British Columbia Hansard — Thursday, April 11, 2019 p.m. — Number 239 (HTML) (41st Parliament, 4th Session) (20190411pm-House-Blues)
20190411pm-House-Blues
British Columbia — Debates (Hansard)
Fourth Session, 41st Parliament
(2019) OFFICIAL REPORT
OF DEBATES
(HANSARD)
Thursday, April 11, 2019
Afternoon Sitting
Issue No. 239
ISSN 1499-2175
The HTML transcript is provided for informational purposes only.
The PDF transcript remains the official digital version.
CONTENTS
Routine Business
Introductions by Members
Orders of the Day
Second Reading of Bills
Bill 25 — Coastal Ferry Amendment Act, 2019 (continued)
N. Simons
B. Stewart
S. Malcolmson
J. Rice
R. Sultan
S. Gibson
Hon. C. Trevena
Bill 19 — Energy Statutes Amendment Act, 2019
Hon. M. Mungall
G. Kyllo
T. Shypitka
B. Stewart
Hon. M. Mungall
Bill 27 — Ticket Sales Act
Hon. M. Farnworth
M. Morris
B. D’Eith
J. Martin
S. Chandra Herbert
M. Stilwell
Hon. M. Farnworth
Royal Assent to Bills
Bill 5 — Budget Measures Implementation Act, 2019
Bill 10 — Income Tax Amendment Act, 2019
Proceedings in the Douglas Fir Room
Committee of Supply
Estimates: Ministry of Environment and Climate Change Strategy (continued)
M. Stilwell
Hon. G. Heyman
P. Milobar
A. Olsen
S. Thomson
G. Kyllo
THURSDAY, APRIL 11, 2019
The House met at 1:33 p.m.
[Mr. Speaker in the chair.]
Routine Business
Introductions by Members
G. Kyllo: It gives me great pride today to stand and introduce some very close
friends, Shannon Martinson and Trevor Harrison, visiting us from Salmon Arm.
Trevor is a homebuilder — very successful, does an amazing job. Shannon is a
very close friend of our family. Shannon has two kids, Kade and Keela, who
were born about the same time as two of my girls. I’d like the House to
please give Shannon and Trevor a very warm welcome.
B. Stewart: It gives me great pleasure to welcome to the House some of my family:
my mother, Rosemary Stewart; my sister Andrea McFadden and her husband,
David. Obviously, they are here looking for the excitement around Bill 15,
but unfortunately, we’re not discussing that today. We’ll look forward to
the other debates going on in this House.
Coming from a long line of agriculturalists, they are very interested
in changes to the agricultural land reserve. More importantly, Andrea and
her husband have one of British Columbia’s most successful lavender
enterprises called Okanagan Lavender.
[1:35 p.m.]
Orders of the Day
Hon. M. Farnworth: I call continued debate in this chamber on second reading, Bill 25,
Coastal Ferry Amendment Act. In
Section A, the Douglas Fir Room, I call
continued debate on the estimates for the Ministry of Environment and Climate
Change.
[J. Isaacs in the chair.]
Second Reading of Bills
BILL 25 — COASTAL FERRY
AMENDMENT ACT,
(continued)
N. Simons: I’m happy to have this opportunity to speak in favour of Bill 25,
the Coastal Ferry Amendment Act, 2019.
I’m very pleased that our government has made a very concerted
effort to ensure that this important infrastructure of our province,
which serves thousands of residents of island and coastal communities,
is not only strong but has a strong foundation for going forward. It’s
been a long time, I think, that I’ve spent in this House listening to
questions about ferries from my colleagues, asking some of my own, and
hearing, from government, answers that never satisfied me or residents
of ferry-reliant communities.
I represent Powell River–Sunshine Coast. For those who don’t know,
it’s the only constituency in the province that’s entirely only
accessible by boat or by plane. Or if you’re a good swimmer or if you
happen to hike the very long trails up and around Howe Sound, up and
around Jervis Inlet or Bute Inlet…. That was tried once, to no happy
conclusion.
This is, in fact, a piece of legislation that strives to ensure
that the public interest is a central part of the act, the legislation,
that governs how our ferries operate in this province. Now, back in 2003
or ’04, I believe it was, the previous government made a decision to
take the authority of running the ferries from the government. They
decided to divest it to a private company.
They gave that company its operating orders, and those orders were
in the form of the Coastal Ferry Act. At the time, Judith Reid, the
Minister of Transportation, said that the new act would increase the
number of jobs, promote stable fares and…. There was another thing that
I don’t quite…. Oh, ensure our level of service was
maintained.
Now, since then, of course, we saw that fares increased, in some
cases, up to 105 percent — on the Texada Island ferry. Services were
cut. The number of about 2,700 sailings per year were cut. We saw the
elimination of the discount that was provided to seniors to travel on
certain days of the week. We saw communities that were, in effect, left
completely out of the discussion around how their infrastructure was
going to serve them.
Studies were done by independent examiners to see what the impact
of the B.C. Liberals’ plan for B.C. Ferries was, and it was that our
communities suffered economically, socially. And unfortunately, it
resulted in a lot of people having to struggle more in order to make
ends meet. This is simply because they lived in communities that were
served by ferries and relied on ferries.
I call our communities ferry-reliant. We’re not dependent; we’re
reliant. Our businesses use the ferries on a daily basis to bring goods
to market or from the market. Family members go and visit friends or
family across the Salish Sea or across Jervis Inlet or from Horseshoe
Bay over to Langdale.
[1:40 p.m.]
These are ferries that connect people, that connect communities,
that connect businesses. They ensure that young people can participate
in sports activities that might not be present in the community they
live in. We had kids participating in orchestras who had to travel on
the ferries.
When the government made decisions about ferries, they did so with
very little input from the public, not because the public wasn’t
interested. The public was specifically kept out of the decision-making
process — specifically and intentionally kept out.
We went from a system that the previous government felt was
problematic…. They decided to off-load the responsibility for ferries
onto a company. So when people had complaints, they would phone me, and
I’d say, “You have to phone the Ferry Commissioner,” and the Ferry
Commissioner would say, “You have to phone B.C. Ferries,” and B.C.
Ferries would say: “This is not our problem. Talk to the
minister.”
We talked to the minister. The minister from the previous Liberal
government was known to say things like “boo hoo.” It wasn’t his
concern. He wrote a piece of legislation that cut the public out of the
decision-making process, and his response to our concerns, when we
raised them appropriately in this House, was boo hoo. In other words:
“You’re on your own. We wrote the legislation. Forget about it. We’re
done. This is the way it’s going to happen.”
We saw fares increased. We saw services reduced. We saw
communities suffering economically. We saw people having more difficulty
accessing health care, entertainment, employment. People take the ferry
every single day between West Vancouver and the Sunshine Coast for work.
People take the ferry every day from Texada Island to Powell River to
work.
These are nurses. These are people who teach in our school system.
In fact, on Texada Island, when the government allowed services to be
cut so much, kids could no longer attend school. People moved off the
islands in order to be able to do the most basic community activities,
such as going to school or keeping a job.
Now, I think the concerns that this is somehow going to make
government specifically in charge of every decision that B.C. Ferries
makes is just wrong. I don’t think that the opposition should be so
scared. I don’t think they should be so concerned that, in fact, when we
talk about public interest and we enshrine it back into the legislation,
that’s something to worry about. It’s not.
We’re here to serve the people of the province. When you hear the
opposition say, “We don’t like that you put public interest back into
the mandate of the authority,” I really question who the opposition is
supporting. I’ve asked that question many times on many different pieces
of legislation. Who are they standing up for here? It doesn’t seem to be
the people of the province.
I’m more than happy that the Minister of Transportation has worked
hard, with the support of her caucus and her colleagues in cabinet and
the Premier, to say public interest is important. On a service — on
ships that ply our waters, that serve our communities, that make sure
our communities are strong — there should be public input into how those
programs are offered.
I really question the idea that just because it’s our government
restoring public interest into the act…. It doesn’t mean that there’s a
secret plot to take over the running of the ferries again. Yes, there
are many people in our communities who would like government to bring
back ferries under the direct authority of government. There are many
people with many cogent arguments to say that’s a good idea. Our
government has made the decision, based on some financial
considerations, that that wouldn’t be a good idea.
But we’re making efforts to overcome the barriers that that
creates by saying, “Okay, the legislation governs ferries. It’s still a
separate company. The single shareholder is British Columbia people.” We
should have a system that says: “Consider the interest of the public.”
Now, the interest of the public isn’t simply to ensure that we have
reliable service back and forth but that we have a service that reflects
the concerns and values of British Columbians.
Our concerns and our values include ensuring that we have a clean
environment. Yes, we are making good, strong efforts towards addressing
our climate change goals. I think the CleanBC is a singularly important
part of that process.
Individuals and companies in our communities have their own
responsibilities as well. We’re not telling B.C. Ferries they have to
reduce their carbon emissions, but we’re saying that the oversight of
B.C. Ferries has to include the consideration of their impact on the
environment.
[1:45 p.m.]
Now, a member from the opposition, the member for West
Vancouver–Sea to SkyWest, spoke earlier, and he made some good points.
Well, he made one good point that the public interest was…. No, I can’t
really think if he made a good point. Anyway, he raised concerns that,
in fact, the government was taking everything over, that we were going
to be micromanaging B.C. Ferries. That is singularly not the
intention.
We are ensuring that the board, the authority, represents the
public. The government appointments are still a minority on that board.
It is not going to be able to control the day. The input of people that
the government thinks will reflect the interests of the public…. They’ll
be the ones chosen for the board, and I’m, quite frankly, very pleased
about that.
I think that coastal mayors and councillors and district directors
are all saying that we finally have a government that recognizes that
ferries are not just like a funucational adventure, as the one previous
minister used to call them. We don’t go on the ferries for fun and
education. Sometimes we get fun, and it’s educational. We see whales. We
see the beautiful coastline. We enjoy the ferry rides often.
Unfortunately, they did cancel the shrimp salad sandwich, and the
government’s not going to say you have to restore that sandwich.
Everything that the ferries does is up to them, but they operate within
the legislation that we’ve written. We’re amending that legislation, as
is the responsibility of government. The responsibility of government is
to ensure that the public interest is embedded in the legislation that
we pass here.
Unfortunately, in 2004, I believe it was, the public interest was
actually excluded from that legislation. We’re correcting a wrong. We’re
fixing a problem. We’re actually overcoming what I think might have been
an ideological bias. Our perspective from this side of the House is to
ensure that the legislation we pass here is a reflection of the
interests of the public, the people of British Columbia.
People who don’t even live in ferry-reliant communities benefit
from an affordable service that serves the coastline — goods and
services from the Sunshine Coast, people from the Sunshine Coast. We
welcome so many visitors to our beautiful area, and they come over on
the ferry. When ferry services prevent them from travelling, even with a
little bit of inconvenience, that’s usually surmountable. When the
inconvenience means you have an eight-hour wait at a ferry because
they’ve decided to cut the midday sailing, that is a serious problem. I
understand, because I used to not live in a ferry-reliant community. I
understand that it’s hard to conceive of what it is like. But when you
count on your highway being closed for two hours and then open and then
closed for two hours….
Every single time you travel anywhere, you need to take a ferry.
My riding — you need to take a ferry from West Vancouver. You get to
Gibsons. Everybody wants to go to the Sunshine Coast. It’s beautiful. If
you want to continue up the Sunshine Coast, you have to take another
ferry. That ferry goes to the Powell River region. If you want to go to
Texada Island, you’ll take another ferry over there. These are
communities that need to have their concerns reflected in
legislation.
When the government allowed B.C. Ferries to consider cancelling
the first sailing on a Sunday morning, it suddenly meant that if you
were travelling and you needed to go to the Vancouver airport in order
to catch your flight, you’d have to go the night before. You’d have to
buy an expensive night in a hotel. That’s the kind of thing that I think
a well-considered system would take into account before a decision is
made on that kind of thing.
Kids wouldn’t be able to go up to Whistler, in the member from Sea
to Sky’s own constituency. They wouldn’t be able to go first thing in
the morning, like kids and skiers and outdoor enthusiasts like to do.
They’d have to wait. And the inconvenience is more than an
inconvenience. It impacts a lifestyle. It impacts the quality of
life.
Restoring public interest, I think, is the most fundamentally
important part of our responsibility in this House. For that reason, I’m
strongly supportive. I encourage those who may not understand the
complexity of our coastline or the difficulty in transportation along
our coastline to recognize that in ferry-reliant communities, we have a
perspective that might be slightly different. Just as I might not
completely understand all the issues in Peace River or I might not
understand all the concerns about the Kootenays. But I rely on my
colleagues in this chamber to inform me of the concerns of their
constituents.
[1:50 p.m.]
Even as a member of the government caucus, I welcome any insight
that could add to my understanding of the diverse geography and
demography of our communities. I’m pleased to offer my encouragement to
members in the opposition. I understand the way our system works. We
don’t require their support, but it would certainly be a nice indication
for residents of the coast to see that the opposition understands that
when we took out the public interest from the management of our ferry
system, we did a disservice to British Columbians, including my
constituents.
I hope that after careful consideration, and perhaps proposed
amendments, the opposition will support this important piece of
legislation. I thank you, Madam Speaker, for the opportunity.
T. Shypitka: I seek leave to make an introduction.
Leave granted.
Introductions by Members
T. Shypitka: It gives me great pleasure to introduce two very, very, very important
people in my life that are here in the gallery today, the first one being my
son, Adam Shypitka. He just turned 11 yesterday. They just made the big trek
from the Kootenays down here. We’re going to watch the Vancouver Giants
sweep the Victoria Royals tonight. The second one — my wife, Carrie. She’s
the rock. She’s the love of my life. I really appreciate them coming down
here. I hope the House will join me in welcoming them here.
Debate Continued
B. Stewart: It gives me pleasure to rise on a very important topic for British
Columbians. As many of the previous speakers have noted, this is an
integral part of the history of British Columbia and the development of
Vancouver Island and the Gulf Islands and all the coastal communities up
and down the coast. This is very important and, of course, one of the
things that would be considered to be particularly topical, especially
when you adjust service and what it is.
I want to talk a little bit about the history and kind of how
we’ve got to the B.C. ferries corporation today. We’re talking about
amending the way that the appointments are made and why the B.C. ferries
corporation was set up as an independent Crown corporation. This was a
privately run enterprise in the early ’60s. Of course, the government of
the day decided that that wasn’t servicing the needs of the
communities.
I can remember travelling from Vancouver to Victoria on one of the
old CP ferries, which doesn’t look anything…. It was more like a cruise
ship. You loaded in through the side, but it was one of the early kinds
of ships.
Another famous trip that we took back in the mid-’60s was a trip….
We flew out of the Kelowna Airport — in those days, there weren’t many
flights — probably on a DC-3 to Vancouver. We loaded up into a wagon and
went across to Saltspring, where we spent an absolutely unbelievable….
Probably one of those best memories in our lifetimes as a family —
getting to the Gulf Islands. Coming from the Okanagan, it seemed
idyllic, walking along the beaches and all the changing tides — things
that we didn’t have on Lake Okanagan, where we spent our time and grew
up.
The Okanagan is not that much different. Even today, Kootenay Lake
still has automobile ferries. Lake Okanagan was not that much different
in the sense that we had a ferry there until 1958 when the bridge opened
up.
Interjection.
B. Stewart: It wasn’t a free ferry, as the member is suggesting about the
Kootenay Bay ferry. That’s a decision that’s….
As far as what we’re talking about, the fact is that a toll bridge
was built across Lake Okanagan. It was a toll bridge, meaning that the
residents or the people that used the system had to pay. So it wasn’t
free.
The reality is that the ferry service that we have today is not
free. I think the member admits that. There is a cost to it. We need to
manage that, and that’s what B.C. Ferries…. I think that one of the
things that is really important is that we talk a little bit
about…
Interjection.
[1:55 p.m.]
Deputy Speaker: Member.
B. Stewart: …what the changes are.
I’m sure that the member is quite passionate, being that he’s from
Powell River–Sunshine Coast. I know that it’s a ferry-dependent
community. I do want to speak to some of his comments that he made. I’m
sure that he’ll give me that opportunity to speak directly to some of
his suggestions — that it would be great if we could come together on
this. I would like nothing better than that, Member, in the sense that I
think that if we could arrive at the same principled kind of approach on
this, I would be happy to support Bill 25. However, there are some
dangers being proposed in Bill 25 that I think need to be
raised.
I know that the minister is listening intently in the sense that….
I mean, she’s also from coastal-dependent communities. It is important
that we have this dialogue. But I want to just go back in time a little
bit. I want to talk about the B.C. Ferry Authority and what the changes
were that the member for Powell River–Sunshine Coast
references.
One of the things that we have to look back on is: what led to the
creation of an independent Crown corporation? Part of that was not…. If
the service was in good financial stead, I doubt very much that the
government, back in 2001, would have had to look at what was
happening.
Maybe I should just take you down memory lane and summarize a
little bit about what happened the last time that your government was
running ferries for ten years in the province. You had several terms to
be able to make the changes and adjustments. And no doubt, the service
has improved. It was very much, I’d say, focused in on the communities,
etc., but there are some concerns that I do want to raise.
Just so you know that you can talk about ferry fares, between 1991
and 1999, the ferry fares in British Columbia increased 72 percent,
which, I mean…. Okay, 72 percent is almost doubling in less than ten
years. So you have to think about what that meant.
Despite the 70 percent fare hikes, B.C. Ferries’ debt increased
1,800 percent. So what did we get for the 1,800 percent in increased
debt? From $60 million in 1991, when they took over from the former
government, to $1.1 billion in 2000. That’s a staggering increase, and
what do we have to show for it? Do we have a fleet of new ferries? Did
we get improvements in terminals?
Where did it all go? No new terminals. The ferries that were
built, which I’ll come to in a second, were sold off because they didn’t
work. The bottom line is that we were left with a system that not only
had increased the debt, but it was dragging down the province’s credit
rating because of this debt.
One of the reasons that Crown corporations are set up off-books
and set up with an independent board of directors is to ensure that,
essentially, when looking at the province’s overall debt load as the
Minister of Finance, you would look at how much debt and what we can
afford to do with it.
B.C. Hydro. It’s expected that B.C. Hydro will take care and
service its own debt. B.C. Ferries — it’s the same thing. It’s set up as
an entity to make certain that they can afford to make certain the
repayments.
I have to say that, you know, on top of the fact that there were
losses in the ’90s…. One of the worst years ever posted was in 1996-97,
when they had a total loss of $77 million. All right. So even last year,
if I’m not mistaken, the province of British Columbia not only covered
almost a quarter of a billion dollars of subsidy that went into B.C.
Ferries….
Interjection.
B. Stewart: Well, it goes into B.C. Ferries to help prop them up. This is part
of our….
Interjection.
B. Stewart: Okay. It’s part of the expectation that we will make certain that
there is adequate service to those communities. So a quarter-billion
dollars is coming out of all the other taxpayers in the
province.
I see the member wants to…. He must have other things to go to,
but I do want to address one of his comments that he made.
[2:00 p.m.]
I think the fact is that we don’t see that there’s a secret plot.
What we do see is that if we end up getting to a situation where the
highways are considered to be an equivalency, like a two-hour wait for a
ferry…. Well, I know the member for Kootenay East was travelling to
Kelowna recently to get to some meetings that he was attending there,
and there was a truck that was in one of the creeks. What ended up
happening is that Highway 3 was closed for more than a day. Of course,
it was a tragic accident. But this is a reality we face in the interior
of British Columbia. Snow, avalanches and all the other things that can
delay transportation.
Many of us…. I know that I travelled with…. Five of us, my
colleagues, were unable to get here for the throne speech because of the
fact that the flights in and out of Victoria were cancelled on February
11 and then the morning of the 12th. So we drove. Of course, it was a
horrific day of driving — vehicles on Highway 1 through Vancouver. But
we did eventually get here, albeit late. But it was an exciting and
bonding experience, I have to say.
The point about it is that I think that many of the members that
don’t have ferries in their communities appreciate the fact that we have
DriveBC, and we rely on the fact that the skilled and top-flight
government workers and bureaucrats, etc., try their best.
I’ve heard all sorts of complaints, as a former chair of the
regional transportation advisory committee. Lots of Interior people felt
that we should have no avalanche closures on the Coquihalla. Well, when
you look at it, and you actually start to understand how snow is
controlled in those corridors, it is impossible to guarantee that. It
doesn’t matter….
I think that really, one of the things that we have to appreciate
is that there are disruptions. In ferries, it’s wind and other matters —
mechanical breakdowns and things like that.
I want to go back to, you know, this idea and notion that we’re
taking B.C. Ferries and we want to turn this from maybe a Crown
corporation that has oversight from an authority that gives direction.
And typically, the management are charged with the responsibility of
doing the strategic planning, making the decisions, making the
recommendations to the authority and making certain that the mandate is
achieved as to what the commissioner and the authority give direction
on.
In this particular bill, one of the things that we’re talking
about is that we are changing the makeup of that board. We’re actually
taking the number of OIC board appointments to the B.C. Ferry Authority
from two to four candidates. This is going to eliminate two community at
large candidates. I’m not quite certain that’s making certain, as it
says here…. We want a service model that puts people first. We’re taking
community at large candidates that are no longer going to be there and
sitting on the B.C. Ferry Authority.
That is part of what I don’t understand — why the government feels
that it needs to have its own appointments or what the agenda is.
Because besides the four representatives on a nine-member board, there
is also a representative from the workers, which in this particular
case, would be the union members that are part of the B.C. Ferries
staff.
So between them and government, what if they decide: “Well, you
know, we don’t really like the business model that the other four
business-minded or whoever is sitting on the B.C. Ferry Authority, and
we want to make changes”? As the member for Powell River–Sunshine Coast
said: “We want the shrimp sandwich back.” Or we don’t think that having,
you know…. I’d say utilization on some of the ferry routes running at
less than 20 percent, which sometimes happens. I’ve seen the
statistics.
Certainly, the bigger routes — Tsawwassen, Swartz Bay, Nanaimo,
Horseshoe Bay…. Those ones have high utilization, and I think, for the
most part, we don’t have complaints. It is the communities that are more
difficult to get to that do struggle with the service that they have
come to expect or believe that they should have.
Yet I go back to that trip in the mid-1960s, and we all loved the
idea of: wouldn’t it be nice to be on island time, where we didn’t have
to worry about the fact that…. Things happen, right? You don’t get the
ferry. I have cousins that spent their entire lives growing up in
Ucluelet. They used to take the ferry over. It was quite a journey in
the early ’60s travelling from Ucluelet — the Pacific Rim National Park
didn’t even exist — and making their way across to Port Alberni, down to
Nanaimo and over to Vancouver.
[2:05 p.m.]
I think that their idea of coming was that they came as close as
they could, but the reality is that things happen when you’re taking
those long journeys.
I think that one of the concerns about having the B.C. Ferry
Authority under too much government control is: does it pass the smell
test from the people that look at our credit ratings? And will that mean
that we may end up having to take the B.C. Ferries debt back into
government because we want to have this control? We want to make certain
we’re making decisions based on the priority of, as the minister said,
putting people first.
I want to talk a little bit about our record in terms of what
actually happened after this fiasco with building ferries on our own,
when it was government directly awarding contracts to, maybe, their
friends and families or whoever you want to call it. The reality is that
we built three ferries in the 1990s here that cost British Columbia
taxpayers $462 million to build.
Those ferries — I remember seeing them plying the waters, going
back to Nanaimo. They looked very…. Fast cats, I think, is the brand
that they were sold under. But the reality is that they were not really
designed for the waters here. The wake, etc., swamped the boats and
ruined docks, etc., and they had to be taken out of service. It was a
case where there wasn’t enough due diligence done.
It’s a case where people that are not in the business of running
an enterprise like B.C. Ferries are making decisions based on something
that sounds good. It’s going to create jobs, and we’re going to put all
these workers to work on these ferries. We had those ferries in
operation for a very short time, and we’ll talk about the outcome of
that.
I want to just flip the page ahead, to back when the federal
shipbuilding procurement was taking place, back seven or eight years
ago, here in Canada. Of course, the federal government put the
procurement out across Canada. It was a highly competitive bidding
process, and of course, British Columbia wanted its fair
share.
The reality is that we worked with the shipbuilding yards both in
Esquimalt…. As the member for Esquimalt-Metchosin said earlier: “Why
don’t we build ferries here?” or “Why don’t we do that?” We do want to
do it. We do retrofits right in her riding. She has one of the biggest
dry docks on the west coast of North America, and we do want to take
advantage of that. But we needed to have the skilled workers. We didn’t
have them at the time. We didn’t have the people that understood how to
do that.
Here on Vancouver Island, at Camosun College, we put in programs
around shipbuilding — the wiring, the painting and the engineering of
these things — to help build the capacity that we needed to have to make
certain that we could undertake shipbuilding in a constructive
manner.
Those people that have been trained through that program have been
out working with Seaspan, out of North Vancouver, which is where the
contract, eventually, for some of the ships in Canada…. Not the largest
one, but it was a start, and it helped get our foot in the door. It
helped build the capacity so that British Columbians, with a coastal
province, have every right to be able to make certain they have the
ability to participate in a competitive bidding process.
Now, we know that there’s lots of competition, and we’ve got lots
of challenges in British Columbia, as we’ve seen with the recent LNG
plants. Bringing steel in from offshore or from other countries —
there’s a tariff on it. So we have that disadvantage. We have an
incentive to using Canadian-produced steel — not that it’s from the
west. But the reality is that we incentivize the idea that we’re going
to create employment opportunities here in Canada for
Canadians.
Not all of that makes sense, so some of those LNG facilities are
being built offshore, in modules. Some are coming from Korea. I imagine
parts are coming from China. The reality is that we want to do that, but
we have to have the capacity to be able do that.
I’m going to go back to the fact that we were successful in the
government procurement bid, working with Seaspan to make certain that
they had the tradespeople. We had the education system to backstop them,
and we were prepared to help them get to capacity so that we could build
those supply ships here in Esquimalt, as well as in North
Vancouver.
In the 1990s, that fast ferry project, the $462 million debacle….
I mean, it was something that I’m sure Glen Clark, or I should say the
former Premier….
[2:10 p.m.]
I apologize. I retract that, Madam Speaker.
I’m sure that the Premier probably would have liked to have seen a
better outcome. I’m sure we all would have, as taxpayers.
At the end of the day, those two ferries were sold off. They went
to…. I think it was Abu Dhabi. But anyways, they’ve been recently
spotted in Egypt.
Anyways, the situation is that those ferries sold for $19.4
million, and they cost $462 million to build. That’s $6½
million….
Interjection.
B. Stewart: Hey, listen. They’re your ferries. It’s your legacy. If you wanted
to buy it for $6½ million, you could easily have…. I’ll bet you the
scrap metal would have been well worth the investment. But you know,
that’s not my business expertise.
I do know one thing: the business expertise that is needed to make
certain that we don’t get B.C. Ferries back to where we were, where
government was running B.C. Ferries and making all the decisions…. It’s
not a place we want to go. Bill 25 is taking us back to a place where,
both from a credit-rating point of view and a danger point of
view….
We do want to make certain that we consult with the public. We
want to make certain that we take their input, which we did in 2013 and
2014 before we looked at the utilization, the subsidy that was going
into B.C. Ferries and what the taxpayers of the province of British
Columbia are willing to fund on an annual basis to have the services
that the member for Powell River–Sunshine Coast mentioned.
You know, people on Texada Island, he says, can’t get to school.
I’ve got people in my riding, kids, who travel two hours, one way, in a
bus, along British Columbia’s worst….
Interjection.
Deputy Speaker: Members. We’ll come to order.
Interjection.
Deputy Speaker: Members, please come to order.
B. Stewart: Well, Member, I…. Okay, so….
Interjection.
Deputy Speaker: Member, come to order.
B. Stewart: Well, you’re the one that suggested that they couldn’t necessarily
get to school. My point is, I’ve been on Texada Island. I know that one
of the members earlier, from Esquimalt-Metchosin, talked about sailing
around. That’s idyllic. That’s the island way of life.
I think that when you make a decision…. When you go to islands,
etc., I think that there is a responsibility that you take on to make
certain that there are adequate resources. Some of the communities…. I
know many of the members from rural British Columbia have small
communities that have small schoolhouses that are closing or being
threatened to be closed because of the fact that there’s a lack of
students in those ones. So it is not a perfect solution.
Anyways, I know the member has vast experience in making business
decisions, but these numbers speak for themselves. So $1.1 billion in
debt.
Interjection.
Deputy Speaker: Member.
B. Stewart: Thank you, Madam Speaker.
I think that one of the things that we…. In the recent
consultations, when we were in government, we knew that there was going
to be hardship in those communities — ferry-dependent communities up and
down the coast. We never took anything lightly, but we made certain that
the Ferry Commissioner, who I think did an exceptional job to make
certain that the authority was alive to the fact that they had to make
certain that they did consultation….
What were they going to do for communities that were affected, as
the member suggests, that the ferry was shut down? The ferries, at
certain times of day, were shut down, but not all of the ferry service
was shut down, as far as I know, to any one of the communities that were
ferry-dependent.
I worry, also, about the long-term strategy. B.C. Ferry Authority
is about the strategy, the fact that…. I’m sure that anybody who’s in
this House who has travelled on B.C. Ferries in the last decade has to
say that there’s an improvement not only in the services but the fact
that the food services have been…. You know, they’re dynamic. They’re
diverse. They meet the requirements. The Internet. The comfort. The fact
that they have an exceptional on-time service record. The fact is that….
You know what? I think that for most people….
[2:15 p.m.]
I realize it’s an inconvenience. But you know, when I go to fly
here in Victoria, I have to plan to be at the airport an hour ahead. I
have to leave my house 30 minutes or 45 minutes, depending on the time
of day. It’s part of planning. It’s part of life. It’s not…. The ferry
service has an on-time record.
The fact is that what we want is certainty, to make certain we can
do that. If we start fiddling around with that — because we think, “Oh,
it’d be nice to have an extra sailing here, there and everywhere else” —
that’s how the clock keeps running up and we keep spending more money.
You don’t have to take my word for it, okay?
Interjection.
B. Stewart: Well, back when your government was last running the ferries,
Member, I can tell you that there was a review of what had happened,
okay? So let’s not just look at the fact that it was a bad deal, and how
it all happened.
The independent Wright report, 2001 — and the Auditor General, in
’99, report on the structure of B.C. Ferries — found that political
interference was rampant across B.C. Ferries operations, not just in the
fast ferries. Wright said in 2001 that B.C. Ferry Corp. would be unable
to meet its financial goal of solvency due to the governance structure.
That’s the whole reason that we’re here. This is about the reality that
governance matters. That’s why we’re all here. If you can’t learn from
past lessons, Member, you haven’t really learned anything. What you need
to do is to understand.
Re-read the Wright report; re-read the Auditor General’s report.
Both of those reports we acted on when we became government. The 1999
Auditor General report and the 2001 Wright report recommended that
control of B.C. Ferries be placed in a truly independent board. We tried
to make certain that we did exactly that. We tried to make certain that
we didn’t interfere.
We increased the subsidy when we realized that there were
challenges. We made certain that B.C. Ferries, through the
representation, did community consultation. Nobody likes to have a
reduction in services or increased costs. I think that as far as some of
the things that I know we were doing recently with LNG, we were very
much focused in on putting LNG, clean ferries, into service. That’s a
new opportunity in British Columbia because of the large supply of
natural gas here in the province and having facilities that can supply
B.C. Ferries right here with cleaner-burning natural gas, LNG, versus
bunker fuel, would be a benefit.
I like the idea of the e-drives — I do know that there’s a company
that I visited in Vancouver that’s a world-leading manufacturer of
batteries — that actually convert to battery power when vessels are
entering ports. Some of the best ports around the world are demanding
and expecting that ships coming into port use this type of alternative
energy, rather than being dependent on bunker fuel in areas where it’s
spewing out CO 2 and whatever other emissions that are in the
air.
I think the reality is that we don’t have to look very far.
British Columbia has been leading in that already. The company is
selling their product to fleets of ferries all over Scandinavia and in
Europe, and B.C. Ferries should be embracing that type of technology to
make certain that we’re using homegrown clean technology to make the
ferry fleet better.
In closing, I just want to make certain that I’ve answered some of
the questions, some of the concerns I’ve heard from the members
opposite. They talk about that this is really about serving the public
interest, and I get that. I think that that’s always what we’re here to
do: to make certain that we’re serving in the public interest. These
B.C. Ferries are like a marine highway, and highways, as I mentioned,
are subject to closures.
Recently, and the member for Penticton…. There was a landslide,
and the highway between Penticton and Kelowna was closed for weeks
because of the fact that the slide was unpredicted, a geological event.
There was a fix that they put in on highways. The staff there, as
always, put in temporary measures, but sometimes they’re not very
popular: a three-, four- or five-hour trip for some of the people that
were in my riding. They were commuting back and forth to work. It
happens. The fact is that you have to work around that and try and find
friends or other people, maybe, to stay with while you’re in the
situation where the highway is closed.
[2:20 p.m.]
I’m looking forward to further debate on this. I know that some of
my colleagues that had to take over this fiasco back in 2001 — of having
too much government interference in the B.C. ferry system — will, I’m
sure, have a word or two or want to say the real facts about what it was
like and how difficult it was to get back to a balanced budget that this
government, I know, is talking about, with all of the tax increases that
they’ve brought in.
Well, the fact that increased taxes…. It seems like a small
amount, but $6 billion in carbon tax, an increase in provincial spending
over the next three years, will bring it up 25 percent. That’s not a
small amount of tax increases.
I think the reality is that it’s all hinging on the status quo,
the economy growing as the best in Canada. The reality is that history
has shown, as we know from the ’90s, that the economies do ebb and flow
and they change. I hope that they’ll give further consideration to some
of the comments that I’ve made today.
J. Brar: I seek leave to make an introduction.
Leave granted.
Introductions by Members
J. Brar: I see a number of students there. I don’t know what school they’re
from, but they’re there to witness the debate in this House and also to
learn about this institution.
It’s Ladysmith Intermediate School. They’re here to learn about this
democratic institution and watch the debate. I will ask the members to make
them please feel welcome.
Debate Continued
S. Malcolmson: Ladysmith is close to home and another ferry-dependent community,
so I’m glad that the students are here to listen. I hope they don’t take
too much to heart the comments from the Liberal member opposite, knowing
full well that the NDP has only increased taxes on the wealthiest and
most-connected Liberal friends that were looked after for so long, when
they did not look after regular people, including ferry
users.
The history of B.C. Ferries over the last 15 years has been a
terrible one for our community. As someone who lives on an island
serviced by a ferry, I have been deeply embroiled in the debates and the
community concern and comments about how best to manage
ferries.
So this really is a good day. We are standing together as New
Democrats with our Minister of Transportation, who herself lives on a
Gulf Island — Quadra Island. This is one of the ferries that goes back
and forth. It’s a real commuter ferry. For people that live on Quadra
Island — the same as where I live, living on Gabriola Island — the ferry
is absolutely a lifeline. For any members or anybody watching who
doesn’t have that experience and know how deeply intertwined the ferries
are with B.C.’s community, with our economy and with our settlement
pattern….
In fact, when B.C. Ferries was created in the early ’60s, it was
taken on not by a New Democrat government but by an arguably more
right-wing government. It said this is in the public interest — to make
this part of the province’s infrastructure. Indeed, settlement patterns
were laid down on that basis — on commitments that the ferry service
would be provided by the province and that the fares would be
affordable.
We do pay, unlike the Interior ferries — they were the focus of
most of the previous speaker’s debate — where they don’t pay anything
for their ferries. On the coast, we do, and it matters. It has
impact.
Then because of the push in development that happened because of
the ferries, Islands Trust was created in 1974 by the NDP government.
But it was a recommendation of all parties, recognizing that the
development pressures on the southern Gulf Islands were intense. Partly,
that was because of the access now from the public ferry system. So
those two institutions have grown up very much together.
[2:25 p.m.]
As I was elected as a trustee in 2002 until 2014 and, for six of
those years, was chair of Islands Trust Council, a lot of my advocacy
and what I’ve learned about ferries came directly from ferry users and
from islanders.
Let me also just give a picture of how a ferry changes a
community. When the ferry is not running, we truly are inter-reliant and
interdependent as a community. It creates very tight
communities.
Also, the conversations that happen in the ferry lineup or on the
ferry itself knit communities together in a way that they wouldn’t in
any other way. It’s not the same as being stuck in a traffic jam
together. It’s not the same as being in the waiting room at an airport.
We get to talk with people in our community that we would never know
otherwise.
Very often we unload on the ferry. After a 20-minute conversation,
I feel, as an elected official, like I’ve just had my second mini–town
hall of the day. But people always say that that’s a conversation we
would not have had if we had a bridge or any other way to get to the
community. So I’m grateful for that. They are community
builders.
This is why this legislation that we are bringing in today is so
important, to bring and affirm public interest back into the centre of
the Coastal Ferry Act. Again, the previous speaker talked a lot about
inland ferries, but they’re not governed by this legislation.
The previous government made reckless cuts to service on our
routes and reckless, ideologically motivated fare increases. They drove
fares up repeatedly, putting islanders at a disadvantage that was costly
and unfair. Some of the results of that are still felt today.
Fares doubled under the B.C. Liberals, during the time they were
in power. This led to a big decline in ridership, and it caused billions
in lost economic activity.
I’m very grateful for the work of local governments in this
regard. That includes the Union of B.C. Municipalities, which put a
major effort into trying to get the government to see the damage that it
was doing and to hire the consultants to do the business modelling to
prove that the link between the user-pay philosophy of ferry fares….
It’s a philosophy that is applied to no other government service. Roads
are not user-pay. Hospitals are not user-pay. Schools are not user-pay.
But under this government, ferries became user-pay, and that was
wrong.
Ferry fares doubled. A family of four on a round trip between
Vancouver and Victoria now pays $216. That’s $96 or 80 percent more than
they paid in 2001. And ferry fares rose at a rate of four times the rate
of inflation between 2001 and 2015. Then making it even worse, in 2014,
the Liberals pressed ahead with $19 million in service cuts, cutting
sailings on 13 routes, without consulting communities or doing any
socioeconomic impact on what that would cost.
Now, the Liberals on the other side will say: “We did consult.”
Let me tell you, I was there, and this was the form that the
consultation took: “We are cutting half a million dollars out of
operating costs, out of your ferry. Which runs and which B.C. Ferry and
Marine Workers staff do you want to sacrifice?” It was an impossible
situation.
We ended up having people saying: “If you cut that early morning
sailing, I will lose my job at the hospital. I will not be able to get
to my shift in time.” And the hospitals have got 1,000 people there.
They are not fiddling with each person’s salary to accommodate those who
happen to live on an island just 20 minutes away.
These were life-changing decisions for families. We lost, on
Gabriola, a lot of our young working families. With the demographic on
the coast, we could not afford to lose them. They were heartrending
conversations. That was no consultation, and the government did not show
up.
At that time, it was the member for Kamloops–South Thompson, who
still sits in this House. It was his cut. It was his process. He would
not show his face to any of those communities and say to them directly:
“I am going to force you to either lose your community, your friends,
your whole kids’ network and teachers you’ve come to know or lose your
job.” It was mean-spirited, and it was wrong.
They also eliminated the Monday-to-Thursday 100 percent discount
for seniors. Who messes with seniors? The Canadian Association of
Retired Persons were protesting on the front lawn of the Legislature.
Have they ever had to do that before? For what savings? This was the
midweek sailings only that they got a 100 percent discount, if they were
there as a passenger. It saved not a lot of money, but it sure riled up
a lot of very activist seniors. It was ridiculous.
[2:30 p.m.]
These cuts hurt communities. They hurt the economies. Tens of
thousands of people put their names on signatures to this Legislature
demanding a fare freeze and rolling back the fares on B.C. Ferries,
ferry cuts. They asked for a full resumption of service.
These are all things that this government has done in the first
year and a half in power. We have restored the seniors discount. We have
frozen fares on the major routes. We have rolled back fares 15 percent
on the minor routes. It is having an immediate impact, both on ridership
and on people’s pockets, and it’s the right thing to do for a government
that is oriented for the people and that runs B.C. Ferries as an
organization, as a corporation, for the people.
[R. Chouhan in the chair.]
Still more B.C. Liberals that still sit in this House…. We met
with the member for West Vancouver–Sea to Sky repeatedly. As chair of
the Islands Trust Council, I was part of a group of regional district
chairs from the entire coastline, from the CRD here right up to Reg
Moody, who is the Bella Bella regional district chair. All walks of life
— Mount Waddington, Alberni-Clayoquot. We all were there.
Joe Stanhope, from the regional district of Nanaimo — I didn’t
think we had the same ideological inclination, me and Joe Stanhope. But
we became firm friends, and we united so strongly. It was his old party
who did this, and he was spitting mad at them.
Blair Lekstrom was a transport minister who heard us and said:
“You’re right. We’re doing damage.” He did nothing to repair it,
although he was the most sympathetic one.
The member for Langley, who still sits in this House — she refused
to hear what coastal communities wanted. We met with the Premier,
Christy Clark. She beamed at us and told us our analysis was brilliant —
again, did nothing. So, yeah, they are still here, still doing
damage.
Now, even worse, then they brought in their own Coastal Ferry Act,
and this is what they said it was going to do. People that represent the
coast, listen carefully to some of this language. See if any of this
worked out. They said that “the primary intent of this bill is to ensure
that our coastal ferry service can flourish and support our economy.”
This was in 2003 that this was brought in.
“We all want the service to succeed; we all need it. It is
fundamental to local economies, and it is one of the most prominent
symbols of our lifestyle here on the west coast…. Most of all, B.C.
wants B.C. Ferries to meet its potential, to sail on time, to have clean
facilities, a good selection of food choices and friendly services and,
of course, to remain affordable.
“This piece of legislation…give assurances to people as we move
forward that their ferry service will be there for them. They will know
what rates they’re going to pay for it, so they can make their plans.
The industries that use the ferries will be better served.”
Finally:
“I believe this will lead us into a time where we can look forward
to more people travelling on the ferries instead of feeling like the
ferries were a bottleneck to our economic growth and
prosperity.”
That’s what the Minister of Transportation, Judith Reid, said was
going to be the outcome of their Coastal Ferry Act. Instead, high fares
eroded B.C. Ferries’ customer base and high fares affected business
viability in ferry-dependent communities like the Gulf
Islands.
When I was representing Islands Trust Council, we wrote this
letter to Blair Lekstrom in 2011: “Trust Council wants economic and
social considerations taken into account when establishing fares and
service levels for routes serving rural coastal communities. Small
business is struggling under the weight of the cumulative effect of
excessive fare increases. Tourist traffic is down, adding stress to
communities counting on tourism to ease the transition from reliance on
traditional resource extraction.” It doesn’t sound like that 2003
promise was kept.
From Bowen Island, here are some specific impacts, then, of the
service cuts. They said: “Morning cuts have resulted in social impacts
that include children no longer participating in off-island
activities…and shift workers now needing to spend that night off-island.
It has also resulted in inconvenience for people who want reasonable
travel connections to the airport or to weekend morning events such as
church service.”
Denman Island and Hornby Island, which were very hard hit, then
were forced to take a gap in service in the middle of the day. They say
missing a mid-day ferry now means a significant cost. Delivery
businesses can no longer make two deliveries in a day. Denman Island
elementary schools had to stop competing in interschool sports, and
Vancouver Island schools have to wait in the lineup for hours and hours.
So it affected that fabric of the community also.
[2:35 p.m.]
We ended up with a conclusion of “failure to deliver” for the
Coastal Ferry Act. We wrote again — this is now 2011 — from me, Islands
Trusts Council, to the Ferry Commissioner. Since 2013, with funding
frozen to the ferry service and increasingly referred to as a subsidy —
implying it’s not a legitimate government contribution to provincial
infrastructure — we illustrated precipitous increases in ferry fares, an
average of 60 percent at that time and as much as 125 percent fare
increases on some routes.
We identified the corresponding drops in ridership levels that
were having grave impacts on island communities. We said that this is
setting up a negative cycle of impacts. As fares increase, ridership
drops. Then businesses close, and families leave, threatening the social
and economic stability of island communities. When ridership levels drop
once again, B.C. Ferries’ only option is to further increase fares,
continuing the downward cycle. Instead of the promised improvement,
we’ve seen skyrocketing fares, seriously slumping ridership and a ferry
service that doesn’t appear to sustain itself.
The costs of goods and services on the island have gone up
substantially, as well as the cost of essential trips to see doctors,
dentists, family and friends. Contrary to some suggestions, our
communities are not wealthy, with average family income below or close
to B.C. average levels.
So here we are today — total failure and economic failure, as well
as a failure to honour the public good. We are instead introducing….
Well, actually, even before this bill, we already had a lot of good news
for ferries. The legislative amendments here on the Coastal Ferry Act
will ensure that the model is putting the needs of people in B.C. at the
heart of the decision-making. They’ll also enshrine the view that B.C.
ferries are an integral part of B.C.’s transportation
network.
Having, with this legislation, community interest at the forefront
of decision-making, there are a few ways that this is being done. The
viability of the corporation, of course, is still considered, but cost
and service to communities is paramount, as it should be as a Crown
corporation.
Second, the public interest group participation in ferries is now
facilitated and funded, which I think is great. We’ve had a huge amount
of expertise — retired economists and modellers and number crunchers
that have been doing the yeoman’s work for 15 years. The ferry advisory
committees do this work. The FAC, ferry advisory chair’s committee, have
been doing this work. My friend Brian Hollingshead, on Saturna Island,
just made it his entire retirement project to crunch the numbers to
forecast on what the impacts would be on people of increased ferry
fares.
I’m just so glad that, as in other legislation…. Ontario used to
have this, the Intervenor Funding Project Act. If you are truly in the
public interest and you need an analyst or a lawyer to help represent
you in a public interest regulatory hearing, you should have that. That
will increase and level the playing field so that public interest is
represented. And then more representatives on the B.C. Ferries board
only makes all the sense in the world.
I appreciate other small pieces too. In a previous amendment to
the Coastal Ferry Act, the requirement that there be no
cross-subsidization between routes was removed. That was deeply damaging
to us. That’s already gone. In this bill, though, is gone the
requirement or the invitation to contract out routes or to say that you
could meet your obligation to get people from A to B by building a
bridge or by privatizing the route. That was never taken up on. I’m very
glad that the Transportation Minister has taken it out. This is public
infrastructure and so should remain.
More good news, just to end, in our community. We are restoring
the service cuts that were removed under the previous government. I
represent three routes: Nanaimo–Horseshoe Bay, Nanaimo–Duke
Point–Tsawwassen and also Nanaimo-Gabriola. Gabriola is going to have
service — that’s route 19 — restored, I believe, starting on April
[2:40 p.m.]
The Ferry Corp., with help from the Ministry of Transportation,
said to the ferry advisory committee: “You decide. You talk with your
community about which of the sailings you want to restore and how that’s
going to work.” They were able…. Just yesterday they announced that
they’ve recommended that it be the early morning sailing. They’ve also
done some tweaks to assure that people can connect to the first ferry
departing Nanaimo for Horseshoe Bay. Again, the connectivity piece
that’s extremely important.
Then last year we provided support to freeze fares on the major
routes, roll back fares 15 percent on the minor routes and restore
seniors’ travel midweek — all very humane, sensible,
good-for-the-economy, good-for-affordability investments. I’m really
proud of the Transport Minister for taking those on.
If I may, Mr. Speaker, I’ll finish by talking not about a B.C.
Ferries project but a really important ferry project in my own
community. For years we’ve talked about a private harbour-to-harbour
foot passenger ferry between Nanaimo and Vancouver. It would boost
affordability in the region. It would really boost the local economy.
The tech sector especially says that this would be great for jobs for
us, that they can attract more people, more talent.
We’ve been helping it move forward. I have, as a Member of
Parliament and as a local government rep before then. I have been
fighting myself, personally, for five years for this project, along with
Mayor Krog and many other community members.
In December, the Transport Minister agreed that the infrastructure
money allocated for passenger ferries and federal infrastructure money
would be prioritized by the B.C. government. That’s something that the
B.C. Liberals refused to do. So that’s a major leap forward for this
project and a really good news piece for Nanaimo, which has been arguing
this for so long.
We’ve also — this is the minister — lifted the non-compete clause
with B.C. Ferries and removed one more barrier to this private foot
passenger ferry going ahead; also accelerated the federal funding
process, gaining six months at least; and then also working with
TransLink to gain approval for the passenger ferry to land on the
Vancouver side. So four big ways that we have helped to remove barriers
to this project. We were very helpful — that that work has been
successful.
I’m really proud that, in addition to this work on the coastal
ferry system, the minister and her staff have been able to help Nanaimo
with this smaller private project. We need ferries. We are reliant on
ocean travel. It’s good for the community and the economy. I’m very
proud to support Bill 25.
J. Rice: I’m really excited today to stand up and talk to Bill 25, the
Coastal Ferry Amendment Act, 2019. Thank you to the member opposite who
has made space for me today to talk at this timeline.
The legislation we’re discussing today will strengthen the Coastal
Ferry Act to better serve the needs of people in coastal communities. I
found it really interesting to hear from the previous member opposite,
from Kelowna, talk about the hardships faced by Kelowna residents with
the occasional road closure and comparing that to the impacts that have
been felt by coastal communities. That was quite intriguing.
I also note that the ferries that are in his area, in the interior
of the province, are 100 percent free, unlike the ferries that service
coastal British Columbia and island communities.
British Columbians deserve a ferry service model that puts people
first. People living in coastal communities depend on this vital service
provided by B.C. Ferries. But for many years they experienced service
cuts and skyrocketing rates. These amendments to the Coastal Ferry Act
will put people at the heart of decision-making. These are the Minister
of Transportation’s words. I agree 100 percent. I have to say that I’m
so pleased she’s here today, because I am so honoured to be speaking to
her bill today.
[2:45 p.m.]
It is going to dramatically transform the lives of my constituents
on the north coast and Haida Gwaii and in the Central Coast — for many
rural and remote communities, most of which are Indigenous, most of
which don’t enjoy the wealth from the interior of the province like the
member from Kelowna was speaking about.
This is transformational, not just for economics. It improves
health. It improves mental health and wellness. And it improves the
social ties that people are privileged to have in other parts of the
province and that have been cut off by decisions made by the previous
government in years past.
The legislation captures several amendments that will signal an
emphasis on public interest — the key words here being “public interest”
within the Coastal Ferry Act — but it’s also intended to capture the
government’s broader goals, which are about people.
The amendments are based on the recommendations in Blair Redlin’s
coastal ferry review. I want my constituents at home, who haven’t had a
chance to read through the thick report, to know that some of the
highlights of these amendments include requiring the B.C. ferries
commissioner to prioritize the public interest when regulating ferry
services, including the consideration of the province’s greenhouse gas
emission targets. It’s pretty progressive.
Other highlights include facilitating the participation of
consumer advocates in the B.C. ferries commissioner’s regulatory
processes to consider the needs of people in the review of ferry
services. Simply put, that allows public participation, which many
people were unable to do before because they simply couldn’t afford to
gather up their resources and make a submission. Now we’re going to
actually make resources available so that the public can participate and
guide the services that they rely on.
The amendments to this act increase the number of B.C. Ferry
Authority directors appointed by government, from two to four, to bring
a greater public interest perspective in the role of B.C. Ferries
shareholders. It ensures that the B.C. Ferry Authority oversees the
strategic direction of B.C. Ferries in support of the public interest,
including safe, reliable and affordable coastal ferry service in British
Columbia, and it requires the B.C. Ferry Authority to set term limits
when appointing directors to the B.C. Ferry Services board to improve
the oversight of B.C. Ferries.
Now, it’s no secret that having boards change over, having a
diverse perspective put on boards and having fresh new eyes every few
years make for a healthy and robust board. In this case, we’ve had board
members that have been installed by the previous government and that
have served for a very, very long time. So this is about refreshing the
perspective of board members.
Interestingly enough — and I think a lot of my constituents would
be excited about this — over the years, talking a lot about the concerns
that fares were skyrocketing and so were the salaries of the top brass
at B.C. Ferries…. Now, I’m not here to criticize them at all. They are
deserving of a wage, a salary, a good salary, and they have a big
responsibility guiding the institution of B.C. Ferries.
However, anyone that knows B.C. Ferries like us here in the
coastal communities will know that there are VPs of pretty much
everything. Yet these executive roles — we are not privy to what kind of
salary or compensation they are receiving. I think that by having a true
sense of what the executive is being compensated for at B.C. Ferries
allows for better transparency and accountability.
Once enforced, these amendments are intended to reframe the model
to better reflect the public interest. I keep saying that, but that’s
exactly what this is about. And the view that ferry services are an
integral part of the transportation network…. They are part of our
marine highway — no bones about it. I can’t believe we’ve actually even
had that debate in the past.
However, we should talk about some of our recent successes, which,
again, I profusely and profoundly thank the Minister of Transportation
for. I speak on behalf of my constituents. The most amount of mail I’ve
ever received in six years as an MLA had to do with how the service cuts
and skyrocketing fares have impacted my constituents.
[2:50 p.m.]
And the most amount of positive emails I’ve ever received in my
six years as MLA were letters of thanks and congratulations and dramatic
appreciation for what our government has done to improve the lives of
coastal communities.
We’re restoring the sailings on the majority of ferry routes that
were cut in 2014. That will see over 2,700 additional round trips added
to schedules on ten minor and northern routes. We’re providing funding
to B.C. Ferries to reduce fares on the smaller and northern routes — we
have already done that — by 15 percent and freezing the fares on the
major routes. Fares will continue to be frozen this year.
Like I said, I have received so many positive emails, and I would
love to share just one here today, from a constituent. I have to say
that Joni Fraser has been a tireless, tireless advocate for improving
the Coastal Ferry Act and improving the services. I’ll read you two of
hers. One was:
“I am so thrilled with the B.C. NDP’s decision. I was actually
thinking I would have to move. I thought about going by medevac in the
Coast Guard boat at night, in winter, in a southeast storm, and I was so
horrified by the idea that I thought about either moving away or signing
a waiver that there is no way I would ever allow myself to go across
water in a small boat, strapped to a spine board. Anything goes wrong,
and you are helplessly going to the bottom with the spine
board.”
This is a reality that was faced by my constituents on Haida Gwaii
when the B.C. Liberals cut the two eight-hour shifts between Sandspit
and Skidegate and installed one 12-hour shift, essentially cutting off
services at 6 p.m.
Whereas patients who had to be transferred or medevacked had been
put in an ambulance and taken over to the Queen Charlotte hospital by
ferry, they were now going by Coast Guard boat, which is essentially a
Zodiac — an inflatable vessel in a community that experiences up to
24-foot tides, wheeling patients up steep gangways to shore, essentially
— with logging injuries, with broken bones — bumping along in the
massive waves in a totally inappropriate vessel so that they could get
medical care. That is what the previous government’s impacts were to my
constituents. It impacted their health to the point where a resident of
Sandspit wanted to sign a waiver that she wouldn’t even go on a spine
board, and risk her health.
I was interested in listening to the previous member talk about
our previous record in the 1990s, when I was a teenager, around B.C.
Ferries. I couldn’t help it. It triggered a memory of mine where the
Queen of Chilliwack in 2014 was taken out of service right
after $15 million in retrofits and then sold, ironically, to someone who
used to work for B.C. Ferries — who knew better, who knew this was a
steal — for $1.8 million. So $15 million of taxpayers’ dollars to fix
this ship up, and it sold for less than $2 million. It is now sailing
happily in Fiji today.
I wanted to talk about where we’ve come from and where we’re
going. The cuts that we’re talking about, which were such a dramatic
blow to my constituents in 2014, were all in the name of seeking
efficiencies. It was $19 million worth of seeking efficiencies. The
previous government made reckless service cuts and hiked our fares for
years. For example, in 2003, it was $223 to go from Port Hardy to Prince
Rupert in a car. By 2016, that more than doubled to $469.
We’re looking at ferry increases of over 100 percent, just in the
short four years that the B.C. Liberals had and were governing in my
last term as MLA. They drove up the fares repeatedly. They were going up
so much that I couldn’t keep track of them and putting coastal
communities at a disadvantage. It was costly, and it was unfair. Fares
doubled. It led to a huge decline in ridership, and it cost billions of
dollars in economic activity.
[2:55 p.m.]
In 2014, they pressed ahead with this $19 million in service
reductions, cutting sailings on 13 routes, including all four that
service my communities in the north coast, without even consulting with
them. They essentially came and said, “We’re doing a consultation in
your communities,” but all the decisions had been made. They just said:
“How do you want to make it different? Here’s the decision, but here we
are consulting. Check off a box.”
It was hugely insulting. People were crying. It was so painful to
attend these meetings. And they did this without a socioeconomic impact
analysis. It took UBCM to do their own socioeconomic impact analysis,
and they demonstrated that these cuts were costing the British Columbia
economy billions of dollars — not an “m,” a “b.”
They did no analysis to look at how these impacts to coastal
communities were actually impacting the Interior, where people take
circle routes — for example, from Port Hardy to Bella Coola and Bella
Bella. They do a circle through the Interior, up Highway 20, through
Williams Lake and back down. They do the same thing through Prince
Rupert, across over to Prince George and back down. They did no economic
impact analysis of what the Interior communities were
experiencing.
They didn’t look at the impacts to health. I had physicians
phoning me in Prince Rupert, saying: “Jennifer, you have constituents
and I have patients in Haida Gwaii who are neglecting their health. They
are not coming to see me in Prince Rupert — and they desperately need to
see me — because they can’t afford to stay in a hotel for four days in
Prince Rupert, or they’re fearful of the cuts or that they won’t be able
to get back home.” They desperately needed medical care, and they were
neglecting it.
They didn’t look at the tourism sector as a whole. They didn’t
look at it, definitely, for coastal communities. Tens of thousands of
people signed petitions demanding a freeze and a rollback of fares. They
wanted their services reinstated, the service levels put back to what
they were.
I definitely remember that my colleague here from Nanaimo, who
spoke about the rallies on the Legislature lawn…. I clearly remember
those moments. People carpooled and rented buses to come here and let us
know, as legislators, that these cuts were wrong. Yet they still went
ahead with them.
It was a trying time for my constituents in Bella Coola — taking a
125-car ferry, selling it for nothing and installing the oldest ferry in
the B.C. Ferries fleet, the Nimpkish , which can take a maximum
of 16 cars, not including people travelling with their RVs, etc. They
were told that was fine and that it was all in the name of
efficiencies.
The Bella Coola Valley has communities that were heavily reliant
on the forestry sector. Then, when we brought in the Great Bear
Rainforest agreement and adopted ecosystem-based management, these
communities were told: “Logging like you have known it is done, and you
need to reinvent yourself.” For two years, a bit of money was given from
the Ministry of Tourism. They said: “Here. Go and reinvent yourself in
the ecotourism sector in the Bella Coola Valley. You’ve got lots of
bears; market your bears.”
So here these people invested in lodges, rafting companies, tour
guides and hiking companies, spending their own money, taking a risk and
starting businesses. Then two years later, the only way in, for them to
actually have tourism, was cut off — all in the name of so-called
efficiencies. These people have suffered. Businesses have shut down.
People have gone bankrupt in the valley. These cuts were
heartless.
Now, let’s not forget that Christy Clark did promise them a new
ferry just before the election. She promised it would be in operation by
summer of 2018. It never happened because B.C. Ferries was put under the
gun to get a ferry servicing them, to fulfil this whimsical election
promise, on a tight timeline that was essentially impossible. They had
no choice but to buy a secondhand vessel overseas and get it retrofitted
to meet that timeline.
[3:00 p.m.]
Well, it turns out that because they were so rushed, they bought a
lemon, and now the cost of refitting that vessel has gone from $53
million to $64 million. It didn’t meet the timeline, and it’s further
delayed. Hopefully, and thankfully, we’ll see that vessel in service
this summer. But again, that was about poor decision-making. B.C.
Ferries would have liked to build a new vessel that met the needs of the
community on the Central Coast, a vessel that made sense. Instead, they
were forced to take whatever they could find, and in no time, it
actually will be proven that it’ll be oversubscribed and we’ll need a
bigger vessel. Not good use of money. Not good policy-making.
Deputy Speaker: Member, just a second.
Members, could you please lower your voices while the member for
North Coast has the floor. Thank you.
Please continue.
J. Rice: I’m almost finished, hon. Speaker.
I just wanted to go back and talk about how this all happened,
where the government wanted to make these cuts and these fare increases
all in the name of seeking efficiencies.
I remember a constituent from the Central Coast, who was an
advocate, phoned me up one day and said: “You know, I want you to hear
what a cabinet minister said to me.” This was a cabinet minister from
the opposition currently, now. They said: “If you guys don’t want to see
ferry cuts in coastal British Columbia, you guys have to stop voting
NDP.”
That was such a heartless thing to say. It may be true. I mean, it
demonstrates the ideology on the other side of the House. But what a
horrific thing to say to someone who is in not a ferry-reliant but
actually a ferry-dependent community, like my constituents. We’re here
to legislate and serve people. We’re not here for our own
self-interest.
Government efficiencies were sought by the previous government by
tearing up care workers’ contracts, which led to a decade of neglect for
seniors in care, and seeking efficiencies in classrooms by tearing up
teachers’ contracts. The human cost was a decade of overworked and
overloaded teachers and a generation of students in overcrowded
classrooms.
By putting public interest at the forefront of the services B.C.
Ferries provides, we’re putting the human cost in a benefit above
everything else, and that is why I am so proud to stand here and support
Bill 25.
R. Sultan: During those absolutely dreadful 16 years which transfixed our
political opponents, providing a handy excuse whenever their inevitable
foul-ups come along, B.C. Ferries actually became a model admired around
the world. Equipment was modern. Safety was enhanced. The ferries mostly
ran on time, through some of the stormiest seas separating two large
urban areas. B.C. Ferries was well managed and efficient.
Of course, it came at a price. Fares continued to rise, which was
a hardship on some. But B.C. Ferries was not free to charge whatever
they wanted; there was a price-cap system. B.C. Ferries was treated like
a regulated utility, operating with monopoly powers, which indeed it
virtually does.
Under the existing price-cap model, fares have risen in line with
increases in operating costs and capital expenditures and according to a
regulated rate of return on equity. Fares on the minor routes have risen
faster than on the major routes as a result of a prohibition of
cross-subsidization between route groups, whereby costs have been spread
across lower volumes of traffic compared to the major routes. Some think
that’s very unfair. But I haven’t heard people on the major routes
saying they’d like to pay more so that people on the lesser routes could
pay less.
[3:05 p.m.]
In January 2012, Gordon Macatee, commissioner, and Sheldon
Stoilen, deputy commissioner, issued a report including recommendations
for changes to the act which would “better enable the commissioner to
balance the interests of ferry users with the financial sustainability
of ferry operators.” That’s a very key phrase.
Macatee also, by the way, said a new market for B.C.’s depressed
natural gas industry, in those days, could open up. He recommended,
among other things, that the semi-independent organization, which was it
was, start using LNG to fuel its vessels. But that’s an
aside.
Now, when it comes to ferries, it’s not hard for an economist to
predict the views of people who live on islands or even people who live
up on peninsulas. More-often sailings are better than less often, and
less expensive is better than more expensive. It’s really pretty simple.
But perhaps things are now going to get a bit more
complicated.
I would observe that the NDP, with Bill 25, may be releasing the
trailer of a movie whose basic plot line we observed before. “NDP Gets
Into the Ferry Business: The Sequel.” Wait for it. The original movie
was gripping drama. The well-intentioned party, long on social
sensitivity, rather short on commercial memory, stumbled into their
original movie plot by — get this — skirting B.C. Ferries governance.
They stumbled into their movie plot by skirting B.C. Ferries
governance.
Here’s a brief movie synopsis. The early 1990s were a depressing
time for shipbuilding on the coast. Socreds were lobbied by union
leaders, who saw west coast yards frozen out of the east coast
shipbuilding contracts. By the time the New Democrats took power in late
1991, union members’ bitterness about job loss — and it was very severe,
particularly on the North Shore — turned into militancy.
A new Finance Minister delivered good news: a super ferry for B.C.
would be designed — several, in fact. They’d be contracted locally. It
would inject millions into the provincial economy, creating 700
person-years of employment and benefiting 260 businesses. The PacifiCat
program had been launched. The vision was bold: 250-vehicle,
1,000-passenger catamarans capable of speeds of up to 37 knots between
Horseshoe Bay and Nanaimo.
Now here comes the important part. Through a series of
jaw-dropping breaches of what would today be considered good governance,
the Premier forced his plans onto the Crown corporation responsible for
ferries. Directors were pressured to rush things through. “An awkward
situation,” my old friend George Morfitt, the provincial Auditor General
of the day, described it.
The Premier attended a ferry corporation board meeting, presumably
to better instruct directors on their duties and responsibilities. The
Premier instructed the Crown corporations secretariat to take charge,
resulting in a project proposal substantially different from what B.C.
Ferries’ own staff had come up with. The rest is history. In the 2001
election, my first, only Joy MacPhail and Jenny Kwan survived. The
PacifiCat aluminum hulls are today somewhere, I believe, in the Arabian
Gulf.
Now, given that lurid history, which we all know, one would think,
when it comes to ferries, NDP stalwarts would be very wary and cautious
and move very slowly. But no. I would say the next movie might be
subtitled “Fatal Attraction: Cannot Resist the Temptation.” History
notwithstanding, governance lessons from the past long forgotten — and
it wasn’t so long ago — the existing governance structure of B.C.
Ferries is, I believe, once more going to be turned
topsy-turvy.
[3:10 p.m.]
What is B.C. Ferries’ current governance and regulatory structure?
Well, it has three components. Just to review, the British Columbia
Ferry Authority is a non-share capital corporation whose purpose is
merely to hold and administer a voting share in B.C. Ferries but also
elect the directors to the board and approve the compensation
arrangements for the directors and executive of B.C. Ferries.
Two, the B.C. Ferry Services Inc. This is the operator. It’s the
operating subsidiary of the authority providing coastal service, with 35
vessels travelling between 47 terminals on 25 routes. B.C. Ferries, as
has already been mentioned in this debate, is one of the largest ferry
operators in the world, both in terms of fleet size and also in terms of
passengers carried.
The third leg of the stool: the British Columbia Ferry Commission,
the provincial regulatory body, with statutory responsibilities under
the act for making regulatory decisions affecting the ferry operators.
The commissioner’s role includes regulating core ferry services that are
defined in a coastal ferry services contract between the ferry operator
and the province, establishing price caps for each performance term and
monitoring compliance with the price caps.
Now, I predict that all of this governance structure will soon
come tumbling down or be rendered meaningless through judicious staffing
replacements, board appointments, etc. Ultimately, I think it’s
inevitable that the cabinet will be in charge, not the marine
professionals and certainly not those annoying bean-counters or persons
with treasonous thoughts about the marketplace. Heaven
forbid.
Key features of the new law, Bill 25, are: redefining the
objectives of the corporation. Tossed aside will be the January 2012
Macatee commissioner report that included recommendations for changes to
the act which, I repeat, “will better enable the commissioner to balance
the interests of ferry users with the financial sustainability of ferry
operators.” The perpetual trade-off — one trades off against the other,
back and forth.
Under Bill 25, the new world,
section 21.01 of the act will be
revised, stating that now decisions will be made “in the public
interest.” Well, who can argue with that? In other words, forget about
balancing the interests of ferry users with the financial sustainability
of ferry operators. The public interest will prevail. What does that
mean? Well, de facto, I believe that it will be the interests of the
ferry users. Period. As I said before, they’re easy to predict —
more-often sailings, lower prices. Simple as that.
The second innovation of Bill 25 is a redefined
section 45.1,
which will require ferry prices — the key phrase — to be based on
“recovering direct costs.” My underlined portion: some portion of
“indirect costs.” To repeat myself: some portion, underlined, of
“indirect costs.” Since they are not defined in the act, let me guess at
the meaning which will be attributed to direct costs. Fuel. I don’t
think we can argue that if you leave the ferry tied up at dock, it’s not
burning any fuel. Well, there are no direct costs, that’s for sure. It’s
just sitting there.
But how about wages? Well, maybe, but if labour is more or less a
fixed cost, and under contracts it frequently is — laying people off
just because it’s stormy out there; I don’t think they operate that way
— then they could easily be categorized as an indirect cost.
[3:15 p.m.]
Fixed and variable — it’s an old debate among MBA students and
ferry governors. The tendency will be to load up the indirect costs with
everything you can imagine, because the pricing only has an obligation,
under the law, to recover a portion of indirect costs, not all of the
indirect costs.
Well, carrying the analysis a bit further, how about the servicing
of capital interest expense and so on? I don’t think many people would
argue with the proposition that those are clearly indirect costs. So
forget about recovering all of them. I say you’ll be lucky if prices end
up covering, let’s say, a third of them, but I guess it’s anybody’s
guess. It’s discretionary; it’s certainly not specified in the
law.
The parent company would have to pay for the other two-thirds, in
my hypothetical example. Let’s say it comes out of carbon taxes or,
maybe, real estate taxes on those overpriced West Vancouver homes owned
by those old people who won’t move out. That would be fair. So welcome
to the new world of ferry prices under the NDP, at least as I foresee
it.
Possibly disturbing this new picture, however, is that pesky
Auditor General again, always lurking around with clearly inconvenient
ideas from time to time, in this case about the twin labels of
taxpayer-supported debt versus self-supported debt. Where have we heard
those phrases before? In this new world, I believe the AG, the Auditor
General, would find it hard to categorize B.C. Ferries’ financial
obligations, longer-term debt, as self-supporting. They will have to be
subsidized.
Well, it’s almost literally in the law, Bill 25. About $1.3
billion of B.C. Ferries debt will probably show up on the provincial
balance sheet. Oh well, it’ll find good company there. There’s already
$44 billion of taxpayer-supported debt and $20 billion of
self-supporting debt sitting there. We hope the rating agencies don’t
notice an extra $1.3 billion of new provincial debt layered on top of
what is already sitting there — or perhaps they will. Uh-oh.
To conclude, I believe that Bill 25 may signal a turning point, a
shift away from running B.C. Ferries as an efficient, modern enterprise
paying its own way towards a less modern, politically dominated
organization where union interests, island interests, up-the-coast
interests and NDP interests generally will prevail, cross-subsidized by
taxpayers elsewhere in British Columbia. More money spent on ferries,
less spent on hospitals. That’s the unfortunate iron law of government
finance. Bon voyage, Bill 25.
S. Gibson: I want to thank the hon. member for West Vancouver–Capilano for
his insightful ruminations. I do appreciate them. I know they will
contribute to the discourse here today.
When you look at this, Bill 25 looks kind of innocuous — just a
few pages. You could almost miss the agenda that is lurking in there.
But I’m nervous about this government’s aspiration for B.C. Ferries. I’m
anxious; I’m apprehensive. I say this as a former employee of B.C.
Ferries, one of the best summer jobs I ever had. I was living in
Victoria at the time. I was working on B.C. Ferries as a student at
UVic.
[3:20 p.m.]
What a privilege it was to work for four summers for B.C. Ferries,
including up the coast on the Queen of Prince Rupert ferry. I
learned a lot about the ferries and social skills, and all the things
that a young man needs to learn as he enters into his career life. I
also might add that I worked in Duncan and lived in Sidney. I used to
take that little ferry, the Brentwood ferry, across regularly, and I got
to know the captain on there, who invited me up to the bridge and showed
me around.
I have a high regard for B.C. Ferries. And when I hear even
rumblings of the kind of tampering that has been alluded to by my
colleagues and, specifically and more recently, right now by the hon.
member for West Vancouver–Capilano, I too am expressing some
considerable reservations about the direction this government is
taking.
B.C. Ferries. If it was just small, maybe two or three ferries, I
think we probably wouldn’t even notice. But this is a big deal. B.C.
Ferries is one of the largest ferry systems in world, and I am very
proud of it. Tonight many of us are catching the ferry and getting home
to our constituencies, our families. Every time I travel on B.C.
Ferries, I have that sense of pride. Twenty-five routes, 47 terminals
and 36 vessels.
The B.C. Coastal Ferry Amendment Act seems to be typical of the
NDP’s agenda. Once they get in control, they grab onto government…. They
wait, and then suddenly they get into government, and they can hardly
wait to interfere with successful organizations. It’s almost predictable
that they would do this.
Perhaps it’s nostalgia, going back to the warm and fuzzy days of
the 1990s and the NDP governments of the day. Now, I call those days
disturbing, frankly. I know many British Columbians would. We’ve heard a
lot about the fast ferries. I think if we had a vote here right now on
whether the government would like me to talk about the fast ferries,
they’d probably vote against it, which leads me to believe it’s probably
a good thing to talk about.
Remember the fast ferries? They were very fast, all right. They
were fast money-losers. They were fast into the repair shop. Remember
they had some maintenance problems? And they were fast in squandering
taxpayers’ money. They were fast, all right — $450 million to build, and
they were sold to a company in the United Arab Emirates for how
much?
Interjections.
S. Gibson: It was $19 million? I would not hire any of these folks to be my
financial planners, based on that model. What a testament to the
financial incompetence of the government of the day.
I think even newer members here in the House probably lament that
and wish that was something, perhaps, that opposition members wouldn’t
mention. I understand that; I’m not surprised. This is not something
that I am surprised about. This act wants to roll back to those days,
when the government, cabinet, appointed the members of this majority —
and you’ll notice that — on this authority. The control is going to
government.
Now, I would think most British Columbians would want the ferry
fleet to operate in a businesslike manner. I’m sure that if you surveyed
the public and said, “Would you like it to be run by government,
directly through cabinet, or would you like it to be run in a
businesslike manner?” I suspect most people would go for the latter,
right? Probably, I think, that would be the case. This government,
however, is delusional. They think: “Well, no, let’s get involved in
everything. B.C. Ferries — we’re going to get involved.”
That’s not this government. What kinds of powers will be
exercised? We’re not sure. It’s a kind of social activism at the
taxpayers’ expense. Will the Ferry Commissioner still be encouraging a
commercial approach to ferry service delivery? Will he be encouraging
commercial? Apparently not.
I remember the member for North Coast. She had some good remarks a
moment ago — from her perspective, at least. She recommended, in a
previous session of this House, that the ferry system basically be
considered just an extension of the highways. Remember that? That would
be incredibly expensive, if that were adopted by this government.
However, perhaps she did get through to some members of this
government.
[3:25 p.m.]
Maybe that’s the long-term plan — that the ferries will simply
become an extension of the highways, whatever the cost. So if you want
to move to a tiny little island, immediately when you get there, you
demand top-notch, hourly ferry service, because: “I’m here. It’s my
right.” Not a good plan for the interest….
Interjections.
S. Gibson: I’m getting some good support from the other side. Thank
you.
I’m genuinely upset, very upset, that B.C. Ferries is being
politicized at the whim of an activist government. What about the issue
of debt? Now, if the paradigm changes, there’s $1 billion plus that
could show up on government’s books. What will the rating agencies say
about that? We haven’t heard about that. The rating agencies may look at
those ratios, which are very important to them. We already have a
significant debt. Adding that on could have a dramatic impact on our
debt. I’m just pointing that out.
Now, I mentioned the fast ferries….
Interjection.
S. Gibson: Thank you for the response on that; I appreciate it.
With a decade of NDP government, B.C. Ferries had debt problems.
It’s all recorded; have a look. Morale was struggling. When morale is
struggling, the whole system is struggling. There was no real vision for
B.C. Ferries, just kind of, “Keep her going” — no vision, no
plan.
Our side of the House, as government, had a real vision working
with the management and the board of B.C. Ferries. There was a clear
vision, and the people were drawn to that. B.C. Ferries had a vision,
and people liked that. There’s a verse that says: “Without a vision, the
people perish.” It’s a Bible verse; I like it. Without a vision for B.C.
Ferries, B.C. Ferries is going to struggle. Is it going to be set at the
cabinet table? That worries me.
I know that the B.C. Liberal governments of the day took pride in
the fleet. I came here in 2013, but for many years, our side of the
House, as government, took a real pride in the fleet. There was a real
sense of: “This is our system. We’re proud of it.” It was well governed.
It was a good business model, the structure to keep politicians out of
the decision-making.
How many of you have ever heard this term “micromanagement”? Have
any of you experienced that? Any of you been micromanaged? It’s not a
good thing. I had the privilege of teaching human resources at a
university level. One of the first things I would ask my students was:
“How many of you have worked for a micromanager?” Just about all my
students put their hands up.
Thank you. The member for Nanaimo–North Cowichan put up his hand.
He’ll probably share those experiences with the House.
Interjection.
S. Gibson: He’s lamenting that, but he looks like he’s overcome that. I
appreciate that. Maybe he was the micromanager.
In any event, I asked my students, “Who of you have been
micromanaged,” and most of them put their hands up. I said: “How was
that experience?” You know what? They don’t like it. It’s not good
management.
B.C. Ferries needs to have good levels of autonomy — to be
accountable to government, yes, to the taxpayers, but to be allowed to
do its thing with expertise. Once you tamper with that and get
government involved, it squanders that, and there’s immediately a high
level of micromanagement.
Now, the NDP government, according to what I’m reading, is anxious
to run B.C. Ferries. You’ll hear that from most of the speakers on this
side. You’ll notice the continuing message: “We want to continue to be
involved. We want to get involved in B.C. Ferries.” That’s something to
be troubled by.
[J. Isaacs in the chair.]
It eliminates the percentage of appointments. It goes from two to
four. The government is taking over the proportion on the authority. Why
does this government want to tamper with a working model? I think part
of it is the desire to micromanage.
You know, B.C. Ferries did a lot of good planning in the past.
Rate classes were understandable. Low-emission vehicles are underway.
Organizational efficiencies — we’ve heard about that in the reports.
Improvement at the Langdale terminal — we know about that.
[3:30 p.m.]
A developed capital plan, good labour relations — that’s
important. B.C. Ferries has a large number of hard-working employees. A
2.3 percent cap on fares right through to 2024 — that’s
manageable.
I’m troubled that this government wants to politicize the
administration of B.C. Ferries. This is not caring for the taxpayers.
It’s activism that is truly troubling. It could be a disaster in the
making.
Now, I understand the NDP still wants to have ferries built here
in B.C. Is that right? Is that correct? At any cost?
Interjection.
S. Gibson: Okay, now my understanding is…. I don’t know. Are we looking to go
for airplanes to be built here? Is that right? Is that one of the next
ones we’re looking at? What about cars? Is that one we’re looking for
too? I just thought it would be useful to do a checklist, because we’ve
got ferries. Cars? Buses? Motorcycles? Bicycles? Skateboards?
Roller-skates?
The point I’m making is the taxpayer must be respected. Don’t do
things out of social activism. Yes, we want our ferries built here but
not at any cost. I think government’s involvement could destroy this
fleet as we know it. I was saddened to hear some of the remarks by
colleagues across the floor. How passionately they want to manipulate
B.C. Ferries. You’ll notice their comments. They want to get involved.
They want to be activists.
We need to have a plan that not only serves passengers, yes, but
the entire province — all taxpayers, whether they live in Prince Rupert
or Duncan or Abbotsford, where I come from, or Dawson Creek or wherever.
Every taxpayer in this province must be respected, not just the folks
that travel on B.C. Ferries.
B.C. Ferries is something to be proud of. But I worry that with
this act, B.C. Ferries’ financial security is threatened. This kind of
government activism could potentially destroy the fleet.
Deputy Speaker: Seeing no further speakers, the minister closes debate.
Hon. C. Trevena: It is with great interest I’ve sat through the debate of Bill 25
and listened to the comments of members from all sides. I’m fascinated
to see a sudden passion about ferries from the opposition. When they
were government for 16 years, they ignored the system and exploited the
system and exploited those communities that relied upon the
system.
We’ve had some very eloquent comments from my colleagues who
represent coastal communities about the importance of putting public
interest into the heart of B.C. Ferries, both in the oversight from the
authority board and in the strength and role of the commissioner. The
member for West Vancouver–Capilano gave this outline of the three-legged
stool of B.C. Ferries governance. He might be pleased to know, if he
actually read the bill, that that is still very strongly there. In fact,
we are strengthening the role of the commissioner, and we are changing
the makeup of the authority.
As I say, the fact of the need of the public interest, putting
people at the heart of the ferry system, was clearly reflected in the
comments, the stories that my colleagues from coastal communities gave
about their constituents who are affected and their constituents who
fought long and hard over 16 years of the cuts to the system, the
increase in fares and the devastation that they saw — 16 years of simply
bad governance.
[3:35 p.m.]
The opposition may try to go back to times when some members on
this side of the House were teenagers or even younger on government
benches and try to say that that is the reason why we have to have the
status quo. I would argue against that. That was many years ago. We all
know that there have been advances in very many different fields, and we
need to be embracing that.
We need to be embracing ways of looking at things, whether it’s
when we’re visioning on B.C. Ferries, that good strong vision, or when
we are discussing what the public interest is. Their history lesson does
not justify the devastation they wrought on our ferry system.
A couple of very quick points. I wanted to clarify the Liberal
math. They are very concerned about the fact that we are putting two
extra people, who will be appointed by government, on the B.C. Ferry
Authority board to replace those who are self-appointed — the
members-at-large. There will still be four people who are representative
of communities, of regions, and there will be one person who represents
labour, who is not an active labour member at the time. I believe she’s
retired at the moment. But to clarify Liberal math, that’s still nine
members of an authority board. Four does not become a majority. Four is
not the majority out of nine, just to help the opposition understand
that.
Also, there is the terrible fear about what the Auditor General
may or may not say. The government is not taking direct control of B.C.
Ferries. B.C. Ferries is operating, as I mentioned in my opening
remarks, as a quango. It still operates there as a company, making money
and making sure that people can travel where they need to go.
What we, as a government, are doing…. While we strengthen the
commissioner’s role, we are ensuring that when the authority and the
commissioner are making their decisions to allow for a financially
healthy and fiscally responsible ferry system, they put people at the
heart of it, communities at the heart of it — the people who have been
neglected for so long.
One final note. I notice there was a lot of passion about the
discussion of shipbuilding and the shipbuilding industry. The member
from West Kelowna was particularly concerned and particularly vociferous
about this, but other members have talked about it. I would just like to
note that shipbuilding isn’t any part of Bill 25. Whether or not this
side of the House…. This side of the House, perhaps, would like to see a
vibrant shipbuilding industry with B.C. ferries being built here. That
isn’t part of Bill 25.
I look forward, with great interest and great anticipation, to the
inevitable discussions we’ll have at committee stage and for the
questions at committee stage.
With that, I move second reading of Bill 25.
Motion approved.
Hon. C. Trevena: I move that the bill be referred to a Committee of the Whole to be
considered at the next sitting of the House after today.
Bill 25, Coastal Ferry Amendment Act, 2019, read a second time and
referred to a Committee of the Whole House for consideration at the next
sitting of the House after today.
Hon. C. Trevena: I call second reading of Bill 19.
BILL 19 — ENERGY STATUTES
AMENDMENT ACT,
Hon. M. Mungall: I move that Bill 19 be read a second time now.
I’m pleased to present the Energy Statutes Amendment Act, 2019.
I’m very proud of this bill. This bill comes as a result of our review
of B.C. Hydro, which, of course, I’ve called, in this House before,
British Columbians’ crown jewel. It’s our public utility. It’s what
turns all of the lights on in this place and most parts of the
province.
The dams in my area, which are responsible for powering up 50
percent of British Columbia — many of them are B.C. Hydro dams. B.C.
Hydro provides electricity to four million customers with reliable
power, serving 95 percent of the province’s population, and 98 percent
of that power that we generate with B.C. Hydro is clean electricity.
It’s renewable power.
[3:40 p.m.]
When we decided, as a government, to review B.C. Hydro, it was
because we have such a value for this crown jewel, for this public
utility. We want to make sure that the electricity it produces and
transmits to people’s homes is affordable. That was the driving factor
behind our comprehensive review of B.C. Hydro.
The legislation that I’m presenting today is essentially part of
the culmination of the first phase of our review. We are also going to
have a second phase of the review that we’re going to be moving into.
The second phase will look at transitioning B.C. Hydro into the 21st
century, into the future.
There are a lot of changes happening right now. We know that we’re
going to see a stronger tech industry in B.C. that’s very dependent on
electricity. I just presented the first introduction of legislation for
a zero-emission vehicle mandate. British Columbians are adopting
zero-emission vehicles at a faster rate than other jurisdictions in
Canada. So we know that that’s going to put demand on B.C. Hydro as
well.
I could go on with that list, but the point of mentioning that is
because we are looking to do that second phase of the B.C. Hydro review
to transition it into the 21st century to meet those demands that we
anticipate are going to be coming. In fact, we know they are going to be
coming.
The legislation we have here is in response to our first phase of
our B.C. Hydro review. It was a structural review, looking at how we can
make sure that rates are affordable, because the costs at B.C. Hydro
directly impact the rates that people have to pay, those bills that they
get every month, every couple of months. We want to make sure that our
utility is running as efficiently as possible so that we are not
overcharging our customer base, those four million British
Columbians.
We want to make sure that our public utility is operating at prime
efficiency. Our review resulted in an ability to reduce the projected
rate increase by the previous government, the B.C. Liberal government.
It reduced their projected increase by 40 percent. That’s very good news
for British Columbians.
This year, for example, the increase that B.C. Hydro is going to
be applying is already applied to the B.C. Utilities Commission. The
increase that they put forward is actually less than consumer price
index. We’re finding ways that we can save people money. Like I said, we
found a 40 percent rate increase reduction from the previous
government’s plan.
But we need to ensure that going forward, B.C. Hydro and the
British Columbia Utilities Commission have the tools they need to ensure
that when they are doing their work, B.C. Hydro, in terms of making its
plans, and the B.C. Utilities Commission, in terms of reviewing those
plans, have the ability to ensure that rates remain affordable, that
they have the tools in their toolboxes to make that analysis.
One of the things that we’re doing with this legislation is
re-empowering the BCUC to do the job that it’s supposed to. That is to
work in the public interest in terms of reviewing, analyzing and
regulating B.C. Hydro. For example….
Actually, before I get there, I want to just take a moment to
acknowledge…. I’ve talked about making life more affordable. Why is it
important that we keep rates affordable? It might go without saying, but
let’s put it on the record.
When we have higher rates and we don’t pay attention to making
sure that we have them at an affordable level, and we let them increase
— for example, 70 percent over the course of the previous government’s
term — we are making life harder for British Columbians.
[3:45 p.m.]
I’ve talked to many people, low-income single moms…. When they get
that hydro bill, they have to make the choice between paying the
electric bill or snacks for their children for that week or that month,
depending on what they can afford. That should never be a choice for
somebody.
While we are lucky in British Columbia to have some of the lowest
electricity rates in the world, that doesn’t mean that it’s still not
difficult for British Columbians when rates go up. We have to be mindful
of things that will impact rates, and we have to be mindful of how
they’re regulated. That’s why this is important.
We need to ensure that B.C. Hydro is working for British
Columbians. We need to ensure that, and this type of legislation does
that.
I’ve mentioned that the previous government let rates increase by
70 percent over their watch, hon. Speaker. Well, one of the things that
allowed that to happen was by hand-tying the B.C. Utilities Commission
from doing the exact job that it’s supposed to be doing. The previous
government sidelined the BCUC and made decisions forcing B.C. Hydro to
advance that government’s own political agenda at the expense of
ratepayers right across the province. Rates for residential customers
can now skyrocket under things like rate rebalancing and also cost
millions for surplus energy purchased from independent power producers,
and that was passed on to ratepayers.
We did a study. A gentleman named Ken Davidson took a look at how
the previous government’s IPP scheme impacted British Columbian
ratepayers: $16.2 million in excess costs that are now borne on the back
of British Columbians —$200 a year for the average British Columbian
household that has B.C. Hydro as its electric source.
That just wasn’t right. That was not okay. We have to look at the
mechanisms by which that happened, and we have to correct that. That’s
why empowering the B.C. Utilities Commission to do its job as the
province’s energy regulator and restore independent oversight of B.C.
Hydro is essential, and we’re doing that with this bill.
It will ensure that electricity rates are kept affordable for
British Columbians and also protect taxpayers from millions in costs. We
are implementing key recommendations made from that first phase with
this bill.
I already talked about how we had the first phase of our review,
and we are going to be moving into the second phase. Part of the first
phase of our review, though, is…. I’ve mentioned the BCUC. Also, we
needed to talk to the BCUC, and we did just that. We worked with them in
identifying ways to make sure that they are able to be the strong
regulator that British Columbians need them to be and that they have the
tools in their toolbox, as I mentioned, to put analysis to B.C. Hydro’s
integrated resource planning. For people at home who might not
understand what that technical term means, you can liken it to B.C.
Hydro’s business plan for a period of time, where they identify what the
demand would be for future electrical demand and how they would meet
that demand.
Going back to the BCUC. We talked to them in terms of…. They had
the tools in their toolbox and provided analysis to the integrated
resource plan, to the rates applications that they put forward, and how
they could ensure that they were also providing analysis in terms of
affordability for British Columbians. Not just that they were making
sure that B.C. Hydro was meeting its costs through its charges to
ratepayers, whether those ratepayers be families, households,
residential households, commercial or industrial ratepayers.
BCUC has been a part of this process, and I greatly appreciate
them doing so, because of course, they ultimately provide that
independent, non-political oversight working in the best interests of
British Columbians, rather than the political whims of the day, which
they change depending on where members sit in this House. But they
provide that consistent, independent oversight over B.C. Hydro working
in the best interests of British Columbians.
[3:50 p.m.]
I know that other members want to speak to this bill. I will not
be an official designated speaker and speaking two hours, as interesting
as I know the full and in-depth explanation of things like feed-in
tariffs and expenditures for export may be. But I will go over some of
those points just so that people who are watching have a good
understanding of what this bill is about, as well as other members of
the House.
The integrated resource plan. I’ve already mentioned that the B.C.
Utilities Commission will be reviewing that now. That’s what this bill
specifically allows. The previous government required B.C. Hydro to
submit its integrated resource plan to government for review and
approval, therefore bypassing the BCUC altogether.
What this meant was that there was no independent oversight over
that forecasting for demand and forecasting for how to meet that demand.
There was no independent oversight over that. Rather, it was a political
oversight. Politicians being politicians and going by what might be
popular, what lobbyists might be saying to them, was not in the best
interests of British Columbians by any stretch, right? Perhaps it’s part
of the reason why we saw the IPP scheme — why we saw that — and why
those types of things would have been better off being reviewed by the
B.C. Utilities Commission.
Now the B.C. Utilities Commission is going to be reviewing B.C.
Hydro’s integrated resource plan. That’s not something weird or out of
the ordinary or unusual. In fact, this is the general practice amongst
other jurisdictions as well — that their regulator reviews the overall
resource planning that their utilities do. This is the right direction
to head towards. It’s the direction that we used to have in British
Columbia, and we need to get back to that.
I’ll also talk about the feed-in tariff that this bill addresses.
It actually removes the government’s power to order B.C. Hydro to
establish what’s called a feed-in tariff. This is a program through
which B.C. Hydro could enter into new purchase agreements with
independent power producers without the approval of BCUC. That’s
essentially what that mechanism does. We want to remove that mechanism
because, as I said earlier, BCUC is the appropriate regulatory body to
be reviewing these types of power acquisitions. BCUC needs to be looking
at that.
B.C. Hydro, of course, is forecast to be in surplus for the future
and does not need to be purchasing new electricity generation, so it is
not required to have a feed-in tariff at all. In fact, this concept of a
feed-in tariff has been quite problematic in other jurisdictions such as
Ontario. Learning from those experiences, we will be removing that here
in British Columbia to make sure that this is not a detriment to
ratepayers.
Rate rebalancing is a point that I briefly alluded to, so let me
speak to it here for just a moment. Rate rebalancing is the process by
which…. The bill will be prohibiting the BCUC from doing rate
rebalancing. This was something that the previous government allowed
for. What it means is that…. Of course, utility can still apply for rate
rebalancing, but it cannot be directed by the BCUC anymore, the reason
being that rate rebalancing can happen between different classes of
ratepayers.
I’ve already mentioned that in British Columbia, we have
residential class, we have commercial class and we have industrial
class. Sometimes, in looking at how we pay for the overall costs of
energy generation, you find different mechanisms to create balance
between the different classes. Rather than just doing the
straightforward approach of…. All residential users — their payment
equals their cost 100 percent, right? That is not the case right
now.
[3:55 p.m.]
Right now, to keep rates more affordable for residential
customers, there’s a little more on industrial and commercial. They’re
paying a little bit more than exactly what their costs are. But this
government, through policy, has removed the PST off of their electricity
— therefore, making it affordable for them as well and attracting
investment.
We want to make sure that if a rate rebalancing does need to
occur, that analysis is done within the utility itself and then they
apply to BCUC for that, rather than putting BCUC into the position of
having to make rates unaffordable for any one of those other classes
without being able to consider a government policy that’s happening
elsewhere.
I know that sounds very convoluted, but the point is that at the
end of the day, we’ve consulted with the BCUC on this. This is now a
tool in their toolbox that will ensure that rates are more affordable
for British Columbians.
Another concept that this bill addresses is called expenditures
for export. We will be removing the concept of expenditures for export
from the Clean Energy Act. Expenditures for export are expenditures on
infrastructure and energy for producing surplus power for sale to export
markets. For example, one could argue that the IPP’s scheme was not
going to ultimately be for domestic use because we have a surplus of
power, but that B.C. Hydro would have to enter into these agreements to
purchase IPP private power and then turn around and sell it through its
subsidiary, Powerex, and sell it on the private market.
That might sound really good, and it would be really good if the
case was that energy prices always stayed high and you could buy low,
sell high. That would be great for ratepayers. Unfortunately, what’s
happening right now, as we learned from Ken Davidson’s report, is that
we’ve been buying high and selling very low. We’ve been buying at around
100 megawatts per hour and selling at around $25 to $35 per megawatt
hour. That’s a major loss. And that’s where he identified the $16.2
million…. Sorry, I believe I misspoke on that one.
Interjection.
Hon. M. Mungall: I know the member over there is expressing what must be jealousy
of a woman being able to nurse a child all night long, still come to
work every day, introduce bills and speak to the bill. Maybe I don’t
have the right number for him, but I know he could not do what I’m
doing.
Back to the issue at hand, though. The point is that we are going
to be removing the concept of expenditures for export from the Clean
Energy Act because they have just not worked in favour of British
Columbians. It’s that simple.
Finally, the bill addresses that Powerex will continue to be
solely regulated by the Federal Energy Regulatory Commission. It’s
important that it remain regulated by this particular body because this
body is used to the type of market activities that require a very quick
response. So it’s in a better position to regulate Powerex. It’s in the
best position to regulate Powerex. So we will be putting that from a
regulatory perspective into a legislative perspective to make sure that
that is enshrined in law — who will be regulating Powerex.
Those are my comments on this bill. I’m very proud of the work
that my ministry has been doing on this and that other ministries, as
well, have been putting into our analysis and our