Fifth Session, 41st Parliament

(2020) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Tuesday, July 21, 2020

Afternoon Sitting

Issue No. 345

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Orders of the Day

Committee of the Whole House

Bill 6 — Mines Amendment Act, 2020 (continued)

T. Shypitka

Hon. B. Ralston

R. Sultan

S. Furstenau

Report and Third Reading of Bills

Bill 6 — Mines Amendment Act, 2020

Committee of the Whole House

Bill 14 — Municipal Affairs and Housing Statutes Amendment Act (No. 2), 2020

T. Stone

Hon. S. Robinson

A. Olsen

M. de Jong

TUESDAY, JULY 21, 2020

The House met at 1:32 p.m.

[Mr. Speaker in the chair.]

Orders of the Day

Hon. M. Farnworth: I call continued committee stage, Bill 6, Mines Act.

Committee of the Whole House

BILL 6 — MINES AMENDMENT ACT,

(continued)

The House in Committee of the Whole (Section

B) on Bill 6;

S. Gibson in the chair.

The committee met at 1:35 p.m.

section 2 (continued) .

T. Shypitka: A question to the minister. Is it the intent to have this office —

I’m talking of the mining unit office, the office of the chief auditor —

function similarly to the Auditor General’s?

Hon. B. Ralston: No, it’s not intended to reproduce the Auditor General’s office.

In the legislation, it has a very specific purpose. The process is not

to duplicate the Auditor General’s office. It is generally similar in

the sense that they are conducting audits, but this is a very specific

and focused process internal to the ministry, in the way that we’ve been

discussing this morning.

T. Shypitka: Will elected officials be able to suggest audit coverage

areas?

Hon. B. Ralston: Yes.

T. Shypitka: Can the minister give me an example of what the chief auditor may

give as a subject matter?

Hon. B. Ralston: The example I gave earlier was of a possible audit of the tailings

treatment by an individual mine or by mines in British Columbia, but

part of the process of opening it to nominations from the public — or as

the member has mentioned, elected officials such as Members of the

Legislative Assembly — is that there would be a variety of topics. The

ultimate decision on selecting those topics for audit would be that of

the chief auditor. So it would be difficult to predict in advance what

all the topics might be.

T. Shypitka: When is the audit plan due every year? Is there a set date, a

certain time of the year or a month? Can priorities change throughout

the year?

[1:40 p.m.]

Hon. B. Ralston: The proposed

section 2.3 speaks of the audit plan and speaks of an

audit plan that would be developed — I’m reading from the section:

“…identifying the subject matter of the audits to be given priority in

that year.” So it would be an annual plan.

T. Shypitka: I wasn’t sure if I understood the answer there. Is there a set

time per year when the audit plan is to come out, and can the priorities

change throughout the year? I might have missed that.

Hon. B. Ralston: Although the legislation mentions each year, it’s expected that it

would align, as many things — indeed, almost all things — in government

do, with the fiscal year. In terms of a change in direction or an

addition or amendment to the plan within the year, any responsive and

well-functioning organization is capable of doing that. So yes, I

imagine that that would be…. If emergencies arose or some urgent and

pressing issue arose, obviously the plan would be able to be responsive

to such an event, whatever it might be.

The plan is to give direction and thought and to solicit the ideas

of the public and, in this case, as the member has suggested, Members of

the Legislative Assembly to focus on issues of public concern. But that

plan would be flexible enough to be changed in response to conditions

that may change throughout the year. Certainly, this year is a pretty

good example of a year where it wouldn’t function now, in July, in the

same way that you might have thought you were going to function in

January.

T. Shypitka: In the added

section 2.5, can the minister tell us what a

reasonable time might be? And does a mine include all mines regardless

of status?

Hon. B. Ralston: Answering the second part of the member’s question first:

referring to mines, that includes all mines in the province, whether

they’re permitted or not. I took from the member’s question that he was

referring to proposed subsection 2.5(1)(a), “at any reasonable time,”

and I think that is fairly self-explanatory. That would depend on what a

reasonable person would do. That’s a drafting convention. It’s

interpreted widely in case law, so I think it follows those

conventions.

[1:45 p.m.]

T. Shypitka: What types of persons will be brought along by the chief auditor

under subsection 2.5(2)?

Hon. B. Ralston: This

section is intended to refer to those persons who are not

delegated. The typical example would be a person with expertise in, say,

waste management or tailings or something like that. It might also

include, where there are agreements with First Nations, the opportunity

for a member of a First Nation to accompany the auditor in the

process.

T. Shypitka: All right. So no specific technical skills or mining experience to

be an invitee. But can that person be employed by anyone in the private

or public mining sector?

Hon. B. Ralston: I thought I’d given an example of someone with specific technical

expertise of waste management or tailings. It would be someone who would

add value and be able to assist the chief auditor in conducting the

inspection. It could be anyone that the chief auditor deems an

appropriate person, based on her or his judgment.

In addition, I want to stress the possibility, where there are

agreements with First Nations, to invite a member of a First Nation to

accompany the chief auditor on an inspection.

T. Shypitka: In regards to reclamation, currently, doesn’t the chief inspector

already have the authority to order reclamation work to be

done?

Hon. B. Ralston: I just would invite the member to narrow his question, if he

could. Is he talking about this

section in reference to reclamation?

There are other sections that deal more specifically with reclamation.

I’m wondering just where he’s focusing his question.

[1:50 p.m.]

T. Shypitka: My apologies, Chair. I’ll ask that question in the appropriate

section. No more questions for this section.

Section 2 approved.

section 3.

T. Shypitka: Is this, essentially, strengthening previous language? What

specific situations brought the need for these changes? Under the

existing legislation, could the chief inspector not already take these

actions?

Hon. B. Ralston: The current

section speaks of making an investigation or report

about an accident that has caused serious personal injury. The key

amendment here is the addition of “…an incident that has caused, or has

or had the potential to cause….”

It’s the opportunity to investigate, in a preventative way, before

something has happened, where there’s a concern that it might cause

serious personal injury, loss of life or property or environmental

damage. It widens the avenue or the ambit of a potential investigation

to investigate something where there’s a serious concern that something

might happen but hasn’t yet happened. That’s the key change. It enables

the chief inspector to focus on a preventative investigation.

T. Shypitka: What was the rationale for this change? I think the minister has

hinted about it. Has the ministry encountered problems that required

this change?

Hon. B. Ralston: The broader investigation authority is required because…. As I’ve

said, the current investigation authority doesn’t allow investigations

into incidents that did not cause serious personal injury or fatality or

damage but that had the potential to do so. If there is a near miss,

that would enable an investigation to be undertaken. It enhances the

potential and the actual safety of a mine operation by giving the

inspector that power.

T. Shypitka: No more questions for

section

Section 3 approved.

section 4.

[1:55 p.m.]

T. Shypitka: I’d like to recognize the member for West Vancouver–Capilano. I

think he has a few comments.

R. Sultan: As my esteemed colleague from Kootenay East observed, if I could

speak to

section 4 of Bill 6, the B.C. Mines Amendment Act, 2020. I have

five questions to ask.

We’re dealing specifically, in

section 4, with the functions of

the chief permitting officer, a newly created officer position in the

ministry.

Just to put my cards on the table, Minister, I intend to support

this bill. It’s an important bill.

Public confidence in the mining industry has taken a bit of a

beating in recent years, sometimes for good reason. It’s terribly

important for the productivity, efficiency, morale, investment

confidence, and so on in the mining industry in the future that we have

smart new regulations and laws, as required, but ones which are

transparent and crystal-clear as to their intent.

Maybe, in some respects, this important bill could be improved.

I’m here not to debunk the bill, heaven forbid, but, hopefully, to

suggest some ways it might be improved to achieve the ends, which I

think the government has made quite clear.

With the permission of the minister and probably the Chair, I

would like to read into the record, in consecutive file, five different

questions with comments in between, answers first. I say this because

I’ve observed the dialogue on the first three sections of the bill with

some disappointment.

This minister has one of the most technically challenging

assignments in the entire government. Think about it. He’s responsible

for B.C. Hydro. He’s responsible for the oil and gas industry. He’s

responsible for mining. He’s responsible for a lot of other stuff. So

when asked a question, naturally he has to consult deeply with his

advisers, who themselves may not entirely know the answer. So the Q and

A rolls along rather slowly.

What I would prefer to do is to lay out my questions all at once,

and then the minister may choose to answer them. From my personal point

of view, at least, it would be quite sufficient, from my perspective,

that he responds in writing after he has had time to further consult.

Whether that violates parliamentary procedures or not, I’m not sure, but

that’s my personal feeling about it.

I think there are many important issues here that I could raise.

They cannot be answered just with a snap of a finger. They do take

thought. I think the industry itself would appreciate more than just the

sometimes politically motivated banter back and forth on a subject that

really should be above politics. That’s my request.

I may also — trying to keep my ego parked on the shelf where it

belongs — just mention a couple of things about my own background.

Section 4 is about permitting. I was sitting there last night, saying:

“Permitting. Wait a minute. I know something about permitting in British

Columbia.” As a matter of fact, I personally permitted a mine

here.

I looked it up. Yes, indeed, in 1992, I was the senior officer of

the corporation which received the mine development certificate, as it

was called in those days, for the Cirque deposit. That is probably 25

miles up the side of the Rocky Mountains above the Fort Ware First

Nations community, which didn’t even have road access in those

days.

[2:00 p.m.]

I spent a lot of time trampling around that hillside, talking to

Chief Charlie Boya of the Fort Ware band and so on. Finally, with a lot

of help from Rescan Environmental Services, we got a mine development

certificate to proceed.

Now, one of the lessons of this whole experience was that in those

days, a mere 28 years ago, it was very heavily and environmentally

driven permitting process…. The number one issue that we had to answer

was, in fact, how to dispose of the tailings safely, both

environmentally but also physically. I watch with some bemusement the

change that seems to have occurred in permitting, the subject, I repeat,

section 4, as an EMPR responsibility without reference to the

Ministry of Environment.

But we all know damn sure the Ministry of Environment is not above

it all, an uninterested party. So I think one thing the industry will be

trying to puzzle out is: how does this new set of functions on

permitting and other activities interface with the perhaps parallel

functions of the Ministry of Environment? I’m sure they’re going to be

there at the end of the day, but it’s not spelled out in this

legislation for today.

In fact, aside from my little interlude as a mine permitter in

person — I’m sure the only person in the chamber, real or virtual, who

can make that claim — I have some other interfaces. I was a member of

the Public Accounts Committee which reviewed the Mount Polley collapse

report of the Auditor General.

I was a senior line officer at Hudson Bay Mining. I was in charge

of a $5 billion mining and energy portfolio at the Royal Bank. As a

registered professional engineer, I am more or less aware of the

disciplinary actions ongoing, probably as we speak, against some of the

engineers involved, geoscientists — they’re all in the same regulatory

body — on Mount Polley.

Finally, I had my own mining task force, which I invented, much to

Gordon Campbell’s dismay, back in 2001. As I went through the list of

properties, major mines as they’re listed on the government’s website, I

recognized some old names, from 20 years ago. So the industry does not

change that fast.

Anyways, the first question I have is: would it be possible to

obtain a job description for the chief permitting officer, which is the

purpose of

section 4? The proposed law says: “The chief permitting

officer may delegate in writing to an inspector any of the powers

conferred on the chief permitting officer under this Act.” You search

through the act to see where it explains what these powers are or duties

or responsibilities or a job description. It’s not there.

I think if the ministry expects the industry to respond, they have

to try and understand the structure that they’re going to be dealing

with, and a job description is a simple way of doing that. That’s my

first question: could I get a job description of this chief permitting

officer?

I must say, some of the commentary and the answers to questions by

the member for Kootenay East have revealed to me, I think, the thrust of

permitting as envisaged by the drafters of this bill in the ministry.

But that’s speculation on my part, and that’s not good

enough.

The second question I have refers to the scope of responsibilities

of this new permitting responsibility. At the risk of causing, perhaps,

some fuses to blow in the Hansard transcribing machine, let me just

rattle off 30 major mines and mining projects as I gleaned them from the

government’s own websites. Let me assure Hansard that I will send them

the list so that they don’t have to try and keep up with a lot of

strange names.

Let me just rattle them off. It won’t take two or three minutes.

Tulsequah Chief, Silvertip C&M, Red Chris, Brucejack, Kemess,

Huckleberry, Equity Silver, Mount Milligan, Endako, Willow Creek, Brule

Dillon, Wolverine, Murray River, Trend-Roman, Bonanza Ledge, Gibraltar,

Mount Polley, Orca, Quinsam, Myra Falls, New Afton, Highland Valley,

Moberly, Craigmont, Copper Mountain, Greenhills, Fording, Elkview, Line

Creek, Coal Mountain — 30 names.

[2:05 p.m.]

My question is: are all of these mines and mine projects

potentially under the purview of the chief permitting officer? Are they?

I’d like an answer to that. It can be in writing. I don’t need it right

away.

Let me just make some comments on the list. About half of them are

active, and half of them are dormant in various stages. Of the active

mines, maybe close to half of them are owned and operated by Teck Corp.

— one company. So this is a very concentrated industry, and there are a

lot of names out there, including….

What caught my attention was Barkerville Gold. My mining task

force went up and listened to the story from Barkerville Gold. There was

a very attractive younger lady, geologist. She had all the cores, there

in boxes on the ground. We understood they were trying to assess,

probably, a three- or four- or maybe even five-kilometre trend line of a

vein that would make everybody rich some day.

I forgot about Barkerville Gold, but last night I’m trying to

figure out: “Well, what? Is Barkerville Gold still around? It’s on the

list here.” So I clicked on a broker analysis website, and here’s a

broker analyst talking about Barkerville Gold. They showed a clip. It

had a young lady, geologist. She didn’t have core samples in front of

her, but she gave exactly the same pitch: “There’s a trend line here,

maybe three to five miles long. The core grade of the drill core is

amazing. We’re just going to scope this thing out.”

Now, wait a minute. That’s the same story I heard 18 years ago. I

have to say, as politicians, we’re taught to stay inside the message

box. I congratulate Barkerville Gold for being able to stay in the

message box for so many years. I was tempted to ask — but I think I know

the answer — how many ounces of gold has Barkerville Gold actually

produced? You don’t have to answer that. I think I know the answer

already.

My third question, having dragged you through this long list of

names, is to ask: is the chief permitting officer responsible for new

mines only? Existing mines? Sand and gravel operations, like Orca, one

of the names on the list? Inactive mines? Bankrupt mines? Decommissioned

mines? Speculative mining ventures, and I’ve just described one of them

to you, and so on? What are the boundaries here? Because if I go to two

different government websites, and I see the list of more or less the

same names of major mines and major mine developments in British

Columbia, I expect this to be the final word on what’s going on in the

mining industry.

I might assume that if we’re going to have a chief permitting

officer, this person is very active on all 30 of those names,

presumably, but could you enlighten me?

The fourth question I want to ask is how this new officer, the

chief permitting officer, will interface with the other officers, both

within the ministry and across ministry? It seems to me that there are

five entities involved here — a little bit hard for industry to keep

track of.

Let me just explain to those who might read this transcript and

say: “Oh, is that what’s going on?” Well, first of all, we have the

chief of mines, permitting. That’s what I’m talking about here with

section 4. Then we have the chief of mines, auditing. And my esteemed,

very confident colleague from Kootenay East was asking many, very

pertinent questions about what, in fact, mine auditing is all about.

Thirdly, mine inspections. Well, that’s another big job there. Then we

have the über-regulator of engineering and other professions — as I call

them, but that’s a rather disrespectful title — emerging from the

Professional Governance Act of 2018 of this government.

[2:10 p.m.]

The relevance of this is — propelled by some of the motives, I

suspect, which led to this new bill — that the government decided that

the professions, whether we’re talking forestry, geology, technologists

or engineers, aren’t quite up to snuff, and they’d better get their act

together, and we’re going to appoint somebody up top there to make sure

it happens. So we have this so-called über-regulator.

This is not academic. As a member of the EGBC, the Engineers and

Geoscientists of B.C., I’m more or less aware of the disciplinary

hearings, which have been underway for some time now, for those somewhat

junior engineers who were the last people to be assigned at Mount

Polley. Now their professional careers are on the line.

I can advise this ministry again, this House, that it is no fun to

be brought up to disciplinary hearing by your peers, by EGBC, because

you could lose your licence or practice. It certainly impairs your

employability. This is a professional disaster, but the

engineers….

The Chair: Member, thank you very much.

We’ll turn things over now to the member for Kootenay East,

recognizing the minister first, please.

Hon. B. Ralston: The member for West Vancouver–Capilano is a well-known member and

has some considerable expertise in this area. Perhaps, if there’s

unanimous consent of the House, he could continue and finish his

question.

The Chair: Member for West Vancouver–Capilano, as you are probably aware,

there is a 15-minute limit to the time you can speak. The minister

has spoken, allowing that break, and if the member for West

Vancouver–Capilano would like to continue his soliloquy…. You’re

certainly welcome.

R. Sultan: I do appreciate that I’ve bent the rules here a little bit out of

shape.

My fifth question: could the minister provide us with a

retrospective description of how the amended act will operate with

increased efficiency and reduce risk in the permitting of an actual case

history that we’re all familiar with — which in fact, perhaps, motivated

this bill — namely, Mount Polley?

This mine, and the mining dam which collapsed, was permitted in

the 1990s on the watch of the NDP government of the day. So if this bill

purports to inhibit or discourage or even prevent such fiascos from

happening in the future, I would like a retrospective analysis of the

key mistakes that had been made and how this new bill would make sure it

would be very unlikely those mistakes could ever happen again. That’s

the end of my remarks.

Hon. B. Ralston: I certainly appreciate the questions that have been asked. The

member has said that he…. Obviously, that would require some time, as he

acknowledged, to answer these questions fully and accurately. So subject

to any ruling that you may make, Chair, I would propose to follow what

he has asked, and that I respond in writing.

Obviously, that won’t be part of this debate. I’m not sure how

fast we can get those, but it would not be immediate. I’m not sure

whether there’s any prohibition in the rules in responding that way, and

I’d invite you to give me direction on that.

The Chair: Thank you, Minister. That’s appreciated.

I believe we’re still on

section 4. Are there any remarks or

comments on

section 4?

T. Shypitka: Thanks to the member from West Vancouver–Capilano. That is why he

is my mom and dad’s favourite MLA.

section 4, permitting and enforcement budgets…. To the

minister, between the presentation of the 2019 estimates last year and

the 2019 actuals this years, it appears that the ministry reallocated

about $1½ million from the competitiveness and authorizations division

to the enforcement division. Why was this allocation made?

[2:15 p.m.]

Hon. B. Ralston: This topic was canvassed in budget estimates, and it does have,

certainly, a financial dimension to it. Both sides of the division of

the budget have increased. There is a beginning of a practical

separation of the two functions, and that has taken place. So it’s not a

question of one side being preferred over the other. It’s a question of

beginning the separation of functions.

T. Shypitka: Well, the separation was done a couple of years ago, and a budget

was allocated — $20 million. A certain amount was requested over to the

permitting and authorization side, and the other part was to the

enforcement and compliance side. The reallocation was done last year in

the actual budget from the 2019 estimates.

I understand there’s a separation, but there are also two sections

to the mining sector now. They each have their own budget, and a

reallocation was made of $1.57 million. The question is: why was that

done?

My spider senses tingle a little bit when I see this mining audit

unit that’s coming into play and a chief auditor coming in and this

whole new independent model coming in. I’m just asking the question: why

was the $1.57 million reallocated from the authorization and

competitiveness side to the enforcement side?

[2:20 p.m.]

Hon. B. Ralston: This, I would say, is more strictly an estimates question and not

really directed to any particular

section in the bill. But nonetheless,

in the interest of disclosure and furthering the understanding of what’s

going on…. The $1.5 million was transferred. It was a reallocation of

expenses, which had formerly…. So overhead and travel costs…. It’s split

between the two for accounting purposes. There was no movement of any

staff from one division to the other. It’s really an internal accounting

adjustment that was made to better reflect the reality of the two

divisions.

T. Shypitka: That’s a lot of travel for those in the permitting side, I would

imagine. The separation and why this is relevant to this bill is that

the minister has stated that the separation, and to formalize the

separation, is what part of this bill is — what a third of this bill is

about.

If it’s the mandate to support permitting through this bill, what

does the minister think the implications are if the permitting side is

being sapped resources to hold up the enforcement side?

Hon. B. Ralston: Thank you very much to the member for the question. I just want to

comment on his comment: “That was a lot of travel expenses.” In fact,

that’s not the case. That’s inaccurate. I don’t think that should be

left unanswered.

What is being spoken of there is corporate services, so it’s

accounting, bookkeeping — all the centralized administration that was

then being reallocated to the other division to properly reflect the

services that that particular

section was drawing on. I don’t think it’s

fair to leave a false impression on the Hansard record, as the

member seems to want to do.

Secondly, again, these are budgetary questions. These don’t seem

to be directed to any of the sections that are before us. But again, in

the interests of disclosure, I’m advised that the permitting

section in

the budget has an allocation of $18 million plus earned revenue — $3

million in permitting fees — for a total of $21 million. The health and

safety division has a budget of about $10 million.

[2:25 p.m.]

I wouldn’t particularly draw any conclusions from that — certainly

not the conclusions that the member seems to be predetermined, defying

any evidentiary basis, to want to drive at.

While I’m speaking about this and on my feet, I just wanted to

draw to the attention of the Legislature some of the industry support

for this division of functions that the member seems to want to

disparage and oppose. I’m reading from a letter by Kendra Johnston,

who’s the president and CEO of the Association for Mineral

Exploration.

“We thank the government for creating an audit unit within the mines

health, safety and enforcement division, and we are encouraged that this

mandate includes recommendations for improving regulatory

effectiveness.

“An effective and streamlined regulatory framework supports a

healthy and sustainable industry that benefits all British Columbians as

well as government and industry. As such, we recommend that audits of

regulatory effectiveness, such as notice-of-work permitting, include

aspects such as timeliness of authorizations, consistency of decisions

and functionality between government ministries and agencies, and we

recommend that this is an early priority for the new audit

unit.”

That’s support for the change and some good recommendations about

what the new chief auditor might turn her or his mind to.

T. Shypitka: The whole point was that if we’re constantly…. We could have the

best robust enforcement and compliance department in the world, but if

we’re not getting permits out the door, we’re going to have a lot of

chief auditors sitting around doing nothing.

I’ve heard time and time again through industry that we’re not

getting permitting through. There’s definitely a bottleneck in

permitting, FrontCounter all the way through. I’m just trying to draw

attention to the minister on…. I’m really hoping that this bill does

support permitting. But no more questions in

section 4.

S. Furstenau: Just one question on

section 4. I know this has been canvassed by

the opposition, but I just wanted some clarity.

This

section requires the minister to designate a chief permitting

officer and establishes authority for the chief permitting officer to

delegate any powers to an inspector. So it proposes to enable the chief

permitting officer to delegate these powers to inspectors, which seems

to conflate the separation described above between permitting and

inspections.

Can the minister just provide some clarity on the separation of

these roles?

Hon. B. Ralston: I thank the member for the question.

The term “inspector” is a generic one, and there will be

inspectors employed in both divisions. But the chief permitting officer

would not have authority to delegate to any inspector in the other

division. There’s a functional separation.

[2:30 p.m.]

I think the lack of clarity arises from the fact that those in

both divisions are entitled “inspectors,” which is a generic

term.

[R. Chouhan in the chair.]

T. Shypitka: Before we go on to

section 5, I just wanted to make a quick

comment that…. I think the minister alluded to that I was disparaging

the division. I just wanted to say that I’m not disparaging anyone. I

just want to make sure the divisions, both divisions, are well-resourced

and well-supported. That was the intent of my comment.

Sections 4 to 6 inclusive approved.

section 7.

T. Shypitka: One of the newer powers contemplated by this

section is that the

chief inspector or their delegates may “enter on or below the surface of

the mine and cause the required work to be performed or completed.” What

would the process for this look like?

Hon. B. Ralston: These were powers that were exercised by a previous regime, by the

chief inspector, so they’re not new powers. What this does is just give

greater clarity to the authority of the chief inspector to exercise

those powers.

[2:35 p.m.]

Under the Oil and Gas Activities Act, these powers are expressly

set out. So the drafters thought, in the interest of greater certainty

and greater clarity, it was important to add this detailed language at

the time of the amendment of this bill and clarify and give certainty to

the powers of the chief inspector.

T. Shypitka: No more questions on

section 7.

S. Furstenau: If I may, I have one question.

section 7, there’s some clarity made in the proposed bill on

reclamation and an ability for the inspector to take from the

reclamation bond, if it exists, to put toward perceived or real risk to

environment or people. But we have yet to see an update on financial

assurances. The previous government agreed to update the mine

reclamation bond policy because of the Auditor General report. There has

been a subsequent report and public consultation by this government in

The question is: why not, at this point, add the much-needed

change to the act so that the chief inspector must — as opposed to may —

require financial securities for mine reclamation?

Hon. B. Ralston: This is an important question and quite a legitimate one. What

this amendment does is give greater clarity to how the money that’s been

posted may be used.

In terms of the question of what the policy might be in terms of

requiring posting of money for potential reclamation, that policy is

under development. I would say that in the oil and gas sector, in the

orphan well area, that policy has been revised in the sense of requiring

more — some may argue not enough. But certainly, a change in that policy

and a similar policy would…. Work is underway here to have a look at

that and see what would be appropriate in the sector.

Of course, consultation obligations require further consideration

before we’ll be in a position to come forward with a change in policy.

So the member’s question is timely. I appreciate it. It is a reminder

that this work needs to be considered at an early point in the

future.

S. Furstenau: Just following up on that just a little bit. Could the minister

provide any kind of timeline on that work? And does the minister have a

ballpark figure of reclamation costs that have fallen to the province

for sites that have not been reclaimed after being finished with the

mining?

[2:40 p.m.]

Hon. B. Ralston: To the member’s two questions. On the timing of the policy, there

is an internal policy being developed. There’s an anticipated further

engagement this fall on that policy. Work is underway and moving

forward.

In terms of the member’s second question — about how much

reclamation work there has not been funding for — there’s no answer

available immediately. I can commit through the staff to follow up with

the member. That will be outside of this process, but again, I think

it’s an important question. We’ll endeavour to get the member an

answer.

Sections 7 to 10 inclusive approved.

section 11.

T. Shypitka: How are mine emergencies determined under the new

section 17? What

would be out of scope here?

Hon. B. Ralston: I wonder if the member might just perhaps add a few words on what

he means by “out of scope.” I’m not quite clear on what he’s getting at

here. Certainly, there are some reasonable questions to ask about this

section. I just don’t…. The term “out of scope” doesn’t….

T. Shypitka: How are emergencies identified? I guess it’s all I really want to

know. Simply, just how are mine emergencies determined under the new

section 17?

[2:45 p.m.]

Hon. B. Ralston: I think there’s a pretty standard and common understanding to

determine an emergency. It is not defined in this act, but I don’t think

there’s any intention to make a mystery of it. I think most people would

recognize and understand an emergency as a catastrophic event requiring

urgent action, whether to save life, save property or prevent damage to

property, persons, the environment or something in the nature that I

think most people would understand as an emergency.

T. Shypitka: No more questions for this section.

Section 11 approved.

section 12.

S. Furstenau: I just have one quick question on this, which adds “authority for

an inspector to order the preparation of a professional report.” Could

the minister just help me understand why “incident” isn’t better defined

and what we should understand as what an incident is that causes actual

or potential environmental damage?

Hon. B. Ralston: The choice of “incident” is a deliberate one, rather than an

accident or an occurrence. I think the agreed

interpretation of incident

is that it is broader than either of those two categories, so it gives a

broader scope to matters that an inspector could investigate. It’s

intended to broaden the powers of the inspector without having to define

whether something is an accident or not.

T. Shypitka: The member from Cowichan Valley stole one of my questions, but

that’s all right. I’ve got another one.

Can the minister confirm that environmental damage reports ordered

under this

section are carried out by an independent third

party?

Hon. B. Ralston: Yes. The language of the

section does use the term “an independent

study,” so yes, it would be independent.

T. Shypitka: No more questions on this section.

Sections 12 to 14 inclusive approved.

section 15.

T. Shypitka: Reclamation obligations are clarified to be required, regardless

of the provisions of security. Was this at issue in any prior

case?

[2:50 p.m.]

Hon. B. Ralston: Yes, the member is correct. There has been some ambiguity about

the application of the language in the previous section, so this is

intended to provide clarity.

T. Shypitka: The question was: were there any previous issues or cases that

brought on this piece of legislation?

Hon. B. Ralston: Yes. In the past, there’s been some dispute about the

interpretation of this section, where a party has provided money for

reclamation. They regarded that as an end to their obligations for

reclamation, and this

section is intended to clarify that.

Sections 15 and 16 approved.

section 17.

T. Shypitka: What types of obstructions, if any, have been encountered by

investigators or officials that required this provision?

Hon. B. Ralston: The language in the previous

section is somewhat dated, I think at

least 30 or 40 years old. So this is a fairly standard phrasing of

powers under a penalty section. Just given the opportunity to amend the

act and clarify the powers, the opportunity was taken to bring this

section, as a penalty section, into conformity with other penalty

sections — very similar to other prov­incial statutes.

T. Shypitka: I will take it that there were no previous obstructions or

encounters by investigators or officials to bring this legislation…?

It’s just some housekeeping that we’re just tidying up, I guess. Is that

true?

Hon. B. Ralston: This particular

section was recommended by Crown counsel in

drafting a penalty section. There have been concerns in the past, so I

wouldn’t want to leave that impression that the member has

suggested.

[2:55 p.m.]

This section, as it’s drafted in the new form, is intended to

provide the powers to deal with those.

Sections 17 to 24 inclusive approved.

Title approved.

Hon. B. Ralston: I move that the committee rise and report the bill complete

without amendment.

Motion approved.

The committee rose at 2:56 p.m.

The House resumed; Mr. Speaker in the chair.

Report and

Third Reading of Bills

BILL 6 — MINES AMENDMENT ACT, 2020

Bill 6, Mines Amendment Act, 2020, reported complete without

amendment, read a third time and passed.

Hon. S. Robinson: I call committee on Bill 14, intituled Municipal Affairs and

Housing Statutes Amendment Act, 2020.

Committee of the Whole House

BILL 14 — MUNICIPAL AFFAIRS AND

HOUSING STATUTES

AMENDMENT ACT (N o . 2), 2020

The House in Committee of the Whole (Section

B) on Bill 14;

R. Chouhan in the chair.

The committee met at 3 p.m.

section 1.

T. Stone: Good to see everyone today. Happy afternoon. With the indulgence

of the minister, I just wanted to ask a couple general questions. I’ll

do them here in

section 1. I just have maybe half a dozen general

questions. Then we’ll move through the specific sections.

The first question I wanted to pose to the minister was this. In

the opposition we’ve called for a relief on the 4.4 percent insurance

premium tax, the tax which is charged on insurance premiums, including

strata insurance premiums. I’m just wondering if the government has

considered looking at that particular piece as a means that would

provide some immediate relief to strata owners across British

Columbia.

Hon. S. Robinson: The insurance premium tax is not new. It’s been collected for

decades on every type of insurance and in all Canadian provinces.

Moreover, it’s insurance companies that pay the insurance premium tax,

not individual consumers. That’s why ending or reducing the tax would

actually provide little or no benefit to people. The tax is not one of

the factors contributing to increased costs in the strata insurance

market.

T. Stone: Well, the 4.4 percent insurance premium tax is layered into the

cost that’s passed along to the consumer. The out-of-pocket amount that

the consumer pays at the end of the day for their insurance, including

strata insurance, is inclusive of the 4.4 percent insurance premium

tax.

[3:05 p.m.]

The B.C. Financial Services Authority in their recent report

indicated very clearly that this was an issue that was, in part, driving

higher costs for consumers and that this was one measure that could be

passed along to consumers insofar as alleviating some of the pressure

that they’re facing from higher rates.

I believe the B.C. Financial Services Authority estimated in their

report that was delivered to the Minister of Finance and the Minister of

Municipal Affairs only weeks ago that there’s about $300 million that’s

collected in insurance premium tax at the 4.4 percent level on strata

insurance premiums. The savings of a temporary holiday on this tax would

be in the range of about $13 million per year. Those are real dollars

that could be passed along to consumers.

Is the Minister of Municipal Affairs willing to commit, along with

her colleagues, that she will look at and consider a tax holiday on this

insurance premium tax for strata insurance premiums to leave those

dollars in the pockets of strata owners?

Hon. S. Robinson: I want to remind the member that these changes that we’re making

here are changes that are based on an interim report that we received

from the BCFSA. There’s a final report, and I look forward to seeing

what else might be in the final report.

T. Stone: Again, there’s $300 million charged in strata insurance premiums

on an annual basis. That’s as estimated by the B.C. Financial Services

Authority, indicated in their recent report, and 4.4 percent of that

amount represented of the insurance premium tax works out to about $13

million.

[3:10 p.m.]

Again, one more time to the minister. Will the minister commit to

working with her colleague the Minister of Finance and others to provide

a temporary tax holiday to leave that $13 million in the pockets of

strata owners, who, by the way, are paying…? Every time their insurance

premiums go up…. They’ve been going up, in many cases, not by the 50

percent to 60 percent that the BCFSA says, but in many cases, they’ve

been going up by 100 percent, 200 percent, 500 percent, 800 percent year

over year. They’re paying the 4.4 percent premium tax on that

ever-increasing higher amount, which is just simply not fair, and people

can’t afford it.

Will the minister commit to doing what it takes, working with her

colleagues to provide strata owners with relief in the form of leaving

the insurance premium tax, otherwise a charge — leaving those dollars in

the pockets of strata owners?

Hon. S. Robinson: Again, I want to remind the member that the insurance premium tax

is not new. It has been collected for decades, and it’s collected on

every kind of insurance, including car insurance, life insurance,

property insurance. The amount of tax payable is calculated based on the

total amount of insurance premiums collected by an insurance

company.

Reducing the tax rate — I think members of the chamber need to

know — for one sub-type of property insurance will reduce the total tax

owing by an insurance company. It really doesn’t mean that those tax

savings — I have to say — will be passed on to individual consumers. We

have no guarantee of that. Again, I think the savings would be

minuscule.

T. Stone: Well, the minister can say that the insurance premium tax has been

in place for quite some time. That is factually accurate. What is also

factually accurate is that it’s only over the last year to 18 months

that strata owners have been facing ridiculous increases in their strata

insurance premiums, related deductibles and the flow-through impact of

higher monthly strata fees. This has been happening just over the last

year to 18 months, and people need relief.

The minister said in her answer moments ago that she’s looking

forward to reviewing the B.C. Financial Services Authority final report,

which is scheduled to be released at some point this upcoming fall. Is

the minister basically saying to strata owners across British Columbia

that they have to wait until the fall of this year before she and her

colleagues in government may consider providing financial relief which

strata owners need today?

[3:15 p.m.]

Hon. S. Robinson: Like I’ve said before in earlier debate, we are working as quickly

as we can to address a significant challenge for many strata owners.

This is a first step, and there’s absolutely more to do.

T. Stone: I will take from my multiple questions and the multiple answers

from the minister that the answer is no. There won’t be financial relief

coming in the short term for strata owners. The minister has had several

opportunities now to suggest that she would focus on immediate and

short-term measures such as a tax holiday on the 4.4 percent insurance

premium tax, and she’s not willing to go there.

I’ll ask this question. In the same BCSFA report that was provided

to government and released publicly recently, it indicated that

approximately half of claims — total dollar value of claims — were

related to water damage events. I don’t think that comes as a surprise

to anyone. Certainly, when you talk to folks who live in stratas,

whether it’s involving a dishwasher or a toilet or any other fixture

that has water coming in and out of it, it is prone to having leaks and

is prone to things going wrong. That can obviously have a huge impact on

that unit and other condo units in a building, usually below that

unit.

One of the other ideas that the official opposition had presented

a number of months ago was for the government to establish a strata

water damage prevention program. That would incentivize and help strata

corporations and strata owners to cover the costs of doing some of that

critical prevention work, that maintenance and prevention work up front

— to install a variety of different fixtures and so forth that would

reduce the prevalence and the severity of water damage events occurring

in the first place.

Can the minister tell us why there has been no…? Certainly,

there’s no inclusion of a water damage prevention program or

contemplation of a water damage prevention program in Bill 14. There was

no mention of it in the announcement that wrapped around this bill when

it was introduced. Can the minister tell us and, more importantly,

strata owners across British Columbia why she and her government are not

considering some form of a water damage prevention program?

Hon. S. Robinson: Home maintenance, of course, has always been the responsibility of

the homeowner. These can certainly be useful upgrades. They’re

preventative as well. Homeowners in strata corporations are certainly

free to consider them, to consider these upgrades, because when they

make these upgrades, they can save money on their premiums by improving

their risk profile.

[3:20 p.m.]

T. Stone: Certainly, it is the case today that strata corporations and

strata owners make decisions to do the investments, the required

maintenance and upgrades, as and when they can.

The issue here…. The question, I guess, is: why is the government,

recognizing the unique circumstances of massive increases in insurance

premiums for stratas, huge increases in deductibles as part of that,

huge increases in monthly fees…? Many strata owners are also facing

one-time special assessments, often in the thousands of dollars. Why

would government not consider these unique circumstances to be such that

a government-led initiative around preventing water damage events from

occurring in the first place might be advisable and might actually help

strata owners with the pressures that they’re facing from increasing

insurance premiums?

I will point out that the Home Adaptations for Independence

program, HAFI, which was created by the former government and is still

in place today, albeit under a review at the moment, has provided

significant dollars to enable homeowners to make necessary upgrades that

are all about mobility and independence and so forth. Obviously, a very,

very different objective than preventing water damage. But there is a

model there, the HAFI program, that works very, very well. It directs

dollars to those homeowners that can make those upgrades that are needed

in that particular household.

We’re talking about investments in things like automatic water

shutoff valves, hard-wired water detection systems, steel braided hoses,

low-flow toilets, drains in laundry and washroom floors, recessed

sprinkler heads, protected sprinkler guards — you know, the list goes on

and on.

Again to the minister, is she considering creating some form of a

water damage prevention program that could help offset some of these

preventative maintenance upgrades for strata owners which would serve

the purpose of preventing claims from happening in the first place and

thus apply some downward pressure on strata insurance rates in the

months and years ahead?

Hon. S. Robinson: It is a good thing, I think, for strata corporations to understand

the state of their buildings, the state of their homes. That’s why in

this bill we are requiring the depreciation reports. We’re changing the

framework around that so that building owners and homeowners can really

know what needs to happen and they can make the appropriate investments

that would have impact on their insurance rates.

Water detection, flood prevention — these are good things. But

requiring a depreciation report so that they understand and can then

make the appropriate investments as needed is a good thing, I think, for

everybody.

[3:25 p.m.]

T. Stone: Well, we’ll get to the depreciation report changes in a moment.

But the difference between the discussion around depreciation reports

and what the government is proposing and a water damage prevention

program is that a water damage prevention program would actually incent

investments today in those areas of a strata unit and a strata building

that would reduce the prevalence and the severity of water damage events

— thus reducing the frequency of water damage–related claims, thus

reducing pressure on strata insurance premiums.

I think that’s the important point that strata owners, strata

corporations, have been making to all of us elected officials. So it’s

disappointing to hear that the minister is not considering a water

damage prevention program — call it whatever the minister wants — a

program that would provide some immediate help insofar as reducing the

frequency and severity of water events. We’ll continue to press

government on that point in the weeks and months ahead.

Another idea that the official opposition has proposed is that

we’ve encourage the government to extend, on a temporary basis, the

property tax deferment program to be inclusive of strata property owners

that are facing significant financial stress as a result of skyrocketing

strata insurance premiums. Is the minister prepared to consider this

idea — again, the temporary extension of the property tax deferment

program — for strata owners facing significant financial distress from

soaring strata insurance costs?

Hon. S. Robinson: First of all, I think it’s fair to say in this House that taxation

is out of scope on this particular bill. So I can’t provide any

significant comment. That would be up to the Minister of

Finance.

What I can say is that almost 80 percent of homeowners are already

eligible for B.C.’s tax deferment program, and I would encourage anyone

who might be listening to the exciting committee stage on this bill to

make sure that they are taking full advantage. We do know that lots of

people can absolutely take full advantage of an opportunity that’s

before them.

T. Stone: Well, it’s interesting that the minister says, “I cannot talk

about taxation; that’s the purview of the Finance Minister,” and that

then she goes on to talk about taxation.

The 80 percent of British Columbians being eligible for the

property tax deferment program is a wonderful statistic, but we’re

talking about real people here. There are a heck of a lot of people that

don’t fall within that 80 percent — who, therefore, are not eligible for

the property tax deferment program and who are facing massive increases

in their strata insurance costs as a result of these increases. Their

monthly fees are going up. They’re facing one-time special assessments,

and there is no relief that’s being provided to them, in the short term

here, to address that situation.

[S. Gibson in the chair.]

Again, will the minister commit to working with her colleagues,

particularly the Minister of Finance, to extend the property tax

deferment program to be inclusive of strata owners that are facing

significant financial distress as a result of soaring strata insurance

costs?

[3:30 p.m.]

Hon. S. Robinson: This question was already asked, and I already answered. I believe

I do get to share, with British Columbians, information about an

existing program. I think it is the appropriate thing, when I have the

floor, to remind British Columbians about an opportunity that is

available to them.

T. Stone: I did ask the question, and the minister did not answer the

question. I asked the question twice: is she willing to commit to

working with her colleagues to extend the property tax deferment

program? She did not provide an answer to that question, other than to

say that she can’t talk about tax, but then she talked about a tax. I

would suggest that, for the thousands of strata owners out there who are

impacted by soaring strata insurance costs, that’s not good

enough.

I guess we’ll just assume that the answer is no, so that again,

there’d be no consideration by this minister for extension of the

property tax deferment program, as there will be no consideration by

this minister for a water damage prevention program, and no

consideration by this minister and government for a tax holiday on the

4.4 percent insurance premium tax that’s charged on insurance

premiums.

Why don’t we try this one? We have suggested that the government

undertake a review of the B.C. building code, again looking at what

changes could and should be made to strengthen the requirements for

construction related to those areas of a building that typically factor

significantly into insurance claims. Again, a lot of that would be water

damage–related claims.

Is the minister willing to commit to undertaking a review of the

building code, again with that in mind?

Hon. S. Robinson: The member probably knows, but I will read it into the record,

that the B.C. building code is updated, of course, to meet world-class

health, safety and energy efficiency standards. It’s based on the model

of the national building code of Canada. We always monitor changes and

what the best practices are. We are monitoring proposed amendments to

the national plumbing code in response to the strata insurance

issue.

T. Stone: Does the minister have any timing as to the review — I think she

used the word “review” — of the national standards, the plumbing codes?

Is there any timing that people can hang their hat on here in terms of

when that work would be done and any potential changes might be brought

forward?

[3:35 p.m.]

Hon. S. Robinson: We’ve got the 2020 model codes that are being reviewed right now,

and we will adopt any changes that are merited. I also would like to let

the member know that we’re also looking at best practices in other

provincial codes, like Quebec’s, for potential adoption in the B.C.

plumbing code.

T. Stone: Can the minister tell us if she and her ministry have contemplated

any enhanced requirements, training or tools from an education

perspective that might be brought forward to provide strata corporations

with a broader set of best practices and tools that they can use?

Recognizing that strata councils are all volunteers, they work very,

very hard, in most cases, to do the best job that they can with the

tools, the expertise and the resources that they have available to

them.

Some provinces have gone so far as to implement mandatory training

modules or training tools in other forms that are not so much, I think,

intended to be onerous additional requirements on a strata corporation

but, rather, are intended to be additional resources and tools that can

be embraced by strata corporations to assist them with what can be some

very complicated and challenging work — which they’re often trying to do

after they’ve put a long day in at work or to tuck it in at different

hours of the day around other personal priorities.

The question is: has the minister and her ministry considered

adopting best practices in this space from other provinces insofar as

implementing tools and training modules and so forth, particularly

around risk management, for use here in British Columbia by strata

corporations in our province?

Hon. S. Robinson: Being educated and having the information that you need is

certainly helpful for strata council members. What caught my attention

in the question was people tucking kids in at night, being really busy

with work and having to take additional courses, even when people are

volunteering for their strata council. What we also know is that they

already have access to some extensive educational resources through the

Condominium Home Owners Association, the Canadian Condominium Institute

and the Vancouver Island Strata Owners Association. They have many

comprehensive programs and modules that are available to strata

owners.

What we’re finding is that the main obstacle, really, to proactive

maintenance is not the strata council’s, perhaps, lack of knowledge —

they often know what needs to get done — but it’s the reluctance of

enough owners to approve the needed expenditures, which really goes back

to the depreciation reports.

T. Stone: In my previous question, I didn’t say “tucking kids in.” I was

simply saying that because strata councils are volunteers and are often

busy in their own right with other aspects of their lives, they end up

having to tuck strata council work into odd, different hours of the day

and night and whatnot, above and beyond other priorities that they may

have.

[3:40 p.m.]

I am certainly aware of the Condominium Home Owners Association

and other organizations that do make resources available. I have also

heard, loud and clear, from a lot of strata councils that they do

believe that there is a deficiency of resources available to them. They

would like to see the ministry or some other agency take more of a

proactive lead role on getting those tools out into the hands of

councils.

Certainly, that’s no criticism of the resources and the work

that’s in place today with existing associations. I’m simply reflecting

back to the minister a theme that I have heard from a lot of people on

strata councils.

I guess the final piece to this question would be…. I think

Ontario has adopted a model of mandatory training, some modules that

strata councils need to engage in and complete. I took a look at them.

It wasn’t like these were day-long courses and so forth. They were

modules that were fairly straightforward and quick to engage in and

complete.

Is the minister giving any consideration to…? Again, from a

training and education perspective, particularly around risk management,

is she considering or has she considered adopting a mandatory model of

training as exists in other provinces in Canada?

Hon. S. Robinson: B.C. Housing is already doing research on best practices on water

leak prevention. That information does go into the strata property guide

that is pushed out to all of the various organizations. As well, it’s

available to any strata corporation.

The member had asked a question about mandatory education and

training. The member described people tucking into their training —

sorry, I thought he was talking about tucking in children — in the bits

and pieces of their lives where they have some free time. I think the

member recognizes that these are volunteers. It can be quite challenging

to get people to volunteer to sit on a strata board, on a strata

council.

[3:45 p.m.]

We’re trying to balance the needs to make sure that people have

adequate information to make decisions on behalf of their strata

corporation and, at the same time, making sure that people are willing

to volunteer. We don’t want to make it too onerous. That becomes, then,

a different kind of challenge for the strata corporation. So really

trying to balance these needs and making access to the information as

simple and as available as possible is a goal that I think we can all

agree is really what we ought to be doing.

T. Stone: With respect to the transparency of data and information…. One of

the things that I think we’ve all heard from strata owners frustrated

with the skyrocketing strata insurance costs has been the lack of access

to the information that insurance companies are using to justify these

astronomical increases in premiums and deductibles.

One of the things that the official opposition has called for the

government to consider is to require the BCFSA to make public the data

and the information that it receives from the insurance industry related

to insurance premiums and deductibles and so forth so that the public

can actually see that information and, possibly, better understand the

rationale for these increased costs or, likely, call even more into

question the justification for these huge increases in premiums and

deductibles.

The question to the minister is this. Why has she not included any

requirement in this Bill 14 for the BCFSA to make the data and the

information that it receives from insurance companies publicly available

— for strata owners, in particular — to better understand, at least, the

insurance industry’s rationalizations and justifications for these

massive increases in strata insurance costs?

Hon. S. Robinson: There has been, certainly, some interest in this issue that the

member raises. The Ministry of Finance and the BCFSA are working on a

plan to release the aggregate data to the public as part of the final

report.

T. Stone: I will look forward to that. If I heard the minister correctly,

she said that the aggregate data that the insurance industry has

provided to the BCFSA will be included in the BCFSA final report. If

I’ve captured what the minister said correctly, I, again, will look

forward to that and pay close attention to it when it comes

out.

[3:50 p.m.]

I guess my final question on this piece will be this. Will the

minister consider a further amendment to the legislation requiring, as

an ongoing matter of practice, the disclosure of the data and the

information that is provided by the insurance industry to the BCFSA, as

opposed to just a one-off dumping of that aggregate data in the report

that we are all anticipating will be provided to us elected officials

and to the public later this fall? Can the minister commit to making

that a permanent requirement on a go-forward basis in the interests of

transparency?

Hon. S. Robinson: The BCFSA, as a Crown that we work with, have access to this data.

In the course of them acting as a regulator, they can collect the data

the member was asking for, and they can make that available.

T. Stone: I’m well aware that the BCFSA can make the information

available.

My question to the minister is, will the government require, as a

matter of the regular expectation going forward of BCFSA, that they will

make that information…? Not can they make it available; will they make

the information available on an ongoing basis to the public?

As opposed to requiring people to try to extract it from BCFSA,

will the government require BCFSA to actually just push the information

out proactively in the interests of transparency so that on an ongoing

basis…? Particularly in the short to mid-term, as British Columbians

ride whatever this strata insurance storm has in store for them in the

months and hopefully not years ahead, at least as a matter of practice,

it would be required for that data and information that is provided from

insurance companies to proactively be disclosed and made available to

British Columbians. Is the government prepared to make that a

requirement?

[3:55 p.m.]

Hon. S. Robinson: Like I said earlier, the data that will be released in the final

report will show British Columbians, and explain to them, why their

insurance rates are so high. Should we need to in the future do another

data call, we will do just that.

T. Stone: I will take from that answer that, again, the answer is no. The

government does not intend on making it an ongoing requirement for the

data and the information that the insurance industry provides BCFSA to

be disclosed to the public. That’s very regrettable. That is very

disappointing.

When people are facing such massive increases in their

out-of-pocket expenses through no fault of their own and they’re looking

for answers, the transparency of those that are driving these higher

costs, that are demanding these higher premiums and demanding these

higher deductibles, transparency on the underlying financial rationale

for those increases is the least that I think British Columbians facing

those increases can expect. It really is a matter of transparency, so

it’s very disappointing that the minister won’t commit to that becoming

an ongoing requirement.

I wanted to next ask the minister this. I’m curious as to what

level of engagement the minister and the ministry have had with other

provinces. This is, obviously, a huge issue across the country,

particularly in larger urban centres, but we know that increased strata

costs are taking place in Alberta and Ontario and Quebec.

I’m wondering if the minister could share with us what the nature

of her engagements and consultations have looked like with other

provinces. Has she met with, had conversations with…? I’m sure that they

would have been Zoom calls if they were meetings, but has she actually

had formal discussions with other Housing ministers across the country?

If she has, which other jurisdictions has she engaged with on this issue

of skyrocketing strata insurance costs?

[4:00 p.m.]

Hon. S. Robinson: I can let the member know that we have engaged with Ontario and

most other provinces and territories on this issue. The problem,

however, is most significant in British Columbia, given the numbers of

stratas that we have and some of our most unique challenges related to

our own geography. We also know that we need solutions that reflect our

own regulatory framework and that work for British Columbians

here.

T. Stone: Well, I appreciate that. I wanted to also ask the minister if she

could advise as to where the federal government is on this issue and if

she, on behalf of the provincial government, has sought any support,

financial or otherwise, from the federal government that could be

provided to pass along to strata owners in British Columbia. There’s no

question that the challenge is significant here in British Columbia, and

I believe that Ontario and Quebec are also experiencing similar

challenges.

I’m curious to know if the minister has actively sought some

federal engagement and support on this issue. That could potentially

help those British Columbians that are facing such astronomical

increases in their strata insurance costs.

Hon. S. Robinson: I want to assure the member that this is something that we have

considered. It’s an issue that we are raising with the federal

government, and we are certainly anticipating the final report that will

help us in further engagement.

T. Stone: I want to thank the minister for indulging me in those more

general questions. I’ll now move to a few questions on

section 1.

Actually, these couple of questions, or handful of questions, relate to

sections 1 and 2. They’re very similar, as I think we all know that

sections 1 and 2 authorize regulations prescribing the percentages of

the estimated operating expenses set out in the sections.

I’m just wondering if the minister could advise the House and

advise British Columbians if she and the ministry have determined what

the new prescribed percentages will actually be. At the moment, they’re

at 5 and 25 percent. Those numbers are being removed, and the amounts

will be prescribed in regulation. Could the minister advise the House as

to what those new prescribed regulation amounts will actually

be?

[4:05 p.m.]

Hon. S. Robinson: No, at this time we don’t have specific numbers. We have some

consultation that we’d like to be doing with the stakeholders. I want to

make sure that we balance the needs of owners and strata corporations

with developers. So we need to engage with these groups accordingly so

that we could strike the right balance.

T. Stone: Will minimum initial contingency contributions be different or be

prescribed for different types of stratas, different sizes of strata

corporations? What is the minister’s thinking around what any

differentiation might look like insofar as what these new prescribed

percentages will end up being?

Hon. S. Robinson: Again, pending further consultation is part of what will help us

get there. At this point, we are not considering differentiated

minimums.

We need to remember that a more robust contingency reserve fund

will just help ensure that strata corporations have enough funding for

their depreciation reports and the repairs from the beginning. That, I

have to say, is about alleviating rising insurance costs and future

claims due to inadequate maintenance. We want to make sure there’s a

good base there when these homes become occupied.

T. Stone: Can the minister advise the House and British Columbians what the

timing will be on these consultations related to establishing new

prescribed minimum initial contingency contributions? What does the

timing look like for those consultations? Are we talking 30 days, 60

days, end of the year, into next year?

Hon. S. Robinson: Our intent is to start these consultations imminently, with

bringing regulations in this coming fall.

[4:10 p.m.]

T. Stone: Can the minister advise the House and British Columbians what

immediate financial relief will be pro­vided to strata owners as a

result of

section 1 and

section 2 of this bill?

Hon. S. Robinson: Sections 1 and 2 are about ensuring that strata corporations can

maintain their buildings properly, that they understand what the needs

of the building are and they can invest appropriately in the maintenance

of the building, as well as, of course, mitigate the risks going

forward. That, I think we can all agree, is absolutely critical to

managing skyrocketing insurance premiums. This is really about

mitigating the risks so that the payments can be more

manageable.

T. Stone: I think we understand that these two sections,

section 1 and

section 2, are about mitigating those risks. My question was: how do

these two sections actually provide relief in the immediate term, the

short term, for strata owners who have been facing skyrocketing strata

insurance costs? Perhaps the minister could take one more run at the

question from that perspective. What immediate relief do these two

sections provide British Columbians who are facing massive increases in

their strata insurance costs?

Hon. S. Robinson: We know that the rising cost of insurance for condo and apartment

buildings is, of course, a serious and urgent issue.

[4:15 p.m.]

The skyrocketing insurance rates — the harm caused by this is

clear. But it’s the local and global factors that have been driving

these increases. We also know that it’s quite complex. For the first

time, thanks to the BCFSA interim report, we have an in-depth analysis

of the many factors that are driving the skyrocketing costs of strata

insurance here in British Columbia.

It’s complex. It’s impacted by local, national, as well as global

factors. They’re affecting the cost and the availability. It is a

problem that does not have a quick fix. But this legislation and these

sections, in fact, are a first step to help tackle the problem while we

work to get the market to balance.

T. Stone: Well, I hazard to say that in-depth analysis by the BCFSA doesn’t

pay the bills. That’s not going to help the hundreds of thousands of

British Columbians who are suddenly facing huge increases in their

insurance costs, huge increases in the deductibles, huge increases in

monthly strata fees as a result — and often one-time special

assessments, often in the range of thousands of dollars.

It’s cold comfort for those people, I believe, to hear the

minister say: “Well, for the first time ever, we have in-depth analysis

from the BCFSA.” People know what the problem is. They can’t afford

these skyrocketing insurance costs.

Again, what I took from the minister’s answer is that nothing in

sections 1 or 2 of this bill will provide immediate short-term relief

for British Columbians facing soaring strata insurance costs.

With that, I have no further questions on

section 1 — or

section

2, for that matter, Mr. Chair.

A. Olsen: Thank you for the opportunity to ask some questions. On

section 1,

I’m just wondering if the minister can give some indication as to what

measurable impact the changes of the rates might have on people living

in stratas today and maybe the expected increases next year or over the

coming years.

Hon. S. Robinson: I want to ask for clarification from the member. Was he referring

to the rate that stratas would pay or the insurance rate? I just want to

understand. The rate that they have to pay into the reserve…. I’m just

trying to understand the nature of his question — what specifically he’s

asking.

A. Olsen: This is a really unique situation. I don’t think ever before has

the committee stage of the bill happened where the minister is sitting

directly in front of the member asking the questions. Anyway, it’s one

of the unique challenges of the seating arrangement that we have

here.

[4:20 p.m.]

The question is just to try to get an understanding of whether

there’s going to be any material impact on the people living in…. The

member before was asking the questions about the savings. I want to know

what impact these percentage changes may have on people today and in the

near future.

Hon. S. Robinson: The contingency reserve fund is used by the strata corporation to

pay for common expenses that usually occur less often than once a year

or that do not usually occur. Prescribing the minimum amount that the

owner-developer must contribute to the contingency reserve fund will

allow government to increase the initial contribution amount, if

appropriate, to encourage proper maintenance of strata

properties.

A more robust contingency reserve fund will help ensure that the

strata corporation has enough funding so that they can complete the

depreciation reports and the repairs, which will help to alleviate

rising insurance costs and future claims due to inadequate

maintenance.

The contingency reserve fund may also be used to pay an insurance

deductible. This will help people whose homes are in a

strata.

A. Olsen: One of the challenges with moving these numbers from legislation

into regulation is that those numbers then can also again be changed by

regulation in the future. I’m thinking about the relationship that the

developer has now with this project. Maybe the minister can provide some

context to….

I’m just thinking in my head of a developer who’s putting the

costs together of constructing a building. They look at the legislation,

and they say: “We’ve got 5 percent, and we’ve got 25 percent in the

legislation.” Now that’s being moved to regulations. It’s solid, but

it’s less solid than if it’s in legislation and we have to have a debate

where we have this kind of conversation to go through.

Can the minister maybe just highlight some of the conversations

that she has had or some of the thoughts that have gone into the impact

that this might have on the construction of new units and the

construction of future buildings?

Hon. S. Robinson: We are engaging with the development community as part of moving

forward on this, because we do need to strike the right balance. We also

need to recognize that it’s affordability over the long term that we

also need to consider. So making sure that we do that, it’s critical

that we engage with the industry.

[4:25 p.m.]

We also want to ensure that the strata fees are not set at,

realistically, low amounts when a unit is first sold so that they can

get off on the right foot when they’re starting to build their

contingency reserve funds. This is really about making them more robust

and, in the long run, a stable, well-functioning strata sector. It’s

also good for developers too, because they too are investing in this.

They want to make sure that they’re not seen as problematic investments

for families and for people retiring or for young people just getting a

start in life. We’re going to make sure that we do a robust consultation

so that we can address this for the long run.

A. Olsen: I just want one final question on this, and then I’m kind of going

to work my way backwards. The member for Kamloops–South Thompson asked

some general questions to begin with. I’ve got a few before we move on

to other sections, if that’s okay.

I just want to inquire a little further on this. The buildings

that are in the middle of construction right now…. I’m just kind of

wondering where those stand in this. A developer has dug a hole. A

developer has got 12 storeys being built. How does this change impact

those construction projects that are midstream right now?

Hon. S. Robinson: Again, this is part of the conversation with the development

community to better understand how to best move forward on this — to

work with them to address some of these transitional measures. Of

course, the timing of the regulation will be based on that consultation

so that we can strike the right balance, recognizing that at some point,

a change needs to happen and what the things are that need to be

considered in order to attach it — recognizing, too, the sensitivity of

timing on development projects.

A. Olsen: There was a comment that was made in the BCFSA report. I look

forward to understanding a little bit more about it, maybe. I’m going to

ask a question here about the construction and, perhaps, deregulation in

the construction sector.

There are some challenges with newer buildings, as has been

highlighted in this report. I’m just wondering if the minister can maybe

provide any comment on whether there’s been deregulation in the

construction sector that has contributed to some of the construction

quality issues that we now face that have been highlighted in the

report.

[4:30 p.m.]

[R. Chouhan in the chair.]

Hon. S. Robinson: The member mentioned something that was in the report, and I think

he’s referring to new buildings less than five years old seeing more

claims. I think that’s what the member is referring to.

At this point, we don’t see any evidence that suggests poor

construction here in British Columbia. We do have a well-regarded

new-home warranty insurance system that protects consumers against

construction defects in newly built homes.

We have been made aware that, in some cases, claims that should be

covered by the warranty are instead ending up on the strata

corporation’s property insurance policy. We’ll be looking into this with

B.C. Housing, whose licensing and consumer services division oversees

new-home warranty insurance.

A. Olsen: Just a question with respect to the Strata Act. I’m wondering if

part of the challenge that is being faced here is that we’ve had a large

amount, 1.5 million British Columbians, living in strata homes, homes

with a strata corporation.

I’m just wondering if the minister can comment on the regulatory

regimes and the number of different strata arrangements that exist and

whether or not the Strata Act has been a contributing factor to this

problem.

Hon. S. Robinson: The short answer to the member’s question about the Strata

Property Act is no. It’s not the Strata Property Act; it’s, really, a

global insurance challenge. What we’re doing here today is to make some

changes so that strata corporations can better manage a very difficult

global insurance challenge.

Sections 1 and 2 approved.

section 3.

T. Stone: With respect to

section 3, this being the

section that requires a

strata corporation to include a

summary of the strata corporation’s

insurance coverage in an information certificate, I’m just wondering if

the minister could confirm for the House what information will be

included in that

summary of the insurance. What would the specific

information be that will have to be included in that insurance

certificate?

[4:35 p.m.]

Hon. S. Robinson: What’s proposed to be required are the types of coverage that the

strata needs, as well as the deductibles, as well as other requirements

that we will identify through consultation.

T. Stone: Could the minister clarify the intent of new subsection

(5.1) respecting the information in this information certificate not being

binding?

Hon. S. Robinson: The proposed change also indicated that the

summary is not binding

on the strata corporation, just as the member queried, if the

information is obtained from the strata corporation’s insurer or

insurance agent. This will just help to ensure that the strata

corporation is not liable if the information provided by third-party

insurers or brokers is inaccurate.

T. Stone: Can the minister explain what immediate financial relief this

section 3 of Bill 14 provides the hundreds of thousands of strata

owners, the hundreds of thousands of British Columbians, who are facing

skyrocketing strata insurance costs?

[4:40 p.m.]

Hon. S. Robinson: Again, it’s important to recognize the dynamics that are driving

these increases are playing out in the private insurance industry.

Government does not set insurance rates or regulate pricing. These

amendments to the Strata Property Act and the Financial Institutions Act

are going to help to lessen the impact of rising insurance costs for

strata corporations and increase transparency for strata lot owners and

purchasers.

The proposed amendments are intended to protect consumers and to

help them to make informed decisions and deal with rising insurance

costs. The amendments will also help to make sure that strata owners and

purchasers can get timely information about their strata corporation’s

insurance coverage.

The bill, of course, will also help protect people by limiting

their liability for soaring strata corporation insurance deductibles,

which we’re going to see a little bit later on in this bill.

T. Stone: I take from the minister’s answer that — as with sections 1 and 2,

dealing with new prescribed minimum initial contingency contributions —

this

section 3 of this bill, providing for the requirement to include

insurance coverage in an information certificate, also does not provide

any immediate financial relief for all of those British Columbians out

there trying to figure out how to pay these ridiculous increases in

strata insurance costs. That’s regrettable.

With that, my colleague from Abbotsford West has some additional

thoughts, comments, questions, with respect to

section 3.

M. de Jong: Just flowing from that, I think the conversation…. The minister

has brought the legislation to the House and commends it to the House.

In the

section that we’re now on…. I think it’s a disclosure section. I

think the minister would make the case that at this time, in particular,

information is important for owners and prospective owners to have. I

think that’s fine. I think we shouldn’t pretend it’s something that it’s

not and just go from there.

I’ve alerted the minister previously that I’d like to explore with

her some broader questions and approaches to the situation we’re facing,

which I think is accurately described as a structural or systemic

failure. Just as a

preamble to that, I thought that it might be useful

for us to clarify on the record, or seek to establish on the record,

that we have a mutual understanding about what the problem is. I think

we do. I hope we do. But this might be the time, quickly, to run through

and do that.

We have seen the reports. Some of us — likely the minister

herself, given the part of the province that she represents as an MLA —

have had constituents attend and provide information showing increases

to insurance premiums of 100, 200 percent, all the way up to 500. I

think there was one case of 600 percent.

The insurance industry says those higher amounts are outliers —

there seem to be a fair degree of outliers — and instead counters that

the average increase is more in the 60- to 70-percent range. Well, we

can talk about that in a moment. In this day and age, to see,

year-over-year, even a 60 percent increase is troublesome.

[4:45 p.m.]

Deductible increases. In this case, there doesn’t seem to be much

dispute. Deductibles seem to be increasing by 1,000 percent — commonly,

from $20,000 or $25,000 to $250,000. That seems to be the new

benchmark.

I think it’s worth just asking the minister to comment. Does she

accept those reports and that information as accurate? Or does she, and

the government, feel that they are exaggerations of a situation that

isn’t that serious?

Hon. S. Robinson: What I say to the member opposite is that we certainly have heard

the same stories, the same concerns. We certainly, I believe, have read

the same reports, recognizing that these are significant increases that

are very challenging to many British Columbians.

M. de Jong: Well, that’s helpful. At least we’re in agreement in terms of the

magnitude of the problem and the challenge it represents.

Does the minister — I think she does, but again, on the record —

accept that those dramatic and, I would say, unreasonable increases in

premiums are translating into increases in strata fees, of between 50

percent and 100 percent, depending on the amount? In any event, they are

translating into significant increases in the strata fees that the

owners of strata units are having to pay.

[4:50 p.m.]

Hon. S. Robinson: We certainly do acknowledge that there could certainly be

significant impact on fees or special levies. But we also know that 54

percent, according to the BCFSA report, received an increase of less

than 30 percent. In digging down into that data, we saw that those

strata corporations that got the most significant increase were those

with a significant claims history.

That’s why, in this bill, we want to provide more predictability.

We want to make sure that strata corporations are taking a look at what

the opportunities are to address any depreciations and any improvements

they can do to their building so that they have affordability over the

long term and that they have stability and predictability with their

insurance costs.

M. de Jong: That’s actually a nice segue into the next question. I’m not

intending it to be a loaded question, but some might perceive it that

way. That is that I would be curious to know whether the

minister….

When I ask this of the minister, I mean on behalf of the

government, because these are issues that engage her as a governmental

spokesperson, but there is an overall government perspective and

government approach that will guide the public policy that arises from

the government benches.

Knowing what she knows, based on the reports and the other advice

that she receives as minister, does she accept as appropriate or

reasonable the decision by insurance companies to impose these dramatic

increases? The insurance sector itself confesses — or acknowledges,

maybe, is the more neutral term — to average increases in excess of 30

percent, 60 percent or 70 percent. But does she accept as reasonable or

acceptable those increases when we are in the midst of the worst

economic downturn recession in living memory?

Hon. S. Robinson: I certainly appreciate the member’s question. I know that he knows

that this is an issue that was raised pre-COVID. We started seeing this

late in the fall as an issue. But also, there are some significant

dynamics — again, pre-COVID — that were at play here, that are playing

out in the private insurance industry.

Again, I know that the member knows this, but I want to make sure

that British Columbians know that the government does not set insurance

rates or regulate pricing in the private insurance industry. The

skyrocketing costs and diminishing availability of strata insurance is

not unique to British Columbia. We’re seeing it in some other provinces

and in some U.S. states as well.

[4:55 p.m.]

The combination of high property values and increase in severity

in weather-related disasters in recent years have increased costs.

These, of course, have posed risks to global insurers. To add to that,

there are only nine or ten insurers that provide significant capacity

here in British Columbia. We have heard…. They’re reporting to us that

sustainability for them in the market due to losses for mostly minor

claims is certainly having an impact.

The interim report that we received from the B.C. Financial

Services Authority identified risk factors that make B.C. more

susceptible, including the rapidly-growing number and value of stratas

here in the province. Some poor maintenance in some of the existing

buildings, and of course, heightened earthquake risk. All of these are

feeding in to some of the challenges that we’re having in the private

insurance market.

M. de Jong: I want to get to what I hope will be the more positive part of the

conversation. The minister has outlined some of the arguments we have

heard from the insurance sector, but I’m going to make this proposition

for her to at least comment upon, to the extent that she can or is

willing.

Those things do not account, in my view, for the dramatic

year-over-year increase. The earthquake risk in 2020 is not appreciably

different than it was in 2019, unless the insurance sector has got

something they haven’t given the minister or me. Insurance people deal

in actuarial data and risk management. To suggest that suddenly

something transpired, that the risk profile changed in November or

October of 2019, strikes me as implausible.

That there are other dynamics at play where a sector of our

economy has decided now they’re going to increase rates, and they are

going to do so because they can. There is nothing to stop them. The

minister has now repeated, several times, the point that the government

doesn’t set rates. I will acknowledge that on the record so she doesn’t

have to go back to that page on a regular basis.

In responding, I’m going to ask the minister, because I have

forgotten what the allowable increase is for a tenant’s rent this year.

I think with COVID, it is nil, if the minister can confirm

that.

Yet here is an industry…. The minister points out, “Well, this is

a phenomenon that began last year,” and that may be so. But these

invoices have been arriving in the minister’s office, constituency

office, and mine and the members for Kamloops–North Thompson and

Kamloops–South Thompson — all of the members here — have continued on

through March, through April, through into the height of the lockdown,

where at a time when public bodies, governments, have said that it is

unfair and unacceptable for landlords to increase — by any amount — the

rent a tenant is paying.

The owners of units, sometimes living side by side with tenants,

are being confronted by these enormous increases. I find that

unacceptable. My question isn’t designed to be more complicated than

that. Recognizing that there are reasons….

We can agree or disagree about what some of the contributing

factors are, but I’m hoping that the minister is in a position where she

is able to say, on the record, that she too and the government find that

to be unacceptable.

[5:00 p.m.]

Hon. S. Robinson: It is a hard time for everybody. I think we can all agree with

that. And I have to say, I think there’s an appreciation that the

insurance system is complex. There are many different factors. It’s a

global system, with multiple elements to it that feed into how it

operates. That’s why we tasked the BCFSA to undertake actions to

determine the various elements that are contributing to the skyrocketing

prices, and that’s why we need to get a better understanding of all the

elements and where the challenges are in the system.

I want to share with the member…. Again, this is, I think, very

interesting, because he did start off by talking about earthquake risk.

It turns out that in February of this year, there was some brand-new

research around the understanding of how the insurance has been

developed over a number of years. I think it was that the cost would be

58 percent higher than was previously understood. I know that that’s

always hard to imagine.

I think of New Zealand and other places that have had significant

earthquakes. The challenge that we have here in British Columbia is

real, and getting refined information, of course, I think, is this other

element.

[5:05 p.m.]

I don’t know if he was being cheeky or playful, but there was new

information that just came to light in February of this year.

M. de Jong: I’m mindful of the fact that in the time that I have been in this

place, it’s about every two or three years that the insurance industry

presents to government a new assessment on their risk assessment around

earthquakes. Not to diminish the fact that it exists, but it’s a heck of

a time in the economic life of most families to decide now is the moment

to address that and address it all in one fell swoop, which is what the

insurance industry seems intent upon doing.

I don’t want to dwell overly on this. I think the minister is, as

is generally the case, receiving advice to be guarded in her comments. I

don’t need to be as guarded. I think the insurance industry has acted

irresponsibly. I think unveiling reports and doing a risk reassessment

and imposing these kinds of increases — particularly in one fell swoop —

on strata corporations, which after all are just neighbourhoods of

people, is irresponsible in the extreme. I think the people of the

province and the nearly one million people that live in strata

corporations are ill-served by the behaviour of the industry.

Interesting phenomenon here in that we’re not quite two

sword-lengths apart, as we used to be — the free enterpriser taking

shots at the market-driven insurance sector and the minister in the

position of having to be more guarded in her comments. I think they have

acted irresponsibly in foisting these dramatic increases on people in

one fell swoop, particularly in the midst of the greatest recession most

of us have known and, hopefully, will ever know.

A couple of last preliminary matters. Again, I ask this not to be

mischievous but to determine to what extent, if any, the minister is

prepared or able to comment.

We have heard reports and the minister has heard reports,

speculation, on the part of those who are involved with condominium home

ownership, acknowledging a feature of what the minister has spoken

about, the limited number of players in the insurance field, but also

making allegations and speculating about the degree to which those

players collude with one another in a way to facilitate the dramatic

increase in premiums — and, by the way, the deductibles.

Does the minister believe there is any collusion taking place to

artificially increase rates?

[5:10 p.m.]

Hon. S. Robinson: I know that the member knows this, but I’ll read it into the

record. The BCFSA, as a regulator, has the power to investigate,

research and report on a variety of things related to insurance matters.

As part of the minister’s mandate letter, she directed the BCFSA to look

at the strata insurance issue, in particular. That will include, of

course, the practices of insurance companies. It will be and is part of

their review.

M. de Jong: Has there been any specific investigation, to date, examining the

possibility of collusion in price setting?

Hon. S. Robinson: The BCFSA has identified, as part of their report, best terms

pricing, which, it’s my understanding, is a common practice in the

insurance sector.

Large commercial insurance policies are generally insured through

a subscription policy, meaning that multiple insurers insure a portion

of the policy to provide a total of 100 percent coverage. Now, under

best terms pricing, insurers are given the right to obtain terms no less

favourable than those obtained by any other insurer participating in the

subscription policy.

The BCFSA is looking into this best terms pricing

further.

M. de Jong: Okay. I want to, though…. I think that was, potentially, a helpful

and hopeful response.

[5:15 p.m.]

Does that mean that as part of their work, the FSA is specifically

examining price-setting policy with a view to determining whether or not

there is collusion taking place between the very limited numbers of

insurers who are offering condominium insurance in British

Columbia?

Hon. S. Robinson: The BCFSA is, of course, continuing to do their work. Part of that

is to see how this best terms pricing framework, which is used globally

and nationally as a pricing method, is impacting the current challenges

that we’re seeing here in British Columbia. They’re talking to the

insurance companies and trying to understand how this method of pricing

they’re using is impacting not just here but other places.

M. de Jong: Again, that’s helpful. Believe me. I’m not trying to trap the

minister into saying something inappropriate or

unministerial.

I’ve asked her whether she thought there was collusion. Now I’m

asking whether or not, in addition to examining pricing policies…. If

she’s saying to the committee and the House that the examination of

pricing policies will also capture the question of whether or not — and

I emphasize that — there is some form of price collusion taking place,

then I will be satisfied with that answer.

Hon. S. Robinson: The final report will capture any of those findings.

[5:20 p.m.]

M. de Jong: I think the last question on this topic, then. Does the minister,

in the conversations she is having with the Financial Services Authority

and her officials, believe that given, as she has frequently pointed out

during the course of our conversations on this matter, the national

nature of what seems to be visiting particularly harshly on condominium

owners in B.C., there is a role for the federal Competition Bureau? If

she does, is she prepared to make a recommendation to what we used to

call the combines investigation branch, the Competition Bureau, that

they conduct an investigation into pricing policies and the existence or

non-existence of collusion in pricing?

Hon. S. Robinson: We have had conversations with the BCFSA that they would bring

this to the federal Competition Bureau if they felt that there was

reason to.

M. de Jong: Okay. Well, I’ll make my pitch for…. Given the magnitude of the

challenge before us, the minister will obviously be interested to hear

what the FSA says. But given the national nature of the scope of the

problem, it would be worthwhile for her, independently at least, to

alert the federal Competition Bureau to conduct an examination on their

own, at least to run to ground these persistent rumours, allegations

that we are seeing surface — and probably not surprisingly so, given

what has happened to insurance premiums and deductibles.

I’d now like to get, essentially, to the part of the conversation

around

section 3 that I was hoping to have with the minister. Bill 14,

as I understand it, represents the government’s response, thus far, to

the situation facing so many families residing in condominiums and

responsible for strata fees that must be sufficient to cover

maintenance, to cover insurance premiums and the sort.

Bill 14 includes a number of measures and amendments. The minister

and my colleague from Kamloops South are going to have a detailed

conversation about the degree to which those measures will be of

assistance, either now or at some point in the future. Some may have

merit but be of dubious consequence to the immediate challenge before

us. All of those are issues that the minister and my colleague from

Kamloops South will discuss.

[5:25 p.m.]

I’d like to, if I can, now canvass the minister’s views on

something that I would characterize as a more fundamental change to the

model. I think, in part, what the minister has been saying to the

committee and to the House is that the Financial Services Authority is

examining this with a view to this whole gambit of contributing

factors.

I began this conversation by suggesting that I think there is a

structural or systemic failure. It may be time to consider a different

approach, a different model.

I don’t know that I’ve mentioned this to the minister. I was, a

week or two ago, sitting on the back deck where I’ve lived for 50 years,

and all these farms…. It suddenly occurred to me that after the Second

World War, most of those dairy farms were in a position where they

wanted to expand and couldn’t. The systemic financiers of the day, the

big banks, weren’t lending money. It was frustrating for them, I’m sure,

but they decided to do something about it. They got together, and it

really was the advent of the credit union movement in B.C., which we now

arguably lead the nation in.

It was a form of collective action where people in the agrifood

sector, farmers, said: “This is not satisfactory. These large financiers

from central Canada, from down east or back east, aren’t responding to

our needs, so we’re going to come up with an approach on our own where

we will pool our resources and find a way to accomplish what we need to

do independent of their disinterest.”

It strikes me that when one considers the magnitude of investment

and the values involved in the strata property portfolio within British

Columbia — I’ve seen estimates in the $250 billion range — there is a

plausible argument to be made for a similarly cooperative venture: a

model of self-insurance.

There is technical language…. The minister knows that we in

British Columbia actually have legislation on the books that

contemplates a captive insurance company. That language becomes: captive

from who? People say “captive,” and people go: “What’s that all

about?”

I prefer the term “self-insured” because it speaks to the concept,

which I think has merit, out of necessity, for examination on the part

of government — creating the additional regulatory framework necessary

for those who reside in strata units and own them, and the strata

corporations, strata councils, that represent them, to engage in a

process of self-insurance.

The minister knows that municipalities, through the municipal

insurance fund, engage in a similar form of self-insurance. The

provincial government itself is self-insured. Law Society is

self-insured.

We may have come and arrived at a point, by virtue of what I — I

won’t ask the minister to say this — will characterize as unreasonable

behaviour on the part of the insurance sector, where a preferred option,

by necessity, is to facilitate the creation of a self-insurance model

for the owners of strata properties.

To believe the insurance industry, they don’t like the risk

profile here. They don’t want to be here. Well, if that’s the case, we

can either allow ourselves to be held hostage to that attitude or

facilitate an alternative. I’m under no illusions about the extent of

the work necessary to facilitate that option. It is significant. It

would be complex.

[5:30 p.m.]

[S. Gibson in the chair.]

Today what I’m hoping to elicit from the minister on behalf of the

government is an indication of whether they see merit in the idea and

whether they are prepared to initiate work, if it hasn’t been initiated

already, to explore and facilitate the creation of that self-insurance

option and model.

Hon. S. Robinson: It’s always so interesting to hear members opposite talk about a

cooperative model of financing, given their — as I guess I’ll call it —

allegiance or loyalty to the private sector. It’s always interesting to

hear creative ideas around how to support people.

What I have come to understand is that these options do exist for

strata owners right now. Certainly, it would take significant effort to

raise capital to put the funds together to make this viable. It would

take significant work, but there is currently no barrier, from a

government perspective, to having this framework in place for strata

owners.

M. de Jong: Well, let me say that, candidly, I was hoping that, in

articulating the absence of hurdles or barriers, it is accurate to

suggest that the legal framework, at a certain level, exists in the

statute books over there. To facilitate the creation of a self-insurance

model on this scale, involving as many councils and corporations as

would be necessary, will probably require two things.

It will require engagement by government to ensure that a

regulatory framework is in place.

By the way, I should also say this. This is still a market, driven

— to my mind — in the same way that credit unions represent a feature of

the financial services market. They happen to be a cooperative venture,

owned by the members. That’s a similar type of model that I see having

some application here. I think a signal from the government that it is

prepared to devote resources to ensuring the detailed regulatory regime

necessary for this to happen would go a long ways to attracting

interest.

Secondly, the challenge is always the transition. I’m not in a

position to articulate authoritatively on what, if any, fiscal backstop

would be required to facilitate transition, on the scale we are

discussing, to a self-insurance model.

[5:35 p.m.]

My question today is whether or not the minister and the

government are prepared to conduct work to examine what that fiscal

backstop might look like — which is a very different thing than pledging

to provide it. I understand that as well. We are confronted by this

situation that is adversely affecting thousands of strata councils and

hundreds of thousands of owners of strata units. They are these

independent, little enclaves that need, in my view, some measure of

encouragement or coordination if they’re to effectively explore this —

and, I would say, a signal from government that their work will not be

in vain.

The minister says there are no impediments to them conducting that

work. Candidly, I was hoping she’d go a little bit further and say that

the government sees merit in their conducting that work — and, where

possible, is prepared to lend assistance and to direct the Financial

Services Authority to lend analytical assistance, if nothing else, to

determine what some of those questions are that would need to be

answered to facilitate a regulatory shift on the scale that we’re

talking about.

We’re not just talking about a couple of buildings in Coquitlam or

a couple of buildings in Abbotsford. We’re talking about a shift that

would have to occur on a much larger scale. At least, I think it would.

So I’m hoping that the minister can offer a little more encouragement

than, “Carry on, folks; there’s nothing standing in your way to do

this,” but I’ll wait to see.

[5:40 p.m.]

Hon. S. Robinson: I listened as the member was describing, with history, around

credit union formation. Certainly, what struck me was that if there were

entities, private entities, that wanted to explore a self-insurance

model like the one he described with the farmers….

I can just picture how they came together and the hard work that

they needed to do in order to put together a framework that would work

for them so that they could do what they did best, which was farming.

But they needed financial support, and they needed to create a system

that would give them the tools that they needed.

Certainly, government’s role to provide some general background

advice to a private entity that wanted to put this together…. There is

nothing saying that that couldn’t happen. I think that’s certainly

available to, I’ll say, the sector, if I can call it that — whatever

that would look like. But of course, there will have to be

decision-making around risk tolerance, retentions, deductibles,

coverage. They would have to do a significant amount of work to

understand the task that they’re taking on.

I appreciate the member’s creativity and thinking, I would say,

outside the box on this. I think there is an appreciation about how hard

it is for people in stratas, and looking for solutions when people are

significantly challenged, particularly right now with the pandemic and,

certainly, the additional economic impact that that’s having on so many

people. So I want to express gratitude for the member’s analysis of this

and opportunity to explore what that is.

If there are entities that wish to do that, we would certainly be

available to provide some background advice on that

situation.

M. de Jong: Can the minister advise the committee: in conducting their work

thus far in examining the challenges that have beset the condominium

homeowners, has the Financial Services Authority conducted any

analytical work around the possibility of a self-insurance model in this

area?

[5:45 p.m.]

Hon. S. Robinson: The FSA, as a regulator, has no role in looking outside of

existing financial institutions, so that’s not an appropriate role for

them — to be looking at alternative models.

M. de Jong: Do I take it, then, that there has been no analysis? I’ll come

back to that question, because I have taken far too much of the

committee’s time.

I am thinking about what confronts that family in Coquitlam, the

one in Kamloops, the one in Langley and the one in Abbotsford who have

gotten a notice from their strata council, composed of volunteers. We

have federal government. We have provincial government. We have First

Nations government. We have municipal government. It’s a form of

governance.

Now, it’s not a constitutional form of governance. But it’s these

bodies of volunteers that are charged with the task of managing these

neighbourhoods — some of them quite small, some of them very, very large

— and have, on short notice, been provided with a bill. They are

confronted by a legal requirement to insure and now a bill that has seen

the cost to comply with that legal requirement increase

dramatically.

I will say to the minister — and this may be slightly different,

given the market conditions where she lives than where I live — that the

rate increases to the premiums are themselves egregious, in my view,

independent of any other change. But to be coupled with an increase in a

deductible from $20,000 to $250,000…. Well, people are sitting around

their kitchen table, going: “My unit’s not worth $250,000. Now, as a

neighbourhood, we’re sending $400,000 or $500,000 to some insurance

operation in the east or overseas.”

What those people are saying to me is: “If someone would help us,

we’d like to set up an agency, and we’ll do this ourselves. We’ll assume

that risk.” There are all the benefits that go with that, because when

you’re dealing with your own risk capital pool, you’re going to be

pretty diligent about the claims you accept. You’re going to be a lot

more diligent, I suggest, about ensuring that the maintenance

schedule

is adhered to.

It will require a signal and some leadership and, candidly, a

stronger signal than the minister feels able to deliver today to say

that this can be a viable option. And, yes, it is for an agency to do

the organizational work around bringing these groups together. But the

government is prepared to work with that agency to ensure that the

regulatory questions are answered and are in place to allow for them to

transition into this new model.

It’s curious. I talk about credit unions, and I don’t want to

become fixated on that. I can’t remember when it was. I’ve lost track of

time. If it was ten years ago or 20 years ago, credit unions in British

Columbia began offering insurance products.

[5:50 p.m.]

The insurance industry got all upset and said: “Well, that’s not

fair. That’s unfair competition, because when the member comes in to get

their mortgage, they’re being directed right down the hall to purchase

their insurance product.” They were forced to create a wall between the

credit union and the insurance products that they were selling. Now here

we sit in a dramatically different world.

What a change on this magnitude requires, I would suggest, is a

willingness on the part of government to signal that it is prepared to

work actively to explore the option. If I am misstating this, then I

want the minister to tell me. What I have heard from the minister,

though, is a very passive approach: “Well, we don’t see any impediments.

If people want to do it, that’s their business.”

I am suggesting that the reality of the situation where all of

these small governance entities called strata corporations are strewn

across British Columbia’s vast landscape, that they are going to need a

signal from government that this could be a viable alternative, and if

they were to empower an organizational agency on their behalf, the

government would be active and enthusiastic participants in ensuring

that the regulatory structure exists and to explore what some of the

financial impediments might be in terms of the transition

period.

Hon. S. Robinson: I appreciate the member’s line of questioning. I think it’s an

interesting one. Again, I express gratitude for exploring options that

really are about bringing relief to British Columbians. Certainly, under

the Financial Institutions Act, persons are permitted to get together to

insure each other through a licensed reciprocal insurance arrangement. I

know the member knows that. There is a regime in place for

that.

We also know that private sector experts are knowledgeable about

these self-insurance regimes and that they could be used by individual

strata corporations or groups of strata corporations to explore the

benefits and costs of this model. I’ve come to understand that, in fact,

there has already been some discussion of various self-insurance options

by industry organizations. I know that they’re having those discussions

actively, and I look forward to hearing more from them around how those

discussions proceed.

M. de Jong: Is the government prepared to engage with those agencies that are

embarking upon that work in a concerted way to assist where it can? I

see the Finance Minister here. I am not at this point discussing

specific financial pledges. That is something that, if it were to happen

at all, would be the product of detailed examination and Treasury Board

consideration and risk assessment.

Is the government prepared to actively engage with those groups

and to report back — either through the report we are expecting in a few

months, or by some separate mechanism — on the progress of that

work?

[5:55 p.m.]

Hon. S. Robinson: Yes, to ongoing engagement with the industry groups around a

self-insurance framework. If those discussions need to be reported out,

we’d be, certainly, happy to do that.

M. de Jong: The minister has been at this…. And I know we’re drawing close. I

wonder if this might be, for a variety of reasons, an appropriate moment

to take a four- or five-minute recess.

The Chair: We’ll take a recess and resume momentarily, hon.

Members.

The committee recessed from 5:57 p.m. to 6:01 p.m.

[S. Gibson in the chair.]

M. de Jong: Picking up where we left off, we’ve had a conversation about one

of the options that may well be available to systemically address the

dire circumstances that have arisen in the strata home marketplace with

respect to insurance premiums and insurance deductibles.

I’m grateful to the minister for the opportunity to have the

conversation and engage her and the government’s position. She is aware,

as are members, that I have placed on the order paper a proposed

amendment to the

section that we’re on that includes a specific

reference to the possibility of a self-insurance model. It includes in

3(a)(l.2) the words “or, if the strata corporation has opted to self

insure, a

summary of its self insurance coverage.”

I will be candid. I was hoping for a slightly more enthusiastic

response from the minister, but she has, to be fair, indicated the

government’s willingness to explore this. She has recognized that there

are agencies that are engaged in work, who are alive to this option. I

am hopeful, as a result of this and other interactions, that she will

signal to those groups — to strata homeowners and, quite frankly, the

strata insurance industry — that the government is alive to this

possibility, is in no way hostile to it and perhaps may ultimately grow

to be an enthusiastic supporter.

Other jurisdictions, I am reminded, have introduced specific

legislation to facilitate the creation of a self-insurance model.

Happily in B.C., we have the skeleton statutory framework necessary. I’m

not under any illusions. I think that would have to be…. There would be

significant statutory and regulatory work that would be necessary to

facilitate the shift on the scale that I, at least, and others would be

contemplating here.

[6:05 p.m.]

What we have is not working. I haven’t, to her credit, heard the

minister dispute that fact. To impose this magnitude of increase on

families at the height of the worst recession that any of us have ever

experienced strikes me as unconscionable and tells me that the industry

is out of touch and needs a wake-up call.

By moving the amendment to

section 3, I am hoping that will serve

as a wake-up call. It will certainly confirm, in a formal sense, the

support of the official opposition for work that will lead to the

creation of an entirely different insurance option for families, for

people that own strata property, strata homes, in British

Columbia.

With that, I’ll move the amendment that stands in my name on the

order paper to

section 3.

SECTION 3, by deleting the text shown as struck out

and adding the underlined text as

shown:

Section 59 is amended

(

a) in subsection (3) by adding the following

paragraph:

(l.2) a

summary of the strata corporation’s insurance

coverage , and or, if the strata corporation

has opted to self insure, a

summary of its self insurance coverage;

, and

(

b) by adding the following subsection:

(5.1) Despite subsection (5), information in subsection (3)

(l.2) disclosed in a certificate is not binding on the strata

corporation if the disclosed information is obtained from the strata

corporation’s insurer, as defined in

section 1 (1) of the Financial

Institutions Act , or insurance agent, as defined in

section 168

of that Act.]

On the amendment.

T. Stone: I appreciate the opportunity to speak today in favour of the

amendment that has been moved by my colleague from Abbotsford West. Like

most colleagues and any British Columbians watching this debate this