior, the north, on the Island and the rural, regional areas of this

province have access to the capital as intended through this program. We

want to see an equitable distribution of this access.

That brings me to my final point. I am the designated speaker on

this. My final point is this. When I listened to the Premier and the

minister make this announcement, and when I got my hands on the material

and was able to dive into it and start to wrap my head around what this

was shaping up to look like, InBC…. Obviously, there were references in

StrongerBC. There were references in the budget. There were references

in previous communications. But when you look at this, InBC, as it was

announced earlier this week, I couldn’t help but be struck that this

appears to be an initiative that’s largely silent. What I mean by that

is: where is the broader economic strategy for the province of British

Columbia? Where is the broader jobs plan for the province of British

Columbia, and how does this fit into it?

If the government believes that risking $500 million of taxpayers’

money to establish a highly risky program — a corporation that’s making

investments in highly risky companies — is the be-all and end-all and is

the only piece of the puzzle that’s required to facilitate the growth of

tech companies in British Columbia, they’re sadly mistaken.

I look at things like the 23 new and increased taxes that the NDP

have put in place since they’ve been in power. I look at the fact that

British Columbia has the third-highest marginal tax rate in Canada. That

directly impacts the recruitment of tech sector workers. It’s a highly

competitive industry.

[2:35 p.m.]

Washington state has no state income tax. According to talent.com,

a software developer earns $27,000 less in B.C. than they do in Ontario,

but their taxes are much higher here. B.C. has a higher corporate tax

rate than Alberta and Ontario, two of our key competitors in this space

from a Canadian context. B.C. has the employer health tax. Obviously,

Alberta doesn’t. Ontario and Quebec have a similar form of employer

health tax, but they’re both in the midst of moving to reduce the

employer health tax burden on businesses.

High tech investments are actually moving out of the province. I

was struck the other day, in looking at a news release on carbon

emissions from a company in Squamish that is doing some incredibly

cutting-edge innovation relating to carbon capture…. They’re

headquartered in Squamish. Well, the news release was all about how they

were excited to tell the world that they’re establishing a pilot project

not in Squamish, not somewhere in the interior of British Columbia, but

in Texas.

We hear this story far too often — companies like Carbon

Engineering that will tell you the taxes in this province are too high,

the regulatory burden is too high, the access to talent is really

challenging, and this is not a friendly place to do business. It’s not a

friendly place to come and make an investment.

This is, again, a major difference between us and the government.

We believe that the role of government is to create the conditions

within which investment is attracted to your province so great jobs can

be created, so companies start here and can grow here. And they do it

largely without the need of the taxpayer to risk significant sums of

money. They do it because it’s a great place to live, it’s a great place

to work, and it’s also a great place to start and grow a

business.

So there’s that whole tax and regulatory piece that…. You know,

I’d be curious where the government’s plan is on that, because that is a

critical component that has to go hand in hand with an access-to-capital

strategy. I don’t see a strategy around tax and regulation.

Likewise, we need some significant modernization of the

intellectual property laws in British Columbia. There are some

significant challenges that relate to IP issues. Where’s the

government’s plan to deal with that?

I’ve talked about talent quite a bit today. Where’s the plan to

attract the talent that British Columbia needs? Where’s the plan to grow

that talent in our own universities? We, our former government, had an

actual jobs plan with sector-by-sector components. The tech sector was

one of those components. We mapped out, over a ten-year period, what the

needs of that sector were going to be in terms of capital, in term of

labour, regulatory changes that would make a difference — on and on it

went. We don’t see that with this government.

Another point that, absent action, is going to make the access to

capital issue more challenging than it should be is that this

government…. We still don’t do a good job in this province of government

acting as an agent, meaning government acting as a customer or being a

customer for early-stage companies in British Columbia.

I remember in my days, I had signed up with…. Our tech company had

signed up almost every customer we could in the local government space.

It’s where we did our early business in Alberta. We had most of the

municipalities there. We signed up a whole ton in Ontario. We had half

the state of Washington signed up. I could count on one hand the number

of organizations in the government space we were able to sign up here in

British Columbia, for all kinds of reasons. That challenge still exists

today.

[2:40 p.m.]

Carbon Engineering should be a company that…. Maybe there is a

strategic opportunity to have them doing carbon capture as part of the

Site C project or some other major industrial project in this province.

The province, if it was strategic about this, would be looking for those

opportunities and matching those opportunities with B.C. companies that

are already here today.

That’s not about risking taxpayers’ money. That’s not about

attaching strings to the investment of taxpayers’ money in private

sector companies. That’s just about being smart and strategic and saying

government is going to serve as a pilot for tech companies in British

Columbia. We don’t do that. We don’t do that here.

I want to also say this. Every venture capital and tech CEO or

tech executive that I’ve talked to this week has said the same thing too

— that the government is walking away from its child care commitments,

walking away from its housing affordability commitments; that these are

critical headwinds that are building that are making it more and more

difficult for tech companies to recruit the talent, to bring people in,

to fill the positions that are needed to help them scale.

So much for access to capital. But if you can’t get people here to

work in your businesses…. Part of the reason is because if the taxes are

too high, the regulatory challenges are too burdensome, you can’t access

a good and affordable place to live for yourself and your family, you

can’t access child care for a variety of reasons, that person is not

going to come to that tech company here in British Columbia. That’s

what’s happening right now.

The point is that access to capital is one piece of the puzzle.

The government has got to have a strategy around taxes. The government

has got to wrap its head around the regulatory burden. It’s got to wrap

its head around talent. It’s got to wrap its head around intellectual

property. It’s got to fulfil its commitments relating to affordable

housing and affordable child care. Those are all key economic

imperatives that need to be in place for the tech sector to have a

fighting chance.

I did want to say that the B.C. tech fund that I referenced

earlier…. It’s part of what’s being rolled up in InBC — the B.C. tech

fund and the Renaissance Fund. The B.C. tech fund actually has been

quite successful. I looked in the service plan. You look at the

investment tables there, and for 2020-2021, the cumulative capital

called on the B.C. tech fund commitment was $51 million. The cumulative

investment by fund managers and syndicate partners in B.C. companies, so

leveraged off that $51 million, is $663 million. That’s a significant

and very positive leveraging of the investment.

Again, what are we trying to fix here? It would appear that

there’s a tremendous track record with the B.C. tech fund and how it’s

managed and the results that it’s generated. We know there are literally

billions in private sector capital sloshing around, looking for good

investments here in British Columbia, yet the government is proceeding

with creating this whole new scheme.

In

summary, again I go back to my initial comments. The tech

sector, and everyone in it, is something that I’ve been very proud of

and been very grateful to have been part of for so many years. I, like

the minister and I think every person in this House, wants to see this

sector continue to grow, and not just in the Lower Mainland but right

across the province.

There are great ideas in every town and community around British

Columbia. Yes, access to capital is an ongoing challenge. I’m not

convinced that this model, this particular structure, is the way to go

about facilitating improved access to capital. I’m not convinced that

this structure minimizes the risk to the taxpayer. I’m not convinced

that absent the government’s apparent lack of focus on those other areas

— taxes, regulations, talent, IP, government as a customer and other

areas — this strategy is going to work.

[2:45 p.m.]

We’ll get into all of these details in the committee stage. I look

forward to very thoughtful and detailed answers to what will be

thoughtful and detailed questions. With that, I thank you, Mr. Chair,

for the time.

B. Bailey: I apologize that there is banging in my condo. This has been an

ongoing issue in the months that I’ve lived here, and I apologize to the

members and those listening that there is a distraction in the

background. However, we will push on.

I’m delighted to have the opportunity to share my enthusiasm in

regard to this wonderful InBC strategic investment fund, which is what

the tech sector has been asking for, for years, maybe even decades. The

$500 million over three years is a significant amount of money. This is

not a small investment, and it’s a carefully structured investment to be

done on behalf of B.C. and on behalf of taxpayers.

Let’s talk a little bit about the need that this is solving for.

British Columbia has a really amazing start-up sector, and we’ve often

been recognized for our start-up sector. There are some who say that in

fact we’re the number one start-up system in Canada and in the top 15

globally. We’ve heard mention, of course, that we have over 11,000 tech

companies, but the challenge that I’ve seen in the two decades that I’ve

been in the sector, and which we often hear about from those who

represent it, is that so many of our companies are start-ups, are small

and medium-sized businesses.

When you identify the challenges within a sector — certainly, the

member who spoke prior to me, the member for Kamloops–South Thompson,

rightly noted it — it always comes up that talent is a challenge, for

sure. That challenge has been growing year over year. It also always

comes up that capital in this system is problematic. It’s not only a

lack of capital, but it’s also the type of capital. We hear from people

frequently that this gap keeps our businesses from scaling.

I don’t want to assume that someone listening today will

necessarily understand how an investment makes a big difference in a

company and why companies need investment. Let me just take a moment to

kind of paint that picture a little bit. When you’re building a company,

it’s not always true that you can bring product to market and use your

own revenue to fund the growth of your company. Of course, we all wish

that were true. Wouldn’t it be great if we could very inexpensively get

our product to market and we could use revenue to build our company? The

best money in, to build your company, is revenue. But that’s

difficult.

Often the cost of building whatever product it is…. Whether it be

software, a technology that’s going to be applied to reduce carbon

emissions or any other example, those costs to create the product that

you’re building or the intellectual property that you’re building can be

very large. Yet when you look at the potential, the upside, once you do

bring your product to market, of what it will make, it makes sense. But

you can’t get there. There’s a gap. That’s why this investment money is

so important.

I apologize to those who understand the investment world. It’s a

very simplistic description. But I’ve heard a couple of folks in my

community say: “What is this InBC, and how does it affect me?” It’s

really, really important that when we look at how we grow our tech

sector, we help address that issue.

When you look at really successful ecosystems in the tech sector….

Of course, we like to look at Silicon Valley. There are a whole bunch of

reasons that go into the success of Silicon Valley. There’s not just

one. One of the important reasons is that the ecosystem includes a huge

amount of investment income. If anyone has ever done the Sand Hill walk,

it’s just one VC company after another. There’s so much money in the

ecosystem. It’s a fast-moving ecosystem. Deal flow happens incredibly

quickly. It’s a “yes” ecosystem, not a “no” ecosystem, which ours often

is. There are many, many other differences.

[2:50 p.m.]

British Columbia is interesting because we have really, in many

ways, quite a unique scenario in that we punch above our weight in terms

of this start-up ecosystem, in terms of the quality of ideas people

have, the companies that they’re building. Technology is iterative. It

builds on top of each other, and there is a lot of iteration happening

within our sector, but the challenges were relatively small. We’re

relatively small in terms of our labour flow, but we’re also relatively

small in terms of who we attract for capital.

Even though we punch above our weight in terms of having many,

many start-ups and great ideas and we’ve done well in the start-up

ecosystem, we don’t really have that when it comes to capital. Death on

the vine happens from being undercapitalized, so it’s really, really

important that we address this gap.

The ability to grow your company, to look at that as a solution,

is really, really important. Without that capital allowing you to grow,

what happens is often you’ll take different types of investments that

aren’t what we call a patient investment. This is a patient investment.

It’s not immediate returns quickly that you have to then replace with

other investments, this perpetual replacement of investments that can

completely eat up a CEO’s time and energy.

Founders are best at running their companies and growing and

working on their product and moving it forward. To always spend your

money on fundraising is really not the best use of founders’ time. It’s

so important there’s a way to allow growth that doesn’t mean that the

only strategy for your start-up is in early acquisition.

What happens in the British Columbia ecosystem is people sell

pretty early, before they really get the value out of their company.

That’s just tragic. We’ve seen it so many times. It’s so disappointing

because we don’t unlock that potential within that company.

We do that because there’s no capital to help them move and grow.

When we think about becoming an anchor company, what do we mean by that?

Of course, we do know what an anchor company is, but the difference is

that if you’re able to grow your company from maybe being a 40-person

company to being a 500-person company, you can be an anchor company in

your own province.

What does that look like? It’s so important. I’ll give you an

example. I’ve mentioned that I worked in software, specifically in video

games. One of the anchor companies in British Columbia was founded

about, I don’t know, 25 years ago and got bought by EA. Distinctive

Software, it was called. When EA bought Distinctive and decided to grow

in British Columbia, it did a huge amount for that ecosystem. All of a

sudden, there’s a big player.

What happens when there is a big player? Well, it draws attention

to the sector in the province. You’ve got someone to point to. “Hey,

look what’s built here. Look at this amazing work being done.” But also

what happens is talent works within that organization, and they learn

best practices. They’re great engineers when they come in, but they’ve

got even better processes when they step out. They become very astute in

business practices in addition to just building.

The corporate training that people experience in a larger

corporation like that is just so incredibly helpful. What very often

happens is that entrepreneurs, after being at a large corporation, an

anchor corporation, for some time, will even start their own companies.

We’ve seen literally hundreds of companies, mine included, started from

people who left EA.

Interjections.

Deputy Speaker: Sorry, Member.

Members, if you could please respect that the member for

Vancouver–False Creek has the floor. Thank you.

Sorry, Member. Apologies from the House. Please

proceed.

B. Bailey: Thank you, Chair.

It’s just so integral that when people leave anchor companies and

start up their own companies, they do so with really strong experience

and great processes, and they’ve learned that from the larger

corporation that they’ve left. Very often this sort of calving off that

happens from anchor companies is how the whole ecosystem builds. Often

the anchor company will buy the smaller companies that have started out

as part of the whole ecosystem development.

[2:55 p.m.]

We want to see more anchor companies, because it feeds the

ecosystem. These are really well-paying jobs. The tax base from them

contributes to the public coffers. It’s very, very important. Now what

we have instead is a very, very strong start-up ecosystem, but that

growth has been stymied because we don’t have that middle investment

piece that we need, and people have been asking for it.

It’s very, very important that we address the question of scaling

and how to scale. The idea that if people are able to bring in

investments into their company and grow their company in British

Columbia instead of taking sort of the first exit opportunity that’s

there — that’s massive. It can actually change the ecosystem. It can

change it, and I think it will. So I’m extremely, extremely excited

about this. Again, it’s something that’s been asked for, for a very,

very, very long time.

Sometimes selling your company externally, outside of British

Columbia, outside of Canada, can be beneficial. It’s not always a

negative thing. It’s negative when the company leaves, in my opinion,

and we lose that talent and lose that potential of growth here in

British Columbia. Sometimes when a company is purchased by an external

actor, the growth continues in B.C. Those great jobs stay in B.C., and

the talent stays in B.C., but the revenue and the profit doesn’t stay in

B.C. Profit staying is important, again, to that ecosystem.

When you consider another example…. For example, I’m thinking

about something up in the Kelowna area from some time ago, when Club

Penguin sold to Disney. That particular acquisition created something

like 40 millionaires in one day. The ecosystem, as I understand it….

Certainly, the member for Kamloops–South Thompson can speak to this

probably more than I, but as I understand it, the ecosystem that came

about in Kamloops — much of that money is related to that particular

acquisition.

So it’s not always true that acquisitions to external actors are

negative. They can also create funding to feed the ecosystem. But what

we’re concerned about is really when that money leaves, and that’s

happening more and more in British Columbia. We see a lot of

exits.

However, I would take issue with my colleague the member for

Kamloops–South Thompson in saying that people are fleeing British

Columbia right now. I don’t believe that’s so. In fact, we’re seeing

data to the opposite. Many, many tech companies are investing here in

B.C. We just saw Best Buy decide to settle in south Mount Pleasant,

which is a really encouraging aspect. I think it’s really about what the

ecosystem can be. We’ve got an exceptional, exceptional tech talent

group here, and this will support the continued growth.

Does that matter beyond the tech sector? I think that’s

interesting, because the tech sector…. It used to be that we would think

of it kind of as a vertical. You know, there’s the logging sector,

fisheries and technology. But the tech sector isn’t a vertical anymore.

That’s just not the case. There is not even really a tech sector. People

who work in technology work in all other sectors. I think that’s really

important to note, because this is going to affect all of B.C., right?

It’s not just the tech sector. The kind of growth that this can drive

will benefit all of B.C., not just the tech sector, because the tech

sector is all of B.C., really, and technology is a competitive

advantage. It’s not a separate thing.

In addition to anchoring and growing more companies in B.C. and

driving long-term growth across the province, I’m also very excited

about the structure that’s been chosen for this InBC, specifically the

triple bottom line. My colleague mentioned that businesses don’t like

investments that have strings attached. I’ve certainly heard that to be

true, and I know that was true in my own business. But there are strings

and there are strings.

[3:00 p.m.]

I think that the way that this is being designed is very attentive

to that concern. We can balance the objectives of having government

priorities as part of decision-making but very broadly, so it’s not

prescriptive or limiting or somehow makes it less appealing for

businesses to be involved in the funds. I think that’s being paid close

attention to, and I’m particularly excited about that.

I’ll share with you now my thoughts on why the triple bottom line

is so important and why I’m proud that this fund has taken that

movement. A lot of people might not know what a triple bottom line is,

so I’m going to just speak a little bit about that. It was a concept

developed in 1994 by John Elkington, and it’s made up, of course, of the

three elements: the people, the planet and the profit.

Historically, investments made by VCs, in particular, would only

look at profit. But profit registered in revenue is a quite minimalistic

way to look at how businesses have impact and also how the world impacts

businesses. The idea is to encourage businesses to look at their

performance analysis beyond just financial performance — to look also at

sustainable investing, sustainability, what it means to the planet and

what the implications are. Often those implications are not borne by the

particular business. They’re shared out among all of us — so an

encouragement to look at that and also to look at people and

community.

We know that these businesses that have pivoted into looking at

triple bottom line have actually been very successful, because talent is

interested in this. People want to know that businesses have a

conscience, care about the planet, care about the people that work for

them. So from a particular business point of view, where this original

triple bottom line emerged, it became quite successful and

popular.

I think it’s also important because we know — I know, anyways —

that investment decisions are not always decisions that are made just on

the merits of a business. There’s a lot of bias that exists in venture

capitals and investment firms. I witnessed this firsthand when I was

searching for investment for my second company, Silicon Sisters, which

was a women-owned and -run video game studio.

I did that walk on Sand Hill down in Silicon Valley. I had great

numbers, and I had a great story, and I had a business that was really

rolling, and I was told: “Women don’t play video games. No. Women don’t

run video game companies. No.” Not any interest at all in the metrics

and the data and the business case, but a bias. That bias is something

that’s been noted again and again. There’s a tremendous bias against

women leading companies. Yet that bias is remarkably unjustified,

because we do know, in fact, that there’s really, really good data on

what happens when women run companies and when women sit on

boards.

Just to share with you, here’s a case for women-led start-ups.

This is from Forbes magazine. It’s the top ten reasons that we

should consider supporting women-run start-ups.

“Private technology companies led by women are more

capital-efficient, achieving 35 percent higher ROI and, when

venture-backed, 12 percent higher revenue than start-ups run by men,

according to the Kauffman Foundation.

“Women-founded companies in First Round Capital’s portfolio

outperformed companies founded by men by 63 percent.

“In a study of over 350 start-ups, MassChallenge and BGC determined

that businesses founded by women deliver higher revenue, more than two

times as much per dollar invested, than those founded by men, making

women-owned companies better investments for financial backers.

“Despite the severe funding gap, start-ups founded and co-founded by

women actually performed better over time, generating 10 percent more in

cumulative revenue over a five-year period, according to BCG.”

Fifth point:

“Companies in the MSCI world index with strong women leadership

generated a return on equity of 10.1 percent per year, versus 7.4

percent for those without strong leadership.”

Number 6:

“‘Women-owned businesses are growing much faster than all

businesses. From 2007 to 2018, women-owned businesses grew by 58 percent

in terms of the number of firms, and 46 percent in terms of revenue,’

according to American Express researcher Geri Stengel.”

The other three points are very similar, but essentially, I think

you get where I’m going. Although there’s a negative perception in

Silicon Valley about investing in women-owned companies — or certainly

this was true five, six years ago — the data doesn’t bear it

out.

I think this experience that I’ve had, and it’s been documented

widely now, is also true when it comes to BIPOC people’s experience in

business. We tend to invest in folks that remind us of ourselves. We

tend to hire folks that remind us of ourselves. Those two things are

problematic, and they keep us from perhaps making our best decisions in

both of those regards.

[3:05 p.m.]

I’m not saying that this is a factor that should overwhelm all

other factors. I’m not making that argument. I do, though, think that

these types of considerations should be part of any decision in regards

to investment. Although I don’t know yet exactly what this will look

like and haven’t seen the mandate letter, I do hope there will be some

component that does provide encouragement that we look at women-led

companies and companies led by folks who are BIPOC.

I’m also really excited about the structure. In

part 3, in 6(a),

we see that there are two directors from the public service and up to

seven directors outside the public service. This is so important. We

have some exceptional business people who have had amazing exits here in

British Columbia and who have just tremendous knowledge to share. I

don’t know yet, but I’m hoping we’ll see some of those folks who step

forward to use their incredible experience to help us guide the best

investments possible in this fund.

I think the independence of the chief investment officer — not

being political at all and cannot be directed by anyone — is absolutely

integral, not only to the integrity of the fund, but in terms of who we

attract. We really want to attract the best of the best. I think that

the structure that I see in the bill will be able to do just that. I

think that’s incredibly important, because this person is going to have

a lot of power and decision-making capacity and really needs to be the

right person, which I think will be structured into this. It invites the

right person — let’s put it that way.

In regards to the priorities of the fund, I’m very excited that

the priorities of companies that are focused on a low-carbon economy are

going to be highlighted as well as our absolutely stellar and growing

biotech sector. The tech sector is very broad, as I’ve mentioned, but

those two particular areas are so ripe for investment — just absolutely

ripe for investment. We’ve seen some incredible acquisitions. We’ve seen

IPOs in both of those sectors that are really, really

encouraging.

I will just disagree a bit with my colleague from Kamloops–South

Thompson when he speaks about the carbon company in Squamish leaving to

Texas and that this is an example of the result of taxes. Actually, I

think it’s different than that. I know that businesses react to paying

more taxes for sure, but really, the challenge is not that. The

challenge is ensuring companies stay because there is a climate for

investment here. This fund is exactly the kind of fund that will keep a

company like that here. That’s exactly what this fund will do. So I

don’t think that that example is…. I think that example is on the other

side of the ledger. It is, in fact, why this investment fund is just so

important.

When we think about the word strategic…. Strategic has a very

specific connotation when considering it in light of investment.

“Strategic investment” is a term that really specifically means that

this investment is meant to draw other investments. It’s a tool to

leverage. The strategic part of it is that it’s very specific,

well-thought-out and designed to get particular outcomes.

[3:10 p.m.]

I think those outcomes are just going to be absolutely stellar

from this fund — specifically focusing on the two areas already

mentioned, those of biotech and clean tech — because when we grow those

sectors, we’re not only supporting the business environment of that

growth; we’re supporting incredible jobs for young people in our

province — we’re also supporting new technologies that can help us

address the greatest crisis of our time, which is climate

change.

These new technologies can serve us in so many ways. They can

serve us in terms of us battling climate change, but they can also serve

us in terms of us exporting best-in-class technologies all around the

world and establishing ourselves, even further than we already have, as

being the cream-of-the-crop leaders in terms of climate change

technologies and help in solving this problem. B.C. has the capacity to

do that. We absolutely do. The talent here is extraordinary. I think

that particular aspect of this strategic investment is really worth

noting, because it will pay dividends in so many different

ways.

I had the great privilege — not anymore, but prior to this year —

of sitting on a board that gives out scholarships to women who are

studying for post-secondary STEM degrees. One of the things I most love

about that scholarship fund is that we asked them to talk about how

their research, how their studies, will change the world. There are

usually about 150 applicants a year. It’s incredible what they write,

what they want to study and what they want to do.

Across the board, probably 80 percent of the answers are in regard

to solving for climate change in the most creative ways imaginable. What

these young engineers are planning to do is incredibly exciting to me,

and I know that some of those young women will come out and start

start-ups. This fund makes it more likely that they’ll be successful.

Instead of hitting that wall of growth and not being able to get past

that 20- or 30-person company, we have a much greater chance of that

occurring because of this.

As you can tell, I very, very much support Bill 5. I think this is

an absolute game-changer. I’m not overstating it. I truly believe that

this will pivot our province to being a world-class leader in

technology. We’re already a competitor. We’re already doing incredible

things, but this will kick it into top gear. I’m absolutely excited to

see the metrics going forward, to finding out who our CIO is and the

board of people who will help us continue this work. I’m very proud of

the minister and all of the folks who worked so diligently on this

excellent piece of legislation.

L. Doerkson: It’s indeed a pleasure to bring greetings from the

Cariboo-Chilcotin to you and, certainly, to the House. We’ve heard much

information here in the last couple of hours. I’d like to bring it back

to, maybe, some simpler terms. It is a great pleasure to stand here and

speak to another important bill — the InBC Investment Corporation

Act.

I want to start, though, if I could, just by acknowledging all of

our front-line workers. It can’t be said enough in this place how

grateful we all are for the services that so many people have provided

for all of us throughout this extremely challenging time. I did want to

note some of those front-line workers who are perhaps a little bit less

obvious to most of us.

I’m obviously very appreciative to all of the nurses, doctors and

care aides, but I’m extremely thankful that our search and rescue

departments have not taken a break; that our volunteer fire departments

continue to serve all of our communities every day; that police continue

to keep our communities safe; that wildfire fighters are here in the

Cariboo-Chilcotin right now and that they’re sandbagging, waiting for

those inevitable wildfires; that vets and vet techs continue to watch

over our pets and livestock; and that truck drivers, retail workers and

grocers continue to provide for us. I’m extremely thankful for all of

them.

With respect to Bill 5, I understand that it will create loans and

funding for businesses, and I think we’ve heard that there is some

support for that, but there are questions around it. These investments

can be risky, and these will see taxpayers funding the start-up of these

businesses. It focuses, of course, on tech and those start-ups, and it

refers to post-pandemic recovery.

[3:15 p.m.]

It also appears that it would be taking half a billion dollars and

investing in these private companies, which is concerning, a bit, to me.

It should be noted that so many of these businesses existing today have

done their very best to not only supply us with some very essential

goods and services, but they have also done that on limited income, with

limited staff and, of course, around very strict public health orders.

Those orders continually challenge these businesses to reinvent

themselves and to recreate the ways that they conduct

commerce.

So many of these businesses have been unable to obtain funding

today through current programs that have been offered — programs that

have, in many ways, failed in the business community. It is highly

peculiar to me that we would be introducing post-pandemic funding, as

clearly, we’re not through the pandemic.

I referred to these businesses as providing essential services,

and I’d like to speak to that for just a moment. When I speak to the

essential need for a resort to be open in the West Chilcotin, some may

question this, but I must point out that for road crews or other work

crews, where else would they stay? Where else would they dine? While the

operators find themselves servicing crews like this — and I’m sure

they’re all too happy to do so — it’s not without its own challenges.

Because of public health orders and because of travel bans, these

businesses are struggling with less staff and working very, very hard to

provide those services, but they do.

Bill 5 will aim to help those businesses that are focused on tech

and will focus on start-ups. Furthermore, it suggests that this will be

post-pandemic funding, as I mentioned before. For the $500 million

committed to this program, it does nothing for businesses today. I would

have hoped that the funding could have helped businesses that are

struggling right now. I’m sure that businesses, struggling to provide

essential services for people that have to travel for medical needs to

larger centres — where they and their families will need lodging,

restaurants, fuel, perhaps supplies — need support now.

Most of these businesses are struggling under either orders or

lack of business. In other words, they’re struggling to keep the lights

on while they serve us. It is, for sure, a trying situation for so many

small businesses right now. They’re struggling now, and from what I can

see, post-pandemic is still some time away.

I know that in my riding — in the early part of many of the most

recent orders that were introduced for restaurants in the

Cariboo-Chilcotin and, certainly, the rest of the province — if they

were the lucky ones that had outside dining facilities, they were, of

course, covered in snow. The restaurants farther north than the

Cariboo-Chilcotin were, for sure, at odds, not only with orders but,

certainly, weather as well. Many of these businesses have been unable to

secure funding and help from this government.

As the government has introduced other funding models in bills

like Bill 5, we’ve seen some failures with respect to those rollouts.

Certainly at this point, those failures would have to be acknowledged by

this government. There have also been funding models that have simply

vanished. We saw the animal care initiative in 2020. They’ve

acknowledged that there were issues with guide-outfitters, rodeo stock

contractors, zoos and even the Vancouver Aquarium. The need to help

these businesses was identified in 2020, and I would certainly hope that

that need is recognized here again.

These costs have not gone away for the businesses, and they have

not had business at all — nothing. I know a number of businesses that

are caught in this situation with respect to animals, and I know that

with action not happening soon, some of these operations will have to

make very serious decisions.

[3:20 p.m.]

Someone pointed out on my Facebook page the other day that

businesses don’t want to have to apply for funding. They don’t really

want the government to have to come up with these creations like Bill 5.

It was pointed out to me that all they really want is an opportunity to

work, an opportunity to earn money and an opportunity to be in

business.

I would never suggest that we shouldn’t all do our part, and I’m

sure that most businesses would agree that they, too, want to do their

part to keep COVID-19 at bay. But it must be acknowledged…. If the

government insists that these closures and travel bans are necessary,

then we must figure out ways to effectively find funding and get that to

the businesses today. It is key that funds actually get to businesses,

particularly when the funding has been approved and is literally sitting

there doing nothing.

We’ve watched how the B.C. recovery benefit has rolled out. This

promise, made back in the election of 2020, was to be delivered to

qualifying recipients by the Christmas of 2020. It’s May next week, and

I still have constituents coming in to find out why they have not

received their $500.

Surely, the government must understand that this program has

certainly been flawed. There is hardly a day that goes by now that I

don’t receive calls as to held-up funding, applications that have not

been accepted, requests for massive amounts of information for the B.C.

business recovery program. With respect to the businesses of this

province, Bill 5, should it pass, will not help anyone until

I have my doubts about this bill. Should it come into effect, I’m

hopeful, at a minimum, it will have mechanisms that will protect the

taxpayers who have provided the funding for this bill from their

hard-earned money. I hope that if it is passed, the criteria of getting

these funds and loans does not become so cumbersome, also, that it costs

tens of millions of dollars to administer the program. The previous

funding models have struggled at the cost of business throughout the

province.

This process has truly been flawed from the beginning. I believe,

at this point, that only about half the funds have actually been

delivered by the B.C. business recovery program. I want to point out

that these funds have been approved by everyone in this place months

ago. I would have hoped that rather than posting a pandemic funding

announcement of Bill 5, we could have seen funding to help other sectors

of hurting businesses and funding for some of our

not-for-profits.

There is a real need by many rodeo grounds, agricomplexes, fair

grounds, racetracks, sporting complexes, etc., that have a constant

pressure of maintaining property. They’ve had no business. Giving good

care to the Williams Lake Stampede Grounds for sure comes at a cost.

Volunteers, as always, are happy to do the work, but there is a real

cost of buying materials. Oftentimes a lot of these materials are

donated by small businesses, but as you know, many of these businesses

are struggling because of the lack of these events.

It’s a vicious circle. Each of these events and businesses feed

off each other, and many exist because of each other. It is very

important that we see funding for some of these groups.

Bill 5 could have had options for funding today, I think, to help

some of these groups and businesses or, at the very least, make what we

already have approved in this House function better and actually get to

where it needs to be the most. There has been no funding for groups like

these, yet Bill 5 will take half a billion dollars in taxpayer money

with very high-risk investments. We must be far more efficient with

programs like this in the future.

The last round of closures to indoor dining has been devastating

to the restaurants. The travel bans have destroyed what was hoped to be

the start of the summer season for so many tourism operations. I’ve

discussed, at length, these bans with many operators in the

Cariboo-Chilcotin. It has been a devastating blow.

When introduced, it was suggested that the province leads Canada

in supports for small business. I would suggest that we may lead in

announcements, but I question whether we’re leading in deployed funds.

The deployment is paramount at this time. These funds will have to get

where they are destined to go. We must break down the walls and

obstacles that have slowed the delivery of funds in the past. We must be

as committed to delivering these funds as we are to announcing

them.

[3:25 p.m.]

Mr. Speaker, I don’t have to tell you that a lot of months have

passed between the last funding announcements and these ones. Of course,

these ones are announced for the future and not for right now, when

they’re needed most. The times right now are, for certain, desperate for

some. It’s not just that the times are uncertain, but orders have also

been very uncertain.

While restaurants have struggled with outdoor dining orders…. As

I’ve mentioned before, when these orders were first introduced, many

decks that existed were co­vered in snow. But for many, they

didn’t have a deck or outside dining possibilities. Not to mention the

timing of the orders before Easter.

It didn’t take long for many restaurants to call with their

absolute shock at these latest orders. It wasn’t just that they were

difficult to work around, with establishments coming up with creative

ways to prepare different meals. The timing of the orders was awkward as

well. As you know, there was not much by way of warning, and many of

these restaurants had already received speciality orders for the Easter

long weekend. Many had hired extra staff for what was to be a good

weekend financially.

With respect to lodges, the confusion of announcing a travel ban

with no clarity around the rules has been a complete disaster for their

businesses. I’ve not talked to an operator in my riding that is clear on

the rules or what they are to do with people that seem to be committed

to breaking or disregarding those rules. It is safe to say that these

operators have been put in a very awkward position.

My point is that while Bill 5 is being announced as a

post-pandemic recovery fund, it does nothing to help businesses that

have been completely boxed in by the government’s regulations. Bill 5 is

to help tech start-ups in this province, and I understand that. It’s

also set up for a post-pandemic world. The problem is that there are no

economic recovery plans unveiled in that world yet — no clear

direction.

Bill 5 is being announced at a time when many businesses are

teetering on the brink of closure. The timing of the announcement and

the bill is, quite frankly, to me, a bit strange, particularly in light

of the situation, with so many small businesses that are suffering right

now.

In my role as rural critic…. Connectivity has become the number

one priority in rural British Columbia. It was interesting to see that

we will invest the taxpayers’ funds in these companies, some of them

very risky, through Bill 5 funds. But wouldn’t it be nice if our

government saw as much value in connecting our rural communities with

such privileges as Internet and cell phones?

Bill 5 will commit $500 million to tech, but the commitment to

connectivity over the next four years in this province is only $40

million. How can this government show its commitment to tech when so

many people in this province can’t even connect to the Internet? They

cannot connect to the World Wide Web.

In closing, I really think this bill would have been better suited

to helping businesses now. I think there would have been so many more

things the funds could have done to help right now.

A. Mercier: It is a pleasure to stand in this House and speak to Bill 5, the

InBC Investment Corp. Act.

To the relief of many in this House, I think, my remarks will be

rather brief today. I’d like to begin by thanking my friend the Minister

of Jobs, Economic Recovery and Innovation. He has not only managed to

help support and throw a lifeline to small businesses that are having an

incredibly hard time right now because of the pandemic.

I’ve heard from businesses in my community and my constituency of

Langley that have received the circuit breaker grant and that have

applied for and received the launch online grant. To have had that come

to them is a real lifeline to help them. The minister has also done that

while bringing forward an innovative bill that looks towards the future

of British Columbia and the future of the B.C. economy.

Now, we heard, amazingly, some remarks from the member from South

Kamloops that he’s worried about the government meddling in Crown

corporations. Imagine that, coming from the former minister responsible

for ICBC, from a government whose track record, over 16 years, was to

view Crown corporations as a source of income for general revenue so

they could extract value from ratepayers and use that to give tax breaks

to their friends.

[3:30 p.m.]

What we’re seeing with this bill is a paradigm shift and a sea

change in the way that Crown corporations are managed and in the way

that the government interacts with the economy — and not one that is

just value extraction for the wealthy and those who sit at the top, for

the well connected.

[N. Letnick in the chair.]

This isn’t about giving buildings that belong to Crown

corporations to lobbyists. This is about ensuring that values and public

purpose are at the heart of our investments. And to assuage the concerns

from our friend the member from Kamloops South, I’m going to read from

the act. I find that many of his answers, he’ll find directly in the act

itself.

Going to

section 4, purposes of the corporation: “The purposes of

the corporation are as follows: (

a) to make investments that achieve a

financial return; (

b) to make investments that support the social,

economic and environmental policy objectives of the government.” So you

can see, Mr. Speaker, that a financial return is in here, but also: “…to

make investments that support the social, economic and environmental

policy objectives of the government.”

What this is about is…. This isn’t about a quick return for

venture capitalists. This is about crowding-in funding…. It was very

eloquently stated by my friend the member for Vancouver–False Creek

about patient capital. This is about crowding-in funding for firms that

have trouble scaling up due to a lack of ability to attract capital,

because they need a longer lead time for returns, and making sure that

those that are having trouble getting off the ground, and that serve a

real social and economic purpose, have the support that they

need.

You know, I can understand that there are some members on the

other side that don’t believe that greenhouse gas emissions are a source

of pollution or cause climate change. But on this side of the House, we

do. That is a major purpose of this act — to make sure that there is

support there.

I’ll turn now to

section 16, because we heard concerns about the

chief investment officer.

Section 16 of the act: “The chief executive

officer must, on the recommendation of the board, appoint an individual

as the chief investment officer of the corporation.” Subsection (2):

“The board, on the recommendation of the chief executive officer, may

the chief investment officer.” Here’s the important part: “The chief

investment officer must ensure that investments of the assets of the

corporation are made in accordance with the purposes of the corporation

as set out in

section 4.”

What does that mean? Well, if you continue reading, it’s

explained. Subsection (4): “For the purposes of subsection (3), the

policy objectives referred to in

section 4 (1) (b),” which is the

section that we just read, “are to be determined by the minister and the

Minister of Finance, acting jointly, and communicated in writing to the

chief investment officer by the chair of the board.”

What this does is it sets up a structure whereby the minister, my

friend the Minister of Jobs, Economic Recovery and Innovation, and the

Minister of Finance — both of whom oversee deputy ministers who will sit

on this board — together communicate in writing to the CIO, through the

chair of the board, what those purposes are. The CIO then must make

investment decisions that generally fit those purposes.

What’s important, then, is turning to

section 18 of

part 4,

“Financial Administration,” division 1, “Investment Independence”: “No

person other than the chief investment officer or an external fund

manager retained by the corporation may make an investment

decision.”

So the government can set the parameters of the policy objectives,

but they cannot meddle or interfere in that investment decision, subject

to section…. I’m going to read the entire section. It’s important. It

ought to help inform the committee stage. “Subject to

section 16 (3), in

making an investment decision on behalf of the corporation, (

a) the

chief investment officer is not subject to direction from anyone, and

(

b) an external fund manager is not subject to direction from anyone

other than the chief investment officer.” This is a high degree of

latitude and independence.

“For certainty, in making investment decisions on behalf of the

corporation, the chief investment officer and an external fund manager

are not subject to direction from any of the following” — so for

certainty, no one can interfere, but here’s a list of those that

specifically can’t interfere: “(

a) the government; (

b) a minister; (

c) the board or a director; (

d) the chief executive officer; (

e) any other

public officer.”

[3:35 p.m.]

So the answer is in the scheme of the act, which is that the

government can’t meddle, which is a theme of the acts that this House

has passed under our government as pertains to Crown corporations. I’m

thinking back to the act that was passed to prevent the government from

raiding ICBC coffers into general revenue.

Further, if you turn to

section 23, “Annual reports,” division 3,

“Reports and Reviews”: “

(1) The corporation must, for each fiscal year

of the corporation, make a report to the minister and the Minister of

Finance on the performance of the investments of the corporation.” It

then specifies the form and how to make those reports.

But subsection (3): “The minister must lay a report made under

subsection (1) before the Legislative Assem­bly as soon as

practicable and, promptly after doing so, must make the report publicly

available.” This is about transparency and the public

interest.

You see that throughout the scheme of this act in terms of how the

corporation is set out. It ensures that the values of the public are

realized, through direction from the chair of the board on what the

parameters are, in terms of government policy objectives. It’s a very,

very clear and clearly laid-out act, and it’s very forward-thinking.

There are examples of this around the world from strategic investment

funds in Ireland and in Scandinavian companies. That’s really what this

is. This is a triple-bottom-line strategic investment fund. It’s a key

component of the economic recovery, yes, but it’s also about what we

want our economy to look like after the recovery.

To answer the member for Cariboo-Chilcotin’s assertions that all

of this money ought to be spent elsewhere, what government has to do is

complex, and there are many different facets of the economy in our

society that we need to manage. Yes, we absolutely need to make sure

that we’re getting relief to businesses, and we are. I’m hearing from

those businesses every day in Langley. But we also need to make sure

that we’re setting ourselves up for success down the road, so that we

can address things like climate change, which is real and is

happening.

We need to make sure that those firms have a chance to scale up

and aren’t passed by, by venture capital looking for a quick return. We

need patient capital. What this will do is crowd in investment into this

sector and ensure that this money isn’t just value extracted from our

economy but that it creates value and generates additional value. This

really fixes and solves a very clear public policy problem. It’s going

to be a game-changer, and it’s going to be a game-changer in my

community, as well as in this province.

I had a great conversation the other day with the board of

Kwantlen Polytechnic University about the great things that they’ve got

going on there and the innovation corridor that they want to plan along

the Langley bypass and Glover Road. That’s a key component of the

changes and the rezoning that are happening within the city as a

consequence of SkyTrain and our investments, in the last budget, on

SkyTrain.

Well, that will set up…. The fact is that B.C. is changing. We

have clear and pressing public policy challenges and social challenges

that we have to meet. This act and this corporation are going to allow

us to do that. It’s going to make sure that we don’t get left behind and

that the money is used to generate value.

In closing — I know it’s a disappointment to many, but I said my

remarks would be brief — what this is about is a new paradigm for Crown

corporations, where they’re not just there to act as piggy banks for

government to fill holes in the budget generated by handouts. This is

about making sure that Crown corporations ensure the public interest and

are there to address the policy challenges of the day.

B. Stewart: It’s an honour to stand in this House and talk about this

particular bill and the items that I’ve had a brief amount of time to

review and see in here.

[3:40 p.m.]

I guess one of the things that we all need to be concerned about

is…. I’m sure the member and the minister responsible for Jobs is

definitely concerned about businesses in British Columbia. Thousands of

small businesses, as he knows, have been struggling in B.C. for more

than a year. Many are hanging by a thread. They need help right

now.

Here the InBC Investment Corp., created by this bill, won’t be

ready to make investments until a year from now. That’s not the type of

action that government needs to do if this is intended to help create

rebuilding an economy.

We’ve got to think about the economy that we had before this,

unless there’s another plan that I’m unaware of. According to the

service plan, this is going to take some time to implement Bill 5, the

InBC Investment Corp. It’s a big, complicated Crown corporation that’s

going to take time to set up, find the right people, attract

people.

Frankly, I can just see that this is not going to help us in the

current short-term economic downturn that we face. It’s almost a year

from now. How many of these small and medium-sized businesses are

already on the brink of permanently closing, let alone being able to

survive until 2022 and wait for this investment to scale up?

The truth is that one in seven of British Columbia’s small

businesses today is at risk of closing for good. That’s 25,000 small

businesses. Small businesses typically have under ten employees.

Frankly, that’s an awful lot of employment that we’re going to lose. It

adds up to over 300,000 employees whose jobs are currently in jeopardy.

This is on top of the 8,000 small businesses that B.C. has already

lost.

So far, every program that’s been rolled out for small businesses

by the NDP hasn’t necessarily helped and has been a failure. The most

glaring of these has been the business recovery grant, which has failed

miserably to get the money out the door. We saw the announcement. We saw

the extension. We saw the adjustment. In fact, we saw the money being

reappropriated into the circuit breaker program that was announced and

then, of course, had to be extended because of the current change in the

public health emergencies that have locked us down.

I guess what’s more concerning are the criteria for InBC to make

investments. Those are the questions that we’ll, of course, be asking at

the committee stage.

I know the member from Langley just mentioned this purpose. I want

to read it again, “Purposes of corporation”: “The purposes of the

corporation are as follows: (

a) to make investments that achieve a

financial return; (

b) to make investments that support the social,

economic and environmental policy objectives of the

government.”

We also see that there is another subsection. It says: “…does not

apply in respect of investments that are made under agreements that were

in place before this Act comes into force.” What does that mean? I mean,

are there deals that have already managed to have been funded by

something that the government has done? I know that we’ll be pursuing

this much more when it comes to the committee stage on this particular

bill.

I do worry about that type of language and what the purpose of it

is. I do think that it says: “…to make investments that achieve a

financial return.” Well, there’s contradictory messaging, I believe, in

the service plan that says they don’t have to necessarily make a

profit.

I’m conflicted by this. I know that it talks about the importance

of doing things for “social, economic and environmental policy

objectives of the government.” As a matter of fact, we had a fund. When

the carbon tax happened to be revenue-neutral, we took $50 million and

put it into the ICE fund, the innovative clean energy fund, and that was

for new technology that was to help create opportunities like what’s

being talked about. That was $50 million, less than 10 percent of what’s

being promised here.

We successfully found new, innovative technology. Nothing that….

It had to be brand-new, and we were looking at all sorts of green

opportunities. I would recommend that that definitely

continue.

[3:45 p.m.]

On the other hand, the fact is that this fund itself doesn’t

clearly state where those funds are going to be invested. I even

suspect, by that subsection I read out, that there’s the potential that

there are investments that may have either already been committed to

or…. The fact is that there’s a risk that some of the investments might

not work out. They have to be carried by the other investments that are

meant to be, as suggested by the member for Vancouver–False

Creek….

The fact is that there are winners and losers in the tech field,

as we know — in any business. It takes a business plan to come up with

that. It doesn’t just take…. I think that the old saying goes: if you

fail to plan, you plan to fail.

I think the situation is…. Some of us in this House have been

entrepreneurs, where we actually had to not only take our own capital,

but we had to risk everything that we had to make certain we did that.

That didn’t guarantee getting access to this capital. I know that the

intention is to help the sector in terms of technology and make certain

that that’s being created.

Let’s talk about some of the things that take place in other

jurisdictions.

What about the size of tech companies here in British Columbia? I

know that my colleagues from the Okanagan area sat down and participated

a number of years ago. We had this goal of growing technology from 6,000

workers to 20,000 workers, and I have to tell you that we’re well on

track with that. I believe that the number now is about 13,000

workers.

We’ve had, as mentioned by the member for Vancouver–False Creek,

Club Penguin, which was one of these companies that was already in

existence. It had about 350 employees. There have been many other

spinoffs in technology that exist in that area. We do want to see that

grow, but we want to see it grow for the right reasons. We want to make

certain that the people that are getting the benefit of this are here to

stay.

I know that there are some things…. The minister mentioned the

fact that we’re trying to make certain that we have an opportunity to

retain those businesses. Some of those things, which I know the member

for Kamloops–South Thompson talked about, were the fact that…. What is

it? We’ve got the climate. We’ve got people. We could always train more.

We could invest more in post-secondary education, because we all know

that getting talent is one of the things we need.

We have seen some things. The $100 million we put into the B.C.

tech fund has helped in terms of attracting. We gave that money to an

outside firm, rather than trying to keep it in. Kensington Capital

managed that money, and it has actually been leveraged, which is the

whole idea of these types of things. You want to leverage these funds so

that you can actually take a dollar and hopefully make that $10. I’m

sure that the minister, no doubt, wants the same thing.

Prior to getting elected, myself and the former member for

Kelowna-Mission and a number of other local people invested in an

innovation fund, which was around that type of thing.

Interjection.

B. Stewart: Oh, sorry. Okay. I missed that. And the member for Kelowna–Lake

Country. Maybe what it was, was that I was on the board, and he was one

of the people attracted into it.

Anyways, we took our lumps, and we learned the hard way about

investing and doing this. On a small scale, we tried very hard as

entrepreneurs, as we all were, in trying to invest the dollar and trying

to make that even $2. It didn’t quite work out that way, as the Deputy

Speaker has just pointed out. It did morph into something. It has

grown.

The bottom line is that there are other funds, like NDIT and CDIT

and ICE-T, that all became part of what it is that the government was

looking to. They wanted to invest and incentivize businesses to be

attracted into these regions with specific goals.

What I’m thinking with the InBC investment…. I laud the government

for the goals, but I have to say that one of the things that really

needs to be considered here is: what are the things that we have to

attract people here? We’re talking about putting money into these

businesses, in technology. We want them to come and have the opportunity

for capital.

I have to tell you, having dealt with, in a previous role that I

had, attracting companies to British Columbia to invest in technology,

that it is very competitive out there. We have some serious competition

south of us, in Washington state, California. These are big, powerful

entities.

[3:50 p.m.]

Let’s talk a little bit about some of the things that we have

done. We decided that we wanted to incentivize people to come here and

work in the movie production business. We have film commissions. We have

people. We’ve just had an event with Creative B.C.

We have an incentive system. It is not the most generous. It is

not a complete giveaway. However, one of the things that we do know is

that it has made British Columbia a place where the talent is, where

people want to come. They come here because they want to be a part of

the climate, the people, the lifestyle, all of the things that we have

to offer. I think that that’s one of the things.

Now, the things that we have that are negative things? We’ve got

California, which has average-sized companies instead of what we have

here in B.C. So 500 is kind of in the top 10 percentile of tech

companies that are in the tech sector in California. We’re 10 percent of

that.

We have Washington state, which we know is the birthplace of

Microsoft. Of course, they have no income tax for people that are

high-wage income earners. That means that somebody in British Columbia

has to pay a penalty for being here. Not just an income tax penalty.

They actually have to pay many other taxes, and employers have to

consider that when they’re setting it up — and how competitive. I hope

that that consideration goes into the type of investments, because we do

want to grow companies.

Electronic Arts was cited by one of the members opposite. It’s a

great example — I believe, a Burnaby-based company — that’s home-grown.

It attracts all sorts of talent being trained at BCIT. We want more

electronic art companies and other companies that are coming

here.

One of the things that we have to remember about this type of fund

is that having it so close and in government…. I look at the structure

of what’s in here — the board of directors and who the chair is. That’s

all good and accountable to the Minister of Finance. However, as I said

earlier, the B.C. tech fund had Kensington Capital, which managed the

funds, take $100 million and leverage that.

I think that the danger is…. We have examples, with the

government, in their previous time in government, with the Working

Opportunity Fund, which was not what it should have turned out to be.

Currently we have projects where…. We talk about it in a language that

makes it sound very sexy and home-grown, etc.

The community benefits agreement, frankly, is costing more for

British Columbians to get capital built. We’ve heard, in the budget,

that there is going to be lots of capital and new hospitals and things

like that that are going to be built, roads that are under construction,

etc. Frankly, that just delivers less value, and it means that the

taxpayers, like in this particular group, are going to have to pay not

just a little bit more. We’re hearing numbers of maybe 30 or 40 percent

more for the cost of projects.

We’re a small province — five million people or just over that. We

need to make certain that we’re competitive and that things that we

produce here are exportable. We have to sell them. We’re not the place

where a lot of these products are going to be consumed. Electronic Arts,

for that matter, is global. Same with many of the other technology firms

that are here. We need to be globally competitive to attract the talent

in and bring those people here so that they want to set up their

businesses here.

What we have is…. We’ve got a bit of a history of making up

policies on the fly. I say that…. Well, look at the things on the fly.

Let’s talk about the renters grant. It was promised in 2017 during an

election, in April. We’re coming up on four years on that, or past four

years, and there’s no sign of it.

We just recently, in this House, talked about something being done

on the fly with a seniors home right in Vancouver, Grace Seniors Home.

The fact is that we had B.C. Housing make an arbitrary decision to bring

another group in, with the federal program, and displace 70 seniors in a

culturally appropriate building. It was rectified, but making those

decisions on the fly is the type of thing that proves that government is

probably not the best place for making investment decisions.

Find a way to attract and incentify the tech companies to come

here, other than a rule book that essentially is being run by people

that, frankly, have made decisions that are on the fly.

[3:55 p.m.]

I’ll give you another one. There’s another example right now. The

minister was on the radio yesterday talking about the agreement with

Victoria and Vancouver. Strathcona Park was going to be decamped on

Friday. Essentially, the park board in Vancouver is going to be

obligated to move, with a court order, to make certain that the park is

vacated, because there’s enough capacity to make certain that the people

that are taking up residence there….

Well, the same thing is happening here in Victoria. We have

Victoria West, at 225 Russell Street. It’s got a complex, a warehouse,

that has now got sea cans in the backyard, essentially, next to

cooperative housing. The sea cans are being filled with washrooms and

safe injection sites for 70 additional people coming out of those parks.

No consultation. Absolutely none. Those people, until about three weeks

ago, had no idea that this was going into their neighbourhood, their

community.

It’s not the first time. There have been many other purchases, as

there was yesterday. There was another purchase of a piece of property

owned by B.C. Housing and run by them.

The bottom line is that there is a lot of capital flowing out.

Frankly, I think we do need to ask ourselves, in a sense: do these types

of decisions have the financial test that makes them certain that

they’re going to carry out and deliver on what they want?

On top of that, we’ve got hundreds and hundreds of families with

children, a community housing complex right across the road. They’re

going to be impacted by the effects of moving 70 people from Beacon Hill

Park and Centennial Square into this type of facility. It’s going to

start on Saturday. That is not the type of decision-making that I think

we should be doing as government.

Frankly, I worry about the InBC tech fund being something like

that, with the control. Now, it does say on here that there have to be

no government officials on that board. It doesn’t say who the chair has

to be, but in the act, it does talk about the fact that there can be an

advisory board.

I’d be looking forward to seeing the independence, the business

acumen of the people that are going to be on that. I’m sure that the

minister is going to be thinking deeply and carefully about that, but

that’s what I think we need to do — make certain that the people that

are running this can meet that acid test of whether they are truly in a

position to administer half a billion dollars.

I know that the member for Cariboo-Chilcotin…. They’re building a

new hospital. He told me the other day that it’s going to cost close to

half a billion dollars, but that’s a new health care facility. If we

blow this and we spend that half a billion in a way that just doesn’t do

the objective, doesn’t attract the talent here that we’re talking

about….

Where is the investment in advanced education to make certain that

if we’re going to grow this sector, we’ve got the spaces at BCIT,

Kwantlen University, UBC, all the other tech-type universities, etc.? We

have to make certain that we have the capacity to provide people, as

well as that incentive system to attract them here to British

Columbia.

So what are we doing here? We’ve got half a billion dollars going

into this. Sure, we’ve got a COVID pandemic. It is a big problem, no

doubt about it, as the minister struggles under the weight of that every

day on Health. The situation is that we’re looking at deficits that…. A

lot of places are looking at deficits. We can talk about it. We talked

about it in the budget speech the other day.

They talk about rising to 30 percent of debt-to-GDP. If the

economy holds, we’ll maybe be at 30 percent. What happens if it goes

higher? What happens if the rating agencies decide to take us down a

notch or two from triple-A down to something like B-plus or something

like that? What is that going to cost? We’re going to have to pay more.

What if interest rates go up? We’re talking about deficits here that….

We’re forecasting a $9.7 billion deficit for 2021, a further $5½ billion

deficit for 2022, with the combined provincial debt at $103

billion.

I guarantee next year, when we’re in this chamber and we’re

talking about the budget…. I bet you these numbers are wrong. I bet you

that they’re off by a long shot. I bet you the numbers are going to be

staggeringly high, and the situation is that we’re going to be faced

with increases in taxes, things that we don’t want to see.

[4:00 p.m.]

We already are feeling the effects of the speculation and vacancy

tax on land that people bought not to speculate, just lan