20200811pm Hansard n355

British Columbia — Debates (Hansard)

Fifth Session, 41st Parliament OFFICIAL REPORT OF DEBATES (HANSARD) Tuesday, August 11, 2020 Afternoon Sitting Issue No. 355 THE HONOURABLE DARRYL PLECAS, SPEAKER ISSN 1499-2175

PROVINCE OF BRITISH COLUMBIA (Entered Confederation July 20, 1871) LIEUTENANT-GOVERNOR Her Honour the Honourable Janet Austin, OBC Fifth Session, 41st Parliament SPEAKER OF THE LEGISLATIVE ASSEMBLY Honourable Darryl Plecas EXECUTIVE COUNCIL Premier and President of the Executive Council ............................................................................................................... Hon. John Horgan Deputy Premier and Minister of Finance............................................................................................................................Hon.

Carole James Minister of Advanced Education, Skills and Training..................................................................................................... Hon. Melanie Mark Minister of Agriculture.........................................................................................................................................................Hon. Lana Popham Attorney General.................................................................................................................................................................Hon.

David Eby, QC Minister of Children and Family Development ............................................................................................................ Hon. Katrine Conroy Minister of State for Child Care...................................................................................................................................... Hon. Katrina Chen Minister of Citizens’ Services...................................................................................................................................................Hon.

Anne Kang Minister of Education ............................................................................................................................................................ Hon. Rob Fleming Minister of Energy, Mines and Petroleum Resources ..................................................................................................... Hon. Bruce Ralston Minister of Environment and Climate Change Strategy............................................................................................. Hon.

George Heyman Minister of Forests, Lands, Natural Resource Operations and Rural Development ..............................................Hon. Doug Donaldson Minister of Health .....................................................................................................................................................................Hon. Adrian Dix Minister of Indigenous Relations and Reconciliation ......................................................................................................... Hon.

Scott Fraser Minister of Jobs, Economic Development and Competitiveness.............................................................................Hon. Michelle Mungall Minister of State for Trade...............................................................................................................................................Hon. George Chow Minister of Labour ...................................................................................................................................................................Hon.

Harry Bains Minister of Mental Health and Addictions............................................................................................................................ Hon. Judy Darcy Minister of Municipal Affairs and Housing.................................................................................................................. Hon. Selina Robinson Minister of Public Safety and Solicitor General ........................................................................................................... Hon.

Mike Farnworth Minister of Social Development and Poverty Reduction..............................................................................................Hon. Shane Simpson Minister of Tourism, Arts and Culture.....................................................................................................................................Hon. Lisa Beare Minister of Transportation and Infrastructure................................................................................................................ Hon.

Claire Trevena LEGISLATIVE ASSEMBLY Leader of the Official Opposition................................................................................................................................Andrew Wilkinson, QC Leader of the Third Party .................................................................................................................................................................Adam Olsen Deputy Speaker................................................................................................................................................................................

Raj Chouhan Assistant Deputy Speaker............................................................................................................................................................. Simon Gibson Deputy Chair, Committee of the Whole ................................................................................................................ Spencer Chandra Herbert Clerk of the Legislative Assembly ...........................................................................................................................................

Kate Ryan-Lloyd Law Clerk and Parliamentary Counsel.............................................................................................................................. Seunghee Suzie Seo Clerk Assistant, Parliamentary Services...........................................................................................................................

Artour Sogomonian Clerk Assistant, Committees and Interparliamentary Relations ..............................................................................................Susan Sourial Senior Research Analyst ................................................................................................................................................................. Jennifer Arril Senior Research Analyst ...................................................................................................................................................................

Karan Riarh Acting Sergeant-at-Arms..................................................................................................................................................................Greg Nelson

ALPHABETICAL LIST OF MEMBERS Ashton, Dan (BC Liberal) ......................................................................... Penticton Bains, Hon. Harry (NDP)................................................................ Surrey-Newton Barnett, Donna (BC Liberal) .....................................................Cariboo-Chilcotin Beare, Hon. Lisa (NDP)..............................................

Maple Ridge–Pitt Meadows Begg, Garry (NDP) .......................................................................Surrey-Guildford Bernier, Mike (BC Liberal) .........................................................Peace River South Bond, Shirley (BC Liberal)...........................................Prince George–Valemount Brar, Jagrup (NDP).......................................................................Surrey-Fleetwood Cadieux, Stephanie (BC Liberal)........................................................

Surrey South Chandra Herbert, Spencer (NDP) .......................................Vancouver–West End Chen, Hon. Katrina (NDP)...................................................... Burnaby-Lougheed Chouhan, Raj (NDP) .................................................................Burnaby-Edmonds Chow, Hon. George (NDP).................................................Vancouver-Fraserview Clovechok, Doug (BC Liberal) ..................................Columbia River–Revelstoke Coleman, Rich (BC Liberal) ................................................................ Langley East Conroy, Hon.

Katrine (NDP)...........................................................Kootenay West Darcy, Hon. Judy (NDP) ............................................................. New Westminster Davies, Dan (BC Liberal) ........................................................... Peace River North de Jong, Michael, QC (BC Liberal) ..............................................Abbotsford West Dean, Mitzi (NDP)................................................................ Esquimalt-Metchosin D’Eith, Bob (NDP) ................................................................Maple Ridge–Mission Dix, Hon.

Adrian (NDP)....................................................... Vancouver-Kingsway Donaldson, Hon. Doug (NDP)...................................................................... Stikine Eby, Hon. David, QC (NDP).............................................. Vancouver–Point Grey Elmore, Mable (NDP).........................................................Vancouver-Kensington Farnworth, Hon. Mike (NDP) ........................................................Port Coquitlam Fleming, Hon. Rob (NDP) ......................................................

Victoria–Swan Lake Foster, Eric (BC Liberal).............................................................Vernon-Monashee Fraser, Hon. Scott (NDP) ..................................................Mid Island–Pacific Rim Furstenau, Sonia (BC Green Party) .............................................Cowichan Valley Gibson, Simon (BC Liberal) ...................................................Abbotsford-Mission Glumac, Rick (NDP).........................................................Port Moody–Coquitlam Heyman, Hon. George (NDP) ................................................Vancouver-Fairview Horgan, Hon.

John (NDP) ................................................ Langford–Juan de Fuca Hunt, Marvin (BC Liberal) ........................................................ Surrey-Cloverdale Isaacs, Joan (BC Liberal) .......................................... Coquitlam–Burke Mountain James, Hon. Carole (NDP).................................................... Victoria–Beacon Hill Johal, Jas (BC Liberal).................................................Richmond-Queensborough Kahlon, Ravi (NDP)............................................................................... Delta North Kang, Hon.

Anne (NDP)......................................................... Burnaby–Deer Lake Kyllo, Greg (BC Liberal)..............................................................................Shuswap Larson, Linda (BC Liberal) .............................................. Boundary-Similkameen Lee, Michael (BC Liberal) ........................................................Vancouver-Langara Leonard, Ronna-Rae (NDP) ..................................................... Courtenay-Comox Letnick, Norm (BC Liberal).............................................

Kelowna–Lake Country Ma, Bowinn (NDP) .....................................................North Vancouver–Lonsdale Malcolmson, Sheila (NDP) ........................................................................Nanaimo Mark, Hon. Melanie (NDP) .......................................Vancouver–Mount Pleasant Martin, John (BC Liberal)....................................................................... Chilliwack Milobar, Peter (BC Liberal)..................................... Kamloops–North Thompson Morris, Mike (BC Liberal) ........................................... Prince George–Mackenzie Mungall, Hon.

Michelle (NDP)......................................................Nelson-Creston Oakes, Coralee (BC Liberal) ............................................................ Cariboo North Olsen, Adam (BC Green Party)............................ Saanich North and the Islands Paton, Ian (BC Liberal).......................................................................... Delta South Plecas, Hon. Darryl (Ind.) ........................................................... Abbotsford South Polak, Mary (BC Liberal) ............................................................................. Langley Popham, Hon.

Lana (NDP)............................................................... Saanich South Ralston, Hon. Bruce (NDP) ............................................................Surrey-Whalley Redies, Tracy (BC Liberal) .......................................................Surrey–White Rock Reid, Linda (BC Liberal) ................................................. Richmond South Centre Rice, Jennifer (NDP) ............................................................................. North Coast Robinson, Hon.

Selina (NDP) .........................................Coquitlam-Maillardville Ross, Ellis (BC Liberal)................................................................................... Skeena Routledge, Janet (NDP) ....................................................................Burnaby North Routley, Doug (NDP) ................................................. Nanaimo–North Cowichan Rustad, John (BC Liberal) ................................................................Nechako Lakes Shypitka, Tom (BC Liberal) ..............................................................

Kootenay East Simons, Nicholas (NDP) ......................................... Powell River–Sunshine Coast Simpson, Hon. Shane (NDP)..................................................Vancouver-Hastings Sims, Jinny (NDP) ........................................................................ Surrey-Panorama Singh, Rachna (NDP) .........................................................Surrey–Green Timbers Stewart, Ben (BC Liberal) ................................................................. Kelowna West Stilwell, Michelle (BC Liberal)...............................................

Parksville-Qualicum Stone, Todd (BC Liberal)..........................................Kamloops–South Thompson 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 Thomson, Steve (BC Liberal)......................................................

Kelowna-Mission Thornthwaite, Jane (BC Liberal) ...............................North Vancouver–Seymour Throness, Laurie (BC Liberal) .......................................................Chilliwack-Kent Trevena, Hon. Claire (NDP) ................................................................North Island Wat, Teresa (BC Liberal) ................................................. Richmond North Centre Weaver, Dr.

Andrew (Ind.)................................................Oak Bay–Gordon Head Wilkinson, Andrew, QC (BC Liberal) ................................Vancouver-Quilchena Y ap, John (BC Liberal)............................................................Richmond-Steveston LIST OF MEMBERS BY RIDING Abbotsford-Mission............................................................................Simon Gibson Abbotsford South....................................................................... Hon. Darryl Plecas Abbotsford West......................................................................

Michael de Jong, QC Boundary-Similkameen...................................................................... Linda Larson Burnaby–Deer Lake....................................................................... Hon. Anne Kang Burnaby-Edmonds................................................................................Raj Chouhan Burnaby-Lougheed .................................................................... Hon. Katrina Chen Burnaby North .................................................................................

Janet Routledge Cariboo-Chilcotin .............................................................................Donna Barnett Cariboo North.................................................................................... Coralee Oakes Chilliwack ............................................................................................... John Martin Chilliwack-Kent ...............................................................................Laurie Throness Columbia River–Revelstoke .........................................................

Doug Clovechok Coquitlam–Burke Mountain.................................................................. Joan Isaacs Coquitlam-Maillardville ...................................................... Hon. Selina Robinson Courtenay-Comox................................................................... Ronna-Rae Leonard Cowichan Valley .............................................................................

Sonia Furstenau Delta North.............................................................................................Ravi Kahlon Delta South ..................................................................................................Ian Paton Esquimalt-Metchosin ..............................................................................Mitzi Dean Fraser-Nicola .........................................................................................

Jackie Tegart Kamloops–North Thompson .............................................................Peter Milobar Kamloops–South Thompson..................................................................Todd Stone Kelowna–Lake Country .....................................................................Norm Letnick Kelowna-Mission ..............................................................................

Steve Thomson Kelowna West ..........................................................................................Ben Stewart Kootenay East.......................................................................................Tom Shypitka Kootenay West........................................................................ Hon. Katrine Conroy Langford–Juan de Fuca .............................................................. Hon. John Horgan Langley .....................................................................................................

Mary Polak Langley East.........................................................................................Rich Coleman Maple Ridge–Mission.............................................................................. Bob D’Eith Maple Ridge–Pitt Meadows............................................................Hon. Lisa Beare Mid Island–Pacific Rim................................................................ Hon. Scott Fraser Nanaimo......................................................................................

Sheila Malcolmson Nanaimo–North Cowichan............................................................... Doug Routley Nechako Lakes........................................................................................ John Rustad Nelson-Creston ................................................................... Hon. Michelle Mungall New Westminster........................................................................... Hon. Judy Darcy North Coast ...........................................................................................

Jennifer Rice North Island.............................................................................. Hon. Claire Trevena North Vancouver–Lonsdale................................................................... Bowinn Ma North Vancouver–Seymour........................................................Jane Thornthwaite Oak Bay–Gordon Head............................................................Dr.

Andrew Weaver Parksville-Qualicum.......................................................................Michelle Stilwell Peace River North ................................................................................... Dan Davies Peace River South ................................................................................ Mike Bernier Penticton ................................................................................................. Dan Ashton Port Coquitlam...................................................................... Hon.

Mike Farnworth Port Moody–Coquitlam.......................................................................Rick Glumac Powell River–Sunshine Coast....................................................... Nicholas Simons Prince George–Mackenzie....................................................................Mike Morris Prince George–Valemount ..................................................................

Shirley Bond Richmond North Centre..........................................................................Teresa Wat Richmond-Queensborough.........................................................................Jas Johal Richmond South Centre ......................................................................... Linda Reid Richmond-Steveston ...................................................................................

John Y ap Saanich North and the Islands .............................................................Adam Olsen Saanich South .............................................................................Hon. Lana Popham Shuswap...................................................................................................... Greg Kyllo Skeena........................................................................................................... Ellis Ross Stikine....................................................................................Hon.

Doug Donaldson Surrey-Cloverdale ................................................................................ Marvin Hunt Surrey-Fleetwood.....................................................................................Jagrup Brar Surrey–Green Timbers........................................................................Rachna Singh Surrey-Guildford......................................................................................Garry Begg Surrey-Newton ..............................................................................Hon.

Harry Bains Surrey-Panorama ...................................................................................... Jinny Sims Surrey South ................................................................................ Stephanie Cadieux Surrey-Whalley ......................................................................... Hon. Bruce Ralston Surrey–White Rock .............................................................................. Tracy Redies Vancouver-Fairview.............................................................. Hon.

George Heyman Vancouver–False Creek........................................................................ Sam Sullivan Vancouver-Fraserview...............................................................Hon. George Chow Vancouver-Hastings ............................................................... Hon. Shane Simpson Vancouver-Kensington....................................................................... Mable Elmore Vancouver-Kingsway..................................................................... Hon.

Adrian Dix Vancouver-Langara................................................................................ Michael Lee Vancouver–Mount Pleasant..................................................... Hon. Melanie Mark Vancouver–Point Grey ............................................................Hon.

David Eby, QC Vancouver-Quilchena........................................................Andrew Wilkinson, QC Vancouver–West End .....................................................Spencer Chandra Herbert Vernon-Monashee ....................................................................................Eric Foster Victoria–Beacon Hill.................................................................. Hon. Carole James Victoria–Swan Lake.................................................................... Hon. Rob Fleming West Vancouver–Capilano...................................................................

Ralph Sultan West Vancouver–Sea to Sky................................................................Jordan Sturdy Party Standings: BC Liberal 42; NDP 41; Independent 2; BC Green Party 2

CONTENTS Tuesday, August 11, 2020 Afternoon Sitting Page Routine Business Tabling Documents............................................................................................................................................................... 12345 Speculation and vacancy tax, annual report, 2018 tax year Orders of the Day Committee of Supply ............................................................................................................................................................ 12345 Estimates: Ministry of Forests, Lands, Natural Resource Operations and Rural Development(continued) Hon.

D. Donaldson J. Rustad Estimates: Ministry of Finance Hon. C. James S. Bond T. Stone T. Redies S. Furstenau A. Olsen

TUESDAY , AUGUST 11, 2020 The House met at 1:34 p.m. [Mr. Speaker in the chair.] Routine Business Tabling Documents Hon. C. James: I rise to table the speculation and vacancy tax annual report for the 2018 tax year. Orders of the Day Hon. M. Farnworth:I call continued estimates debate, Ministry of Forests, Lands and Natural Resource Opera- tions. Committee of Supply ESTIMATES: MINISTRY OF FORESTS, LANDS, NATURAL RESOURCE OPERATIONS AND RURAL DEVELOPMENT (continued) The House in Committee of Supply (Section B); R. Chouhan in the chair. The committee met at 1:35 p.m.

On Vote 29: ministry operations, $489,126,000 (continued). Hon. D. Donaldson:I have a couple of answers from this morning for the last couple of questions that the mem- ber posed, if I can go ahead with that. As far as the cleaning up of the site on the Morice forest service road where the Gitdumden clan had had some activity, I know the member…. I believe it was a letter to our ministry, and then today he talked about media reports. So yes, we’ll provide it in writing. We’ll investigate the issue and provide him what we discover in writing to that question.

As far as the Wet’suwet’ en First Nation and their FCRSA, which is the revenue-sharing agreement for forestry activ- ities in their area, the member, being a former cabinet minister in this particular area of interest, knows that FCRSAs are the responsibility of the Ministry of Indigen- ous Relations and Reconciliation. However, we checked with them over the break. In the interim, the FCRSA with the Wet’suwet’ en First Nation has been extended, and it will be renewed. We understand a letter from MIRR is about to go out to the Wet’suwet’ en First Nation explaining that. J.

Rustad:There are a couple of questions that we’ll want to push out to the minister here…. [1:40 p.m.] The Chair:Okay, Member. I think there’s something wrong with the Wi-Fi that you are using. Try again, please. J. Rustad:Y es, my Wi-Fi here is not good, unfortunately. Perhaps what I will do is I will submit a number of ques- tions in writing to the minister to get on the record. In the Tahltan’s territory up in the northwest of the province, hunters who have been issued LEH have been denied access or been told they will be denied access by the Tahltan to be able to go out and hunt.

The reason that was given for this is because of COVID-19. Y et the Tahltan are allowing guided hunts to be able to go into the territ- ory, which, obviously, would provide the Tahltan with a fee. So they’re denying resident hunters an opportunity to fulfil their LEHs in the northwest of the province to go in, through guides, and be able to hunt in that area, or other people, not necessarily foreign, that use guides.

The question to the minister is: why is the ministry allowing the resident hunters to be blocked access to the Tahltan territory when the same standard is not being held for other hunting opportunities through guides? [1:45 p.m.] Hon. D. Donaldson:The member’s question — I think I caught the gist of it. I’m familiar with low bandwidth in the northwest, so I hope you can hear my answer properly as well. I think the member might have characterized it as the province allowing the Tahltan to restrict hunting. That’s not the case. The hunt is open for residents and guided hunts in that area.

However, we have encouraged hunters who want to travel to that area to be mindful of the pro- vincial health officer’s orders. Dr. Bonnie Henry has con- sistently stated that you should check with local conditions before visiting remote communities and remote areas, to familiarize yourself with what community wishes are. Obviously, First Nations and Tahltan have a larger degree of risk and loss, should the virus be introduced to communities. So as I said, this is something that people should be aware of and investigate before they travel to these remote First Nations communities.

Many First Nations have good reason to be on high alert, based on how pandemics have devastated their communities in the past — in some cases, the fairly recent past, whether it’s tuberculosis or smallpox. We’ll continue to work with the Tahltan on their con- cerns. But at this point, we have not restricted access to the hunting that’s permitted in that area. J. Rustad:As I said, I had a number of other questions, but given time and the bandwidth, I think I will leave those questions for another time or get them in writing, includ- 12345

ing still looking for a response with regards to the elk issue in my riding. I do want to make a couple of comments before I wrap up the estimates. Hopefully, this will be able to come through. I will try to speak slow and clear. The ministry has done a lot of what-we-heard reports and put them out. I thought perhaps I would summarize what I heard through this estimates process. We have a tremendous amount of land base that needs replanting. There’s work that needs to be done around communities. The Forest Enhancement Society is the vehicle for doing that. The ministry is providing no fund- ing.

The funding for that mechanism will run out. Almost all of that is now allocated. It’s too bad because that means literally there are more than one million hectares that will go unplanted due to fires, as well as lots of work around communities in terms of fire safe. On the coast, we have seen policy after policy that has been introduced that then has been adjusted because obvi- ously there was very little, if any, analysis done or model- ling as to the cost structure.

The implementation of things like fibre recovery zones has simply downloaded an addi- tional cost onto producers, where we have seen, across the province now, more than a 33 percent increase of costs in the Interior and a 69 percent increase in costs on the coast under this government. We have become a high-cost producer. It makes us vul- nerable to the markets, to the market conditions, which ultimately means that mills will take more downtime and create more disruption to an industry. [1:50 p.m.] On the coast, we saw the longest strike ever in B.C. ’s his- tory under this government.

In addition, we saw Mosaic go down for eight months in related, because of the strike, but other issues. On top of that, B.C. now risks a trade war with Japan — obviously, through Canada — by not being able to meet our obligations in terms of exports through the Trans- Pacific Partnership. Another situation that could further hurt our forest exports and our opportunities to be able to access foreign markets. Across the province, we see continued challenges in per- mitting, particularly in some areas. I know the minister said that permitting turnaround is short.

However, every company I have talked to says otherwise. So I’m not sure how those two numbers jibe, when some companies are saying it can take four to five months to get permits through and to get access on the land base. We’ve seen disruptions. People not being able to access woodlot licences because of disputes with First Nations. In addition to this, across the province, we have seen a forest health issue with the spruce beetle epidemic, which is not being addressed effectively.

In addition, an area being set aside for caribou, where there is a known out- break of spruce beetle that can no longer be managed, can no longer be accessed. We’ll just let nature take its course. I seem to recall that was the response by the former NDP government to the mountain pine beetle epidemic in Tweedsmuir Park, and we all know what happened in that disaster. Spruce beetle, fortunately, are of a different nature, but it’s unfortunate that we’re in this situation, where these issues cannot be resolved.

We’ve seen tremendous uncertainty with things like the Interior revitalization — that uncertainty hanging over industry’s head — and the inability to be able to invest and to be able to enact. Even things like in the southern Interi- or, where we have the category 2 sales, which are designed to support the small operators and have opportunity. The recent analysis appears to be about 87 percent of those sales going to large companies. Obviously, not meeting the goals that were set out. The ministry continually talks about wanting to get more value instead of volume.

Fully agree that we should be trying to get more value and have that value-added. But you have to have a primary industry to have something to add value to, and that’s where we see big challenges. In that primary industry, on the coast, once again…. When you look at the manufacturing rigs and the uncer- tainty that’s causing, and the difference between the Interi- or and how the Interior is being managed to the coast, it doesn’t make a lot of sense. It’s like the ministry is target- ing one very specific group or activity as opposed to hav- ing policy that is good for the province.

It’s unfortunate that we see so much of this going on. Uncertainty even with things like the private managed forest lands. Uncertainty on the land base, in terms of the working forest. Reluctance to come forward with inform- ation as to what’s going to be happening with old growth. All of these things basically being kicked down the road. On wildlife, a lot of promises made by this government. In recent conversations with wildlife groups, they’re ask- ing: “Why have these promises not been delivered?

Why is it that the ministry is not moving forward with what had been promised?” In addition, we have the situation of the continual decline of moose herds across the province and a complete lack of ability for this ministry to look at the situation and reverse its course on its antlerless hunt — the hunt for the cow calf — which makes no sense. Y ou go around to any hunter in the province.

It’s hard to find anybody that would ever agree to the policy that’s going on there, when everyone knows the real issue at hand is predators and the need for predator management on caribou issues. [1:55 p.m.] There are more things I’ d like to touch on. With that, I do know that there are other estimates that are waiting that would like to start up here right away. So I will end my comment. I want to thank the staff. Sorry for keeping them so long into the Tuesday. I know that a tremendous number of people have to be online and on a call to have access to information for the minister.

We were hoping to have this 12346 British Columbia Debates Tuesday, August 11, 2020

all wrapped up by Monday. Unfortunately, we weren’t able to get there. But I do appreciate the efforts by staff. I will follow up on the minister’s offer, as well, to have that conversation about the Mackenzie supply area, in terms of the approaches the ministry has taken to be able to support that community, which, of course, has been struggling so badly over the last few years. With that, I will turn it over to the minister and thank him for his time here in estimates. Given my bandwidth, I don’t know if I’ll be able to even stay on to hear the minis- ter, but I certainly will readHansard to hear his remarks.

Hon. D. Donaldson:I, too, want to thank staff for their support, their knowledge and their expertise and the member for Nechako Lakes for his comments. Of course, I don’t agree with his perspective. He has a perspective, and he has read it into the record. I am more optimistic about the forest sector in B.C. and the moves we’ve made. Now, with lumber prices up and stumpage reduced, many workers are going back to work, whether it’s in mills or in the bush, in harvesting. We know that share prices of the publicly traded companies have fully recovered back to the levels they were at the begin- ning of this year.

So it’s an indication that they’re doing well and making a profit. We have challenges, certainly. That’s because not enough attention was paid to the forest sector and other parts that we’re responsible for in this ministry by the previous government. We have made changes, and we’re determined to turn things around. I can tell you, on the coast, we had exponential growth, under the previous gov- ernment, in log exports. We had an increasing concen- tration of tenure that wasn’t good for competition or diversity.

We launched the coast revitalization program to address that and are implementing recommendations from that. In the Interior…. The member knows that there were reports that his government received predicting the over- capacity issue with the decline of the pine beetle. Not enough was done to support communities to prepare for the day. We’ve done that. We’ve got the mass timber port- folio fully launched, with the parliamentary secretary focusing on it as well. We were able to support communities with community grants to the tune of $14 million coming at the end of the last fiscal year.

Much of that money went to rec sites and trails, not only to increase infrastructure and liveability but tourism, when it bounces back, as well as things like meat- processing facilities in remote communities and the can- nabis production facility in Williams Lake, under the Wil- liams Lake Indian Band. We are also intent on bringing more fibre out of the forests. The pellet industry is a good example of a success story in that regard. Some of that work has been enhanced by forest health activities under the Forest Enhancement Society of B.C.

There’s $79 million allocated for this fiscal year and $60 million for the next fiscal year, and we’re working with the federal government to see a continuation of that program. Wildlife management. We finished our Together for Wildlife engagement process. We’ll be putting a wildlife advisory committee in place as a result of that. The ignored issues of the past will now get full attention. We had some good news today on the Big Bar landslide. The Whooshh machine is working, so fish are making it through on that front.

We continue to respond to natural disasters such as that landslide and find success. [2:00 p.m.] I want to say a special thank-you. The member men- tioned replanting. We’ve planted a record number of trees this year, over 300 million. That was in the midst of a COVID pandemic. I want to thank staff for their incred- ible work in ensuring that workers were safe in that industry, that communities were safe in that industry and that we were able to ensure that the trees got planted and follow provincial health officer orders to keep people safe. All in all, lots of work done.

I enjoy the estimates pro- cess of getting to canvass all sorts of topics. I thank, once again, the staff, the critic and the members who took the opportunity to ask questions. Vote 29: ministry operations, $489,126,000 — approved. Vote 30: fire management, $136,310,000 — approved. Vote 51: Forest Practices Board, $3,861,000 — approved. Hon. D. Donaldson:I move that the committee rise and report resolutions and completion of the estimates of the Ministry of Forests, Lands, Natural Resource Opera- tions and Rural Development and seek leave to sit again. Motion approved. The committee rose at 2:03 p.m.

The House resumed; Mr. Speaker in the chair. Committee of Supply (Section B), having reported resolutions, was granted leave to sit again. Hon. C. James: I call the estimates of the Ministry of Finance. [2:05 p.m.] Tuesday, August 11, 2020 British Columbia Debates 12347

Committee of Supply ESTIMATES: MINISTRY OF FINANCE The House in Committee of Supply (Section B); R. Chouhan in the chair. The committee met at 2:07 p.m. On Vote 25: ministry operations, $267,491,000. The Chair:Minister, if you want to make any further comments, please proceed. Hon. C. James: Thank you very much, Mr. Chair. I’ll just take a minute, because I want to make sure that we have lots of opportunity for my critics, who I can see up on the screen, to be able to ask the kinds of questions that they want to ask. I just want to say, first, to start, that these are very unique times.

They’re unique times in the way that we’re doing estimates through technology. They’re unique times in going through a pandemic and looking at supplement- ary votes through this process as well. So I want to say a huge thank you to staff for the extraordinary job and the extra load that they’ve had to put on to be able to prepare for these estimates.

Thanks to my critics and thanks to the Legislature, because certainly it is a unique time and a unique position for a Finance Minister to have to come forward after a budget has been tabled to request supplementary spend- ing, to come forward with the estimate of the kinds of spends that we believe will help the people of this province. I think the fact that this entire Legislature came together in a very short period of time, during a very difficult time, really speaks volumes to the individuals in this House.

We may disagree, but when it comes to very important times, I think we showed that we can come together. We can get work done. We can move ahead on pieces. I think that’s important to acknowledge during these difficult times. I expect there’ll be lots of good questions. We’ll have lots of opportunity to be able to canvass the material here. But I wanted to start off with a recognition of that work that’s happened since the budget was tabled and since we’ve moved into this pandemic. S.

Bond:I appreciate the opportunity to participate vir- tually today from, obviously, my home constituency, which is Prince George–Valemount — so from Prince George to, basically, the Alberta border. I’m most grateful for the opportunity to spend some time with the Finance Minister and her staff. [2:10 p.m.] I do want to begin by echoing her comments and begin with a thank you, first of all, to her and her staff, who work very constructively, actually, with the Finance critics, my co-critic from Surrey and me. We will walk our way through a number of questions over the next couple of days.

I do want to thank her for the opportunity to have briefings, to have conversations, to provide some sugges- tions and to have what I think is a very healthy back-and- forth. As the minister points out, there are places we’re going to agree to disagree, but we’ve also found ways to work as constructively as we possibly can. Thank you, also, to the staff. Having been a minister for a number of years, I know how hard people have been working. They work hard at the best of times, and certainly, we’re facing challenging times. So those are long and difficult days and hours for public servants.

I know that my co-critic and I would want to express our gratitude to them. I think we’ve provided the minister’s office with a gen- eral road map for where we’re going to head over the next couple of days. Let me just perhaps walk through a bit of how this afternoon will look to start with. I’m going to start with some questions, basically what I’ d like to think of as the state of the province today. For the minister’s benefit, so her staff is ready, this is going to be the more dry section, when we talk about numbers. That’s what the Finance Ministry is all about.

We’re going to be asking for some specific numbers around revenue, net income and those kinds of things to get a sense of the lay of the land. Then we’ll walk our way through a number of other sections of estimates questions. I’ll start for a period of time. Hopefully, around three o’ clock we’ll have an opportunity to welcome a couple of other critics and MLAs to spend some time on some spe- cific topics. We’ll be starting those around three o’ clock, for the minister’s information. Then we’ll hopefully…. I’m just reminding the Green Party that they’ll be up to wrap up the day this afternoon.

Hopefully we’ll be getting to them at about 5:30 or so. I want to make sure that people are aware of their time slots so that we can be as efficient as possible. With that, I want to thank the minister. We’ll roll up our sleeves and walk our way through estimates. I think we’ve always found that we can work quite constructively through these questions, and we’ll hope that’s the case again during this estimates session. The minister would certainly be aware that on July 14, she presented what she considered a mid-line economic scenario.

It was a way of providing an economic update, something that, obviously, we as the opposition were very interested in. It was good to see the minister lay out that information for British Columbians. The questions that I have to begin with actually relate to table 2, the fiscal scenario, just to give the staff a heads-up. What I’m looking for here: we want to try to get a sense of the more detailed figures that correspond with the line items that are in table 1.3 of the Budget 2020 document. I 12348 British Columbia Debates Tuesday, August 11, 2020

can’t see the minister on my screen at this moment, but I’m sure she’s aware of what I’m talking about. One of the things that’s important for our clarity is that not all of the line items are laid out in table 2 of the eco- nomic update. I’m wondering if the minister could provide us with, specifically — we’ll start with these two — prop- erty transfer and property taxes, as separate figures. Again, it’s table 1.3 of the Budget 2020 document, and they’re laid out in table 2 of the economic update.

If the minister could provide us with the specific numbers for property transfer and property taxes, as separate figures. [2:15 p.m.] Hon. C. James:The number that the member refers to is $465 million in the table, as the member was referring to. The division of that number — which is, I think, what the member was looking for — is a drop of $425 million for property transfer tax and $40 million for property taxes. Just for clarification, this does not include the school tax cut that we provided to businesses. That’s listed on another line. S. Bond: Thank you very much to the Finance Minister for that.

I do appreciate that. For the clarity around the school tax, I think that was an important piece as well. Could the minister provide the same detail for fuel and carbon taxes, please? Hon. C. James:The total drop for the

section that the member is referring to is $382 million. To divide that out, it’s $117 million for fuel and $265 million for carbon tax. Similar to the other one, which didn’t include the school tax piece that was related to COVID support, this does not include the decision to delay, until October 1, the carbon tax increase that was in place. S. Bond:Thank you to the minister, and thank you, also, to the Chair. I’m juggling a lot of buttons here. Thank you for your patience, hon. Chair. It is appreciated. We look forward to having some further discussions, obviously, about the carbon tax — the impacts.

The minis- ter would also be well aware of the report that was tabled today by BCBC around a low-carbon plan. We look for- ward to having some more discussion, about that whole sense of the carbon tax, in the days ahead. Not surprisingly, the other line item that we would like to have additional clarity on would be the natural resource revenues. If the minister could provide those numbers for us, that would also be appreciated. [2:20 p.m.] Hon. C. James: Thank you to the members for their patience as we go through, making sure we’re getting accurate information via technology as well. Natural resource revenue.

The total drop was $293 mil- lion. The division of that is natural gas royalties, $141 mil- lion; mining, $56 million; forestry, $37 million; water rent- als, $25 million; petroleum royalties, $23 million; and then other is $11 million. That would include $8 million, for downstream benefits from the Columbia River, and $3 million, which is just bonus bids and less activity. That totals up to the $293 million. S. Bond:Thank you to the minister and her staff. Abso- lutely, there will be a lot of patience on both ends of the technology, I’m certain.

Obviously, as we look at those numbers, we can cer- tainly take a moment to reflect on the significant chal- lenges that the government is facing. I mean, when we look at lost revenue and how we’re going to manage through that, there are going to be some significant ques- tions about how we look at those resource revenues in par- ticular and the revenue lines there. I want to now move to projected net income for some Crowns and agencies, etc. We’ll start. The question for the minister and her staff would be: at this point, what is the projected net income at B.C. Hydro? [2:25 p.m.] Hon. C. James: For both B.C.

Hydro and ICBC, we didn’t include an update in the scenario that came forward in July. As I mentioned, there are a number of pieces that have to still be collected. That’s why I felt it was important to be clear that this simply was an estimate, a snapshot in time. Both of those numbers, updates for B.C. Hydro and ICBC, will be coming forward in Q1, which will be com- ing in September. S. Bond: Well, thank you. I appreciate that response from the minister. But in essence, this is pretty much the same question that we’ve looked at related to the other areas. We certainly were not able to….

When we listened and worked through the other critic opportunities with the ministers responsible for Crown net income, we were a little concerned that there doesn’t seem to be a clear sense of what those numbers are. Can the minister perhaps try once again to explain to us why at this point there isn’t some sense of a projection of net income? We understand there are a number of other factors to consider. Perhaps I’ll attempt the question in a different format. There is an $882 million loss in table 2, then, for each Crown. Can the minister perhaps tie it to the lost revenue that’s noted?

What is the assumed loss? We understand that she can’t…. We’re not arguing that there aren’t details outstanding, but at the very least, can the minister give us a sense of what the assumed loss is for each Crown? In this case, we’re starting with B.C. Hydro, and she’s referenced ICBC. What would the assumed loss be for B.C. Hydro and ICBC? [2:30 p.m.] Tuesday, August 11, 2020 British Columbia Debates 12349

[S. Gibson in the chair.] Hon. C. James: The member mentioned the two Crowns listed in the July statement, in the July economic update. Those two Crowns were the LDB, Liquor Distri- bution Branch, and the B.C. Lottery Corp. Those were the two Crowns that were listed there. The drop was 882. The vast majority, 857 of that, was the B.C. Lottery Corp., because obviously casinos were closed down, and therefore, that had an impact on that number — and 37 from LDB. There was an “other, ” if the member is adding them up. There was another that just included Columbia River Basin and some adjustments that were made there.

So those are the only two Crowns that were reported on in the July assumption. Then the member asked about ICBC and Hydro and why they weren’t included in July. This is a discussion we had when we came out with the statement in July as well — to recognize that the economic statement was simply a point in time. With ICBC and B.C. Hydro, both of them have pieces that they are continuing to look at, to be able to look at averaging out to give us a Q1 number.

For example, ICBC obviously had huge change in usage during the early stages of COVID — very few accidents, very few vehicle usages, etc., people not renewing their insurance. Then investments. Again, because of the stock market and investments, a very volatile time. We will be reporting out. Q1 will be coming shortly. It won’t be that long before we’re into September, and we’ll be reporting out. Then we’ll have another couple of months to be able to do a more accurate assumption on that piece. Hydro is very similar. Of course, they look at rate-regu- lated accounting.

That, again, is a process that takes some time, that is done over time, and we’ll have a read on that in first quarter as well. S. Bond: Just, then, to be completely clear, the deficit that was noted, the drop in revenue there, was only based on BCLC and BCLDB modelling. I think the minister would recognize that without any numbers for B.C. Hydro or ICBC, that poses an incredible risk to the taxpayers of British Columbia. I know that one of my other colleagues, who has incred- ible expertise on this file, will be asking some follow-up questions. But I want to just have the minister….

Y ou know, I understand that the next quarterly is rapidly approaching. Is the minister saying that she and her staff did absolutely no modelling or has no even basic assump- tions about B.C. Hydro or ICBC? Frankly, I would find that hard to believe. [2:35 p.m.] All of us understand that the economic update was a point-in-time reference, but to be clear, we are talking about what could be incredibly significant risk to the tax- payers of British Columbia. I’ d be very interested in knowing: was there any model- ling done by the Ministry of Finance related to the projec- ted net income of B.C.

Hydro and ICBC, even as a point- in-time reference? Hon. C. James:Just a couple of things that I think are important. The member will know, if she looked at the July statement and heard the public statements I made when I introduced the economic statement, that I talked about a number of risks. The member is quite right. There are a number of unknowns. There are a number of risks that exist, both on the plus and the negative side. That’s the challenge of the pandemic — the reality of not knowing what’s ahead, of not knowing the challenges ahead.

Certainly, when it’s early going, the trends and the volat- ility create those kinds of difficulties. It’s why, as I said, there was a long page of risks that we talked about when making that statement and delivering that statement to the public. But we felt it was important to bring forward the information that we did have at that point. Just a couple of examples. The member asked about why we wouldn’t be using them right now, why we wouldn’t be looking at assumptions right now for Hydro and ICBC. Well, those organizations also need their statistics to be able to give us the kind of information that we need.

For example, the first Q, the first quarter stats for ICBC, come in mid-August, so those will be stats coming in shortly. They don’t have those stats around their first quarter. Again, I talked about the volatility — people not renew- ing their insurance but also lower claims and fewer acci- dents, falling revenue from investments and then invest- ments coming back again. Again, with all of that volatility, that information is being gathered and will be gathered so that we can make sure that that’s there for Q1. [2:40 p.m.] The same applies to B.C. Hydro.

Both of those Crown corporations are putting that information together. They know that Q1 will be there. They will have their own first Q information to be able to provide that data to us, and then that comes in the public reporting that comes at Q1. Y es, a risk, and yes, identified as a risk in July. S. Bond: I appreciate the minister’s response. Of course I saw the update, heard the commentary and saw the list of risks. One final question. I know that there will be a lot more discussion about these, especially the Crowns.

Can the minister then simply tell me, did the ministry do any fin- ancial modelling based on projected net income for B.C. Hydro or ICBC? I totally grant the minister that there is volatility and there are all of those factors that the min- ister described, but the question is: did the ministry, did the minister, look at what the projected net income would potentially be for B.C. Hydro and ICBC? Was there any modelling done by her ministry? 12350 British Columbia Debates Tuesday, August 11, 2020

Hon. C. James: No, as I already said. Because of the volatility and because of the information that isn’t available until, as I mentioned, mid-August when you’re looking at Qs, assumptions, modelling was not done for B.C. Hydro and ICBC. That will come in Q1. S. Bond: Thank you to the minister for that response. I certainly understand volatility. I’m surprised by that answer a bit. But one final question on this for the moment. There is a cabinet OIC in place, and it directs B.C. Hydro’s reven- ue to be set at $712 million by the BCUC. Does that still remain effective?

Should we then, or can we, treat that as the expected income for B.C. Hydro? Hon. C. James:The member is quite right: $712 million is the income set for this year and next. We have no plans at this point to change that, but obviously, no one planned the pandemic either. I think we all know that the world could change, but at this point, we don’t expect to make any changes to that over the next two years. [2:45 p.m.] S. Bond:Thank you for that clarity. I do appreciate that. I want to talk just briefly about the impacts to taxpayer- supported agencies.

I’m hoping the minister can provide us a bit of a breakdown on some of the impacts. Let’s look at, for example, international student enrolment. We’ve certainly seen the impacts. In fact, recently there was an

article that talked about the state of post-secondary edu- cation around the world and included Canada amongst that long list of countries it examined. The hard-hit sector would be post-secondary institutions because of the incor- poration of a significant international student enrolment. Let’s start with that one, perhaps. Could the minister provide me with a sense of what assumptions were built into the scenario regarding international student enrol- ment? Hon. C. James: There is no question. The member is quite right: the international student enrolment will have a big impact.

It’ll have a big impact mainly on post- secondary education, but as the member would know from our days as school trustees, it also has an impact on some school districts that take in international students as well. Just a bit of a breakdown for the member. Of the 869 around a loss for taxpayer-supported agencies, the largest amount of that, 775, is international tuition. Again, I want to stress — and I’ll do this throughout all the numbers — as the member will know, this is simply a scenario.

There was work done by the post-secondary ministry, of course, to contact the universities and the colleges to look at their numbers. It’s a best guess, a best estimate, a best scenario at this stage, because, again, until actual enrol- ment occurs…. They know there have been some students who have remained in British Columbia who they’re still looking at as students. That’s a piece that is there. A drop in $63 million from school districts — that’s the amount, obviously a much smaller amount, for international students. Then a $31 million drop was PavCo. That’s the convention centre and B.C.

Place drop. [2:50 p.m.] S. Bond:One last question before I move on to another section. I’m wondering if the minister could…. There’s a lot of uncertainty for institutions, obviously, and concerns about how they’re going to continue to operate and man- age all of the funding. It’s the same for school districts. Can the minister, perhaps, give us a sense of…? Will universities…? Obviously, lower tuition income. What is the government’s plan in terms of holding those institu- tions whole? How are those funding gaps going to be man- aged by the government? Has the Minister of Finance…?

What is her plan, working with the Minister of Advanced Education, to actually deal with those dramatic drops in revenue? Hon. C. James:Y es. There is no question that this will be, again…. We talk about volatility. We know it will be a challenging year, certainly, for post-secondary, in par- ticular. The Minister of Advanced Education is working closely with the universities and colleges. Also, thanks to the uni- versities and colleges. They’re also working hard on their budgets right now. Many of them are looking at where they can make adjustments, where they can address some of those pressures.

We’re monitoring that closely from the Ministry of Fin- ance. Again, early going yet. But this is a piece that we’ll be watching closely. S. Bond: Thank you to the minister. I’m certain that MLAs right across the province who are connected to post-secondary institutions will also be monitoring that, and we’ll be hearing back from those institutions about enrolment numbers and the challenges that we’re facing. We certainly want to make sure that our students continue to have the opportunities that they deserve. I’m going to switch over, for a few minutes, before I turn it over to one of my colleagues.

I want to talk a little bit about the regular budget, as we would call it, that the min- ister tabled. I’m wondering if the Finance Minister could tell me a little bit about how COVID-19 has impacted the ministry’s expenses. We know that there have been extra programs outlined and implemented. There has been a variety of things. I’m wondering if the minister can tell us how COV- ID-19 has directly impacted the ministry’s expenses. Per- haps, in that answer, she could let us know whether or not Tuesday, August 11, 2020 British Columbia Debates 12351

the ministry itself has drawn on any contingency alloc- ations or supplementary estimates funding. If that is the case, where, in the ministry budget, were those amounts allocated? If the minister could bundle those answers for me, that would be helpful. [2:55 p.m.] Hon. C. James: There are four areas that impact the Ministry of Finance that have come from contingencies. The first is the B.C. emergency benefit for workers. That is, as the member will know, over $1 billion. We’re estimating it at roughly $1.2 billion. That comes from $5 billion COV- ID contingency.

So those are dollars that came to the Min- istry of Finance to be able to provide the $1,000 through the emergency benefit for workers. The second piece is the commercial rental assistance program. The member will know that this is for a program administered by CMHC with the federal government. That’s $79 million, and that again comes from the $5 bil- lion. These are the areas that impact the Ministry of Fin- ance, as the member was asking. The third area is the pandemic pay. That’s $106 million for the pandemic pay — our portion. Then the last piece would be admin costs.

These would be, as the member has said, a number of programs and services that the Ministry of Finance has put in place to be able to get the dollars out. That’s $1.062 million. That’s coming, again, from the $5 billion. S. Bond: Thank you to the minister for that response. I appreciate it. I know that we’re going to have some very specific questions about some of those programs as we move later into the estimates. [3:00 p.m.] I’m going to ask one final question for now about the budget that was tabled and the assumptions around that, and then I’m going to turn the floor over.

So I’ll ask the question, and then I’m going to turn the floor over to my colleague from Kamloops–South Thompson. He’ll begin his questions, and then we will certainly have more follow- up questions from the Finance co-critics in the hours and days ahead. For now, the last question to the minister is really about caseload assumptions, as she described them in Budget 2020. Just for the record, perhaps the minister could clarify for us: have caseload assumptions, since the budget was tabled, changed? Are they up or down? And how do those changes impact total expenses in the budget?

We’re very interested in caseload assumptions and how those might be addressed, so I’ll wait to hear the minister’s answers. I know that my colleague from Kamloops–South Thompson is, I think, in the House physically, so he’ll begin his questions. We’ll wait for that answer and then turn it over to my colleague. Hon. C. James:There wasn’t a breakdown of the specific caseload pressures in ministries. But if the member looks at the pandemic pay and the dollars that have gone out in the pandemic pay…. I know we’ll have more discussion of that over the next couple of days.

It’s a given that many of the pressures and the funding that went to those ministries was related to caseload pressures during the pandemic. That would include Social Development, for example — the caseload pressure, obviously, on income assistance, on disabilities and on CLBC. That would include child care. That would include the Ministry of Children and Families. That would include Health. And that would include Hous- ing, particularly in the homelessness area.

Those were all funded through the $5 billion pandemic, because they’re pandemic impacts, but obviously, some of that impact would have been caseload as well. [3:05 p.m.] T. Stone:I’m really pleased to take my place in this estimates debate with respect to the Ministry of Finance estimates. I, too, will add my initial comments that my colleague from Prince George–Valemount mentioned earlier — that we certainly all understand and appreciate the incredible work that the folks, the men and women, in the ministry and all of the related agencies do on a day-to-day basis in normal times.

We are certainly not in normal times at the moment and won’t be for likely the considerable future, so I take my hat off to all of those folks for the great work that they do on behalf of British Columbians under a tremend- ous amount of stress and duress, I’m sure, on many days. To the Minister of Finance, a couple of different topics that I would like to cover today. The first involves strata insurance. Certainly, as the minister knows, we had an extensive debate in second reading on the strata legislation that was brought forward.

I guess the most common theme that we’re all hearing — and we were hearing this before the legislation was brought forward, and we’re hear- ing this still to this day — is: where is the financial relief? Where is the immediate assistance for 1.5 million British Columbians living in strata units as estimated by the B.C. Financial Services Authority? Some of these folks, against the backdrop of COVID and potentially having lost their jobs or having had their small business impacted in a significant way…. Maybe they’ve lost one income out of a couple in the household.

Whatever their circumstances are, in addition to those fin- ancial stresses, they have also been hit hard, these strata owners, with huge increases in their insurance costs, which have flowed through to $200-, $300- or $400-per- month increases in monthly fees, one-time special assess- ments, etc. People cannot afford it. My first question to the minister would be this. As that legislation and that strata plan were being put together, did the minister consider including, as part of that plan, financial assistance for people under significant distress 12352 British Columbia Debates Tuesday, August 11, 2020

that would impact them in a positive way in the here and now? Did she consider that kind of support? If she didn’t, why? Why was no financial support actually included in the action plan that government brought forward? Hon. C. James: I know the member has worked very hard on this. In fact, as the Minister of Housing said when the legislation came forward, there were a couple of pieces that the member had raised that were included in the legis- lation. I know this was, as the member has said, canvassed very well during the debate on the legislation.

To go back a bit, I think it’s important to recognize that exactly the reasons that the member raises — the pressures that people are facing, the challenges that are being faced for those individuals who are in stratas and are seeing their insurance go up…. [3:10 p.m.] That’s exactly the reason that we, in fact, asked the BCF- SA to investigate this issue — to make sure that we got a good read of where things were at, to make sure that we had a good recognition of the challenges on some of the approaches that could be taken. We looked and are con- tinuing to look at all the options that are available to us.

The legislation, as I know the member has heard myself say and the minister say, is a first step to address a number of the pieces — looking at the drivers in the market, look- ing at how we lower risk, which is critical in all of these pieces. But it is simply a first step. We recognize that as well. We will be looking forward to the further report coming forward from the BCFSA. If more action — and I expect that there will be more action that will be needed — comes forward, those, again, will be considered, just as we’re con- sidering everything. T.

Stone:Well, the BCFSA process, which the minister just referenced, which involved the provision of a draft or initial report with some initial findings…. That was now several months ago. Everyone is expected to now wait for a number of months for the final recommendations to come in the fall, if, indeed, that happens on that timeline. I think the question to the minister, as I mentioned a moment ago, is: what consideration of financial support, financial assistance was in the minister’s purview of think- ing over the last number of months? I’ll give her one, more specific, in asking this question.

Has the minister, has the government considered providing a tax holiday to strata owners on the 4.4 percent insurance premium tax, which the BCFSA report that the minister mentioned…? There’s about $300 million of strata insurance premiums that are collected every year in British Columbia. That was in that BCFSA report. A 4.4 percent tax on that amount works out to about $13.2 million on an annual basis. That would be a start, in terms of leaving that $13.2 million in the pockets of strata owners for a period of time.

Is that something that the minister has considered, and is that something that the minister is prepared to consider imple- menting in the near future? [3:15 p.m.] Hon. C. James:Again, I know the member has had this discussion with the Minister of Housing as well. Very clear. I mean, the tax is not new. It’s been collected for decades on all kinds of insurance. It certainly isn’t the cause of the rapidly increasing insurance premiums. If we averaged it out for each strata owner or condo dweller, you could be looking at a savings of $20 for each of those individu- als.

That’s certainly not something that’s going to address the pressures, as the member knows well, that people are facing. Certainly, also, no guarantee that those tax savings will be paid on to consumers who pay that property insurance. A company could reduce their premiums. The company could not pass on the savings at all, given the market con- ditions. I think, as the member knows…. I know there was a good discussion on this issue during the legislation. There are a whole number of pieces. This is a private-market challenge and has to be dealt with from that perspective.

That’s why it’s so important to make sure that BCFSA does the work that they’re doing to give us a read of what kinds of things can be done. Transparency is critical. We know that addressing the issue of transparency, whether we’re talking about insur- ance and the cost of insurance, whether we’re talking about companies that are getting out of the insurance and not providing those kinds of premiums, making sure that those pieces are addressed, as they were through the legis- lation, is an important step. But again, simply a first step.

I think, as the member has been quoted often — we’ve cer- tainly said this — and BCFSA pointed out in their report: there is no quick fix. There is no quick fix for this issue. This is a longer-term piece. We certainly recognize that we have to address it and that people who are paying the increasing insurance are struggling. There’s no question about it. That’s why we’re moving ahead with the legisla- tion. That’s why we moved ahead with it, and that’s why we’re having BCFSA come back with their second piece, the interim report, and then the final report for us as well. T.

Stone:The minister indicated that there would be no guarantee that any savings from a tax holiday on the 4.4 percent insurance premium tax would actually be realized by strata owners. Well, you know, there are a number of mechanisms that the minister has available to her. These individuals could be provided rebates on these amounts. There are a number of ways to ensure that the dollars remain in the pockets of strata owners who are being hit hard.

Again, the point is that the plan that was brought for- ward, the legislation that was brought forward and debated in this House, really provided no immediate supports for, Tuesday, August 11, 2020 British Columbia Debates 12353

no immediate assistance for, people who really need it. That’s what we’re trying to understand — what the govern- ment’s plan is, moving forward. This insurance premium tax has been increasing stead- ily over the last number of years, I think in direct correla- tion to the massive increase in what insurance companies are charging. Again, the minister knows well: 200, 300, 400 percent increases year over year in the total dollar value of the insurance premium that’s charged to strata owners, strata corporations. It’s outrageous. It’s totally unaccept- able. It’s irresponsible, and it’s not affordable for people.

But as those premiums have increased, the 4.4 percent tax continues to be collected. So the government is actually realizing an ever-increasing amount of tax from this insur- ance premium tax. Can the minister tell me: over the three-year fiscal plan, what is the total additional dollars that the Ministry of Finance will collect in the form of this insurance premium tax? [3:20 p.m.] Hon. C. James:This is table A9 in the budget — $660 million for ’20-21, $670 million for ’21-22 and $680 mil- lion for ’22-23. That’s for the broad insurance. That’s not broken out.

That’s for the broad insurance amount that’s built into the budget. T. Stone:What portion of the $660 million in ’20-21, the $670 million in ’21-22 and the $680 million in ’22-23…? What portion of those totals represents the taxes collected on the strata insurance premiums? Hon. C. James:This is a broad number that comes in. It’s basically just a 4.4 percent across all insurance. Wheth- er it’s commercial property, car, properties or whether it’s strata or not strata — it’s not broken down. The branch just brings it in. I mean, it’s an interesting piece for us to take a look at, to see, as we do this review.

I expect BCFSA may have some- thing to say about this, as well, whether we want to start tracking that separately. At this point, it’s just the broad number that comes in from the branch. T. Stone:Well, I would strongly urge the minister and the government to direct the BCFSA to do that. Certainly, in their initial report, they did estimate…. I think the number was $300 million per year as collected in the form of tax on strata insurance premiums.

They indicated that that amount was increasing year over year, obviously, in direct correlation with premiums going up. [3:25 p.m.] I guess on this piece we’ve heard a lot from the gov- ernment and from the minister about a series of meas- ures that they’ve taken and, certainly, a strong view that they have about not wanting government to profit off of real estate market taxes. We do know that there is an approach there that the government has implemented over the last three years.

I guess my last question on this piece would be: if that’s the general approach — not wanting to profit off of these market real estate taxes — why would this have not been made a higher priority sooner by the minister, insofar as looking at this insurance premium tax, understanding what portion of it is applicable to strata insurance premi- ums and what mechanisms could be implemented to provide tax relief for people here — to leave these dollars in the pockets of strata owners? Hon. C.

James:I think I come back again to the fact that there is no presumption, even if the tax was reduced, that any of those savings would, in fact, go to the strata owners. Our focus is making sure that the strata owners are see- ing relief from the pressures they’re facing. There certainly would no requirement for those tax savings to be passed on by a company that pays them. They could simply util- ize it themselves. So we’re focused on what we can do for the individuals — what we can do to make sure that their issues are addressed and the pressures that they’re facing, cost-wise, are addressed.

When it comes to how quickly we moved on the issue, I think it’s very clear. When the member looks at when we referred this issue to the BCFSA, when the concerns were coming forward, when we started seeing these kinds of challenges, we knew, again, that a private sector issue was going to be a challenge to address.

That’s why we asked, and why I asked, the BCFSA to take a look at this issue, to do an investigation, to give us an interim report, to begin the work that needed to be done through the legislation and then to bring a report forward to look at further steps that could be taken — this being simply step 1. T. Stone:Well, again, leaving the tax dollars in the pock- ets of financially distressed strata owners could be done through a direct rebate to them.

That would assure that the issue that the minister mentions — the concern she men- tions around those dollars being pocketed, perhaps, at the broker level and so forth — wouldn’t happen. I would urge the minister to again not rule out, in the near future, hopefully, taking another look at the insur- ance premium tax as one step amongst a series of addition- al steps that, frankly, need to be taken quickly to alleviate the financial distress that is being faced by so many British Columbians due to soaring strata insurance costs. I will move to the next piece.

Is the minister willing to consider and commit to extending the property tax defer- ment program for a period of time — again, as another tool that would work for some and would not necessarily work for others — as a strategy that could be embraced by some of these strata owners in an effort to grapple with these skyrocketing strata insurance costs? Hon. C. James:I just want to make one point — I think 12354 British Columbia Debates Tuesday, August 11, 2020

it’s an important one — around the insurance tax that is paid. The premium tax is paid by the insurance companies, not the individuals. It’s just important to make sure that we recognize that — that that is the company itself. So they have a choice of whether they pass those savings on or not, if we reduce down the tax. I think that’s where a lot of the issue comes around what’s possible and what isn’t. [3:30 p.m.] The issue of the property tax deferral. The member will know this from being in government — that the eligibility was expanded.

So there are 80 percent of British Colum- bians who are actually eligible right now for the deferral. Whether everybody is aware of that…. Perhaps it’s another good point around getting information out. [R. Chouhan in the chair.] I’m not ruling out anything in future steps. I’m not rul- ing out anything. I think we’ll get the report from BCFSA; we’ll take a look at it; we’ll work with the Minister of Hous- ing; we’ll look at what options might be there and look at what possibilities are there. I appreciate the member’s ideas and the member’s pro- posals that have come forward as well. T.

Stone:Thank you to the minister. The BCFSA report that we both keep referencing here — the interim findings also found that the largest percent- age of claims costs related to water damage. Forty-six per- cent of all the total claims costs, I believe, from 2017 to present day relate to water damage. I think the number in the report was 56 percent for 2018. It doesn’t matter who you talk to. The prevalence and the severity of dam- age caused by water seem to be a growing problem and a part of what’s driving the increased costs of insurance.

One of the ideas that we had proposed way back in Feb- ruary was for the creation of a water damage prevention program, a program that would offer some funding in the form of one-time grants to homeowners to make those necessary upgrades, whether it be low-flow toilets, steel- braided hosing, modern recessed fire sprinkling systems, shut-off valves — those kinds of things. I’m wondering if the minister can indicate whether or not she is considering and willing to consider the creation of that kind of a program.

It would seem to me that would be a good way to push some money out there quickly to at least help people make these kinds of the upgrades necessary, which should have the impact of perhaps put- ting some downward pressure on rates in the months and years ahead. Hon. C. James:I think this, again, comes back to the…. We’ve talked about the BCFSA report that’s coming for- ward. BCFSA did identify water damage as one of those pieces in their interim look. They wanted to talk more with consumers.

I think we all know that there are stories of stratas that have done a great job around their maintenance and kept their maintenance up, and others that have not and the challenges that that’s created in the market. But the challenge is, most importantly, for all the strata owners in buildings where maintenance has been deferred and they haven’t looked at their maintenance. So it’s certainly a piece. [3:35 p.m.] Again, I’m not closing the door to any ideas. It’s cer- tainly an idea that we expect we’ll hear more from when the BCFSA report comes forward, because they did identi- fy it early on.

So I’m not closing the door to any kinds of options that may be workable to address this issue. T. Stone:Well, in the spirit of not closing any doors to any ideas, the member for Abbotsford West introduced, via an amendment to the legislation that was before this House in recent weeks, the concept of allowing for self- insurance in the strata insurance space. The minister would know well that British Columbia is well-positioned on this front, insofar as the captive legislation, as it’s called, that’s already in place. There’s a bit of a framework there.

There’s a long history of different types of organizations that have embraced self-insurance. B.C. Ferries has a self- insurance plan. The Municipal Finance Authority and all kinds of law firms use that concept in terms of their part- ner insurance and so forth.

Recognizing that the international insurance industry is taking advantage of British Columbians today, through these outrageous, irresponsible, unaffordable insurance increases year over year, is the minister prepared to do the work and to direct BCFSA, perhaps as part of this, to do the work to pave a road here to a day, hopefully in the not-too-distant future, where British Columbians who live in stratas — those 1.5 million British Columbians — may have the choice of purchasing existing insurance products, as they know them today, or opting for a self-insurance option?

Is the minister prepared to do the work to look into that for British Columbians, who are being hammered by these high insurance costs? Hon. C. James: I know the member knows this, but just to remind the few people that might be listening, this option does exist already. There is a regulatory structure in place already. Groups can utilize this kind of structure, a self-insurance program, currently. But we recognize that perhaps this might be an idea that could be looked at. So we’ve certainly asked BCFSA to include a review of this idea in their report as well. T.

Stone:Well, I will certainly look forward to reading what the BCFSA comes back with on that. It sounds like the minister has provided some direction to them on this. Certainly, we agree there is a framework in place here in Tuesday, August 11, 2020 British Columbia Debates 12355

British Columbia. That’s why it makes this such a poten- tially exciting option. However, as the minister has just acknowledged — and I will reinforce what she has acknowledged — there is a tremendous amount of work that would be required, reg- ulatory work to do on this, and likely the requirement for government to step up for a period of time, whether it be a year or two or three years to provide some financial bridging support of some kind. So a lot of work to do on this front. But I appreciate hearing the minister say that it is something that BCFSA has been asked to include in their upcoming report.

I asked this question during the debate on the bill, to the Minister of Housing. The question was around transpar- ency. [3:40 p.m.] I think one of the challenges that many British Col- umbians who are facing these high insurance costs have expressed to us is: “I don’t understand how they arrive at these numbers. How is it possible that my insurance premium can go from $80,000 one year and the next year, 12 months later, with no claims against my build- ing, we’re now expected to come up with $450,000?” This is one example. Water deductibles have gone from $5,000 per occurrence to $250,000 per occurrence.

I mean, it’s ridiculous. There has been a pretty wide call — I certainly support this call, and my colleagues on the opposition support this call — for greater transparency. The data and the inform- ation that insurance companies provide BCFSA should be made available to the public. Now, the Minister of Housing’s response to me on this question was that there would be a data component included as part of the BCFSA report expected this fall. Fair enough. I expect that. I think we all figured that that would be the case.

When I asked the minister if she would be willing to commit to ensuring that there is ongoing transparency — not just as a one-off, in a special case of a report that has been asked to be commissioned, but as an ongoing man- ner of doing business, a requirement to provide the trans- parency to British Columbians on how the insurance com- panies are arriving at the numbers that they are, the data and the information that go into those calculations — she was non-committal.

I would like to ask the Minister of Finance today if she could commit to ensuring that beyond this next update or this next report from BCFSA this fall…. Is the minister prepared to commit to ensuring that there is transparency on a go-forward basis, beyond that, so that British Col- umbians have the data at their fingertips, the information at their fingertips, to better understand — they might not like it — how these insurance companies are arriving at the outrageous numbers that they are? Hon. C.

James: I think there are a couple of different pieces around disclosures, as the member will know. [3:45 p.m.] One, obviously, is in the legislation. We want to make sure that individual strata owners have full disclosure, whether it’s around fees or a company that’s not going to renew or a company that is going to increase the insur- ance. We want to make sure that notice and that kind of information get to the individual owner.

I think the member — correct me if I’m wrong — is more looking at commercial information and information that BCFSA may have the ability to be able to collect and to analyze, to have a better sense of why we’re seeing some of the kinds of increases that we’re seeing — how those numbers are arrived at. BCFSA does have the ability to be able to collect that data. They’re working with the insur- ance companies. But they do have the ability to collect fil- ing information as well, if they need to. T. Stone:I appreciate that.

I guess what British Colum- bians are saying — those that are being really hard hit by these increases — is they’re wanting some answers. They want to see the numbers, the data and the information themselves. Frankly, until British Columbians have, per- haps, a choice in this space, a self-insurance choice, which would be wonderful to see in the not-too-distant future, they have to deal with the existing insurance sector. We happen to support the call for much greater trans- parency right down at the consumer level of, yes, the insurance company information that they’re providing the BCFSA.

So I guess one final time on that: is the minister prepared to make some changes here to commit to ensur- ing, beyond this next report from the BCFSA, that British Columbians will be able to easily, at no cost, access the information that would provide them with some answers, from a data and information perspective, as to how their premiums have gone from $80,000 to $450,000 in one year, as one example? Hon. C. James:I’m sure there are all kinds of ideas that will come forward through the report and through the consultation. I think we have to remember that BCFSA is doing that consultation right now.

They’re talking to indi- viduals. They’re talking to stratas. They’re talking, obvi- ously, to insurance as well. But they’re also having those conversations with the strata owners. I don’t want to prejudge what the approach may be that BCFSA may recommend or may bring forward or the ideas that may come forward from the consultation. But certainly, I’m committed to transparency, and I’m happy to have a further conversation, after the report comes out, with the member, as well, to look at what might be pos- sible, going into the future, to add to the transparency for strata owners. T.

Stone:The legislation that the government brought 12356 British Columbia Debates Tuesday, August 11, 2020

forward has 16 sections in it. Fourteen of the sections require either further consultations, as the minister has mentioned several times in our back-and-forth here today…. A number of the sections also don’t come into force until some regulations have been developed, and those regulations, in many cases, require ongoing con- sultations as well. Wrapped around all of that is a com- mitment from the government, which we’ve heard many times, that this is just a start and there will be additional things coming.

Can the minister provide, again, the 1.5 million strata owners out there, beyond “This is a start, and there’s more coming… ”? Can these hard-working folks, who are deal- ing with these massive increases in their strata costs, look forward to — and can the minister be specific — any fin- ancial measures that are going to provide immediate fin- ancial assistance to these folks this year? [3:50 p.m.] Hon. C. James:I guess we’re kind of coming full circle to the place we started, which is the fact that there isn’t a quick fix for this private sector challenge. I wish there was, but there isn’t.

It is something that we have to work on long term. I certainly hope that the definition that is in the legislation around defining what is common property and what gets insured will address some of the pieces. It’s certainly been a discussion in many of the stratas that I talk to. They’ve begun that work. They’ve started looking at their strata. They’re looking at more definition there that may actually bring their rates down. That’s a piece that I think could provide some support. Certainly, the banning of fees, I think, will help as well. I think this is a longer-term piece that has to be worked on.

It’s all of our obligation to work on this on behalf of, as the member has pointed out, the hundreds of thousands of people who live in stratas and are impacted by this. T. Stone:I hope that that happens as well. It’s a tremen- dous amount of financial distress that’s being faced by a lot of British Columbians, particularly with the compounded effect of COVID and job loss and small businesses going under. We’ve got to do more. This government needs to do more to support people that are facing these outrageous increases in their strata insurance costs.

We’re going to continue to urge the government to do more, and we’ll continue to ask questions, and we’ll con- tinue to look forward to a debate on this. Hopefully, there are some much more tangible actions in the near future that will provide immediate assistance. I’ d like to turn our attention to a topic completely unrelated to strata, the B.C. Infrastructure Benefits Corp. I’ve got a series of questions here. I’ll just ask it in sort of a three-part question. It’s been two years since the govern- ment created B.C. Infrastructure Benefits.

My first question would be this: what has been the total cost that has been spent establishing and staffing up the BCIB? Two, how many FTEs are employed at BCIB as non-project workers? And three, what is the total value of services contracted by BCIB so far, and what services are being contracted? [3:55 p.m.] Hon. C. James:The total budget for BCIB for ’19-20 was $8 million. For ’20-21, it’s $11 million. The number of staff who are not project workers is 48. Then, if I could just get a clarification from the member on the services and what he meant by contract services.

Maybe he could give me a little more specifics, just so I make sure I get the accurate information — what the member would be referring to in that number that he’s looking for. T. Stone:Well, again, I’m just looking for the total value of services that are contracted by BCIB, so the services that they contract to bring in and what that mix of services looks like. Hon. C. James: On the total value of services con- tracted, the only contracted service would be the payroll system for BCIB. In order to save money, they use the contractor that has the contract for the government sys- tem.

They used the government system, and that was $1.4 million. T. Stone:Under the total revenue

section of B.C. Infra- structure Benefits statement here, it refers to a service fee that provides for total revenue of $11.3 million in the cur- rent fiscal year, and then it increases to $15 million in each of the next two years of the fiscal plan — this service fee revenue. I’m just wondering if the minister could explain what this service fee revenue actually entails? [4:00 p.m.] Hon. C. James: The member is talking about the fee, what is involved in that. Y es, the owner pays BCIB for ser- vices that are provided to carry out the CBA, the com- munity benefits agreement.

That would include — remem- ber that BCIB is the employer — everything from what you would think of as an employer: the basics around payroll, the basics around human resources, project man- agement, IT, making sure that the credentials are there, that those pieces are in place, a safety program and man- agement for the safety program, financial planning and reporting, compliance, risk management. All of those pieces are included as part of that. An active role, again, around the worksite. [4:05 p.m.] They provide on-site supports and services as well, both to the workers as well as the contractors.

Labour relations — I think I mentioned that. There’s Indigenous and gender competency training that, again, is provided for the work- place to ensure that the equity groups are not only able to Tuesday, August 11, 2020 British Columbia Debates 12357

work on the project but are comfortable and stay on the project and continue to build that diverse workforce that is so important for our province and so important for the industry as well. T. Stone:Can the minister tell us what is involved in the outreach and engagement expense line item? Again, that provides for $1 million this year, $2 million next year and $2 million the year after that, so $5 million over the course of the fiscal plan. What work is constituted within this outreach and engagement expense line item?

Do any of these expendit- ures in this line item provide for advertisements promot- ing community benefits agreements? Hon. C. James: I’m glad the member is asking these questions, because I think these are critical questions to the community benefits agreement and the opportunities that it provides to people in the province and the benefits that come to the people in the province by having, again, a diverse workforce. Certainly, things will shift with COVID. But pre-COV- ID, as we know….

In fact, I heard last week from a number of people in the construction industry that they’re still facing challenges around having a broad enough work base — well skilled, well trained and ready to be on the workforce now for a number of the projects that are there. The outreach and engagement piece is a critical piece to be able to make sure that we are engaging with communities. The simple question…. First, the question that the member asked about advertising — no, there’s no advert- ising being done through BCIB.

BCIB, through their out- reach and engagement, works directly with specific com- munities. [4:10 p.m.] They engage with all of the Indigenous communities. They reach out to organizations that work in the area with a number of these diverse communities, like MOSAIC and like women in trades. They work with those organ- izations. They work with the communities themselves to look at opportunities for local jobs, because as the member knows, that’s part of the project and looking at the projects — looking for diverse individuals to work on these pro- jects as well.

Then I think that a really critical piece of all of this, of course, is the referrals that are done for people who may have some of the skills and have shown an interest and expressed an interest in working and have engaged through this process but need other skills and other training. The referral…. We have referral agreements through BCIB with over 30 organizations around the province. Again, it provides an opportunity for people to get those skills that they need to be able to go into the workforce. As I said, that’s not a benefit simply to the projects.

It’s a bene- fit, in fact, to all British Columbians, because these people will continue to work, likely in their field, and provide those skills to all of us. T. Stone:Well, certainly we take issue with the minis- ter’s comments that the community benefits agreements actually provide any tangible benefits to the public. We’ll talk about a few projects in a moment, but every project that has a CBA attached to it has escalated significantly in cost. Every project that has a CBA wrapped around it has seen scope reduction in those projects.

Every project that has a CBA wrapped around it has been delayed by two to three years. The assertion that this is about providing additional employment benefits and opportunities for British Colum- bians is perhaps the greatest charade of this whole exer- cise. As the former Minister of Transportation, I can tell this House and the minister and others that there was nev- er a challenge recruiting a tremendous number of Indi- genous people to projects.

The last Trans-Canada project, just east of Kamloops, we had set a new and very exciting high-water mark of over 25 percent in the entire workforce being Indigenous people from all of the nations in and around where the project was, east of Kamloops. We didn’t need a community benefits agreement to do that. Every company will tell you that they, of course, look to hire as local as they possibly can. That’s good business sense. That results in lower costs for them — not having to worry about people travelling great distances to and from their worksites.

There was no problem before CBAs with respect to apprentice training. To this day, 82 percent of apprentice training is done by open-shop workplaces. So what prob- lem the government was trying to fix here with the impos- ition of CBAs, insofar as the interests of workers and con- tractors and taxpayers, is not known to me. What I can say, however, is that if you’re one of the 19 NDP–selected unions that benefit from these agree- ments, it’s a pretty good deal for you. It’s a pretty, pretty good deal.

Eighty-five percent of the construction work- ers in this province that work on major infrastructure projects are actually excluded from working on these projects, unless they choose to join one of the 19 NDP unions. How is that fair? I’ve got a series of questions that relate to the recruit- ment of workers for these CBA projects — or the BCIB projects, I guess, is a more accurate way of describing them. The first one, to the minister, is kind of a two-parter. The first would be this.

To date, how many workers on BCIB projects have been recruited directly by BCIB, and how many workers have been brought along by contract- ors? The second question would be: has BCIB had any dif- ficulties recruiting sufficient workers to work on these pro- jects? If yes, is that part of what’s contributing to driving up the cost of these CBA projects? [4:15 p.m. - 4:20 p.m.] 12358 British Columbia Debates Tuesday, August 11, 2020

Hon. C. James:Just to identify the projects. I think it’s important to recognize the projects that are CBA projects. We currently have the Broadway subway project, the Pat- tullo Bridge replacement project and then a number of segments, as the member will know well from the area he lives in, on the Trans-Canada Highway from Kamloops to the Alberta border. Chase West and Illecillewaet are the projects right now that are active in that Trans-Canada project. I don’t have the specific numbers. We’ll get them for the member.

He asked about how many workers on the pro- ject have been recruited and how many came with con- tracts. The majority of the workers on the projects have been recruited by BCIB. Those are on the projects, as I said, that already have work on them. Obviously, the other projects still have to go out and get the work going. [4:25 p.m.] T.

Stone:When the minister gets back to me — and I appreciate her offering to do that — with those numbers, I would also, again, respectfully request that she include in that any comment that she can offer about any difficulties that BCIB may be having recruiting sufficient workers to work on these projects. In the very short amount of time that I have left, I just wanted to ask the minister if she really, truly believes that these projects are good value for taxpayers’ money. Now, again, the context here, up to this point….

We have had a number of suggestions from government as to what the impact on the project cost is when a CBA is attached to it. We’ve heard 7 percent. We’ve heard 9 per- cent. We’ve heard 10 percent. When we actually look at a number of the projects that have CBAs attached to them, the cost escalations are far, far in excess of 7 percent, 9 per- cent. The Hoffman’s Bluff to Jade Mountain project, which is just east of Kamloops, has had a 30 percent cost increase. That project was originally three segments, 9.9 kilometres long. It’s now been cut back to two segments, only 4.9 kilometres long.

It originally included two full grade-separated interchanges. It now will include one. It used to include an underpass for emergency access at Coburn Street. That’s been taken out. There were safety access improvements at Mattey’s Road. Those are no longer there. The project has gone from $199 million to $260 million, a $61 million increase. Again, it’s less highway, fewer inter- changes and fewer emergency access components for $61 million more — three years late, as well, by the way. Salmon Arm west. The minister mentioned this one, I believe. It originally was a 6.1 kilometre project with three segments.

It’s now been downgraded and scoped to a two- segment project of 3.3 kilometres — again, three years delayed. Project cost has gone up by 13.5 percent. It’s gone up from $162 million to $184 million. The Illecillewaet project that the minister referenced has had a 35 percent cost increase. The original budget of $63 million has gone up to $85 million, and you get half a kilo- metre less of four-laning with that project. The Kicking Horse Canyon project has gone from an original budget of $450 million to $601 million. That’s a 33 percent cost increase.

With all of these projects and, God help us, the Broad- way line, the Pattullo Bridge, likely the Surrey rapid transit project, if the government decides to incorporate a CBA there…. I mean, these are multi-billion-dollar projects with a CBA attached.

Based on the track record of cost increase — 33 percent on one project, 35 percent on another project, 30 percent on the project just east of Kam- loops and 13½ percent in Salmon Arm — one shudders at the thought of just how much taxpayers’ money is going to be spent due to cost escalation relating to these com- munity benefit agreements, again, that don’t appear to be actually providing any benefits to any workers either.

My question to the Minister of Finance, because ulti- mately, literally, the buck stops on her desk, is: against the backdrop of all of these existing CBA projects with these massive cost increases, does she believe that these pro- jects with these kinds of cost escalations, scope reductions and time delays…? Does she continue to believe that the cost of a CBA is in that range of 7 to 9 percent, and does she believe that these cost escalations and what people are going to actually get…? Less for more, I say, should be the NDP slogan when it comes to highway projects.

Does she believe that these projects represent good value for the taxpayer? [4:30 p.m.] [S. Gibson in the chair.] The Chair:Minister of Finance. Hon. C. James:Thank you very much, Chair. Welcome back. The member has asked whether I believe that CBAs are good value. I certainly believe they’re good value. I cer- tainly believe they’re good value for all British Columbi- ans, both in the immediate and in the long term. I think when you are spending public dollars, you need to look at exactly that. Y ou need to look at value for money. Y ou need to look at where the benefits are going to be felt.

Y ou need to ensure that those benefits are not just felt in the immediate but are felt in the long term. The member talks about the escalation of costs. I’m going to leave aside a long list that I could bring up — I’m not going to go there — of the previous government’s pro- jects. I think it is important to note…. If we look at the escalation of costs, many of these projects were budgeted four and five years before they came forward for their budgets to be revised. We did see, no question, a hot labour market and a hot economy. We saw the price of Tuesday, August 11, 2020 British Columbia Debates 12359

materials go up. That has an impact on budgets. There’s no question about that. It’s important to recognize that a large challenge that was being faced…. It was something we heard over and over again from business, from people in the construction industry, from people in communities — the challenges of finding a well-trained workforce. That’s exactly what we’re investing in — using public dollars to ensure that we have a well-trained, well-edu- cated workforce. People are able to find jobs. All British Columbians have a chance to be able to contribute to the economy. We have less job disputes.

There is more pro- ductivity. There are skills that are offered to individuals. Those are critical pieces to invest in, to be able to build a long-term, sustainable economy. Y ou can’t do that if you don’t provide support for people to be well trained; for people to have good, family-supporting jobs; for people to be able to find a trade and to get the full skills and the full ticket they need to be able to continue that work into the future and to support their family. So, yes, I think these are very important and wise dollars to be spent when you look at building a long-term, sustainable economy.

I also want to mention…. The member has used a whole range of numbers. We’ve been very upfront about the costs of the community benefits agreements — 4 to 7 percent on projects. Again, when you look at the supports that provides, long term, for a workforce, I think it’s a very good investment for the dollars. I think it’s also important — the member mentioned projects and costs of projects — to recognize that both Broadway and Pattullo came in, in fact, exactly on budget with the bids. So for the member to say that there are problems on all these projects….

In fact, they came in on budget — what was budgeted for those projects when they were put out. [4:35 p.m.] I think the other piece is that there’s great interest in the projects that are there. For Chase, we got six bids, for example. People are interested in bidding on these pro- jects. They’re seeing the benefits to their local communit- ies. They’re seeing the benefits to them as employers. So, yes, I do believe there’s great benefit in these projects. T. Redies:Good afternoon, Minister and staff.

I’m glad to have an opportunity and appreciate the opportunity to ask a few questions in what, I guess, is going to be my last finance estimates. Minister, I’m going to be focusing my questions around B.C. Investment Management Corp., ICBC, WorkSafe and Hydro, mostly around the financial assets and the pen- sions, just to give you a bit of a heads-up in terms of where I’m going to be focused. I’ll go to the B.C. Investment Management Corp. Can the minister provide us with a brief overview of the COVID-19 impact to major BCI-managed investment funds, including the public service pension plan?

If there have been any negative impacts, what has been done to mitigate those? [4:40 p.m.] Hon. C. James:Welcome to the member. I’m pleased to be able to answer questions for, as the member said, what may be the last estimates for the member to take

part in. Congratulations to the member as well. I’ d refer the member, because this is important for oth- ers who may be interested as well…. As we all know, BCI has a very good reputation and a very strong reputation when it comes to all of their investments and, in fact, is quite renowned for the good work that they do. I think that’s continuing despite COVID, which I think speaks volumes to the work that’s done there. BCI had a release on July 30 that is up on their website that the member is welcome to take a look at.

They talk about the fact that they’re announcing an 8.5 annualized rate of return for the ten-year period for fiscal 2020 — again, very strong information. They’ll have further infor- mation coming out in an annual report which comes out on August 17, just as a preview for the member to be able to take a look at.

I think the other piece that is important is that they rec- ognize, in this release that they put out on July 30, that the annualized return for the combined pension plan cli- ents is in positive territory at 3 percent, net of all fees, which again, given COVID, given the challenges, shows the strong, solid performance, despite the impact that I think every investment is facing because of what’s gone on. T. Redies:Thank you, Minister, for that answer. Can the minister give us some insight as to how much, for example, WorkSafeBC and B.C. Hydro and other pub- lic entities that are managed by BCIMC…?

Can she give us some insight as to how much their financial assets, in particular their equity positions, were impacted prior to March 31, 2020? [4:45 p.m.] Hon. C. James:Just to be clear that it wouldn’t be BCI who would be speaking to individual clients’ portfoli- os. They wouldn’t be reporting out on them. They leave that…. That’s obviously a client piece for them so that’s up to the individual clients, like ICBC or B.C. Hydro, to put that information out. So BCI wouldn’t be reporting on individual clients’ portfolios, but obviously, there’s a tie-in to the Ministry of Finance when it comes to B.C.

Hydro and ICBC. I’m not sure if the member had an opportunity to listen to us canvassing some of this earlier about the July report and whether the July report had any indication of some of the challenges that may have been faced by B.C. Hydro, for example, or ICBC. A little too early yet because of the volatility that has gone on and also because some of their 12360 British Columbia Debates Tuesday, August 11, 2020

information — the first Q report, for example — isn’t com- ing in until mid-August for ICBC. Again, that information will come forward in Q1, so we’ll have an update in Q1 on those specific Crowns and what the investment portfolios and any of the impacts that would come forward through the Minister of Finance and the Q1 report. T. Redies: Minister, I find it hard to believe that you don’t know or at least have an idea of what has happened on those portfolios, particularly as it relates to year-end.

I think the world knows that the stock markets, obviously, showed tremendous volatility and fell substantially — almost 25 percent, I think, that the Dow was down in March. Unfortunately, of course, entities like WorkSafeBC and ICBC have their year-ends as of March 31. The AG, actually, was quoted in the press, on May 14, 2020, I believe, in theTimes Colonist, saying that ICBC was facing a $1 billion loss on its investments. The minister also confirmed that the current financial asset portfolio — about 25 percent is invested in stocks or about $4 billion.

Now, that would seem to suggest that both WorkSafeBC and ICBC…. Again, timing is everything, but it would appear they could be facing, both of them, a $1 billion loss as of March 31. Can the minister confirm that they are looking at signi- ficant losses on their investment portfolio, and if she can’t confirm that, can she explain why she doesn’t know, as Minister of Finance, what the potential impact is on her government’s balance sheet? [4:50 p.m.] Hon. C. James:Just a couple of pieces. Perhaps it’s tim- ing. I understand the frustration from the member in making sure she gets the information. It will be coming.

The member asked about the end of March and what happened at the end of March, at the end of the fiscal year. That will come out in Public Accounts, which is coming out shortly. That’ll be on its way shortly. That will give an accounting for the end of the year for ICBC, certainly — for ICBC and Hydro. It’ll include their annual reports, which also will give a good sense of what occurred at the end of the year. We’ll also have Q1 coming out, which will come out in September. Q1, again, will give a picture of this fiscal year and the impact going in.

I think, as the member has pointed out, there’s certainly, no question, volatility and, no question, some challenges. I think that will continue. I don’t expect we’re out of those woods yet. But I think making sure that we have that full information to be able to put the accurate picture out is critical. WorkSafe isn’t part of government. They have their own financials. That’s separate and apart from our responsibil- ity — my responsibility — when it comes to a direct way. Obviously, it impacts all of us in British Columbia in a big- ger way but a different way for me as Finance Minister.

The public accounts will report on the past year. That’ll be coming out shortly and give us the full picture for the end of the year, which would take into account the impact, certainly in March — probably February and March, as the member will know. I know she follows these things closely. Then we will have Q1, which will give us the fol- lowing quarter and will give us a better picture — true pic- ture, I think — of the kind of impact of the investments, because as we know, the market has gone up and down.

I think you’ll see some adjustments that will have occurred between public accounts in Q1 as well, and that’ll give the full picture for that. T. Redies:Thank you, Minister, for that answer. I think we are all aware of the timing on the public accounts and this and that. I appreciate that the minister doesn’t want to, I guess, be too forthcoming until those numbers are out. But I think, for all intents and purposes, it looks like ICBC, which already doesn’t have any equity — in fact, I think it’s negative equity — is facing a fairly substantial impairment charge, at least as of year-end.

Could the min- ister at least acknowledge whether or not ICBC is going to be taking an impairment charge? If she can’t tell us the exact amount, could she just confirm that that is going to be the case? [4:55 p.m.] Hon. C. James:I recognize the member wants the infor- mation now, but again, the public accounts will be coming out shortly. Q1 will be coming out shortly. That will give a better picture of where we’re at, what happened at the end of the fiscal year and what happened as we transitioned into this fiscal year. I think it’s important to see that whole picture. T. Redies: All right.

I guess we’ll have to wait for the public accounts, but I don’t think any of us will be too sur- prised to see a substantial impairment charge. Albeit, the Q1 numbers may look better. Perhaps we can talk a little bit about the actual overall investment practices of some of the Crowns. Has the min- ister read, for example, the investment policies of ICBC and entities like WorkSafe? The Attorney General con- firmed that about 23 percent of ICBC’s financial assets are invested in equities.

Does she feel, for public Crown cor- porations, which do have a significant impact financially on the province’s balance sheet and financial position, that it is appropriate and advisable for them to be investing that heavily in equities? [5:00 p.m.] Hon. C. James: I think the first piece that’s important to note — the member will know this, I’m sure — is that ICBC’s portfolio has now gone to BCI and that they are now investing on behalf of ICBC. Certainly from my per- spective, from the minister’s perspective at ICBC and from Tuesday, August 11, 2020 British Columbia Debates 12361

government’s perspective, that’s a very smart and strategic direction. Obviously, BCI takes a long-term perspective. When I talked about the numbers — from the release that BCI has on their website — at the end of July, it speaks to that long- term view. That speaks not simply to the short-term, more risky approach or to short-term volatility, but in fact looks at a long-term view. I think that’s important not only for BCI and the pension clients but for Crown corporations within government as well.

I certainly feel very positive about the direction, and I think BCI’s expertise and the advice that they give to their clients, their defensive approach, their approach around investing for the long term, will benefit all Brit- ish Columbians. T. Redies:Thank you, Minister, for that answer. I also agree with you. I think moving the portfolio, the financial assets of ICBC to BCIMC, makes sense. Having said that, what I asked was whether o

Document details

Collection	British Columbia — Debates (Hansard)
Citation	20200811pm Hansard n355
Type	hansard
Volume / chapter	20200811pm Hansard n355
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	80f98c36a15aeae2cbcb372f9da98083f76dcf5e

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