British Columbia Hansard — 20130711am Hansard v2n6

20130711am-Hansard-v2n6

British Columbia — Debates (Hansard)

First Session, 40th Parliament OFFICIAL REPORT OF DEBATES OF THE LEGISLATIVE ASSEMBLY (HANSARD) THE HONOURABLE LINDA REID, SPEAKER ISSN 0709- 1281 (Print) ISSN 1499-2175 (Online) Th ursday, July 11, 2013 Morning Sitting Volume 2, Number 6

PROVINCE OF BRITISH COLUMBIA (Entered Confederation July 20, 1871) LIEUTENANT-GOVERNOR Her Honour the Honourable Judith Guichon, OBC First Session, 40th Parliament SPEAKER OF THE LEGISLATIVE ASSEMBLY Honourable Linda Reid EXECUTIVE COUNCIL Premier and President of the Executive Council .............................................................................................................. Hon. Christy Clark Deputy Premier and Minister of Natural Gas Development and Minister Responsible for Housing ......................Hon.

Rich Coleman Minister of Aboriginal Relations and Reconciliation ......................................................................................................... Hon. John Rustad Minister of Advanced Education ............................................................................................................................................ Hon. Amrik Virk Minister of Agriculture ............................................................................................................................................................... Hon.

Pat Pimm Minister of Children and Family Development ....................................................................................................... Hon. Stephanie Cadieux Minister of Community, Sport and Cultural Development ........................................................................................... Hon. Coralee Oakes Minister of Education ..................................................................................................................................................... Hon.

Peter Fassbender Minister of Energy and Mines and Minister Responsible for Core Review .....................................................................Hon. Bill Bennett Minister of Environment ..........................................................................................................................................................Hon. Mary Polak Minister of Finance .................................................................................................................................................. Hon.

Michael de Jong, QC Minister of Forests, Lands and Natural Resource Operations......................................................................................Hon. Steve Th omson Minister of Health ............................................................................................................................................................... Hon. Dr. Terry Lake Minister of International Trade and Minister Responsible for Asia Pacifi c Strategy and Multiculturalism ..................Hon.

Teresa Wat Minister of Jobs, Tourism and Skills Training and Minister Responsible for Labour ...................................................Hon. Shirley Bond Minister of State for Tourism and Small Business ....................................................................................................Hon. Naomi Y amamoto Minister of Justice ...............................................................................................................................................................Hon.

Suzanne Anton Minister of Social Development and Social Innovation..................................................................................................... Hon. Don McRae Minister of Technology, Innovation and Citizens' Services ................................................................................... Hon. Andrew Wilkinson Minister of Transportation and Infrastructure ......................................................................................................................Hon.

Todd Stone LEGISLATIVE ASSEMBLY Leader of the Offi cial Opposition ......................................................................................................................................................Adrian Dix Deputy Speaker .............................................................................................................................................................................Douglas Horne Assistant Deputy Speaker ...............................................................................................................................................................

Raj Chouhan Deputy Chair, Committee of the Whole ....................................................................................................................................... Marc Dalton Clerk of the Legislative Assembly ................................................................................................................................................... Craig James Deputy Clerk and Clerk of Committees .................................................................................................................................

Kate Ryan-Lloyd Sessional Law Clerk ...................................................................................................................................................Roderick MacArthur, QC Clerk Consultant ..............................................................................................................................................E. George MacMinn, OBC, QC Sergeant-at-Arms ................................................................................................................................................................................. Gary Lenz

ALPHABETICAL LIST OF MEMBERS Anton, Hon. Suzanne (BC Liberal) .............................. Vancouver-Fraserview Ashton, Dan (BC Liberal).....................................................................Penticton Austin, Robin (NDP) ................................................................................ Skeena Bains, Harry (NDP) ....................................................................Surrey-Newton Barnett, Donna (BC Liberal) ............................................... Cariboo-Chilcotin Bennett, Hon.

Bill (BC Liberal) ...................................................Kootenay East Bernier, Mike (BC Liberal) ................................................... Peace River South Bing, Dr. Doug (BC Liberal) ................................ Maple Ridge–Pitt Meadows Bond, Hon. Shirley (BC Liberal) ........................... Prince George–Valemount Cadieux, Hon. Stephanie (BC Liberal) ................................Surrey-Cloverdale Chandra Herbert, Spencer (NDP) .................................Vancouver–West End Chouhan, Raj (NDP) ...........................................................

Burnaby-Edmonds Coleman, Hon. Rich (BC Liberal) .......................... Fort Langley–Aldergrove Conroy, Katrine (NDP) .............................................................. Kootenay West Corrigan, Kathy (NDP) ..................................................... Burnaby–Deer Lake Dalton, Marc (BC Liberal) ............................................. Maple Ridge–Mission Darcy, Judy (NDP) ..................................................................New Westminster de Jong, Hon. Michael, QC (BC Liberal) ..............................

Abbotsford West Dix, Adrian (NDP) ............................................................Vancouver-Kingsway Donaldson, Doug (NDP) ......................................................................... Stikine Eby, David (NDP) ..........................................................Vancouver–Point Grey Elmore, Mable (NDP) ................................................... Vancouver-Kensington Farnworth, Mike (NDP) ............................................................ Port Coquitlam Fassbender, Hon. Peter (BC Liberal) ...................................

Surrey-Fleetwood Fleming, Rob (NDP) .......................................................... Victoria–Swan Lake Foster, Eric (BC Liberal) .......................................................Vernon-Monashee Fraser, Scott (NDP) ............................................................Alberni–Pacifi c Rim Gibson, Simon (BC Liberal) ............................................. Abbotsford-Mission Hamilton, Scott (BC Liberal) ...........................................................Delta North Hammell, Sue (NDP) ....................................................

Surrey–Green Timbers Heyman, George (NDP) .................................................... Vancouver-Fairview Hogg, Gordon (BC Liberal) ............................................... Surrey–White Rock Holman, Gary (NDP) .......................................Saanich North and the Islands Horgan, John (NDP) .......................................................................

Juan de Fuca Horne, Douglas (BC Liberal) ..............................Coquitlam–Burke Mountain Hunt, Marvin (BC Liberal) ....................................................Surrey-Panorama Huntington, Vicki (Ind.) ..................................................................Delta South James, Carole (NDP) .........................................................Victoria–Beacon Hill Karagianis, Maurine (NDP) ........................................Esquimalt–Royal Roads Krog, Leonard Eugene (NDP) .............................................................

Nanaimo Kwan, Jenny Wai Ching (NDP) ........................... Vancouver–Mount Pleasant Kyllo, Greg (BC Liberal) ........................................................................ Shuswap Lake, Hon. Dr.

Terry (BC Liberal) ....................Kamloops–North Th ompson Larson, Linda (BC Liberal) .........................................Boundary-Similkameen Lee, Richard T. (BC Liberal) ......................................................Burnaby North Letnick, Norm (BC Liberal) ........................................Kelowna–Lake Country Macdonald, Norm (NDP) ....................................Columbia River–Revelstoke McRae, Hon. Don (BC Liberal) ..................................................

Comox Valley Martin, John (BC Liberal) ..................................................................Chilliwack Morris, Mike (BC Liberal) ..................................... Prince George–Mackenzie Mungall, Michelle (NDP) ..........................................................Nelson-Creston Oakes, Hon. Coralee (BC Liberal) .............................................Cariboo North Pimm, Hon. Pat (BC Liberal) ...............................................Peace River North Plecas, Darryl (BC Liberal) ....................................................Abbotsford South Polak, Hon.

Mary (BC Liberal) .............................................................. Langley Popham, Lana (NDP) ...................................................................Saanich South Ralston, Bruce (NDP) ................................................................ Surrey-Whalley Reid, Hon. Linda (BC Liberal) ..................................................Richmond East Reimer, Linda (BC Liberal) ........................................

Port Moody–Coquitlam Rice, Jennifer (NDP) ........................................................................North Coast Robinson, Selina (NDP) .............................................Coquitlam-Maillardville Routley, Bill (NDP) .................................................................. Cowichan Valley Routley, Doug (NDP) ............................................Nanaimo–North Cowichan Rustad, Hon. John (BC Liberal) ................................................

Nechako Lakes Shin, Jane Jae Kyung (NDP) ...............................................Burnaby-Lougheed Simons, Nicholas (NDP) ................................... Powell River–Sunshine Coast Simpson, Shane (NDP) ..................................................... Vancouver-Hastings Stilwell, Michelle (BC Liberal) ........................................ Parksville-Qualicum Stilwell, Dr. Moira (BC Liberal) ........................................ Vancouver-Langara Stone, Hon. Todd (BC Liberal) .........................

Kamloops–South Th ompson Sturdy, Jordan (BC Liberal) ..................................West Vancouver–Sea to Sky Sullivan, Sam (BC Liberal) ...........................................Vancouver–False Creek Sultan, Ralph (BC Liberal) ..................................... West Vancouver–Capilano Tegart, Jackie (BC Liberal) ............................................................Fraser-Nicola Th omson, Hon. Steve (BC Liberal) .......................................Kelowna-Mission Th ornthwaite, Jane (BC Liberal) ..........................

North Vancouver–Seymour Th roness, Laurie (BC Liberal).................................................Chilliwack-Hope Trevena, Claire (NDP) .................................................................... North Island Virk, Hon. Amrik (BC Liberal) ............................................. Surrey-Tynehead Wat, Hon. Teresa (BC Liberal) .............................................. Richmond Centre Weaver, Dr. Andrew (Ind.) .......................................... Oak Bay–Gordon Head Wilkinson, Hon. Andrew (BC Liberal) ........................ Vancouver-Quilchena Y amamoto, Hon.

Naomi (BC Liberal) ................ North Vancouver–Lonsdale Y ap, John (BC Liberal) ......................................................Richmond-Steveston Vacant ...................................................................................... Westside-Kelowna LIST OF MEMBERS BY RIDING Abbotsford-Mission ......................................................................Simon Gibson Abbotsford South ............................................................................Darryl Plecas Abbotsford West ...................................................... Hon.

Michael de Jong, QC Alberni–Pacifi c Rim .......................................................................... Scott Fraser Boundary-Similkameen ................................................................ Linda Larson Burnaby–Deer Lake ................................................................... Kathy Corrigan Burnaby-Edmonds .........................................................................

Raj Chouhan Burnaby-Lougheed .............................................................Jane Jae Kyung Shin Burnaby North .............................................................................. Richard T. Lee Cariboo-Chilcotin ........................................................................Donna Barnett Cariboo North .................................................................... Hon. Coralee Oakes Chilliwack .........................................................................................

John Martin Chilliwack-Hope ....................................................................... Laurie Th roness Columbia River–Revelstoke .................................................. Norm Macdonald Comox Valley...........................................................................Hon. Don McRae Coquitlam–Burke Mountain .....................................................Douglas Horne Coquitlam-Maillardville........................................................... Selina Robinson Cowichan Valley ................................................................................

Bill Routley Delta North ..................................................................................Scott Hamilton Delta South ...............................................................................Vicki Huntington Esquimalt–Royal Roads .....................................................Maurine Karagianis Fort Langley–Aldergrove ...................................................Hon. Rich Coleman Fraser-Nicola....................................................................................

Jackie Tegart Juan de Fuca .....................................................................................John Horgan Kamloops–North Th ompson ............................................ Hon. Dr. Terry Lake Kamloops–South Th ompson ..................................................Hon. Todd Stone Kelowna–Lake Country ............................................................... Norm Letnick Kelowna-Mission .............................................................. Hon. Steve Th omson Kootenay East .......................................................................... Hon.

Bill Bennett Kootenay West ............................................................................ Katrine Conroy Langley.......................................................................................Hon. Mary Polak Maple Ridge–Mission ..................................................................... Marc Dalton Maple Ridge–Pitt Meadows ........................................................ Dr. Doug Bing Nanaimo ........................................................................... Leonard Eugene Krog Nanaimo–North Cowichan .........................................................

Doug Routley Nechako Lakes ........................................................................ Hon. John Rustad Nelson-Creston ........................................................................Michelle Mungall New Westminster ............................................................................... Judy Darcy North Coast......................................................................................Jennifer Rice North Island .................................................................................. Claire Trevena North Vancouver–Lonsdale ........................................Hon.

Naomi Y amamoto North Vancouver–Seymour ................................................. Jane Th ornthwaite Oak Bay–Gordon Head ...................................................... Dr. Andrew Weaver Parksville-Qualicum .................................................................Michelle Stilwell Peace River North ...................................................................... Hon. Pat Pimm Peace River South ............................................................................Mike Bernier Penticton............................................................................................

Dan Ashton Port Coquitlam ..........................................................................Mike Farnworth Port Moody–Coquitlam ................................................................Linda Reimer Powell River–Sunshine Coast ................................................. Nicholas Simons Prince George–Mackenzie ............................................................. Mike Morris Prince George–Valemount ................................................... Hon. Shirley Bond Richmond Centre ......................................................................Hon.

Teresa Wat Richmond East ..........................................................................Hon. Linda Reid Richmond-Steveston ..............................................................................John Y ap Saanich North and the Islands .................................................... Gary Holman Saanich South ................................................................................

Lana Popham Shuswap ................................................................................................Greg Kyllo Skeena .............................................................................................. Robin Austin Stikine ....................................................................................... Doug Donaldson Surrey-Cloverdale ....................................................... Hon. Stephanie Cadieux Surrey-Fleetwood ........................................................... Hon.

Peter Fassbender Surrey–Green Timbers .................................................................. Sue Hammell Surrey-Newton ................................................................................. Harry Bains Surrey-Panorama ........................................................................... Marvin Hunt Surrey-Tynehead ......................................................................Hon. Amrik Virk Surrey-Whalley..............................................................................

Bruce Ralston Surrey–White Rock ....................................................................... Gordon Hogg Vancouver-Fairview ..................................................................George Heyman Vancouver–False Creek ................................................................... Sam Sullivan Vancouver-Fraserview ......................................................Hon.

Suzanne Anton Vancouver-Hastings ....................................................................Shane Simpson Vancouver-Kensington .................................................................Mable Elmore Vancouver-Kingsway..........................................................................Adrian Dix Vancouver-Langara .................................................................Dr. Moira Stilwell Vancouver–Mount Pleasant .........................................

Jenny Wai Ching Kwan Vancouver–Point Grey .........................................................................David Eby Vancouver-Quilchena ................................................ Hon. Andrew Wilkinson Vancouver–West End ...............................................

Spencer Chandra Herbert Vernon-Monashee ...............................................................................Eric Foster Victoria–Beacon Hill .......................................................................Carole James Victoria–Swan Lake.........................................................................Rob Fleming West Vancouver–Capilano .............................................................

Ralph Sultan West Vancouver–Sea to Sky ..........................................................Jordan Sturdy Westside-Kelowna ......................................................................................Vacant Party Standings: BC Liberal 48; New Democratic 34; Independent 2; Vacant 1

CONTENTS Th ursday, July 11, 2013 Morning Sitting Page Orders of the Day Second Reading of Bills ............................................................................................................................................................ 369 Bill 2 — Budget Measures Implementation Act, 2013 Hon. M. de Jong M. Farnworth Hon. M. de Jong Committee of Supply ................................................................................................................................................................ 371 Estimates: Ministry of Finance Hon. M. de Jong M. Farnworth V . Huntington M.

Elmore B. Ralston Proceedings in the Douglas Fir Room Committee of Supply ................................................................................................................................................................ 381 Estimates: Ministry of Environment (continued) S. Chandra Herbert Hon. M. Polak A. Weaver G. Holman D. Donaldson

THURSDAY , JULY 11, 2013 Th e House met at 10:03 a.m. [Madame Speaker in the chair.] Prayers. Orders of the Day Hon. M. de Jong: In this chamber I call second read- ing of Bill 2, the Budget Measures Implementation Act, and in Committee A —

Section A, Committee of Supply — continued estimates on the Ministry of Environment. [1005] Second Reading of Bills BILL 2 — BUDGET MEASURES IMPLEMENTATION ACT, 2013 Hon. M. de Jong: I move that Bill 2, the Budget Measures Implementation Act, 2013, be read a second time now. In summarizing the provisions of the act, I'm cog- nizant of the fact that members — particularly those returning members — will have seen most of the pro- visions contained within Bill 2 in a similar legislative instrument that was tabled in February — though not debated and passed. Th e bill before the House today, Bill 2, consists of two parts.

Part 1 amends several statutes in order to imple- ment many of the legislative amendments necessary to give eff ect to Budget 2013 as updated in June of this year.

Part 2 contains a series of technical provisions which validates that the estimates tabled on June 27 and the other documents tabled with those estimates are the ones to be used for the 2013-14 fi scal year. I'll explain that fur- ther in a moment.

Part 1 amends nine statutes to implement some of the taxation measures announced in this budget. Some of those measures, I should say, refl ect some very diffi cult decisions the government had to make but that ultim- ately were necessary in order to achieve the objective of balancing the people's budget. Going through them, Bill 2 amends the Income Tax Act to increase contributions from corporations and higher-income British Columbians.

Specifically, the Income Tax Act is amended to increase the general cor- porate income tax rate to 11 percent, eff ective April 1, 2013, rather than in 2014, as was signalled in Budget 2012. I will point out that even with this increase, the general corporate income tax rate remains 33 percent lower than it was in 2001, and it will remain amongst the lowest in the country behind only Alberta and New Brunswick. I wish also to emphasize that the small business corporate income tax rate remains unchanged.

Bill 2 also amends the Income Tax Act to temporarily — and this is spelled out in the provision — establish a new top personal income tax bracket. With this amend- ment, the portion of a taxpayer's taxable income exceed- ing $150,000 will be subject to a new provincial income tax rate of 16.8 percent, up from 14.7 percent. It's a temporary measure that will apply for the 2014 and 2015 tax years. B.C.'s top marginal rate will neverthe- less remain competitive with other provinces, and British Columbians with incomes up to $122,000 will continue to pay the lowest provincial income tax in Canada.

Th e tax credit rate for total annual charitable donations over $200 will remain unchanged at 14.7 percent for the 2014 and 2015 tax years. Budget 2012 announced an increase in tobacco tax rates eff ective April 1, 2013, to avoid price reductions with the implementation of the HST.

Bill 2 amends the Tobacco Tax Act to further increase the tobacco tax rate by $2 per carton of cigarettes and one cent per gram of fi ne cut tobacco, eff ective October 1, 2013. [1010] Th is tax rate increase builds upon our — I would sug- gest — successful multifaceted tobacco control strategy to encourage and help British Columbians to stop smok- ing. Again, I would say — I suppose immodestly — that I think the strategy is working. B.C. currently has the lowest smoking rate in Canada at less than 15 percent.

We want to drive that number down further and are em- ploying a number of strategies to try and achieve that end. Tobacco prices are, I believe, an eff ective deterrent — particularly for young people — to a certain point. Th is tax rate increase will support our other smoking cessa- tion programs, which cover prescription medications and free nicotine replacement therapies along with other sup- ports and, we believe, help even more British Columbians to stop smoking. When they quit smoking, everyone is a winner — the individuals themselves, their pocket- books.

It's better for their families and better for provin- cial health care costs. Agriculture has a unique place in British Columbia and is integral to the social and economic fabric of commun- ities throughout the province. As previously announced, we are providing an exemption from carbon tax for col- oured gasoline and coloured diesel fuel purchased by farmers for farm purposes, including in farm equipment such as tractors and in eligible farm trucks on the high- way. Bill 2 amends the Carbon Tax Act eff ective January 1, 2014, to fulfi l this commitment.

Bill 2 also includes amendments to expand the land tax deferment program and improve fairness of the property transfer tax exemption for family farms. Th e tax deferment act is amended to expand the prop- erty tax deferment program for families with children. Currently the program allows eligible homeowners who 369

British Columbia Debates370 Thursday, July 11, 2013 fi nancially support a child under the age of 18 to defer their property taxes. With this amendment, the pro- gram is expanded to allow eligible homeowners who fi - nancially support a son or daughter of any age to defer property taxes if that child is enrolled in an educational institution or is disabled. Th is will allow more families to defer their property taxes when family expenses may be at their highest.

Th e Land Tax Deferment Act is also amended to allow certain partial disposals of property under the property tax deferment programs without triggering the end of the agreement and, therefore, the repayment of previously deferred taxes. Th e deferment agreement will continue aft er a partial disposal of land, provided the homeowner continues to own the portion of the property on which the principal residence is located, continues to meet the minimum equity requirements of the program and re- tains no interest in the disposed property.

Bill 2 also amends the homeowner grant to provide re- lief to homeowners who in certain circumstances have claimed the grant incorrectly. Following the amend- ments, if passed, the eligible homeowners will be able to receive the benefi t of the homeowner grant on their principal residence if they incorrectly claimed it on the wrong property. Th e Property Transfer Tax Act is amended by Bill 2 to improve the fairness of the property transfer tax exemp- tion for transfers of family farms to related family mem- bers on the death of an owner.

Th is specifi c issue was brought to government atten- tion by an individual taxpayer whose mother was in a care facility prior to her death. Under the existing legis- lative provisions, the fact that the mother was not active- ly farming the land at the time of her passing made the family ineligible for the exemption. Th e expansion of the exemption will ensure that it is available to farm families as I think was always intended. Th e Hydro and Power Authority Act is also amended. As a Crown corporation, B.C.

Hydro is exempt from the payment of most property taxes, but it is required to pay grants in lieu of tax to taxing authorities and through its community development fund to make payments to non-treaty First Nations. Th e act, by virtue of this instru- ment, would be amended to provide equitable treatment to treaty First Nations by authorizing B.C. Hydro to pay grants in lieu to these First Nations for B.C. Hydro facili- ties located on their land.

Bill 2 includes a technical amendment to the Provincial Sales Tax Transitional Provisions and Amendments Act, 2013, to clarify the transitional rules for legal services, re- lated services and telecommunication services. [1015] Th e provincial sales tax transitional rules set out when and how the PST applies to transactions that straddle April 1, 2013. Th e clarifi cations contained here will en- sure that the transitional rules apply as intended and as we discussed in this House earlier this year. Finally,

part 1 of Bill 2 amends the Forest Act to en- hance its revenue audit compliance provisions. A new penalty and the ability to obtain a compliance order will assist auditors in obtaining the necessary information to assess stumpage in instances where requests for infor- mation are refused. Th ese amendments that I have just mentioned refl ect some of the admittedly diffi cult decisions that were taken to help balance the budget; at the same time provide additional support for families; and, I believe, improve, in some of the areas touched upon, elements of fairness.

Given the need to live within our means, I believe that these taxation measures in the bill strike a fair and ap- propriate balance. Now,

part 2 of the bill is a transitional provision, again largely technical in nature, confi rming the identity of the main estimates for the 2013-14 fi scal year. Due to the fact that the election was held this year, main estimates for 2013-14 have been presented twice to this Legislature — once in February and again in June. A number of stat- utes on the books prescribe information that must be included in the main estimates or be tabled within the main estimates.

Part 2 of this bill identifi es the main estimates tabled in the Legislature on June 27, 2013, as those that apply for the purposes of the Budget Transparency and Accountability Act, the Balanced Budget and Ministerial Accountability Act and the Carbon Tax Act.

Part 2 also establishes the carbon tax plan and other documents pre- sented with June 27 main estimates as those that fulfi l the requirements of the Carbon Tax Act. Th at is my hopefully coherent

summary of what is in the provisions of Bill 2, and I welcome comments from my friend. M. Farnworth: It's my pleasure to rise and off er a few comments in response to Bill 2, the Budget Measures Implementation Act, the bill that will, in fact, implement the various measures as the Minister of Finance has out- lined in the budget that was tabled in February and, in fact, was updated earlier in the last few weeks. We will not be supporting this particular piece of legislation. We opposed the budget that the government tabled before February and then reintroduced aft er the election.

We have concerns about the budget and its abil- ity to actually be balanced, given the signifi cant varia- tions in the forecasts that the government placed before this House prior to the election and the deterioration we have seen since that budget was tabled in terms of the forecasts and the assumption that the government has used. It further reinforces our concern that the budget is, in fact, not balanced. Th is particular piece of legislation does do a number of interesting things that I think are worth commenting on. For four years the government was adamant that

British Columbia DebatesThursday, July 11, 2013 371 under no circumstances…. Th ey would not be raising taxes. Th ey would never raise taxes. Th ey were not going to raise taxes. Th ere would be tax freezes. Th e reality is that they are, in fact, raising taxes. Th ey announced that just prior to February, and this budget does that — the high income tax, over $150,000. I am slightly puzzled as to how that squares with the oft -repeated claim of the Premier that we are freezing taxes, income taxes, for fi ve years, because clearly that's not happening with this particular piece of legislation.

Th ere are changes in the corporate tax rate. Again, this was a government that said they would not raise corpor- ate taxes. Th at was a mantra that they kept repeating, that we could not do that, that it would jeopardize our competitiveness. [1020] Th e reality is, again, that that is what is taking place within this particular piece of legislation. Again, what the rhetoric is doesn't necessarily match the actions of the government. Th e bill also contains a number of measures around in- creasing tobacco taxes.

It deals with issues that are stan- dard in every budget around the coloured, or agricultural, fuel tax, as well as issues around the homeowner grants — in particular, the raising of the threshold. Th e one area, actually, I will add additional remarks on is the issue of the change in the homeowner grant and the case that the minister cited of the woman who had been in the care home and then subsequently was determined to not be eligible for the homeowner grant because she was "not farming." Well, she was in a care home. Interjection. M. Farnworth: Property transfer tax. Th at's correct. She was in a care home.

Th at was an issue that had been raised in this House by the opposition, and the govern- ment had indicated that they would look into the mat- ter, so I am happy that that particular issue is addressed within this particular piece of legislation. Having said that — and I try and fi nd a silver lining in every piece of legislation, and in this case that is it — the bottom line is that this is a piece of legislation designed to implement a budget that we did not have confi dence in. It is designed to implement a budget that, we believe, will impact ordinary British Columbians in a host of negative ways.

And we've already seen that, for example, with the wheelchair tax. Th is bill will help implement a budget that, we believe, will see additional service cuts and reductions in areas such as health care and skills training. As a result, it's a bill that we are unable to support. Th ere are some questions I will have in committee stage. One of the challenges of speaking to this particu- lar piece of legislation today is that aft er this we go into Finance estimates.

I could speak for another hour, but that would come out of the Finance estimates time, which I know the minister is waiting for with great anticipation. With that, I will take my seat. I will have a few ques- tions in the committee stage, but with that, we are op- posed to this piece of legislation. Madame Speaker: Seeing no further speakers, the minister closes debate. Hon. M. de Jong: Th anks to my friend, the hon. critic. I move second reading. Second reading of Bill 2 approved on division. Hon.

M. de Jong: I move that the bill be referred to a Committee of the Whole House for consideration at the next sitting aft er today. Bill 2, Budget Measures Implementation Act, 2013, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House aft er today. Hon. M. de Jong: I call Committee of Supply — Finance estimates. Committee of Supply ESTIMATES: MINISTRY OF FINANCE Th e House in Committee of Supply (Section B); R. Chouhan in the chair. Th e committee met at 10:25 a.m. On Vote 22: ministry operations, $114,879,000. Hon.

M. de Jong: While I am on my feet, let me tell members that we are joined in the committee delibera- tions today by the deputy, Peter Milburn, and Deb Fayad and Marie Ty. M. Farnworth: I half expected the minister to do a brief outline of the ministry. I see him shaking his head. Th at's just fi ne. He's defi nitely quite unlike a previous Minister of Finance, who took probably about half an hour to 45 minutes to expound upon the virtues of the ministry and the policies and the goals that it was pur- suing.

One of the key areas that the minister is obviously responsible for is the budget and the presentation of the budgets. Th e passing of the budgets is the key ob- ject, of course, of government. So what I'd like to do is ask some questions related to the assumptions around budget-building that the minister used in the lead-up to the budget and subsequent to the fi nancial update that

British Columbia Debates372 Thursday, July 11, 2013 was done in the House, particularly around some of the diff erences between the forecasts that were used back in February and the forecasts we're using in the update. Particularly, I'd like to initially talk about areas of GDP — the GDP growth numbers that were used prior to February and subsequent to February. A couple ques- tions I have are: at what point did the ministry decide that they needed to change; when did they become aware and why? What were the key factors for that? Hon.

M. de Jong: Th e member and I have been at this long enough for him to know it is true when I say that I can have trouble introducing myself inside half an hour. But I am also cognizant of the fact that time is limited. Th ere is an exchange to take place, and we best get to it. Th e short answer, as I understand the member's ques- tion, is…. Th e budget in February was introduced, built around a certain set of expectations on GDP growth. Th e budget update of June 27 utilizes a diff erent set of numbers. When did they change?

Th e ministry consulted the Economic Forecast Council end of May — I think May 29, although sometimes the information comes in over the span of a couple days from various sources — gath- ered that information and then did the calculation on what the averages are.

So I think that the answer to the question is: having consulted at the end of May and ana- lyzed the forecast council adjustments, it was at that point that the ministry was in a position to consider that in- formation in any changes that we wanted to build into the budget. [1030] Now, some of those agencies, as I recall — Conference Board being one — publicly released information several weeks before that, several weeks aft er that. But the report from the forecast council that the ministry formally re- quested was received in the last week of May. M.

Farnworth: What were the key drivers of the de- cline in the GDP forecasts for the coming year? Interjection. Hon. M. de Jong: Th e member may have heard a little bit of that exchange. Th ere are some areas that I can relay — and much of this material is laid out in the budget document itself — where the members of the forecast council and the ministry look at indicators. Housing starts would be an example of that, and retail sales. I have come to learn that there are two ways this works. At the early part of the fi scal year, which we're still in, there's limited year-to-date data.

In some instan- ces year-to-date data drives assumptions about GDP . In other cases assumptions about GDP drive calculations about individual areas. So if there is, for example, slower GDP growth, there's an assumption made about slower housing growth. It seems to me that as you move through the year and have more year-to-date information available in the in- dividualized areas, one is able to rely upon that to make assumptions about GDP . Of course, the further you are through the year, the less risk there is or the more bullish people tend to be about their predictions for the remain- ing six or three months.

Housing starts, retail sales are below what, I think, the forecast council was contemplat- ing earlier in the year. I should emphasize this, though. In settling upon the numbers for the June update, the ministry…. We em- ployed the same methodology and process that we em- ployed in February, but the forecast council numbers changed at the end of May, to be sure. Th at's why the as- sumptions around revenue in the budget changed. But it is, as I think the member knows, a regular feature of the quarterly updates that take place in any budget year. M. Farnworth: I thank the minister for that answer.

In the GDP forecast from the forecast council they have an average. Th e minister then lowered that, on a conservative basis. Th at was, I think, by about half a point, if I'm not mistaken. Interjection. M. Farnworth: Y eah, since February. Th en, from the February…. In the update it's lowered, but this time it's lowered…. Th e ministry has not lowered it by the same percentage as it did in February, which again would im- pact on your revenues coming in. Why was that, and how was that decision arrived at? Hon.

M. de Jong: I guess two short answers: confi - dence and risk. [1035] I suppose it's worth pointing out that what the forecast council did at the end of May was adjust their number to what we'd said it was going to be all the way along. Th e fact that we are now part of the way through the fi scal year — slightly less risk. So the need to build in the same gap or the same level of prudence…. Th e advice I received and accepted from the offi cials at the Finance Ministry was that the gap didn't need to be as large. Th at struck me, for the reasons I've just mentioned, as being logical. M.

Farnworth: In terms of retail sales, again, it comes back, I think, to…. Th ere were numbers presented in February, and I understand the minister's argument in terms of saying that you're further into the year, so you have a better sense of where things are at from receipts coming in. Th at I get. But again, there was a further lessening of retail sales,

British Columbia DebatesThursday, July 11, 2013 373 when what the government was expecting, for example…. Aft er the elimination of the HST and the return to the PST there was an expectation that there would be a bump in retail sales and that that would be refl ected. Is that re- fl ected? Is that expected bump refl ected in the latest fore- cast? If so, what other factors, then, are contributing to lower retail sales? What that says to me is that clearly, consumer confi - dence is not strong.

When you combine the government's forecast around retail sales and the government's forecast around continued decline in housing starts, that tells me that consumer confi dence is still weak, or is weaker than it was. What other factors is the government now taking into consideration in determining its calculations in that area? Hon. M. de Jong: Again, with this area of the econ- omy…. First of all, I accept the proposition that areas like this provide a bit of insight or a bit of a window into ques- tions around confi dence.

I think that's true of housing purchases and, I suppose, ultimately, housing construc- tion. But what people are doing in terms of upgrading their homes is generally, in my view, also an indication of how they feel about their own future prospects. So I accept that proposition.

Th e second thing I want to emphasize is that the up- dated numbers are, again, a refl ection of the information and the data that we have received — the consensus view of the forecast council and changes that they have de- tected or anticipate and are projecting for across Canada. [1040] It's perhaps complicated a little bit in British Columbia by something the member has mentioned.

Th at is the sig- nifi cant transition that occurred on April 1 between the HST and PST and to what extent did that skew behav- iour in British Columbia on the part of consumers who, in many cases, would have been aware that the purchase of a product on April 2 would attract a diff erent tax liabil- ity than the purchase of that same product on March 30. I expect that infl uenced some behaviour. Conversely, on the business side my expectation…. I suspect the data will reveal this at some point. In the business sector there may have been some accelerated purchasing. So to what extent those off set one another….

We're talking here about consumer purchasing. I can tell the member that the numbers for April-May — for which there is, I'm told, some data available — match the projections that have been built into the plan very accurately, and that's heartening. In his question the member also referenced housing starts, and this might be an opportunity for me to make this point again as well. Th e numbers in the budget and the forecast predict a slightly lower number of housing starts than in February by, I think, 800 or 900 units, if I'm not mistaken, below the average of 28,000.

Th e numbers we got a couple days ago for May showed what I would say for B.C. is a fairly dramatic increase, far beyond what we have been predicting and what is contained in the budget. Now, is that sustained on a go- forward basis? We'll see. Th e last thing I'll say — and I say it not to be mis- chievous in the way that perhaps one occasionally is in this chamber — is on the uncertainty surrounding the electoral process and what impact that has. Th e budget document makes no attempt to try and quantify that. Th e numbers are what the numbers are, and we have budget- ed on that basis.

But I have made this observation publicly. In the im- mediate aft ermath of May 14, I have certainly been con- fronted anecdotally by a lot of information about pent-up energy and the unleashing of and moving forward of pro- jects that in other circumstances may or may not have, depending who you believe…. We won't know the ex- tent of that — to what extent that phenomenon is real or otherwise — for, I would say six months, when there is hard data for the member to critique and analyze and me to lament or celebrate. M.

Farnworth: I don't think the minister will be sur- prised if I say that I can assure him that I'm more than happy to check back in six months' time and see whether these anecdotes or anecdotal comments that the minis- ter has mentioned have unleashed a fl urry of economic projects in the province of British Columbia. One thing I'm pretty sure of is that people, consumers, make their decisions based on their own family needs and their family situations.

If you have three kids and you have outgrown your two-bedroom house, you're not waiting for the results of an election to decide whether or not you're going to move or buy a new house. Y ou're moving because you need to.

Or if you're a senior waiting to see whether you're going to downsize, for example, it's done because of your life and what's happening in your life and not on the basis of a provincial election. [1045] I say that because you know, as much as we talk about resource revenues in this province and the importance of them, consumer confi dence, consumer spending and home building are signifi cant economic generators in British Columbia. So when we see housing starts in a decline — and I accept the member's comments about the numbers in the past month, the increase — there's so much related to that.

Th at can't help but have an impact. One of the issues around the HST was the fact that, with its elimination, people were well aware of the changeover that was coming. Th ere was an expectation that there would be an upswing in renovations and con- sumer purchases on a signifi cant number of items that were not — we were hearing anecdotally — taking place prior to that. To see a weakening of demand in the forecasts, I think,

British Columbia Debates374 Thursday, July 11, 2013 causes some concern that even with the elimination and the move to the PST, the consumer is not…. Th at uptick, I'm concerned, is not refl ected in the statistics. But that's something we're going to have to wait for until the fi rst quarter comes out, until we get later into the budget year. On the issue of forecasts, one of the questions I have is around the forecast allowance. When we compare the February budget with the July update, we see that the forecast allowance for the next two years has been lowered.

Can the minister explain why that is and why it is going to be the next two years? Hon. M. de Jong: Although he didn't reference it spe- cifi cally, the forecast allowance for this fi scal year has been drawn down, as well, by $50 million, the rationale there being that 25 percent of the way through the year is 25 percent less risk. Th at struck me as a reasonable ex- ercise of the protection the forecast allowance provided. With respect to the out-years, particularly for the next fi scal year, the short answer, I think, is that July is a lot closer to February than February was.

Th e recommenda- tion was that from a risk assessment point of view it was not an abandonment of the prudence principle to reduce by that amount and that one could budget safely on that basis going forward. At the end of the day, a risk assessment exercise and a recommendation that I accepted. M. Farnworth: I asked that question because, as the minister said, into the quarter you're slightly more cer- tain of where you're going to end up. Th e next quarter you'll be even more certain, or one would hope. To see the forecast allowance two years out declining is raising: "Okay.

We're not there yet." We're certainly not there in the third year. Why you'd be wanting to make reductions at this par- ticular point in time — I just wanted to get an answer from the minister. Noting our time…. Th e one thing I know is we'll have a lot more time next February. Th ere are a number of topics to get through. But another key area of the budget, on which the budget was built, was the issue of asset sales. Th at was very much a key component of this particular budget.

I know that when the minister rises to answer, he will no doubt make note of the fact that asset sales occur under every administration in the province of British Columbia, regardless of political stripe. [1050] But I think the point that I want to make in this par- ticular case is the sheer size of asset sales that are taking place in this particular budget in comparison to previous years. I think, over the last ten years, from 2001 to 2010, it's been around $381 million — over the full decade. What I'd like to know is: has the ministry looked at…?

Or can the ministry tell us: during the period, what has been the diff erence between what the government has set as its target for asset sales in each of the years and then the actual target, whether it was met? I think that's a crucial question that needs to be an- swered in the sense that it's one thing to say we're going to spend or we're going to sell, you know, $100 million, $750 million worth of assets and that gets presented in a budget document, but if you don't actually realize those targets, then that calls part of the exercise into question. It says, you know, a lot about…. Th e budget ends up not….

It can be a major hole in the budget. Th e minister has placed great…. A signifi cant amount of emphasis has been made on the issue of asset sales in this particular budget — a key component of it. But what I'd like to know is: what's been the record, to date, in terms of targets and actualities realized? Hon. M. de Jong: I guess — two areas I'll touch on in responding to the member's question. I think it's an in- teresting question, because it may, in part, explain the degree to which attention — attention from others, atten- tion from the opposition — has focused on this.

Whilst it is true, I am advised, that an agency like the transpor- tation investment authority has in the past set a depart- mental objective or a departmental plan for the disposal of some of the assets that they have held from time to time, that hasn't happened corporately in government. Again, not meaning to be mischievous…. I'm told that during the time of the 1990s the equivalent of about a bil- lion dollars in publicly held assets from core government was sold. I'm not certain that there was a target associated with that. Th at's just the amount that was sold.

For the majority of the term of this government, assets were sold on a regular basis. What changed, to be sure, is a purposeful decision to identify across government and the SUCH sector…. And by the way, I've just been reminded that in quantifying the amounts, that is an im- portant distinction, because we are including in these amounts the SUCH sector — school boards, boards of education, health authorities. So that now gets lumped in, in terms of quantifying the amount.

But we did say, "Let's take a purposeful look at the portfolio and identify what we deem to be surplus assets and embark upon the sale of those assets," and that pro- cess created the ability to actually lay out in detail what the government expected to realize from the sale of those assets. [1055] Heretofore, that was never the case. It would have been impossible for someone to look at the budget and say, with any measure of certainty: "Ah, I see. Th e Crown purports to generate revenue of X amount on the basis of the sale of asset." It never appeared as a separate item that was identifi able in the budget.

Now, one could say, in retrospect, that that was a fool- ish move politically. I don't agree. I actually think that it's fi ne to say to the people: "Th ese are the revenues that we

British Columbia DebatesThursday, July 11, 2013 375 hope to generate from the sale of assets that to this point you own." So an interesting question. Th e short answer is that until this point there actually hasn't been a corporate number that says: "We anticipate and seek to sell assets and believe that they will generate X number of dollars." Th at, of course, has made it possible — and I think appropriately so — for the opposition and critics to test the veracity of that number, to ask questions about what assets are involved here. I think that's fi ne. M. Farnworth: I thank the minister for his comments.

I think that the minister raises a really important point, then, in this particular discussion, and that is having set a target…. Th e minister is saying that previous adminis- trations didn't set a target. When a budget is tabled, it's now presumed, or the government is saying, that it's balanced because there is a target. Th at number is there. If that target isn't reached or that number isn't reached, that impacts whether or not your budget is balanced, assuming everything else doesn't change — that you don't get an increase in one area of revenue that wasn't expected —

whereas before, that wasn't the case. Y ou didn't have that target set. Y ou didn't have that set. Th ere were governments that were going to sell assets, but the numbers that they presented, they had…. Th ere wasn't a specifi c number assigned, but now we're say- ing that there is a specifi c number that's assigned, and if that target is not reached, then that has an impact on the budget. Th e minister has said that there has been a conscious eff ort to identify and a conscious plan to go out and iden- tify the properties and achieve a set fi nancial target. So that raises a number of questions.

When did the process take place — over what period of time, I guess, in the lead-up to February — and who was involved? Hon. M. de Jong: I'll get some information, but the timeline goes back some distance. I'll want to be as ac- curate as I can for the member. Th e fi rst part of his observation/question interests me, because there is a fl ip side to what the member is sug- gesting. He says, accurately, that in a budget where you have these assumptions, if the assumptions are not real- ized, you have a problem. Th at is true with respect to asset sales. Th at is true with respect to any dimension of the budget.

It is by defi nition a statement of what we antici- pate to occur on the revenue and expense side. But what happened previously? As the member has rightly acknowledged, this gov- ernment and other governments have most certainly made decisions about selling assets. Th ey didn't lay it out. It was built into the budget. It wasn't enumerated as such. What's the fl ip side of the argument that says that it shouldn't be laid out in the way that it is?

Well, aren't you left with…? [1100] If government has made the decision to sell surplus assets — or any asset, for that matter — isn't there an obligation, as part of the budgeting process, to disclose (

a) that there is a decision in the forthcoming fi scal year to sell an asset and (

b) what the expectation is about the revenue that that sale will realize. [D. Horne in the chair.] If you don't do that, isn't that every bit as inaccurate? Wouldn't that lead to the equally valid assertion that you are purposely underestimating revenues? So if govern- ment has made the decision, as we have…. Th is comes to the second part of the member's ques- tion, which I'll try to get some additional information on.

If you have made the decision to sell certain assets, isn't there an obligation to try and estimate, as best one can, what the sale of those assets will realize and then dis- close that somehow in the budget? Failure to do that, I would suggest, is every bit as manipulative and improper as the other. I'll just take a moment and try to get the information about the member's second question about the time frame. It dates back in excess of a year. Th e genesis of this very purposeful program dates back to the fall, September, of 2011.

Some of this, I think, is referred to in the budget, in the topic box contained in the budget. Hopefully, what I'm telling the member is consistent with what's in the topic box, as I'm sure it is. On September 2011 a decision around a purposeful program to dispose of surplus assets…. Y es, generally, we're talking about real estate here — not exclusively but generally real estate. What needed to occur there- aft er, in advance of the February 2012 budget, was some basic work. What's the defi nition of "surplus"? What's the rationale for a sale? What is the economic generator?

In compiling the inventory, if you will, what are the princi- ples that will guide that? And then ongoing work there- aft er around the inventory of properties. I suppose that is an ongoing exercise, and as I said ear- lier, I think governments have, on an ad hoc basis, looked at assets in departments of government. Transport min- istry properties have sold.

Th e diff erence here is that there was a corporate-level program designed to bring some formality, and obviously, the result of that was the presentation in the budget of a specifi c amount that was anticipated to be derived on behalf of the taxpayer by the disposal of these assets. I hope that helps a little bit in terms of identifying the timeline and when the formal part of this dates from. [1105] M. Farnworth: I thank the minister for his answers. I think one of the key questions that we're trying to get an

British Columbia Debates376 Thursday, July 11, 2013 understanding of is…. I mean, it's fi ne that the govern- ment says, "Y es, we've taken this comprehensive review, or view, of a series of asset sales." Th ey've set a target that they expect to be realized. Th e process started in September, and it's been more comprehensive and thor- ough than in the past. A couple of questions that that raises, though, are: what are the key drivers? Is it a target that needs to be realized in terms of a goal, in determining that that's what we have that is surplus?

Or are you saying, "Y es, these assets are surplus" or "Y es, we have to go out and fi nd $750 mil- lion worth of surplus assets," for example? What's driv- ing it? Is it the number, or is it the actual surplus assets themselves? Hon. M. de Jong: Th e short answer…. I think this is what the member is…. I understand. It's a fair question. It is the defi nitions and, ultimately, the inventory that de- termine what the number would be, as opposed to the other way around.

"Here's what's available; here's what we believe." And no question — no question — there's interest on the part of the government to maximize the return, because the state of the budget and the commit- ment that was made to balance added to that imperative. But the inventory, the estimates of value around that inventory and the speed with which properties could be marketed in a responsible way are what ultimately deter- mined the number that could be plugged into the budget, which is why the member detects less concern on my part than perhaps he and his colleagues have about realizing the number.

If it had been arrived at in the way that the member might be suspicious of, then that would poten- tially be problematic. If it had been a case of setting a number and then fi nd- ing a way to realize on that number, that would be riskier. But that's not how this has come about. M. Farnworth: In terms of the determination of what is surplus, and given that a number of these properties are in the SUCH sector, was consultation taking place with the SUCH sector around the particular properties?

Was consultation taking place, for example, with local governments around a number of the real estate prop- erties, given the fact that we know historically that what may be surplus today is not necessarily surplus tomorrow. A number of communities are very fast-growing, and those particular parcels, for example, may be required for educational or health care purposes. So I'm wonder- ing what level of consultation in fact took place, or was it determined by the needs of government, primarily? Hon. M. de Jong: Again, the short answer is yes.

I'll focus on one aspect of the SUCH sector that I have a lit- tle experience with directly, albeit many, many years ago — boards of education, school boards. In fact, the triggering mechanism there is actually a decision by the school board that a property is surplus. I think the member knows there are ongoing discussions that take place about how the proceeds from a site can be utilized or converted or what the medium-longer-term plans for usage of that site are.

In that case, maybe some of the best proof of this relates to the fact that as we move through this program…. [1110] I'm always hesitant to make a statement like this for fear that an hour from now I'll be contradicted, but I've not heard a great deal of controversy about the proper- ties — the school sites and the other properties — that have been included here.

Th at, at the end of the day, is probably the best indi- cation that there is a measure of consensus around the decisions that have been made and, again, recognition that the proceeds realized from many of these sales are being plowed right back into the provision of important services, whether they're educational or whether they're social housing. In many cases, although this reveals itself as a line item in the budget on the revenue side, this is an exercise in conversion, the conversion of an aged asset into some- thing new and better, yet it is the ultimate result of the sale of a surplus asset. M.

Farnworth: Th e minister said that a number of these assets are surplus, that there has not been a lot of controversy around them. Would the minister, then, be willing to table the full list of assets? I know that we've heard some partial issues, but will he be willing to table a full list of assets and make them public so that people can see which assets are up for sale or looking to be dis- posed of? Hon. M. de Jong: A fair question, but the answer is no. Th at derives in part from the question the member asked previously. We do want to protect market position.

Th at's more important or less important, depending on where we are or where the property is located. Th e other issue relates to obligations that we have to consult with local government and obligations that we have to consult with First Nations. I think the mem- ber would appreciate that the legal obligation to consult with First Nations in some cases can only be discharged in good faith if that discussion takes place before certain public activities are engaged in.

I could dance around this, but I think the member's fair question is: "Can we have the whole list?" I'm not in- clined to disclose the whole list, although I have tried to disclose signifi cant numbers of properties as they move to the marketing stage. M. Farnworth: I've got a couple of questions relating to that. I come back to this issue of the minister saying that there has not been a lot of controversy. I can under-

British Columbia DebatesThursday, July 11, 2013 377 stand the minister talking to school districts, for example, about determining surplus assets. Well, I'll give you an example in my own community. During the election campaign I was talking with a school trustee. We were talking about the general school situa- tion and the situation in the Tri-Cities and some of the issues they've had. We were talking about a school in my neighbourhood. It's getting overcrowded.

What I realized in the discussion was that there was a real disconnect — and I know it's not just unique in my district, but it happens around the province — between what local government is doing in terms of development and what the school district itself is expecting to be tak- ing place in terms of development. With this particular school, there is a series of town- houses in the area. Th at's great. Th ere's land that has been in the community plan for a long time, identifi ed as light industrial. Recently that has changed.

Th ere's now the construction going to be taking place of 850 townhouses and apartments. Th ey're fi lled with young kids and fam- ilies. So the reality is that there's going to be the need for either reconfi guration, a readjustment, or a new school. And where's that land going to come from?

I think that's the question that concerns people. [1115] It's one thing to say, "Y es, it's surplus to a particular area and school needs," but the reality is that develop- ment may be taking place either on a basis that the dis- trict is not aware of or that the scale has changed, in which case there's a requirement for that land. Particularly in parts of the Lower Mainland, that is an issue. We've seen that in the past with school closures be- cause of declining enrolment. Subsequent redevelopment gets that enrolment up, and there's no longer a surplus.

I think that's one of the concerns in terms of selling off of assets and not…. When the minister says, "I don't want to disclose the list," well, I think that's a problem. A lot of these sites…. I understand the minister's com- ments about First Nations obligations, but that doesn't apply to every property. What I would like to see the minister do is make a commitment to release as much as possible where, for example, First Nations issues are not impacted. I would ask: would the minister be prepared to do that?

Y ou know, the more that people know there is a piece of property for sale, if you're looking to get a better price, you have the potential to attract more interest and more buyers. So there's a fl ip side to not letting people know what's for sale as well. Hon. M. de Jong: Dealing, fi rstly, with the question around schools and the phenomenon that the member has described — which, by the way, is a tension that does exist and has revealed itself in various ways in various parts of the province over the years. It is not unique to this particular program, however.

We do ultimately rely upon the board of education, the local school board, to provide the information and advice in their ongoing discussions with the Education Ministry about what the needs are. And the member has correctly identifi ed that depending on where you are in the prov- ince, the communication and level of intel that a board may possess about what a municipality or regional dis- trict's plans are for development can sometimes be good and not so good. But the board of education is the agency upon which one relies to proff er that advice.

I am not aware of any circumstance where the prov- incial Crown has stepped in, contrary to the wishes of a school board, and said: "Th ou shalt sell this property." To my knowledge, it hasn't happened. Th ere has been discussion, consultation about the best course of action. Does that mean circumstances don't arise 20 years down the road, where people look back and say they wish a piece of property hadn't been sold? No. I think that hap- pens occasionally, if land use plans change and a residen- tial component developed in an area that heretofore has not hosted families and residences.

On the other question that the member has posed. I take his questions seriously, and I think I understand the rationale. He has, fairly, conceded that there will be some circumstances in which the obligation to consult with First Nations would trump the ability to reveal informa- tion about an intended sale. [1120] The other market-related circumstance that would have to be taken into consideration is: were there two or three properties located in the same area? Are we com- promising the return by prematurely, from a marketing point of view, disclosing intentions about the sale? Th at is also an issue.

I have tried in the budget, in the topic box, to disclose a goodly number of the properties that are not just in the sales stage but are intended to be in the sales stage, and I will continue to do so. Th e properties will appear on the website of Shared Services B.C., and that will be updated on an ongoing basis. Of course, to this point the member is quite right. When it comes time to market a property, the time frame for this fi scal year is relatively short.

We have targeted the end of October — to have all of the properties slated for sale this fi scal year to be on the market by the end of October of this calendar year. At that point we want as many people as possible, as many potential purchasers as possible, to be aware of what those properties are. M. Farnworth: Can the minister confi rm whether the MFA, the Municipal Finance Authority, building is one of the properties that is deemed surplus and is up for sale? Hon. M. de Jong: My best information is that it is not. M. Farnworth: I believe my colleague from Delta

British Columbia Debates378 Thursday, July 11, 2013 South has a few questions on this particular topic. V . Huntington: I just want to explore the issue of the SUCH revenues anticipated in the budget a little bit fur- ther and, specifi cally, the school board funding. I note that on page 46 of the budget plan the plan speaks at some length about the reinvestment opportunities, the economic generation of some of the sales — particularly, it notes, in the school board district area.

If I take the example of south Delta, $1.2 million on the sale of school board land in Delta is showing up on the revenue side of the budget. Th at $1.2 million resulted from a land exchange between the school board and the corporation of Delta. Th e $1.2 million was fully allocated, with approvals from the Ministry of Education, for the restricted capital reserve of the school district. I have talked to the minister's offi ce and to the minis- ter's offi ce of community services to try and understand. Th at money is allocated and remains with the school district, yet it shows up in the revenues of the province.

How is the ministry balancing the budget through these asset sales when, in fact, that money is already al- located and committed in the Ministry of Education? Are you then looking at reducing the block funding of an equivalent amount to education? How is the sale of these assets assisting with the balancing of the budget? [1125] Hon. M. de Jong: It's a good question, because it can be diffi cult to understand. Th e short answer, again, is…. Th e sale occurs. Th e diff erence between book value and what's realized….

Where the cash is, is irrelevant be- cause the board of education is contained within the re- porting entity. Th e fact that the cash remains there, or if it were held by the Ministry of Education — which it is not, as the member has kindly pointed out — becomes irrelevant. It represents net proceeds held by the overall reporting entity and becomes reportable on that basis. M. Elmore: I have a question for the minister in terms of asset sales.

ICBC has a signifi cant investment portfolio that it has shown to manage very eff ectively, generating returns that have gone into the pot to off set and to en- sure that premium rates are kept at a manageable level. I was wondering, in terms of the asset sales, if there are any assets within the ICBC investment portfolio that are contemplated in the sale of assets this time around. Hon. M. de Jong: No. B. Ralston: Th is is a question about asset sales, par- ticularly fi nancial instruments. I've given the minister a letter several days ago. I don't know whether his staff have had a chance to review it.

In the topic box on page 47 there's reference to the sale of fi xed-income securities, held in the sinking funds of the B.C. Transportation Financing Authority, for $1.447 bil- lion in April 2013, realizing a net gain of $123 million. Th e questions that I set out in my letter are: who was the purchaser; who was the broker of the sale, if there was one; was it sold on a public exchange or privately; and what commission was paid to the seller's agent?

I've also requested a more detailed description of the nature of the securities themselves — the date of original issue, the rate of interest, the original purchase price and just how the $123 million was calculated. Given the size of the sale and the size of the proceeds, I think this is a question that merits an answer. [1130] Hon. M. de Jong: To the member, I acknowledge and thank him for the letter and the inquiry. Th e transaction conducted on behalf of the government by BCIMC, with which I think the member is familiar….

Th e purchaser of the securities was National Bank Financial, and I have a ten-page document that chronicles, over 550 lines, the nature of the securities, the bonds sold. What I suggest is that the member have a look at that, as opposed to me trying to guess what features of that are of interest to the member. B. Ralston: Th e minister has expressed earlier — I think in the House prior to the election — some concern about disclosure of an impending sale as jeopardizing the public interest. So was this sale, then, using BCIMC as the agent, a sale that took place on a public exchange, or was this a private sale?

Hon. M. de Jong: Th e transaction, I'm advised, in- volved publicly traded securities, but the decision by BCIMC was to conduct the sale transaction or negotia- tion directly with the single agency that I've mentioned, National Bank Financial. I will be, and am, relying en- tirely on the advice here from BCIMC. Th at was their de- termination as to how to exact the best return for British Columbia — to take advantage of the best interest rate spreads and to minimize the opportunity for market interference.

My sense is that in the earlier discussions we had — where I was, admittedly, fairly guarded about the nature of what was being proposed for sale by the BCIMC on behalf of the province — that opportunity for market ma- nipulation in a way that would operate negatively to the benefi t of the province is what drove that cautiousness. I am told that BCIMC exacted a very positive return. By virtue of how this was done, the interest rate spreads and the return to the province were much higher than they would otherwise have been.

Th at's the information I can provide to the member in addition to what I said a few moments ago. [1135]

British Columbia DebatesThursday, July 11, 2013 379 B. Ralston: I appreciate the assurance, and I'm sure this would be a pro forma position by BCIMC — that they got the best price they could. It is rather striking that it's a sale to a single purchaser of over $1.4 billion in securities. One wonders: were there other bidders, with- out disclosing who they were, and how was the market price arrived at? If it's essentially a private transaction that doesn't go through an exchange, one would certainly want that assurance.

Can the minister explain, without revealing other po- tential bidders who were, I'm sure, consulted in order to arrive at a competitive price, how that was worked? Hon. M. de Jong: I'm just cognizant of the technical area we're in, and I want to ensure that my information to the member is accurate. As I said a moment ago, the securities themselves are publicly traded instruments. BCIMC, as I think I said a moment ago, sold the assets over the counter as a port- folio by direct negotiation with National Bank Financial. BCIMC determined, largely based on market acumen and recognizing that the instruments….

Th is isn't like selling real estate, per se. Th e people in- volved in this, I am reminded, know with certainty the market value of these instruments. BCIMC determined the best price for the portfolio could be realized by that direct negotiation with the single purchaser as opposed to auctioning off parts of the portfolio, which in their view would have posed the risk of moving the market against the province and lowering the portfolio value. [1140] I am also told that one basis point in shift against the value was worth $1.8 million, so there was great sensitiv- ity in calculating the eff ect of that.

I'm told that BCIMC selected National Bank Financial on the basis of their — that is, BCIMC's — market know- ledge of which dealer in Canada was expected to off er the most competitive price for the portfolio.

Th at, I am told, was based on intelligence and information fl ow with dealers across Canada and also the belief that National Bank Financial was expected to be the most competi- tive, because the TFA portfolio, which I referred to a moment ago, had a signifi cant weighting in Quebec se- curities, which apparently plays to NBF's, National Bank Financial's, competitive strength as the lead manager for the province of Quebec and therefore with the deepest access to investors who want to own Quebec securities.

A really long-winded way of saying that in the opin- ion, apparently, of our experts and BCIMC, this was the agency with which to conduct this transaction, which would give British Columbia the best possible return. I've indicated the magnitude of a shift of a basis point or two on that return. I hope that helps. B. Ralston: BCIMC — although the minister does ap- point a number of the directors, he does not appoint the majority of directors, as I'm sure he's aware. So it is an arm's-length agency. Can the minister advise what com- mission, if any, was paid to BCIMC for their services in eff ecting the sale? Hon.

M. de Jong: I'm advised no commission is pay- able on this transaction. Th e remuneration to BCIMC is, I am told, calculated on the basis of a percentage: six basis points calculated against the value of the portfolio that they are managing. B. Ralston: Perhaps in dollar terms, could the minister just do the calculation and put it on the record? Th en, fi nally, will the minister disclose, now that the sale is complete, the further information I requested, the nature of the securities themselves? I understand there's probably a lengthy list.

He need not provide it here, but could he undertake to provide it in writing to me by the end of the session? Hon. M. de Jong: Th e answer to the last question is yes. I am not going to endeavour to do the calculation the member asked for at the front end of his question on the fl y. I can try and get him the number, but I am not doing that calculation in here. B.

Ralston: Clearly, I perhaps overestimated the cap- acity of those senior public servants who are advising him here, but the risk of an error might be embarrass- ing so I'll be content with that number being provided at the same time as the other information, prior to the end of the session. [1145] M. Farnworth: Can the minister let us know: is this the fi rst time in terms of asset sales that the province has sold fi nancial instruments? Hon. M. de Jong: Th e short answer is no.

I can at least tell the member that in '07-08, '08-09 there was actually, I'm advised, a purposeful decision taken to sell sinking funds. If the member asks me why, I can try to obtain that information for him. But during that period of time, the province engaged in the sale of most of the sinking funds that were held. M. Farnworth: I will ask the question. Why did those sales take place? If the minister could get me the infor- mation, I would greatly appreciate it. Hon. M. de Jong: I will endeavour to do so. M. Farnworth: Just a further follow-up on that.

We have sold fi nancial assets, and the minister has indicat- ed it in terms of: "No, we haven't sold them before, but there were the ones in '08." I accept that. Th e question

British Columbia Debates380 Thursday, July 11, 2013 now becomes: is the minister or is the government plan- ning on using the sale of fi nancial assets in the coming fi scal year? Is that part of the coming — like, next year's — fi scal plan? Hon. M. de Jong: No. M. Farnworth: Just in terms of an understanding of the size of the sale in relation to the fi nancial instruments that we continue to hold…. Th is sale was about $1.4 bil- lion. What's the value of fi nancial instruments that the province currently holds aft er this particular sale? Hon. M. de Jong: I apologize to the member.

I want to be clear that I understand the question correctly so that I give the correct answer. If the question is if the province holds any additional sinking funds, the answer is yes, and I can give a value for that. If the question is if the province holds any additional fi nancial instruments, depending on our defi nition of that, the answer is a diff erent one. So if the member can guide me as to…. M. Farnworth: Well, let's take the broadest thing and go both.

Sinking funds and non-sinking-fund fi nancial instruments would be helpful. [1150] While you're deliberating there, Minister, what would the nature of the others be? In terms of just an idea of what type of assets they would be — the fi nancial in- struments, that is, other than the sinking funds — what would their nature be? Hon. M. de Jong: Apologies to the committee — again, appropriate technical questions. At page 126 of the budget the sinking funds are referred to. Th e esti- mated value of the sinking funds are referred to — $379 million.

Th en beyond that, there are instruments that would qualify or be captured by the defi nition of "fi nan- cial instruments." I'm wondering if the member might be satisfi ed if we endeavoured to summarize in some sort of digestible form for him what they are. Th at might assist him in pur- suing those questions in the committee or outside of the committee. I fear this might not be the best mechanism for getting that information to him. M. Farnworth: No, that would be great. Th at would be appreciated. Basically, what I think we want to try to understand is this is not….

Y ou know, when we've talked about asset sales in government, it generally has been real estate. Th is time there are fi nancial instruments. Th e minister stated there were some in '07-08, and he's get- ting the information for that. Th at's good to understand. I think it's a case of wanting to have a broader under- standing. If there are additional fi nancial instruments that government has the ability to sell other than the sinking funds, to have an idea of what they are, given that this is a new method or has not been a typical trans- action in terms of building the budget in previous years.

If the minister can get that information for me, that would be great. I think we probably have time, while we're on the topic of asset sales, to talk about the issue of the Little Mountain Housing sale. Th is is now the third budget where it is included, and there has been a history around that. I just want to have a good understanding of how the sale is being accounted for.

In the print under chart 1 on page 6 of the budget documents, a footnote indicates that the proceeds of the sale of the Little Mountain property is part of net economic growth for 2013-14. [1155] Could the minister explain that categorization and say where in the revenue estimates the $300 million from that sale appears? And if we run out of time, we can pick it up aft er the House reconvenes. Hon. M. de Jong: What page are you reading? M. Farnworth: Page 6 of the budget documents, under chart 1. Hon. M. de Jong: Oh, I see. M. Farnworth: Y eah, it's in little print.

It's in very tiny print under chart 1 on page 6 of the budget documents. Hon. M. de Jong: Happily the transaction, I'm advised, has now closed — I think last week or the week previ- ously. Th e revenues from that transaction actually are not accounted for within chart 1.1. Little Mountain was not included for budgeting purposes and was not included…. It predated the asset sale program that we have been talk- ing about over much of the morning. At page 18 of the fiscal plan documents, under "Miscellaneous" revenue, the member will see the fact that that budgeted estimate goes up in 2013-14 and then back down.

Th at is largely due to the anticipated Little Mountain revenues. And noting the hour, I move the committee rise, report progress and seek leave to sit again. Motion approved. Th e committee rose at 11:57 a.m. Th e House resumed; Madame Speaker in the chair. Committee of Supply (Section B), having reported progress, was granted leave to sit again. Committee of Supply (Section A), having reported progress, was granted leave to sit again.

British Columbia DebatesThursday, July 11, 2013 381 Hon. M. de Jong moved adjournment of the House. Madame Speaker: Hon. Members, this House stands adjourned until 1:30 this aft ernoon. Th e House adjourned at 11:58 a.m. PROCEEDINGS IN THE DOUGLAS FIR ROOM Committee of Supply ESTIMATES: MINISTRY OF ENVIRONMENT (continued) Th e House in Committee of Supply (Section A); M. Bernier in the chair. Th e committee met at 10:09 a.m. On Vote 20: ministry operations, $99,946,000 (con- tinued). Th e Chair: Good morning. We are currently consid- ering the budget estimates of the Ministry of Environment. [1010] S.

Chandra Herbert: Good morning. Good to see everybody back and bright-eyed. Th e question that we were working on yesterday before we had to leave this place, to our regret, was about frack- ing, Kitimat, LNG and airsheds. We had fi nished with a question around how it would be possible for compan- ies to enter the environmental assessment process before the government had decided on what "the cleanest LNG in the world" meant before cumulative impact research into the Kitimat airshed had been done.

I believe the re- sponse was that we would enter into the EA process and then try and deal with those questions later. I'm wondering if the minister could clarify or expand on that answer a bit, since it's around certainty issues and environmental issues that people are concerned about. Hon. M. Polak: Th ere are two paths here that will lead to our ability to manage what happens in terms of air quality in the Kitimat airshed. Th e fi rst — and we've talked about this — is the sub- sequent permitting that would have to take place for any new infrastructure that was built.

It's signifi cant because the Oil and Gas Commission would issue the permits. But they are under the Environmental Management Act, so we would certainly have the ability to advance con- trols and regulations through an air emissions permit that would be granted by the Oil and Gas Commission. [1015] In addition to that, I don't want to leave the impres- sion that nothing takes place on air emissions in the EA process. Th e EA has been very well informed by the work that's been done on the Rio Tinto Alcan process.

In turn, they are also heavily involved, in the room developing the regulations, the standards, that would be put in place for the future. Th ose who are managing the EA process are not hidden from what's taking place. Th ey're an integral part of it. Of course, that then informs what they decide around their EA decisions as well. S.

Chandra Herbert: To go back to the question of the cleanest LNG in the world, companies will want to know, as will communities all around the northeast and the northwest, what "cleanest LNG in the world" means and what the standards are that are set, as would the en- vironmental assessment offi ce. I'm unclear how we can have the cleanest LNG in the world if we don't have an answer to that before people apply in the EA process. If people are putting forward proposals, they'll be going under the current standards.

If they could proceed through that process, I don't im- agine the government would want to then change the rules partway through once they've fi nished the stud- ies, nor is it fair to communities who may be concerned around the current standards. So it doesn't make sense to me at this point. Maybe the minister can clarify how we could get the answer to some of those questions post–environmental assessment, when people will already have been approved with a pre-standards certifi cate around the cleanest LNG in the world. It makes one wonder whether or not that could be just rhetoric as opposed to real standards.

What comes fi rst? Shouldn't we have the standards before people go through a process and then have to re- spond to new standards aft er — which they may not even have to, if they have already been given a certifi cate and already have been into the development stage? [1020] Hon. M. Polak: I appreciate the member's question. It comes down to, in part, understanding how the EA pro- cess unfolds. With respect to any project that's in the EA process, it's not as though the project, as it's proposed, is then fi xed in that state and never changes, and they'd have to start again if there are changes.

By and large, when projects enter the EA, it's a process whereby communication is back and forth, from the EA to the proponent, and the projects evolve and change as they receive feedback from the EA. Th at's maybe the overarching piece to take into this, thinking around how it would operate. In addition to that, it's also important to note that these projects are all at very early stages. Just because a project…. If it did receive an EA certifi cate, that doesn't necessarily mean it would be permitted. Th e certifi cate

British Columbia Debates382 Thursday, July 11, 2013 simply allows them to go further along in the process. When it comes to the development of the standards, the proponents and the EA are involved in the develop- ment of what the standards are going to be. So everyone is at the table, aware of the development of the standards and in discussion. Th ere won't be any surprise for indus- try. Th ere also wouldn't be a need to deal with the stan- dards retroactively on a project.

First of all, in the EA process, one of the decisions that the EA could make in providing a certifi cate would be to point ahead at the permitting and require that the pro- ject meet the standards that are set. Th at can be part of the certifi cate, even if, at that stage, the standards haven't been completed. Nevertheless, the EA would rely on the permits from the OGC around air emissions, and that would ensure that the standards we have developed are then met by whatever project. But all the way through, the propon- ents are working with EA and with others in developing the standards.

No one is going to be surprised. Th ese are proponents who work around the world. Th ey are knowledgable with respect to standards that they must meet in other jurisdictions. Th ey're knowledgable about the most modern technology that's at play in the industry. So all of that information is assisting as we work together to make this possible. S. Chandra Herbert: Th e minister mentioned poten- tial permits which could impact projects post-EA as a way to try and bring them into compliance with what would be new standards, potentially. I'm curious. The minister mentioned air permits through the OGC.

What other permits would be re- quired? Of course, new LNG facilities will also be re- sponsible for climate emissions, use of water, impact on the land and a whole range of things, including impacts on communities, and that kind of thing. What other per- mits would be able to be used if somebody got a certifi - cate, and then…? For example, "cleanest in the world" could cost more money and probably will cost more money, as it needs to. What other permits would be able to be modifi ed? [1025] Hon. M. Polak: Now, I'm going to be speculating.

Of course, each project comes to us individually, with its in- dividual circumstances, so this is speculative. In respect of what permits they may require through the emergency management act issued by the Oil and Gas Commission, there would be air emissions permits, possibly; effl uent discharge permits, possibly. Th en with respect to impact on the land, there would be permits under the Forests, Lands and Natural Resource Operations — so Crown land tenure, perhaps; maybe Water Act permits; perhaps Forest Act permits.

Th ere would also potentially be federal regulations at play, as we understand that the federal government is developing base-level industrial emissions requirements. As you can see, there's a wide range. Again, just to be clear, I'm speculating. Each individual project would have its own framework around it and would require various diff erent permitting, depending on what their plans are. S. Chandra Herbert: I'll wrap on LNG. I've got a whole bunch more questions — some I may just have to send in letter-form now — but a fi nal question on it.

As the standards are being developed — the cleanest LNG in the world, as the government has committed to — will the public be consulted on those standards? What form of public consultation will that take? I understand the minister has spoken about working with industry. What other groups will be consulted, and how do we in- volve the public in this? [1030] Hon. M. Polak: First, I'll off er a correction. Apparently, I called the EMA the emergency management act. So no, I haven't switched ministries. It's just that I'm still tired from yesterday, I guess.

It is the Environmental Management Act, and I'll try to get that correct as we go forward. Th ere is not broad public consultation with respect to the air standards, in part because what we're doing is setting standards based on the best available science and experience. So we are drawing heavily on the experience with Rio Tinto Alcan. We're working closely with First Nations. We're working closely with folks from Trent University and University of Guelph, folks who are ex- perts in air dispersion modelling. We're working with other jurisdictions, like Australia.

It is important to note that there is always public con- sultation when we get to the permitting process. So each and every project that would be proposed would be open to public consultation as part of the permitting process. But on the standards themselves, it would be similar to asking the CSA with respect to the approval of standards for safety of car seats, for example. Rather than public consultation, you're looking for those who are experts in the fi eld to tell you what is safe and then applying those standards.

But there's always public consultation when it comes to the permitting process on these projects. S. Chandra Herbert: Sorry. My colleague was going to ask a question. But my question was: what consulta- tion is going into the standards of "cleanest LNG in the world"? Not on air emission standards. Cleanest LNG in the world, I would assume, would mean more than air. It would mean water use. It would mean climate emis- sions. It would mean land issues. Th ere's a lot more than air there. [1035]

British Columbia DebatesThursday, July 11, 2013 383 If the minister could refl ect on "cleanest LNG in the world," that would be helpful, because I know it's not just a few standards-setting agencies that would under- stand that. Th ere are independent experts. Th ere are en- vironmental groups who would tell you what "cleanest" means — much more than the industry itself, who have their own biases and beliefs around what cleanest means. I would think that it should involve the public. [1040] Hon. M.

Polak: Important to note that while we are talking here specifi cally about LNG development, stan- dards that we develop — whether it's with respect to air or water or in other ministries, where they permit other activities…. Th ose standards apply, then, across the piece, across industry. A really good example of the kind of consultation that has been underway, as we've anticipated, in increases in industrial development would be the Water Act and the modernization of the Water Act. Th at piece of legislation, as it goes forward, represents signifi cant consultation with the public, with First Nations.

It has been extensive. When the white paper is out for public comment, that consultation will be even broader. When it comes to the Ministry of Environment, we have responsibility for the air and the water piece, in terms of our standards. We've already talked about the emissions. Th e water, for example, has gone through much consultation. While the ministry that's responsible for natural gas development is the lead on ensuring that they have the cleanest LNG in the world, nevertheless, it's those of us who perform a regulatory function who set those.

So in Environment — air, water, others — always we'll strive to have the highest standards. Th ose, as standards do, will change over time as science changes, as our technology changes and as our understanding changes. To me, the consultation piece is always a big part of making policy like modernizing the Water Act. We would rely on that heavily in adjusting any other areas in other ministries. A. Weaver: I have a few questions for the minister.

I'd like to start by quoting from the minister's mandate let- ter, where it says that one of the goals is "to eliminate red tape so that we can get to yes on economic development without needless delay." My question to the minister is: does that raise some concerns that it's in some sense precluding an outcome of an environmental assessment if your mandate is to get to yes, as opposed to determining whether yes is the ap- propriate answer? Hon. M.

Polak: It doesn't, because of the phrase "with- out needless delay." What we have seen in the past, at times, in government is process for the sake of process, rather than process that gets to an answer. I don't see that as indicating it requires a granting of a certifi cate or a permit. What it does require is that we get that answer without having, as the letter says, needless delay. A.

Weaver: Would the minister be able to provide in- formation as to the number of projects that have applied to the environmental assessment process since 2011 that have been approved and the number of projects that have not been approved? Hon. M. Polak: We can provide that. It's going to take staff just a couple of minutes to pull it together. When that's ready, I'll add that into a further answer. A. Weaver: Th e mandate letter talks about the creation of a round table.

My question here is: will the creation of the round table alluded to in the letter be mirrored on the federal version, of the National Round Table on the Environment and the Economy, where the group has had a clear independence from government direction; i.e., they'll be free to determine their own research topics and make recommendations on areas of their choice in place of being given directives by government? [1045] Hon. M. Polak: No, this group would be modelled very much along the lines of the former environment and industry stakeholder group — primarily advisory in nature.

Th e terms of reference are in development, as we speak. But it would not be intended as a research body per se. Of course, with respect to that model, there would be the addition of those mentioned in the mandate letter, in terms of their involvement. A. Weaver: As part of the environmental assessment, is there a plan to reduce the time provided in the assess- ment process for public consultation in order to get to yes in faster time? Hon. M. Polak: No, our plans involve addressing our own processes to ensure that we are working as effi ciently and eff ectively as we can. A.

Weaver: When does the minister plan to have the round-table committee set up? Hon. M. Polak: We're aiming at late fall. A. Weaver: Does the minister believe the committee will have input into the assessment process for future projects on LNG? [1050] Hon. M. Polak: No, we envision that the round table would have a broader role in terms of our policies —

British Columbia Debates384 Thursday, July 11, 2013 not only in Environment, but across government — but wouldn't be specifi cally attached to the EA process. A. Weaver: I have two more questions — one on the carbon tax. Th e question here is: will the ministry be conducting annual reviews of its implementation of the carbon tax? Why I ask this is: suppose that other juris- dictions like Alberta were to introduce carbon pricing, as they have mentioned, to the tune of $40 per tonne — or Washington State or Oregon or others.

Will the B.C. gov- ernment reconsider its approach in the next and further years of its mandate? Hon. M. Polak: Our commitment is that, in terms of the price and scope of the carbon tax for the next fi ve years, it would remain as it is. In terms of ongoing review and response to the changing context worldwide, that would be the re- sponsibility of the Ministry of Finance. Th e Minister of Finance would have to describe the approach that he's going to take for monitoring what happens in the global context and making those decisions around a review. It wouldn't be the Environment Ministry. A.

Weaver: Th e term "old growth" appears very in- frequently, if ever, in the budget document or the esti- mates document. Preservation of old-growth forests on Vancouver Island is of particular concern. Two days ago the Ancient Forest Alliance released a statement calling on the government to establish a park acquisition fund to preserve our rapidly depleting old-growth forests on Vancouver Island. I posed this question to the Minister of Forests, and the answer was that any acquisition would come through the parks fund through the Ministry of Environment. So I reframe the question to the Minister of Environment.

To what extent does the Minister of Environment put aside money in the budget to provide for the preservation of old growth through the acquisition of private lands, which are potentially the last few remaining resources of old growth on Vancouver Island? [1055] [D. Plecas in the chair.] Hon. M. Polak: We don't use a dedicated fund for the acquisition of private lands into parks. What we do use, though, are Crown land exchanges and donations.

Also — a very important part of this, I think — our forest carbon off set protocol is a very signifi cant means by which we can assist in the preservation of old-growth forest, in par- ticular on private land. Using these tools, we have added about $10 million in value to the parks system since 2009. G. Holman: I had a question about the proposed mar- ine conservation area for the southern Strait of Georgia. I'm wanting to confi rm whether or not the province and the federal government support the NMCA in principle, and if so, what the status of the proposal is and the an- ticipated timing of implementation. Hon.

M. Polak: We are supportive. We are currently undertaking a feasibility study, together with the feder- al government, and we anticipate that we will have that complete this fall. S. Chandra Herbert: Of course, the member before me was the member for Saanich North and the Islands. I'm just curious if the minister can tell us what ac- tion is going to be taken to improve endangered species legislation. As the minister will know, the New Democrat opposition has moved bills numerous times to bring in stand-alone species-at-risk legislation, as many other provinces have.

Th e government has not responded to our bills and has argued that they have enough support within the legis- lation they have. However, I do note that in the election campaign, the government did say they may consider legislation. I'm just curious if I can get an update on where that sits and what actions are being taken. [1100] Hon. M. Polak: In response to the Species-at-Risk Task Force, the British Columbia government has put out a draft fi ve-year plan for species at risk in British Columbia called Protecting Vulnerable Species.

It is intended to do a number of things: improve spe- cies conservation through management at the ecosystem and the landscape scale; provide the best available infor- mation to support identifi cation, management and re- covery of species at risk; encourage British Columbians to embrace stewardship of species at risk across all lands; apply protection for species at risk consistently across all sectors; and measure and report on government's invest- ments in species at risk.

Now, that draft fi ve-year plan was posted for public comment, and the public input will inform a revised ver- sion that we anticipate taking forward in the fall. Important to note that one of the reasons we don't have stand-alone legislation in British Columbia is that fi rst of all, the federal SARA legislation applies to all lands in British Columbia. Secondly, we already have on our books 28 diff erent statutes that protect species and habitats. S. Chandra Herbert: Th ere has obviously been a huge discussion around pesticides, cosmetic pesticides.

Th e Premier, when she was running to be leader and, in- deed, running to be the MLA for Vancouver–Point Grey, promised to ban cosmetic chemical pesticides in British Columbia. A task force was struck. Many provided com- ments, and they were all largely supportive of such a ban.

British Columbia DebatesThursday, July 11, 2013 385 Th e government, however, disagreed. Th e Chair did not agree with that stance and instead brought in fairly weak regulations — which don't, I believe, protect children, do not properly protect the public. Within the plan there is supposed to be a set of pesti- cides regulated by government.

I'm curious if the min- ister can provide us an update on when that regulation will take place, if it hasn't already, and what studies the ministry is doing to look into large-scale bee die-off s that are occurring, many believe, because of cannabin- oids, I believe they're called, in pesticides that people in the European Union recently banned — whether or not that is considered as well, given that bees are vital for a healthy environment. [1105] Hon. M. Polak: Th e regulations are under develop- ment, and we hope to bring those forward in the spring.

Insofar as the honeybee population and some of the population trends, any studies around that would be con- ducted by the Ministry of Agriculture. Y ou could inquire with respect to what they are doing to look into that. S. Chandra Herbert: I'm just refl ecting…. Th e former Environment critic, the member for Victoria–Swan Lake, just mentioned to me around endangered species. Part of the answer I got to my question around endangered species was, the minister argued, that all land in B.C. is covered by the federal SARA act and so there was no need for the province to have its own endangered-species legislation.

Eight out of ten provinces have endangered- species legislation. If it was not relevant, I'm not sure why they would do that. My understanding had been that federal lands, migra- tory birds and marine areas fell under SARA but provin- cial lands did not. Can I get some clarifi cation on that? [1110] Hon. M. Polak: Th e answer is that we have a Canada- B.C. agreement on species at risk that was signed in 2005, and it is the fi rst of its kind in Canada. S. Chandra Herbert: I guess I'm to understand, then, that B.C. has agreed that SARA applies to everything. Is that correct? Hon. M.

Polak: It's a cooperative model. Th e accord for the protection of species at risk in Canada came into place in 1996. As a result of our Canada-B.C. agreement on species at risk from 2005, it means that we prepare the recovery strategies for species under our provincial management, but then those are adopted under SARA with the feds. It's a very cooperative model, rather than simply their legislation applying. Th ere's a bit more complexity to it, but essentially, we cooperate as we move forward with plans for specifi c species, etc.

Ultimately, the eff ect of that is that SARA applies across all B.C. lands, but it's in a cooperative framework. S. Chandra Herbert: I've got a question. It kind of goes back to a project under the environmental assess- ment offi ce. I'm just curious about the Liberal platform commit- ment regarding consulting with communities, First Nations and industry to develop a provincially designat- ed protected area in the Sacred Headwaters, otherwise known as the Klappan Valley. How will the government ensure this process is transparent and allows for public consultation, participation and engagement? Hon. M.

Polak: In the course of discussions with the First Nations involved — in particular, the Tahltan — if there were to be protected areas that were then to be designated, there is public consultation involved in the process for designating protected areas. S. Chandra Herbert: Th e minister will know, certainly, from previous hats she's worn as well, that in mid-June concerns were aired around an open-pit coal mine in the Klappan being fast-tracked, which the Tahltan felt, or a number of people felt, broke their election promises around the Sacred Headwaters.

Th e federal government has agreed to substitute the provincial assessment pro- cess in lieu of a federal one for the Arctos anthracite pro- ject that was introduced April 18, 2013. I'm wondering if the minister can explain the current status of this, the government's position and how the gov- ernment plans to reconcile the development of an open- pit coal mine in an area that they've promised to engage on with the local people and look at protecting. [1115] Hon. M. Polak: Firstly, let me say that this project is in no way being fast-tracked.

It's going through the same process that any other mine of its type would have to undertake. It has just entered the preapplication stage of the environmental assessment, very early days, in April. With respect to balancing those interests, that is, in fact, what takes place all the time when we're dealing with designating parks and protected areas. Virtually every time we do that — I would venture to say every time we do that — we have to deal with existing rights and ten- ures. Th at is part of our normal process when we desig- nate parks and protected areas. S. Chandra Herbert: Speaking of parks, I'm curious….

We've heard for many years — certainly we've raised for many years — concerns about maintenance of park spaces. On a recent Canada Day long-weekend trip to the Carmanah, I discovered the door of the washroom was falling off . Large chunks of the boardwalk were broken.

British Columbia Debates386 Thursday, July 11, 2013 Th at is a park which people come to from all around the world. It did not refl ect well on British Columbia. Certainly, we've heard these questions raised around many parks across B.C. In the case of Carmanah, they're still distributing maps from 1997 which list trails which have been closed for quite some time. Th ey talk about the Walbran area of that park — doing a consultation, a study into ecological values and into whether or not trails should be put in there. Th at's on the brochure from 1997. Th at same language is used on the website now in 2013.

Th at, to me, suggests…. It's certainly in keeping with what the Auditor General has said about B.C. Parks not having management plans and not having plans to deal with ecological concerns in there, in many of the parks. I'm curious if the minister can tell us what the plan is to ensure that every park has a management plan, a plan to deal with ecological issues in those parks, and what they're doing to improve maintenance of our parks, given that many are in a challenged state right now. [1120] Hon. M. Polak: If the critic will indulge me, I'll just answer a question from a previous round.

To the mem- ber for Oak Bay–Gordon Head, since January 1, 2001, there have been…. Interjection. Hon. M. Polak: Sorry, it's 2011. Y eah, I have the glasses, and it's still not helping. Since January 1, 2011, there have been a total of 15 that have entered the EA, and 13 of those were approved, and two were not approved. Important to note, as we dis- cussed the EA process previously: oft en it is the case that projects enter, and as defi ciencies are pointed out they are corrected as the process unfolds. Hope that's helpful.

To answer the question at hand, certainly it has been recognized that there is a need to deal with some of the situations in the parks that have been described by the member. By the way, Lori is going to, certainly, look into what you discovered at Carmanah. As a result of that con- cern, the capital budget for parks was increased by 27 per- cent in '11-'12, to the tune of $13.98 million, for that very purpose: to help us fi x the doors on the washrooms, etc. When it comes to publications, brochures, it's true that we have lagged behind in terms of updating those — a conscious decision in tight times.

We have directed our resources to the areas where we think it matters most, and that is, in fact, the park operations and maintenance. S. Chandra Herbert: I'm curious if the minister can share with us what the plan is to deal with all of the man- agement plans, ecological plans that are still left out- standing. As I mentioned, I don't…. I guess tough times, maybe, from when the government took over in 2001 to now be- cause in terms of…. I'm being facetious here, but there have been 12 years, for example, with that one park where they say that the government is planning a study and is studying it.

Th at's actually been on their plans since 1997, and nothing has happened. So how are we going to adjust the huge backlog of management studies, of ecological reports that are re- quired in our parks to protect the species that we want to protect in them but also to make sure that they're there for the public who want to use them? [1125] Hon. M. Polak: Of course the member will know — but we're pretty proud of it, so I'll say it again — that we do have 1,030 parks in our system. Th at means that we have the third-largest park system in North America. In Canada we're second only to the federal park system.

So it is a heritage for us to be very proud of. Th e process unfolds as follows. Y ou begin with a con- servation risk assessment, and for 96 percent of our parks, those have been completed. Once that is done, there is public consultation. Th ere is First Nations consultation around how the park ought to be used. Th at results in a management plan. Two-thirds of the parks now have management plans. I suppose you can always speed something up by throwing more fi nances at a challenge like that, right?

At the same time, I believe we're making steady progress, and really, the time it is taking has more to do with some very thorough work around the assessments and the con- sultation than it does with budgetary impacts. S. Chandra Herbert: Well, I'm sure the management plan into the Walbran Valley, which it has been under- going since 1997, will be a really excellent plan with in- credibly detailed work, as the ministry has been saying it's doing that work since 1997 and still says it's doing that work today. It's going to be quite a considerable report, and I hope to see it soon.

Moving on to fi sheries, I know the minister has said there are pieces of fi sheries in her ministry. I'm curious if she can tell us what steps her ministry is taking to ensure that the Cohen Commission report and the recommen- dations therein are being followed to the fullest of gov- ernment's ability. Of course, the elements that are within her ministry, I'm asking about. [1130] Hon. M. Polak: As it turns out, Agriculture is re- sponsible for working with the federal government on the implementation of the Cohen Commission and the recommendations. S. Chandra Herbert: I guess I'm curious.

Freshwater Fisheries Society has been calling, for many years, for the full amount of funds to be given their way so that they

British Columbia DebatesThursday, July 11, 2013 387 can continue to protect our fi sh but also introduce more people to the joy of recreational angling and fi shing for food for their families. I'm curious. I know it's in the minister's letter from the Premier. What steps are now being taken to ensure that that happens? Hon. M. Polak: We are committed to making it hap- pen. We are working together with Forests, Lands and Natural Resource Operations. I'm advised by staff that at this stage, they are taking a look at what exactly would have to be done in order to make that possible. S. Chandra Herbert: O

Document details

Collection	British Columbia — Debates (Hansard)
Citation	20130711am-Hansard-v2n6
Type	hansard
Volume / chapter	20130711am Hansard v2n6
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	7da09022d63a40c3e41a61a0bebb9d71639db303

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